[Politics] Next Gov: Where will the money come from?

[CheeseRolls]

well it's an explaination how Murphy and others would like it to work. there's a glaring flaw, complete omission of the Treasury in the process of spending, claiming the central bank does this (curiously avoids refering to Bank of England even once), then saying the central bank advances the funds (another name for lending). it pretends the bond markets dont exist, begging the question why was Liz Truss budget such a problem for them? the other major question for MMT proponents is, if tax controls inflation why have we been raising interest rates instead of raising taxes?

which brings us back to reality and our thread question. if MMT were valid, we'd still have to ask the question where should we apply taxes? see MMT doesn't solve anything.

I have to qualify my arguments here. I am neither an expert not comitted to MMT.

1 The model excludes a number of things, principally the self interest of government. Governments neither wish to be voted out or overthrown. High inflation is generally viewed as undesirable and unpopular. Along with high taxes, so the model says there is no theoretical limit to spending, not that there are no consequences.

2 The bond market crisis could be attributed to the loss of control of inflation. Pension funds in particular were looking for higher risk/higher reward returns to counteract higher inflation. The speed with which the changes were introduced and the lack of consultation exarcebated the problem. It doesn't necessarily negate MMT, although I accept this is a somewhat weak argument.

3 Would the central bank (this is a model hence no Bank of England) have needed to raise interest rates if the government had increased taxes? This was never going to happen I have to admit.

4 The Murphy model ignores international trade, money flows and competitiveness. I guess in simple terms it is all about inflation. I think this is very odd and a major weakness.

If you take a look at US gvernment debt, where is the hard stop on government borrowing? They haven't managed to blow it up yet?
I would also point you back to the Cameron government's austerity programme, which was to save the UK from spending itself into default. Government debt has increased massively since then and yet we still rumble on.

 

[abc]

Aside from the taxiation issue which bizarrley could go a long way to being sorted with a simple, fair and transparent tax system.

My worry is history repeating itself, with another Labour landlslide, its the 27th anniversary today of Blairs first win, with the huge influx of new MP's, in 1997 I had great expectations, with a young family of 2 and a 48 grand mortgage, of Blair, who I thought was going to change all of our lives for the better, and closer to home my then mukka Ivor Caplin.

Niether of them really delivered and Ivor C, once he got to the Westminster trough and tasted the water, became a completely different person and was effectively asked to leave Parliament.

Will many of the latest Labour MP intake be corrupted in the same way?

I think most new MPs on all sides go into Westminster with a genuine desire to do good and make a difference. But the Westminster machine - again, on all sides - is not interested in lofty values, only in achieving and maintaining power. I’m not sure what the answer is, but our Parliament is terminally ill and there are no leaders or prospective leaders that will put the good of the people before their party and the pursuit of power.

 

[aberllefenni]

Increase income tax rate by 2-3p in the pound with, as a few have mentioned, an increase in the personal allowance. A forensic purge on tax evasion which currently costs the country £35b per annum (conservative estimate). Incidentally there are 950 tax fraud investigators whilst there are 1400 benefit fraud investigators, with a further 2000 in the process of being hired. Benefit fraud stands at an estimated £6.5b per annum
Massive borrowing for housing and infrastructure projects. Maybe this is a little naive, but if we can do it to raise money to fight wars why can't we do the same in peacetime?

 

[Super Steve Earle]

The money will come from us like the last Labour government with Brown as Chancellor.

 

[WATFORD zero]

The money will come from us like the last Labour government with Brown as Chancellor.

You'd better stick with the current lot for another five years again, they have done such a good job with the economy and infrastructure of the country. Sunak and Kwarteng, we would have been better off with the chuckle brothers as Chancellor

And of course they they didn't get the money from us to waste on mate's PPE contracts, various other dodgy backhanders, parties, paying off libel cases, Brexit costs, hair brained export a refugee schemes, paying all the costs associated with the asylum backlog they've built, etc etc

And 1 in 5 still believe