Unfunded Promises? No such thing!

Modern Monetary Theory: Real Economics

All Govt spending will comes back as taxation eventually. Where else can it go? So, there’s no such thing as “unfunded promises” or “unfunded spending”.  Now that the UK’s election campaign is well underway we are hearing  accusations that their opponents sums “don’t add up” , “haven’t done their costings properly ” etc etc from both sides. It’s not just the right wing that doesn’t understand how money flows in the economy.

Money arrives in the economy when government spends it in and leaves the economy when government taxes it out. More can’t leave than arrive for other than a limited amount of time. It’s physically impossible.

The government doesn’t tax it out because it needs the money. Why would it? It’s created it in the first place. The UK government hasn’t adopted the euro, the UK government still has total control over the issuance of its own currency. It’s…

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