Corbynomics: A Dystopia

bobbymotors

You can't lend yourself money, whether state or individual unless you borrow it from somewhere. That's an axiom.

If you borrow it and pay it back as a state by printing it then that is magic tree money.

Malthusian

bobbymotors wrote: »

If you borrow it and pay it back as a state by printing it then that is magic tree money.

It's not a magic tree, it's perfectly doable - the only problem is that nobody is going to lend you money ever again. Not in Sterling-denominated loans, anyway. This is a problem for any developed economy which relies on the assumption that it will always be able to refinance its debt in the future - but not if you are a Corbynist and insist that the concept of "the future" is false consciousness.

Rusty_Shackleton

bobbymotors wrote: »

You can't lend yourself money, whether state or individual unless you borrow it from somewhere. That's an axiom.

If you borrow it and pay it back as a state by printing it then that is magic tree money.

How about discussing the point you're trying to make rather than regurgitating soundbites from politicians and hack journalists. Trying to refute an argument with 'magic money tree' just makes you sound silly.

From the BoE itself:

Quantitative easing (QE) is an unconventional form of monetary policy where a Central Bank creates new money electronically to buy financial assets, like government bonds

So the BoE, part of the state, basically prints money and loans it to the government, albeit in a round about way. This money, in part, will have been used to repay maturing debts. This was intended to push down the cost of government borrowing by increasing demand for bonds, to encourage investors to seek other places (e.g. businesses) for their money.

If you're interested, the Bank of England published a paper all about this - read it from the horses mouth, or if you want a summary, you can read it in the Guardian (followed by checking it on the BoE because you'll no doubt be screaming FAKE NEWS GRAUN).

I look forward to either an explanation of why you know more about money than the Bank of England, or perhaps an admission that this paper demonstrates (some of) what I've been talking about on this thread with regards to money, government spending and national debt

cogito

Rusty_Shackleton wrote: »

If an individual wants to borrow, they need to find a lender. If the state wants to borrow and controls the currency, they are the lender. This country is borrowing more than ever before, and interest rates are lower than ever before. Yet again, household finances and government finances are nothing alike.

Without getting into a debate of whether you believe Corbyn's borrowing would achieve this, the whole argument against austerity is this: austerity cuts govt. spending but also reduces tax receipts. If govt spending contributes to economic growth, tax receipts go up. The idea that that the deficit can only be tackled by cuts to govt spending is objectively false.

Also, comparing credit ratings of businesses with that of countries? I don't know where to start. Less apples and oranges, more like apples and Tesco.

You really don't have a clue, do you? Your second sentence is one of the most idiotic things I have ever read.

Rusty_Shackleton

cogito wrote: »

You really don't have a clue, do you? Your second sentence is one of the most idiotic things I have ever read.

Care to say why? I should have said the state CAN be the lender, but it's absolutely true. Go ahead and read my post after that (the one you kindly glossed over) and try again. Because as I've quoted from the BoE itself: Quantitative easing (QE) is an unconventional form of monetary policy where a Central Bank creates new money electronically to buy financial assets, like government bonds

How about you try responding with a counter argument or an explanation of why you think I'm wrong - just calling someone an idiot makes it look like you're full of it. If my points are idiotic it shouldn't be difficult for you to explain and prove your point (and disprove me in the process).

cogito

Rusty_Shackleton wrote: »

Care to say why? I should have said the state CAN be the lender, but it's absolutely true. Go ahead and read my post after that (the one you kindly glossed over) and try again. Because as I've quoted from the BoE itself: Quantitative easing (QE) is an unconventional form of monetary policy where a Central Bank creates new money electronically to buy financial assets, like government bonds

How about you try responding with a counter argument or an explanation of why you think I'm wrong - just calling someone an idiot makes it look like you're full of it. If my points are idiotic it shouldn't be difficult for you to explain and prove your point (and disprove me in the process).

You seem to think that Quantitative Easing and Government borrowing are the same thing. They are not.

Sorry but it's not my job to educate you.

steampowered

Malthusian wrote: »

It's not a magic tree, it's perfectly doable - the only problem is that nobody is going to lend you money ever again. Not in Sterling-denominated loans, anyway.

What is your view on QE then?

Has the international investment community refused to take sterling denominated loans as a result of the UK printing that money?

Last time I checked the yield on a 10 year gilt was 1.08% ...

Rusty_Shackleton

cogito wrote: »

You seem to think that Quantitative Easing and Government borrowing are the same thing. They are not.

Sorry but it's not my job to educate you.

The name of this board is Debate house prices & the Economy. It is not your job to educate me or anyone else, but in a debate, you put forward your point and you back it up and actually... you know, debate it. If that's not what you want to do then why are you on here? Ah, sorry, you want to debate with people who agree with you! Silly me.

I've not said QE and government borrowing are the same thing, but they are rather closely related at times. I'm gonna quote this one last time in the hope you will actually discuss this point. The BoE state themselves that QE is printing money and that they use it to buy government bonds. Bonds are an instrument for governments to borrow money. Therefore, QE funnels newly printed cash to the government in the form of a loan.

Thrugelmir

steampowered wrote: »

Last time I checked the yield on a 10 year gilt was 1.08% ...

At the moment............

As with the US. What happens once the proceeds of redemptions plus the income generated isn't reinvested into further gilt purchases. Thereby reducing demand.

economic

Thrugelmir wrote: »

At the moment............

As with the US. What happens once the proceeds of redemptions plus the income generated isn't reinvested into further gilt purchases. Thereby reducing demand.

and what happens once yields rise and start to be more attractive to investors such as pension funds, thereby increasing demand?