The Bank of England is right to step in to fund the Treasury’s coronavirus stimulus package, because there are more important things to worry about than government debt
The truth is that most of the state debt we owe to each other, and we have the capability to meet obligations denominated in pound sterling. Policymakers have long been concerned that if the public understood this then they might ask awkward questions such as: if we could do this to deal with the coronavirus crisis, why can’t we do the same with the climate crisis? The Treasury’s traditional rebuttal is that “monetising the deficit” is more inflationary than selling government bonds to the private sector.
Yet inflation is sparked when nominal spending outpaces the real capacity of the economy to produce goods and services. There’s no sign this is a problem today. This is well understood by figures like Charlie Bean, a former deputy Bank governor, and explains why he has thrown his weight behind BoE financing.
The Guardian
The article might just as well have been written by Warren Mosler, Stephanie Kelton or any other MMTer!!!!
ReplyDeleteI was surprised to read something so forthright MMT in the Guardian.
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ReplyDeleteAnd throw in a Green New Deal:-
https://www.taxresearch.org.uk/Blog/2020/05/05/first-they-ignore-you-then-oxford-univesity-saus-you-were-right-all-along/
"The article might just as well have been written by Warren Mosler, Stephanie Kelton or any other MMTer!!!!"
ReplyDeleteWow! That's four...count 'em... four exclamation marks!
Btw, Ralph, were they used to express astonishment, surprise, or anger? Asking for an MMTer ;)
Four exclamation marks - heartburn
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