Tag Archives: debt
Feb 15, 2020Posted by on
This week on Facebook: The NHS¹ is no more guilty of holding the country to ransom than any of the ‘other’ subsidy that contribute to the government’s deficit financing policy. However, it does provide a simple answer to my question, “Are State subsidies everyones burden?”. For example I had occasion to attend A&E recently and had to wait until my local one opened its doors (it now closes during the night). My ‘accident and emergency’ was prompted by my dropping a drill on my foot. A&E offer a free service (in the sense no money changes hands), similar to freebies given by the nurse or doctor at the General Practice. My point is that neither is a ‘free’ service. Whatever the freebies provided, or time spent on the consultation — both influence fiscal policy. Read more of this post
Sep 22, 2019Posted by on
On looking at some of my ‘drafts posts’ I came across one that included the case for HS2 and decided to post it this week. I am reminded of an article that I read some time ago when an Englishman was bemoaning the fact it took so long (with the appeals procedures) to get things ‘done’ in England. He was engaged in a conversation with a Frenchwoman on train journey through France, in which the Frenchwoman said, “Monsieur, in France, when we want to drain a swamp, we don’t tell the frogs what we intend to do.” I’m not sure if the remark was true, or the Frenchwoman was simply poking fun at the Englishman. Either way, I thought the Frenchwoman’s remark quite funny and recounted it to my colleague when we met for our monthly ‘pie and a pint’.
The subject came up when I asked him about HS2. He is a model rail enthusiast and knows far more about trains than I do, so I assumed that he would know about the HS2. It apparently is not a subject that appears great deal in model railway magazines and my colleague knew less about the HS2 than me. We did however end up discussing high speed rail in the word today (which he knew a lot about), and specifically in relation to the notion of comparative advantage (which I knew a lot about). Incidentally, I did remember an article that I had read on Japanese Bullet Train — probably attracted to it by its reference to the kingfisher.
On Friday morning I sat at my computer (unable to sleep) and searched for articles that may support the case for HS2. Clearly I am influenced by my own views, an Independent newspaper article appealed to me claiming that HS2 won’t improve Government’s poor record on infrastructure. Although I’m not quite sure if this is not simply a left wing newspaper popping at an austere right wing government, or if it is seriously intended to address the lack of rail infrastructure in the UK.
The Independent article fails to mention that in practice that any UK government always spends more money than it receives as revenue and mentioned a report that predicted and expected economic growth in 2025. Economic growth? I live in a State dependent on deficit financing in which the public administration must raise the necessary finance. I have to wonder just how much I am influenced by what I choose to read on social-media.
Sep 21, 2019Posted by on
This week on Facebook: It was only casually reading about the Lloyds bank case that I decided to research some of the government’s financial losses¹ for which no one, and especially not a politician or apparently any other public servant is ever held responsible (the original can be viewed here).
I read that the fraud scandal carried out at Lloyds bank took the police six years to investigate at a cost £7 million (excluding the cost of the trial). The case was dealt with by the Serious Fraud Office (SFO) which, regardless of its successes and failures, as part of the public sector, has an impact on a seemingly inexorable budget deficit.
Certainly some investigative journalism usually results in a story reaching the public, it may even create a furore for a time, but the government know that any furore will eventually subsided and its cause forgotten. The fraud investigation by the SFO at Lloyds bank (a bank involved in a government £20bn bailout) resulted in six fraudsters being sent to jail and a possible £100 million compensation paid to small-business victims by Lloyds bank (1). Read more of this post
Sep 1, 2019Posted by on
In 2013 I came across The New Economics Foundation (nef) publication guide to the UK monetary and banking system with the title ‘Where Does Money Come From?’ contending that there is widespread misunderstanding of how new money is created. The original can be read here, implying that the only widespread understanding of ‘money’ lying in its purchasing power seems a reasonable conclusion and may compliment the monetarist viewpoint. Read more of this post
Aug 31, 2019Posted by on
This week on Facebook: I have to think very hard about whether I am a monetarist or not, the answer seems to depend on how strongly I believe that the State guides its political economy by changes to the monetary supply and other forms of fiat money creation. It was an article or remark of Mervyn King in which he displayed misconceptions about money velocity, particularly with regard to quantitative easing, that first brought the Irving Fisher equation of exchange (MV=PT) to my attention. Economist vacillate over measuring Instruments in economics¹ and while I would hardly call myself an economist — I share in their vacillations. Read more of this post
Aug 24, 2019Posted by on
Where does “plastic money” like debit cards, credit cards, and smart money fit into this picture? A debit card, like a check, is an instruction to the user’s bank to transfer money directly and immediately from your bank account to the seller. It is important to note that in our definition of money, it is checkable deposits that are money, not the paper check or the debit card. Although you can make a purchase with a credit card, it is not considered money but rather a short term loan from the credit card company to you. When you make a purchase with a credit card, the credit card company immediately transfers money from its checking account to the seller, and at the end of the month, the credit card company sends you a bill for what you have charged that month. Until you pay the credit card bill, you have effectively borrowed money from the credit card company. Measuring Money — M1 and M2