As he points out, the widespread use of government money printing (quantitative easing) in the wake of the 2007-08 financial crisis and the Covid pandemic fundamentally challenges the myth that the public sector is entirely dependent on private funding. QE also challenges the assumption that public money printing automatically leads to inflation. The current surge in inflation comes from non-monetary factors: the war in Ukraine and the Covid slowdown.
The problem with Trussonomics was that it targeted the wrong vehicle for growth: trickle-down by the wealthy rather than public investment. There is one black hole sucking up all monetary energy. It is the gross accumulation of private wealth in fewer and fewer hands while public services shut down. An economy for the 21st century must overcome the ideological limitations of neoliberalism and develop the use of public money for the common good.
The article of Larry Elliott and your Bank of England editorial. What a relief to read they show that at least some people in the media are not, as John Keynes put to slave a deceased economist or economic theorist. There is no black hole in the economy of countries that calls for more austerity and tax hikes. There is a social and environmental gap endlessly in the economic solutions parroted by the rest of the media.
As Elliott and your editorial have shown, the bank must stop raising interest rates. Instead, reintroduce a massive program of QE that primarily funded the post-banking and Covid-19 government deficits.
Looking to the next vote was time for opposition parties to start arguing about this funding. The next time they grill to Rishi Sunak or Jeremy Hunt. They should demand that they explain exactly where the $400 billion is. The answers to that are QE, no, and no.
Larry Elliott fully exposes the Tory government and Bank of England’s ludicrous strategies. But the fact that they have been pursuing apparent illogicality for 12 years has nothing to do with economics. She makes it even clear that it is about dismantling our common good – and the result is social murder.
While cruelty, incompetence, and corruption have become hallmarks of the party in power, there is a darker motivation than simply enriching oneself and their friends.
LONDON (Reuters) – British finance minister Jeremy Hunt will seek to fill a 50 billion pound ($57 billion) hole in the country’s around 30 billion pounds in public finances spending cuts and 20 billion in tax rises, two government sources said on Monday.
On 17 th November Hunt is due to present a financial statement to parliament. He will restore financial market confidence after his predecessor Kwasi Kwarteng’s Sept. 23 tax-cutting plan pushed sterling to a record low against the U.S. dollar and ultimately forced Liz Truss to resign as prime minister.
While Britain Guardian’s newspaper reported on Sunday that early drafts of Hunt’s statement included up to 35 billion pounds of spending cuts and 25 billion to the Financial times gave figures of 33 billion pounds and 21 billion pounds.
About these estimates, two government sources told Reuters that they were within the right ballpark and that final figures were subject to change.
Britain’s finance ministry declined to comment on either estimate.
Last week a finance ministry source said broad-based tax rises were likely to fill a fiscal black hole.
Britain’s budget predictions were published in March when they showed 28 billion pounds of headroom to meet a government target to reduce debt as a share of the economy.
The 45 billion pounds of unfunded tax cuts Kwarteng announced from a 16 billion pound cut in payroll took tax effect on Nov. 6.
Short-term government borrowing costs are broadly back where they were in the Kwarteng statement, but longer-term borrowing costs are somewhat higher the economic outlook is bleak.
The bank of England forecast last Thursday, that Britain was at risk of its largest recession in a century, though much less than during the pandemic or after the 2008-09 financial crisis.