At Long Last the Government Can Borrow Straight From the Bank of England – As Modern Monetary Theory Has Always Suggested It Should

Yves here. Even thought both Alan Greenspan and Ben Bernanke ‘fessed up that the Fed can create money out of thin air, and similarly, any currency issuing state can take advantage of that capacity, modern monetary theory has been treated like a taboo, and then more recently, voodoo. But now that governments are in “break glass” mode, MMT is being demonstrated to be operationally valid. as the UK is demonstrating. Nothing like a crisis to force officials to use powers they always had.

By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an “anti-poverty campaigner and tax expert”. He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics. He is a member of the Progressive Economy Forum. Originally published at Tax Research UK

In today’s FT Alphaville was this pure gem:

Hidden in last Thursday’s announcement from the Bank of England that it intends to buy another £200bn-worth of mostly government bonds was this line:

The MPC will keep under review the case for participating in the primary market.

It might sound like dull techno-speak, but the mere possibility of the Old Lady of Threadneedle Street buying bonds directly from the government (i.e., in the primary market) is a big deal.

Since gaining independence, central banks have liked to see themselves as unsullied by politicians’ whims. While the clear distinction between monetary policy and government spending blurred in the aftermath of the financial crisis, until now central banks tried to keep their distance by only buying government bonds in secondary markets – that is, from other investors – as opposed to directly from the state.

I am most annoyed that I missed this, but am delighted that the FT did not.

What, in effect, this means is that the government need no longer go through the charade of quantitative easing if it wants to use the ability of the Bank of England to create money to fund its activities in keeping the country afloat. Instead, what this means can happen is that the Treasury can now create a bond whenever it wishes and the Bank of England may buy it directly from it, without ever involving private banks. In effect, then, the Treasury can now run an overdraft at the Bank of England (even if it is wrapped up in a bond arrangement) which is exactly what is required at this point in time. It also means that private banks need no longer profit from this arrangement, which they have done to date, quite unreasonably.

In effect this means is that the Bank of England has accepted that modern monetary theory works exactly as people like me have been saying for some time. As this note suggests, the government can always spend whatever it wishes simply by deciding to do so. And as we have always said, it can do so because it has the power to instruct its central-bank to fund any sum that it wishes to spend. And tax need not ever be involved in this process.

We do, of course, know that in normal times tax will be a part of this equation, but simply for the purpose of reining in inflation, as the same FT article notes, and not to fund the spending. Now this fact is being explicitly acknowledged.

And the good news is that now this has been done the objection to mechanisms such as green quantitative easing, which were always designed to use this process, have fallen away forever. Coronavirus has changed everything, and this time for the better.

Print Friendly, PDF & Email


  1. Mike Riddell

    It’s a step in the right direction and what will follow is a community currency that will be earned into existence for contribution to the common good, that will be able to pay down debts that are ‘dollar denominated’.

    We need to get rid of the debt burden, once and for all.

    1. Susan the other

      How very nice; for the US to admit to this “earning into existence” it will take some time; we’re well versed in “spending into existence” when it comes to the MIC and other stuff – but not for the general population. So the phrase “earning into existence” is like pure music. We might be close to this, if we can just get rid of our tone deaf congress members.

  2. The Rev Kev

    If the government bypasses private banks, would this imply that this would put a crimp on the practice of fractional banking? If the government can fund itself using MMT principles, then banks could only use customer deposits for this practice then and not count on a stream of money from the government.

    1. notabanktoadie

      If the government can fund itself using MMT principles, then banks could only use customer deposits for this practice then and not count on a stream of money from the government. Rev Kev

      No, because the non-bank private sector may not use fiat in account form but instead must use private bank deposits. So government must still work through private banks and that’s an outrage.

    2. vlade

      Fractional banking doesn’t exist. Even in the times of specie it was more of a myth where the specie served as a reassurance to the public rather than real limit on the banks.

        1. Susan the other

          Is it reasonable to assume that Public Banking (MMT) can quickly reduce the value of money as a medium to store value but still keep and allow to maintain the value of money as a medium of exchange? Stabilizing economies and societies without crazy vast amounts of private wealth at all?

          1. notabanktoadie

            Is it reasonable to assume that Public Banking (MMT) … Susan the other

            Public banking is NOT what MMT proposes but INCREASED privileges for private banks.

            can quickly reduce the value of money as a medium to store value but still keep and allow to maintain the value of money as a medium of exchange? ibid

            Sure, negative interest on their fiat and negative yields on other inherently risk-free debt of monetary sovereigns. Then the rule is spend, lend or invest your fiat since risk-free hoarding of it is penalized.

            That said, individual citizens should be exempted from negative interest up to a reasonable account limit since SOME risk-free savings are legitimate.

