Tag Archives: finance

The UK, like USA, Japan and others, have a profound advantage with which to recover from the financial consequences of Covid, if they choose to understand and use it.

They are currency issuers, unlike countries using the euro and the dollar, which are currency users. Unlike currency users, e.g. Germany, Greece etc. financially sovereign nations can always meet future obligations: they can never run out of their money.

Increasing or decreasing “the deficit” neither makes future generations poorer nor richer. Consequently, the Government can and should, without excessive inflation, spend its currency to fully manage the problems and opportunities to maintain or increase the well-being of citizens and children. It neither needs, nor should, let the “deficit myths” restrict its management of the Coronavirus and its consequences.

The government’s ability to spend is limited by the economy’s ability to produce, not the debt.
Dean Baker

It should also be limited by care of environments which include, climate, ecology and societies.

Economics without contexts and compassion is a form of fascism
William Harris

Fiat money gains its authority through being the medium in which a government extracts taxes. Unlike commodity money, with intrinsic value and representative money, representing something with intrinsic value, it is intrinsically valueless. It is part of a government’s “spend, tax and borrow” practices. Taxation creates the demand for the government’s money and so is not a governing factor in governmental spending. Government spends first and taxes some back. The difference goes to the private sectors of the economy. Unless taxation is less than expenditure, private sectors suffer deficits and the economy under-functions. Insufficient taxation results in damaging excessive inflation.