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The Big Lie About “Balancing the Books”
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"Someone's been listening to Richard Murphy. MMT is just a way of looking at economies. It has it's advantages and disadvantages as a predictive tool, but it's not describing a fundamental truth. There are some sensible MMT proponents, and then there's Richard Murphy. He has no qualifications in economics, and bases all of his theories on his political stance. Given his lack of qualifications, he makes some fundamental mistakes about how classical economics works. If you want to gain some insights into how MMT really works, go find any actual economist and read what they have to say. If you're heavily biased towards the left, happy to make up 'facts' that suit your narrative, and like to ignore actual data and criticism, Murphy's your man. " Richard Murphy is a bit negative for me. I would like to correct you in that a lot of my economic understanding is mostly from a Korean economist, a guy called Ha Joon chang. But to be honest, it's not that relevant | |||
"Richard Murphy is a bit negative for me. I would like to correct you in that a lot of my economic understanding is mostly from a Korean economist, a guy called Ha Joon chang. But to be honest, it's not that relevant " Richard Murphy is the only person that makes the claim that taxes "create demand for the national currency (since taxes are payable only in pounds)". This is clearly untrue as HMRC will accept payment in anything of value, including Euros, Dollars, houses, cars, fine art, bitcoin, precious metals, or anything else that it thinks it can make money out of. | |||
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"The first thing you get taught on an economics course (a level, degree, whatever) is that economics is about the allocation of resources. How you allocate them, to whom and under what circumstances are decisions you can take. There isn’t really a “right” answer as all those decisions will have various tradeoffs. The important thing, however, is that you have resources to allocate. It all becomes a bit irrelevant if the cupboards are bare. Nowadays governments can create money out of nothing for a reasonable amount of time but that money needs to be backed up by real assets at some point. Most current government money creation is not going into the production of real assets. It is going on day to day living expenses. That makes peoples lives better today but will need to be paid for by the people of tomorrow. Those people will struggle as the money didn’t create anything of economic value. It just allowed today’s people not to work. The fundamental issue is our lack of productivity growth. We are failing at increasing our ability to create resources relative to the rest of the world. We are lucky in that we have a huge piggy bank in the UK economy that we can borrow against to pay for our lack of productivity growth but piggy banks always end up empty if you just spend. The question is which of our children’s generations will be the ones who find there is nothing left?"  | |||
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"It's insane how many people fall for this "fiat currency" conspiracy all the time." What exactly do you think is a conspiracy about fiat currency? | |||
"It's insane how many people fall for this "fiat currency" conspiracy all the time. What exactly do you think is a conspiracy about fiat currency? " Not the concept of fiat currency itself. But the idea that if the currency doesn't have to be backed by assets like Gold, a country can easily print money and not worry about the debts and it's those evil politicians who aren't willing to do this. | |||
"Richard Murphy is a bit negative for me. I would like to correct you in that a lot of my economic understanding is mostly from a Korean economist, a guy called Ha Joon chang. But to be honest, it's not that relevant Richard Murphy is the only person that makes the claim that taxes "create demand for the national currency (since taxes are payable only in pounds)". This is clearly untrue as HMRC will accept payment in anything of value, including Euros, Dollars, houses, cars, fine art, bitcoin, precious metals, or anything else that it thinks it can make money out of. " No, that is just not accurate or even true. Tax liability is denominated in pounds sterling only. Yes, you can hand over a car, some art, or foreign currency if HMRC agrees, this is usually non standard like in cases of asset seizures, but they’ll only do so to convert it into sterling, because UK debt exists in pounds. Ut means everyone ultimately needs pounds to settle taxes, which is what ensures the pound is always in demand and accepted for transactions. This idea long predates Richard Murphy. So for what it's worth, chartalism first founded by knapp, is the foundation of mmt. I've made no secret about my favouring of keynesian economics, which also references tax driven systems that control demand. I don’t need to explain that to you though because you already knew, and it’s digressing from the OP, which is all that I'm only willing to speak with you about further, not pointless debate about technicalities and blah | |||
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"If it’s fiat in Italy is it ford in the USA ? Ours British leyland explains a lot . "Lol | |||
"For a clear, official take on how money actually works in a sovereign fiat economy, see the Bank of England’s explainer: What is money? Their page shows money is fiat (not gold-backed) and that the government has a unique role in issuing it and maintaining its value. https://www.bankofengland.co.uk/explainers/what-is-money" Did you ever read about what happens to inflation if the government just issues more money? It's just taxes in an indirect way because the value of the money you posses reduces after the government prints out more money. | |||
"It's insane how many people fall for this "fiat currency" conspiracy all the time." "What exactly do you think is a conspiracy about fiat currency?" "Not the concept of fiat currency itself. But the idea that if the currency doesn't have to be backed by assets like Gold, a country can easily print money and not worry about the debts and it's those evil politicians who aren't willing to do this." I see what you mean. Thanks for the explanation. | |||
"Richard Murphy is the only person that makes the claim that taxes "create demand for the national currency (since taxes are payable only in pounds)". This is clearly untrue as HMRC will accept payment in anything of value, including Euros, Dollars, houses, cars, fine art, bitcoin, precious metals, or anything else that it thinks it can make money out of." "No, that is just not accurate or even true. Tax liability is denominated in pounds sterling only. Yes, you can hand over a car, some art, or foreign currency if HMRC agrees, this is usually non standard like in cases of asset seizures, but they’ll only do so to convert it into sterling, because UK debt exists in pounds. Ut means everyone ultimately needs pounds to settle taxes, which is what ensures the pound is always in demand and accepted for transactions." Yes, I agree that tax is denominated in sterling, but as you have yourself acknowledged, HMRC are willing to accept other things of value which they then convert into sterling to pay off the debt. If HMRC are willing to accept things other than sterling, then your contention that taxes create demand for sterling is incorrect. I could pay off my tax debt in gold if I wanted to, and HMRC would happily accept it, meaning I have no need for sterling to pay my taxes. I would carry sterling for other reasons, but taxes wouldn't be one of them. So your original statement, that one of the reasons for taxes is "to create demand for the national currency (since taxes are payable only in pounds)", is incorrect. | |||