      1. notabanktoadie

        Without implicit* and explicit** government privileges for the banks, they dang well would be reserve constrained and rightly so.

        But who wants an ethical banking system?

        * e.g. Only depository institutions in the private sector may use fiat in account form. This makes runs on the entire usury cartel impractical.

        ** e.g. government guarantees of private, including privately created, bank deposits.

    3. Edr

      The government money printing presses and the bank loan money printing presses, both have created inflation, inflation of the type that has made housing unaffordable…
      Check median salary against median home prices, at least where I live.

      Didn’t they take housing out of the inflation indexes specifically to hide that ?????

      Would really like to read a clarification about that.

      Also the dollar is the global reserve currency so a lot of dollars parked offshore. This relieves some inflationary pressure that would not exist if dollar becomes globally perceived as not a good hedge because not a manufacturer and no stable middle class. What is the effect of loosing that status, due to so many factors?

      1. John Zelnicker

        March 24, 2020 at 8:02 am

        “The government money printing presses and the bank loan money printing presses, both have created inflation, inflation of the type that has made housing unaffordable…”

        It’s not the “money printing” that has inflated the housing market.

        It’s the Fed keeping interest rates so low in order to support the finance sector.

        In the housing market, the effect is to allow banks to lend ever larger sums on any given piece of property, as long as it can be legitimately appraised at an appropriate price.

  3. skookum red

    As I recall, the technical staff at Bank of England knew MMT and how it worked as far back as 2014 when the Bank published a paper validating that the money supply was mostly created by the commercial banks and when that proved inadequate in various situations, the Bank could create more money with QE.
    The research paper didn’t use the term MMT, but most of us who advocated MMT at the time took notice when the Bank of England published this paper.

    1. Clive

      Yes, “taxes fund spending”, “the nation’s credit card”, “how will we pay for it?”

      — an entire political lexicon, now destined to gather dust on the shelf, alongside the concepts of the humors in medicine, the “crowd poison” theory of the composition of air, and creationism thinking the earth is 10,000 years old.

      1. vlade

        Of course no-one rational thinks the earth is 10,000 years old. Every sensible person knows it’s at most 7,000 years old.

            1. Off The Street

              Numbers on green-and-white bar paper from a dot matrix printer stand as the pinnacle of truth, not so much on the beauty front unless you like that sort of thing. /s

            2. Synoia

              Usher got his numbers from a close reading of the Bible. There is nothing missing from his calculations, but much mything.

          1. Steve Ruis

            I tend to favor the late Bishop’s estimate (one of very many, none of which agree, btw) as it means that the Earth and I share a birthday!

  4. Sound of the Suburbs

    Suddenly they have to spend, and the myth is exposed.
    It happened during WW2, but they somehow manage to hide everything that was learned before and we have to find it out again.
    What did they know in the 1940s?
    In the paper from 1943 you can see …..
    They knew Government debt and deficits weren’t a problem as they had seen the massive Government debt and deficits of WW2.
    They knew full employment was feasible as they had seen it in WW2.
    After WW2 Governments aimed to create full employment as policymakers knew it could be done and actually maximised wealth creation in the economy.
    Why don’t the business community like it?
    Really it’s just about control and they want to be in control, you can read the 1943 paper for more details.

    In 1943, Kalecki even foresaw the problems that full employment would bring.
    But, at that time, policymakers were only too aware of the problems unemployment and economic hardship had brought in the 1930s.
    These were the problems they were looking to solve.
    The problems of full employment wouldn’t materialise until the 1970s.

    1. Synoia

      The problems of “full employment in the 70s”. were the cut in spending from the ending of the Vietnam war, and the tripling of oil prices,

      Was there full employment? I don’t recall that being written anywhere, and at that point in my life I read newspapers, Time and The economist regularly, and did not watch TV or use the internet.

      1. Susan the other

        We (US) had big time stagflation in the 70s as we detoxed from Vietnam. Reagan’s Treasury (this from Paul Craig Roberts), starting in the 80s set out to do something to end inflation – they decided on supply side economics, known now as trickle down. There’s not much evidence that it worked because simultaneously there was crazy deregulation and there were lucrative opportunities for corporate raiding and crushing labor by outsourcing nearly all manufacturing. Unemployment was entrenched and it lost George Bush the presidency. That honor went to Bill Clinton – “It’s the economy stupid.” Clinton’s method was to bomb Serbia and pour money into the economy – which promptly crashed in 2000. Nothing was working. Not even the geniuses at LTC could skim a profit from hapless third world countries overrun with dollars. What’s a country to do?? Enter little George. same old same old.

        1. Ian Ollmann

          The stagflation ended when Paul Volcker raised the prime rate to something like 13%. A recession followed.

