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As discussed before on this thread it’s not a debt in the conventional sense. “Debt” in the form of bonds is more like a savings account at the Bank of England. The government creates the money by using key strokes on a computer. When tax is paid into the government accounts the records are...

Not true. taxation doesn’t fund government expenditure nor does the uk have to borrow anything as the issuer of its own sovereign currency. Yea

Why does this matter?

Not quite. You are right that MMT proponents argue that this is how fiat currency systems actually work now, and, despite what is argued sometimes, a set of policy propsals with which you can implement MMT. They regard MMT as a "lens" with which to examine fiat systems. The MMT model applies to...

He would also have to inform the checkout person that unless they accepted his Watford Dollars there would be a gunman waiting outside the shop ready to shoot them dead after their shift otherwise. In the rest of the UK, replace Watford dollars with pounds sterling and the gunman with the Inland...

Yes, the concept that governments which have their own sovereign fiat currency don`t have to either borrow by issuing gilts nor receive tax in order to spend, is one of the tenets of modern monetary theory to which these economists adhere. They argue that spending comes first and that is the...

Are you familiar with their work then? Can you give me an example of something that one of these academics and financial experts has said or written with which you disagree and give your reasons?

Not entirely true - but mostly I agree. As an economics student, I find this forum is an excellent way of testing my own ideas, and learning from others

Again, could you explain in a little more detail why you disagree with what I said. I`m really interested in learning from other people who might have greater knowledge in this area than I. Oh - just a few of the economists etc in reply to your earlier post:- Professor Stephahie Kelton, Warren...

I know what guilts are, of couse. I dont need to look anything up.They are a type of savings account run by the government to give rich people, private pension funds etc an income. Like taxation, the government does not need them to finance its spending. They are also used as a tool for...

Oh why? Can you elaborate - because there are many eminent economists and finance professionals who would agree with my analysis and would really like to learn from you as to why they are so fundamentaly mistaken.

The UK government doesnt have to "borrow" anything to pay for public services as it is the issuer of the pound. Taxes are there to ensure a demand for the currency and amongst other things, depending on the political flavour of the government, ensure equity, and to promote other desirible...

It’s not a fact. Taxation and National Insurance don’t fund public expenditure. The sequence is the other way around. Government creates the money first then taxes it back. That’s why it’s called revenue ie money returning from whence it came.

The UK goverment has infinite revenue so in theory the railway and any public service it runs is not contrained by revenue but by the available real resources. The argument should be about the coherence of the governments neo-liberal agenda.

No the Bank of England is not independent when it comes to monetary policy. HM Treasury is the sole shareholder of the Bank of England following nationalisation in 1946. Section 4(1) of the Bank of England Act 1946 declared the right of HM Treasury to “...give such directions to the Bank as...

As one of a package of measures probably but not solely.

I take it you are perhaps are an adherent to one of Maggie Thatcher`s gurus, Milton Friedman`s dictum that "Inflation is always and everywhere a monetary phenomenon". Are you talking about government spending or the money produced by banks through loans? How are you defining the money supply?

Tax cuts are not dependent on either increased borrowing or cutting public spending . You dont understand how government finance actually works. As the issuer of the pound, the UK central goverment does not need our money in the form of either tax or borrowing to fund its expenditure...

No it doesn’t. You don’t understand what tax actually is for. Tax doesn’t pay for government spending. You have been misinformed!

No, because the premise of this post is false. Despite what most people believe, in the UK at least, tax and national insurance dont pay for the NHS (or any other government spending) - follow this link to a very interesting paper which explains in detail how government finance actually works...