When economic misinformation hides economic negligence
A couple of Tweets from yesterday as I do not have time to elaborate these stories today.
The first is glaringly obvious. As a matter of fact, in economic substance quantitive easing debt is cancelled, as the governments own consolidated accounts prove because debt subject to such arrangements is not shown to exist within them. Meanwhile, central bank reserve account balances are not national debt, as the ONS recognises. So, my claim is correct:
Then there is this story:
£10 billion has not been saved. The loss in question is just not going to be accounted for within ONS data.
There are two things to note. One is that the loss need never be suffered; quantitative tightening is not necessary. Therefore this loss is being voluntarily incurred now.
Second, the framing is also wrong: a sleight of hand that lacks accounting credibility is not a saving.
The real story is that £100bn of government debt is being sold and we are not benefiting, and that is a scandal. We could relieve poverty, fund a massive NHS investment programme and kick start the Green New Deal with that £100bn. Instead it will just be used to reduce the central bank reserve accounts held at the Bank of England by our commercial banks to keep interest rates high and the UK on track for a recession. That means economic misinformation is in this case being used to hide negligent mismanagement of the economy.
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