          Really all the same elements are at play, a surge in money supply due to change in how government created dollars (then coming off gold standard, now MMT), and a political class desperate to buy votes with full employment which provides incentive to push much more money into the markets, than may really be needed.

          We didn’t get inflation in the financial crisis because the bailouts mostly circulated amongst the ultra wealthy who don’t spend much of the extra money they get. This time around, we are talking about bailing out the little guy, who will spend it. And it’s a lot of money.

          There are a lot of great reasons to bail out ordinary people. I just think this time around I don’t think our leadership will do it in a responsible way. I don’t think it has the right priorities (e.g green infrastructure) and I think there is going to be a lot of cronyism involved. Eventually someone responsible will have to come in and soak the money back out of the economy, and that will be painful. So I’m holding onto my hat and will be looking to end my investment in dollars soon.

          This is the problem with MMT. It really relies on having an adult in the room to responsibly regulate the money supply. I don’t see our politicians serving this function or allowing the fed to either.

  5. vlade

    TBH, BoE I believe is quite on MMT (for a large, official institution) – I’d remind people that it had good and accesible explanation that it’s the banks who create money, not “printing presses” around GFC, and a number of high-level bank officials were clearly frustrated by the govt austerity measures at times of extremely low inflation.

    So I’m not surprised that they would be quite happy to run it.

    1. PlutoniumKun

      This, I think, is always the key thing which is very difficult for outsiders to judge on any issue like this. Its hardly a secret that many mid level technical staff in various central banks and regulatory bodies don’t share the views of their leadership (often the leaders themselves don’t buy what they are selling, but they didn’t get to their positions by contradicting powerful interests). You can often see the subtle signalling in various technical papers.

      If there is sufficient external momentum behind a new paradigm, it can be adopted with surprising speed if there is internal momentum within an organisation or establishment. We could well be hitting a point where all Central Banks will be saying in a year ‘oh, we’ve always believed in this, its just common sense!’ and they’ll grab the credit for rescuing the economy. Well, we can hope so. They only certainty is that if they do, they won’t be giving credit to the MMT community.

        1. PlutoniumKun

          Oh that’s very true of course, although I was never quite sure if they represented a real intellectual divide within the organisations or were the type of pet radical you often find in big organisations – the senior naysayer who is tolerated because their presence makes senior managers look open minded, but who is really sneered and laughed at behind their backs and quietly marginalised when it comes to making ‘real, grown up’ decisions.

          1. vlade

            King wanted Haldane to be the next governor after him. IIRC (Col Smithers may have better info). I also know that lots of BoE staff genuinely likes and respects Haldane.

            But don’t see into the politics there more than this.

        2. Off The Street

          Adair Turner has written a lot about debt matters, as shown in the linked search. I found him to be very informative, for instance in Between Debt and the Devil.

      1. pricklyone

        Might be a good time to put away that other old myth: Central Bank Independence.
        “Fed is a private bank”. Nope. At least in the US, created and killable by Congress, who can legislate changes as they will…
        “He who has the ability to destroy something, controls it”
        Mosler liked to say that Treasury doesn’t even have the Fed’s phone number. Not like they call to check before sending out checks…

    2. Susan the other

      So are the banks going to effectively be rationed now that the gov. is getting the money first, and the banks will have to finagle it in the secondary market?

  6. cripes

    Must maintain the illusion of scarcity or people might ask why the hell they DON’T HAVE ANY MONEY.

    And that, of course, would not be good for the people hoarding EVERYTHING.

    I suppose Caitlin is right in this instance, its the stories people are taught to believe, the narratives, that control them.

    So the trick, PlutoniumKun, is–with MMT–to “save” the economy for the wealthy without altering in any substantial way, the precarious employment, debt servitude and onerous price of essentials like housing and medical care for the mass.

    Work like this is why they are paid well, they earn it, unlike nurses and sanitation workers.

  7. skippy

    The Austrian, neoclassical and neo/new Keynesian converts is a sight to behold.

    I kid not as someone with thousands of hours wangling the lot over going on a few decades, dead set like the Red Sea parted and the only path to safety was everything they proselytized against since Hayek became a novelist.

    I do have a suggestion … everyone from the top of the ideological propaganda mill has to publicly denounce whatever barge of dreck they were payed to spew before getting any assistance as anti social parasites. Don’t want these sorts thinking they can resume business [tm] as usually post facto – too much rinse and repeat …

    1. Clive

      Excellent idea. Check the Twitter feeds of The Great And The Good as an eligibility criteria (they’d love that notion as they’ve been proffering eligibility checking on the rest of us since time immemorial). Anyone found to be denying how an economy can work like this can be denied the money which they’ve been claiming is clearly impossible to spend.

