[Politics] Liz Truss **RESIGNS 20/10/2022**

[Half Time Pies]

You can argue that MMT describes how things work, what you cant argue is that things could work differently, unless you can show an example where a Government has just printed all the money it needed without creating debt, and without causing massive problems.

If you print lots of money you potentially cause inflation, MMT has never said that a government can just print money without creating problems.

Governments do however regularly print all of the money that they need: In the UK the BofE owns around £875bn of UK government bonds that it purchased with new money through QE. This was used to fund the bail out in 2008 and more recently COVID and the furlough scheme. The UK Treasury pays interest to the central bank however as the BofE is a wholly owned subsidiary of the UK government, it gets that interest back! £875bn of our government debt our government effectively owes to itself!

 

[Wrong-Direction]

https://youtu.be/pxkBdcWfUfc

Shouldn't she be in some kind of facility?

Sent from my SM-A326B using Tapatalk

 

[Bakero]

Which of these guys told you Taxes are just to create demand for the currency or persuade us to not buy cigarettes?

That's a central tenet of MMT.

 

[BenGarfield]

[MENTION=396]WATFORD zero[/MENTION] you're smart enough to know your household budget isn't comparable to government finances. Unless you print your own Watford dollars?

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 Revenue and this is the way MMT economists explain why tax plays a key role in creating the demand for pounds.

 

[BenGarfield]

not a matter of application, the MMT proponents claim this is how money works. despite their overlooking all monetry systems other than Dollar and Sterling. application implies some choice, a proposed model, very different from stating it is the current monetary model.

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 all fully sovereign fiat currencies in the world not just the dollar and the UK. It equally applies to the Yen, Canadian and Australian dollars and the Chinese Yuan and the Danish Krone for example. MMT cant be said to apply fully to the individual member states of the Eurozone as they are a hybrid between monetarily sovereign federal government, like the US government, and currency-using local government, like the individual US states, or county councils in the UK.

 

[Baldseagull]

If you print lots of money you potentially cause inflation, MMT has never said that a government can just print money without creating problems.

Governments do however regularly print all of the money that they need: In the UK the BofE owns around £875bn of UK government bonds that it purchased with new money through QE. This was used to fund the bail out in 2008 and more recently COVID and the furlough scheme. The UK Treasury pays interest to the central bank however as the BofE is a wholly owned subsidiary of the UK government, it gets that interest back! £875bn of our government debt our government effectively owes to itself!

BoE contributes about £500M per annum to Treasury. When the Tories are saying getting shot of the highest rate of tax would only cost £2B, BoE is not an important income for the Treasury. The Bonds it bought in emergency have to end up in the market eventually.

 

[Baldseagull]

That's a central tenet of MMT.

So MMT says without taxes there would be no demand for a currency? That is even more batshit than I thought.

 

[Baldseagull]

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 all fully sovereign fiat currencies in the world not just the dollar and the UK. It equally applies to the Yen, Canadian and Australian dollars and the Chinese Yuan and the Danish Krone for example. MMT cant be said to apply fully to the individual member states of the Eurozone as they are a hybrid between monetarily sovereign federal government, like the US government, and currency-using local government, like the individual US states, or county councils in the UK.

You can use whatever lens you like, but if you produce more money into the system without someone somewhere having to give up some real value for it, it becomes worthless, which is why taxes have to be raised, not to create the need for the money.

 

[Bakero]

So MMT says without taxes there would be no demand for a currency? That is even more batshit than I thought.

Why would you say UK citizens are attracted to the use of pounds? All governments with a fiat currency require citizens to pay taxes with said currency, thereby creating a demand. That's not an outlandish concept.

 

[Harry Wilson's tackle]

Can we jog on from Martian Growth Theory and focus back on the Truss bus? At all?

 

[beorhthelm]

So MMT says without taxes there would be no demand for a currency? That is even more batshit than I thought.

comes about because in the initial premise there is no need for taxes (government can spend what ever they like), so they have this contrivance to give tax purpose. they ignore currencies can be used abroad, even favoured over other local currencies in places. ignore for many individuals and entities pay little or no taxes, that would mean they need no money? but there are usually debts and they do need to be repaid. still noone has addressed why bonds are priced differently in Dollars, Sterling or Euro.

 

[Sid and the Sharknados]

Why would you say UK citizens are attracted to the use of pounds? All governments with a fiat currency require citizens to pay taxes with said currency, thereby creating a demand. That's not an outlandish concept.

I suspect that if you offered to pay the government your tax in dollars they'd jump at it.

Of course, you'd have to buy the dollars yourself first.

The whole thing is just missing the wood for the trees - a lot of perfectly rational observations with an enormous pile of wishful thinking wacked on top of it

 

[BBassic]

I'm always impressed and baffled at how so many on here know the ins and outs of global finance. Genuinely.

My financial knowledge extends as far as making sure I remember my pin number.

 

[Sid and the Sharknados]

Can we jog on from Martian Growth Theory and focus back on the Truss bus? At all?

Do you really want to think or write more about Truss?

 

[Sid and the Sharknados]

I'm always impressed and baffled at how so many on here know the ins and outs of global finance. Genuinely.

My financial knowledge extends as far as making sure I remember my pin number.

I'm sure you'd be quite willing to bang on at length about some subjects, they just come up less

What's impressive is, on what is notionally a football forum, how little collective knowledge of football there is

 

[nicko31]

Top rant on where we're at now...

https://www.youtube.com/watch?v=pofTr1QKiBk

 

[Baldseagull]

Why would you say UK citizens are attracted to the use of pounds? All governments with a fiat currency require citizens to pay taxes with said currency, thereby creating a demand. That's not an outlandish concept.

It is outlandish to say it is the only function of taxes.

 

[Guinness Boy]

Can we jog on from Martian Growth Theory and focus back on the Truss bus? At all?

Yes, this.

Astonishing that a Corbyn shill who never posts about football like [MENTION=38012]BenGarfield[/MENTION] has derailed a thread about possibly the most incompetent Prime Minister ever - and her a Libertarian wing Tory surrounded by fascists.

Presumably he prefers her to Starmer.

 

[Bodian]

I'm always impressed and baffled at how so many on here know the ins and outs of global finance. Genuinely.

My financial knowledge extends as far as making sure I remember my pin number.

Not only the ins and outs of global finance, but also experts in epidemiology, PPE supplies, long-range missiles, military procurement in eastern Europe - and so on.

 

[GT49er]

Just look up Gilts. Then look up National debt, and Budget defecit and if you really want to humiliate go and ask an eminent economist.

Gilts are female pigs that have yet to farrow (give brth to piglets). Strange argument in context, but probably makes more sense than anything Kwarteng can manage.