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UK National Debt

Spraggons Den said:
I thought that you thought the EU was a bastion of neoliberal economics and the denier of countries from their sovereign currency and the endless possibilities afforded by having your own money and you're so concerned by this that you would vote for brexit had the country not already done so in 2016?
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which just goes to show that you don't understand what I think, and that what you think that I think is wrong.
 
Chapter 6. The National Debt Paranoia

“First, once upon a time there was such a thing as the national debt. That started in 1694. And it ended in 1971. During that period either directly or indirectly the value of the pound was linked to the value of gold. And since gold was in short supply, so could money be.

Then in 1971 President Nixon in the USA took the dollar off the gold standard, and after that there was no link at all between the value of the pound in the UK and anything physical at all. Notes, coins and, most importantly, bank balances all just became promises to pay.”


“So what is special about the Bank of England?….. to be blunt, it’s just a part of the government”.


“The truth is that the national debt is our money supply”

https://www.taxresearch.org.uk/Blog.../Money-for-nothing-and-my-Tweets-for-free.pdf
 
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The term 'national debt' is the problem here. Too many knee jerk negative associations with the term debt. If they'd called it 'national investment' nobody would be so keen to reduce it.
 
What about our friends across the pond who are something like 30 trillion in the hole, surely that can't be healthy for any economy
 
Gingerbeard said:
What about our friends across the pond who are something like 30 trillion in the hole, surely that can't be healthy for any economy
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Government “debt” is, in reality, a private sector savings vehicle.

Paying down the debt, as shown by the graph up thread, is bad for the economy, it causes recessions. One reason is that cutting back on public debt, which is sustainable, increases private debt which isn’t.

Before every recession since the 70’s there has been a credit boom

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Not only is our national debt sustainable, it has, afterall, been around since the Glorious Revolution, paying it down has been the cause of recessions.

The bottom line is that if government wanted to pay off the national debt, it could literally do so at a keystroke, the problem would be that private savings, notably pension providers, would disappear as well.

It should also be remembered that government borrowing, or bonds, are created by government issuance and paid back by government issuance. It is no more than government ‘borrowing’ from itself.

PS. A much better way for government to provide a saving vehicle for pension companies and the like - and to circumvent a lot of the shenanigans of the bond markets with it’s knock on effects to financial markets and speculations - would be for government to provide term deposits, like a 3, 5 or 10 year savings accounts at the BoE. It would achieve much the same ends but without the unnecessary complications and the false narratives.
 
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www.taxresearch.org.uk

Why repaying the national debt is not a good idea

Earlier this week, I published a proposed glossary entry on the true nature of our so-called national debt. This won a lot of praise, but there have been improvements to make, so I have worked on it. I have added a summary based on what was already in it. I have also...
www.taxresearch.org.uk
 
“Kier Starmer and Rachel Reeves have in the last few days returned to talking about the country maxing out its credit card, just as David Cameron did in 2015. This is utterly absurd. A thread…”

www.taxresearch.org.uk

UK politician’s credit card con-trick on the people of this country

I posted this thread on Twitter this morning: Quite extraordinarily, leading politicians, including Kier Starmer and Rachel Reeves have in the last few days returned to talking about the country maxing out its credit card, just as David Cameron did in 2015. This is utterly absurd. A thread…...
www.taxresearch.org.uk
 
The problem is, the general public doesn’t seem to be able to get its head round any economic ideas outside the ‘household budget’ model, because that one makes sense to people. Look at the hostility to MMT we see on here, from people who have at least given these things a bit of thought. So imagine trying to re-jig economic thinking and getting broad public support for it. Especially in the face of hostile media reaction, given the threat it would pose to their owners’ interests.
 
^^^Exactly this, if the public understood how "the system" works they would also understand that poverty is unnecessary and is a political choice.
 
Sue Pertwee-Tyr said:
The problem is, the general public doesn’t seem to be able to get its head round any economic ideas outside the ‘household budget’ model, because that one makes sense to people. Look at the hostility to MMT we see on here, from people who have at least given these things a bit of thought. So imagine trying to re-jig economic thinking and getting broad public support for it. Especially in the face of hostile media reaction, given the threat it would pose to their owners’ interests.
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Yes, on the one hand I do get what you’re saying.

But on the other I think if I as someone who is not highly intelligent, can get my head around it, why cant others? Especially the many on here who have been better educated.

ISTM that it is not so much about an inability to understand as a profound reluctance to alter or even challenge engrained thinking. A lot of the hostility seems to come from a reluctance to challenge one’s own accepted norms.
 
We are conditioned/brainwashed to believe TINA. I guess if the USA embraced MMT or even just Keynesian economics the world would rapidly become a different place, but it can't. The rich, including corporations with budgets bigger than most nations, pull all the strings. Politicians who espouse a different view anywhere in the world have to be discredited, nations that try to walk the walk find they are the victims of coups.
 
Enfield boy said:
^^^Exactly this, if the public understood how "the system" works they would also understand that poverty is unnecessary and is a political choice.
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You can’t eradicate poverty when it’s a relative term. No matter what the definition, there will always be those at the bottom end of the spectrum who are ‘poor’.
 
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