Ben Wray — The Magic Coin Tree Is Real: Treasury Confirms Taxes Are Non Needed To Fund Authorities Spending

A LETTER from the Economic Secretary of the Treasury has confirmed that the authorities does non take away to heighten coin from taxation to fund authorities spending, leading to advocates of increased populace investment to declare “the magic coin tree exists, equally a affair of fact”....

The declaration goes that the authorities tin alone pass what it has raised inwards taxation, alongside whatsoever additional financing having to last raised through debt from financial markets which afterwards has to last repaid. Former Prime Minister Margaret Thatcher famously said “The authorities has no coin of its own. It’s all your money.”

But Treasury secretarial assistant John Glen’s eighteen July reply to Peter May, a Modern Monetary Theory (MMT) advocate who had written to his MP Ben Bradshaw final twelvemonth to enquire of the Chancellor equally to where coin came from, was inwards contrast to Thatcher’s position.

Glen answered: “While it is theoretically possible for monetary authorities to finance financial deficits through the creation of money, allowing governments to increment spending or cut taxation, without raising corresponding financing from the mortal sector, at that spot is a opportunity that coin financing could chop-chop undermine the stability of inflation expectations.”...

Common Space
The magic coin tree is real: Treasury confirms taxes are non needed to fund authorities spending

Ben Wray