Advertisement



  1. Things you need to know about the new ‘Conversations’ PM system:

    a) DO NOT REPLY TO THE NOTIFICATION EMAIL! I get them, not the intended recipient. I get a lot of them and I do not want them! It is just a notification, log into the site and reply from there.

    b) To delete old conversations use the ‘Leave conversation’ option. This is just delete by another name.
    Dismiss Notice

By how much should the Bank of England increase interest rates in a traditional monetarist economy

Discussion in 'off topic' started by lawrence001, Aug 3, 2022.

  1. ks.234

    ks.234 pfm Member

    Sorry, you are correct, there is something wrong in there.
     
  2. Sue Pertwee-Tyr

    Sue Pertwee-Tyr neither here nor there

    I just worry that 'lower taxation' in Truss' head means 'lower corporate taxation' not 'bigger personal allowances'.
     
  3. ks.234

    ks.234 pfm Member

    Yes, I think she has said as much. Bigger personal allowances would work for more people. Her target audience tough is a small group of people who have given Truss their support in exchange for a say in manipulating things their way

    Truss is appealing to Business Leaders, while Sunak is losing that battle so is focussing on morals in economics. If only. The truth is that the moral case against borrowing is flawed because it is more than asking for a double payment. The “cost” of borrowing is met once by government issuance, to ask for our “children and grandchildren to pay off our debts” is to ask them to pay for something will have already been paid for.

    That’s what I call immoral
     
    Sue Pertwee-Tyr likes this.
  4. Jim Audiomisc

    Jim Audiomisc pfm Member

    The snag being for the poor who pay no income tax *now*, so get no personal change in their income. And they are generally the most poor, and hardest hit.
     
    ks.234 and klfrs like this.
  5. klfrs

    klfrs chill out

    Moving the tax burden up is the way to go. But raising the IT threshold to average income would create the mother of all holes in the budget. How would it be financed?
     
  6. ks.234

    ks.234 pfm Member

    From where the money is issued.
     
  7. klfrs

    klfrs chill out

    The hole in the budget will be financed from where the money is issued? Sorry, I don't understand.
     
  8. ks.234

    ks.234 pfm Member

    Yes, that is a serious flaw. What we need to go alongside raising the personal allowance is guaranteeing everyone who wants one, a well paid job
     
  9. ks.234

    ks.234 pfm Member

    Government issues currency, pay for it from there, the same way government spends money into existence every day. No functional need for a hole.
     
    Klassik likes this.
  10. klfrs

    klfrs chill out

    Doesn't sound like a solution, more a series of new problems. Do you remember the previous outcome of BoE getting excessively happy with the magic money printing press?
     
  11. lawrence001

    lawrence001 pfm Member

    You can always PM me happy to have a chat, I've not got any axes to grind and I'm neutral in terms of taking any and all theories at face value. I do get the impression a lot of people accept the theory of how the economy works that favours their policy choices, whereas I prefer the ones that describe the reality, and then frame our policy choices around it. It might not give a better (theoretical) outcome than the most favourable theory suggests, but in practice it will lead to policies that actually work.
     
    Sue Pertwee-Tyr likes this.
  12. lawrence001

    lawrence001 pfm Member

    I suspect you've missed about 10,000 posts on various threads if you don't know the answer yet :D
     
  13. lawrence001

    lawrence001 pfm Member

    Oh dear you're asking for trouble now.
     
  14. klfrs

    klfrs chill out

    "You missed ..." is the story of my life.
     
  15. ks.234

    ks.234 pfm Member

    I find this very strange, on another thread you said that you had a contrary opinion to the observation that tax does not fund our government spending, you chose not to discuss your contrary opinion there, and we don’t want to revive that discussion here, but this thread is the perfect place for you to argue for the monetarist case that tax is functional in funding our government spending.
     
    Klassik likes this.
  16. ks.234

    ks.234 pfm Member

    We’ll see
     
  17. klfrs

    klfrs chill out

    We live in sour times, but that doesn't ring a bell. A misunderstanding?

    Do you remember what happened post 2008?
     
  18. ks.234

    ks.234 pfm Member

    Yes, there p may have been a misunderstanding on another thread, To be clear on this thread I was referring to where you said, “sorry, I don’t understand” when I referred to where funding is created and the role of tax that follows from that observation

    Do you remember what happened post 2008?[/QUOTE]
    Yes, it was austerity imposed by a monetarist ideological choice that believes that funding comes from taxation

    Also worth remembering that it was caused by a monetarist ideology choice that believes that funding comes from borrowing
     
    Klassik likes this.
  19. Jim Audiomisc

    Jim Audiomisc pfm Member

    Still doesn't fix it for relations who are 24/7 carers of a loved one, or simply unable to take a paid job for some reason out of their control.

    In the end, a significant number of people need to be able to cope on 'benefits'. In some cases because the State has shrugged off helping them. e.g. the way the Tories have allowed social care to evaporate.
     
  20. ks.234

    ks.234 pfm Member

    It is in not a deflection, you have not stated a position yet.

    If it’s that the BoE caused a problem by printing money, then BoE did not print money after the GFC.
     
    Klassik likes this.

Share This Page





Advertisement


  1. This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
    By continuing to use this site, you are consenting to our use of cookies.
    Dismiss Notice