I'm a useless maths person so I'm not sure I understand.
Does that mean if the country "earns" £100, it also borrows £95? Or £95 of the £100 goes to pay the interest on what it has already borrowed?
I seem to remember Mrs Thatcher talking about not spending more than the country earnt.
And Mr Micawber had a good speech about debt too!
(And I don't understand why anyone would lend money to a country that is totally reliant on debt - it's a bubble that will burst isn't it? If they keep just printing money that is not backed up by anything then why would anyone trust them? If there is a list of creditors waiting for the bankruptcy to happen why would you keep lending money to them bankrupt?)
"Britain’s current tax-and-spend model is not sustainable." There is no tax and spend model, there's only a spend then tax model. Where would money, Govt IOUs, I Promise to Pay the Bearer, signed by the Chief Cashier of the BoE, originate if nor Govt? What comes out of the OBR ignores reality and so is demonstrable gibberish.
"The money government spends does not appear from nowhere." Yes it does. The process is called ex nihilo. Govt budgets then passes a Supply/Appropriation Bill (look them up in Hansard) forcing the BoE, part of Govt, under the 1866 Exchequer/Audit Act (Google is your friend here!) to create, as a loan, the money. Govt is self-funding. So money for defence? Welfare? Not a problem so long as the actual necessary resources are available.
There you go then, it is simple ( well, not everything is simple! ), our government needs to be run more like a business and less like a charity. The sooner this ( or any future government ) realises that, and that the working population is not a magic money tree ( as well as the bond markets ) the better.
I am disgusted at the way this country has fallen in the last few years ( and I know the rot started many moons ago ) and feel we all need change. But they won’t do it will they????!!!!
Business can't create the money supply it needs. The Govt can and does as what we use for money (say the BoE in their PDF in the 2014 March Quarterly Bulletin) is govt IOUs. There's no comparison between the two models. Interested parties can find this for themselves by Googling for Money Creation in the Modern Economy. That goes straight to the BoE page in question.
"To keep debt at roughly 95% of GDP"
I'm a useless maths person so I'm not sure I understand.
Does that mean if the country "earns" £100, it also borrows £95? Or £95 of the £100 goes to pay the interest on what it has already borrowed?
I seem to remember Mrs Thatcher talking about not spending more than the country earnt.
And Mr Micawber had a good speech about debt too!
(And I don't understand why anyone would lend money to a country that is totally reliant on debt - it's a bubble that will burst isn't it? If they keep just printing money that is not backed up by anything then why would anyone trust them? If there is a list of creditors waiting for the bankruptcy to happen why would you keep lending money to them bankrupt?)
"Britain’s current tax-and-spend model is not sustainable." There is no tax and spend model, there's only a spend then tax model. Where would money, Govt IOUs, I Promise to Pay the Bearer, signed by the Chief Cashier of the BoE, originate if nor Govt? What comes out of the OBR ignores reality and so is demonstrable gibberish.
"The money government spends does not appear from nowhere." Yes it does. The process is called ex nihilo. Govt budgets then passes a Supply/Appropriation Bill (look them up in Hansard) forcing the BoE, part of Govt, under the 1866 Exchequer/Audit Act (Google is your friend here!) to create, as a loan, the money. Govt is self-funding. So money for defence? Welfare? Not a problem so long as the actual necessary resources are available.
There you go then, it is simple ( well, not everything is simple! ), our government needs to be run more like a business and less like a charity. The sooner this ( or any future government ) realises that, and that the working population is not a magic money tree ( as well as the bond markets ) the better.
I am disgusted at the way this country has fallen in the last few years ( and I know the rot started many moons ago ) and feel we all need change. But they won’t do it will they????!!!!
Spot on - if you run a business like we run the country the banks would call the debt in.
Business can't create the money supply it needs. The Govt can and does as what we use for money (say the BoE in their PDF in the 2014 March Quarterly Bulletin) is govt IOUs. There's no comparison between the two models. Interested parties can find this for themselves by Googling for Money Creation in the Modern Economy. That goes straight to the BoE page in question.