      1. skippy

        Ethical – intellectual rigor means testing … has a certain je ne sais quoi about it … does it not.

        1. notabanktoadie

          Not really in this case since we have well accepted guidelines such as equal protection under the law that rule out, for example, such things as:

          1) Needlessly expensive fiat, e.g. gold or gold backed fiat.
          2) Fiat creation for private interests such as banks and asset owners rather than an equal Citizen’s Dividend to replace all fiat creation beyond that created by deficit spending for the general welfare.
          3) A lender of last resort since this also constitutes fiat creation for private interests.
          4) Government guarantees of private bank deposits rather than inherently risk-free accounts for all (citizens, at least) at the Central Bank itself.
          5) The large* scale use of the Nation’s fiat, a public utility, for FREE (not to mention Interest on Reserves).
          6) Non-negative yields on other inherently risk-free debt of the monetary sovereign since those constitute welfare proportional to account balance as does Interest on Reserves.

          There’s some room for disagreement wrt, for example, how much individual citizens should be shielded from negative interest but those are political and practical details apart from what should be self-evident ethical imperatives. But if they are not self-evident to you, let’s hear your alternatives?

          *With an individual citizen exemption up to a reasonable account limit per the inherent right of a citizen to use his Nation’s fiat for free.

          1. notabanktoadie

            Oops! Thought you were replying to me, skippy.

            My bad for jumping to conclusions. Sorry.

          2. skippy

            No friend of AMI here[.]

            For that matter all businesses are government privileged.

            Corporations print their own money – its called equity.

            Free banking period is a bad base line.

            Nothing about endemic corruption in any of your calc – see Black.

            Nothing about the shadow sector that dwarfs institutional banking.

            I could go on …

            1. notabanktoadie

              Free banking period is a bad base line. skippy

              We’ve never had 100% private banks with 100% voluntary depositors, e.g. needlessly expensive fiat allowed private banks to dominate money creation.

              Nothing about endemic corruption in any of your calc – see Black. ibid

              And you think we should have an inherently corrupt system instead?

              Nothing about the shadow sector that dwarfs institutional banking. ibid

              And why should we care about shadow banks anymore than casinos in Las Vegas when non-gamblers can have inherently risk-free accounts at the Central Bank itself?

            2. rob

              You could go on spouting misinformation?
              You could go on mis -understanding the fact that the federal reserve act is the law written by congress for the banking houses to be able to create money, legally. Which IS NOT “the government”…. The government is forced by the federal reserve act to keep the banks “practices”,front and center… all the while making the debt these private money creators , create for themselves, is guaranteed “by the people..(and their government”. to be bestowed back upon the bankers.
              You could go on in the fantasy world you live in where MMT actually already exists…. and My guess is.. you will.
              Even in this article…. it says the bank of england’s practices here are ,”wrapped up in bond procedures”.
              as it would be in the united states. Where the federal reserve act doesn’t allow for “the government” to make money. It has to act through the intermediaries in the system. Those private corporations who get the free lunch.

              The reason the united states congress would have to pass a new law/set of laws to actually :
              1) Create money.(as it was granted power by the constitution ,before the federal reserve act) free of debt
              2) end money creation practices by private corporations/banks
              3) convert all federal reserve assets to be property of treasury.

              Is because the federal reserve act allows the banking industry to create money. The “government” is not the federal reserve. Just like any contractor OF the government…. ISN’T “THE” government.
              And corporations don’t create money by creating “equity”… they are creating something they deem to have value…. and that “supposed ” value is quantified in the terms of monetary value.
              Skippy… your logic is extremely lazy. And without fail, your errors in logic always seem to support your bias. at least you are consistent.

              1. Synoia

                Who “owns” the Federal Reserve Bank? The central one in DC?

                “The federal reserve act allows the banking industry to create money”

                Which is a delegation of police powers, or authority, by the government. It follows the Government ‘s authority is innate, and delegated, and the Federal Reserve a form of Government Agency.

                MMT regards the US Treasury and Federal reserve to be a singularity.

                1. rob

                  the 12 banks/branches of the federal reserve are owned by shares. ALL shares ARE owned by banking corporations. The NY fed is really “the head bank”…
                  The relationship is incestuous.
                  The federal reserve system wants to keep its monopoly… and all the banks out there like the practice of lending money that they don’t have…
                  so they have a community of interest in keeping things the way they are,
                  After a hundred years of non-stop wall street speculations fueled with money created by bankers…
                  right up to and including yesterday, today and tomorrow… how much more can someone say as to how well the system works…and WHO it works for.

      2. pricklyone

        The political types, as opposed to the “economics” types never even get that far.
        The argument is:
        “They are doubling the deficit, they will have to double taxes”
        “Even more than double, cause the interest on the debt”
        “Trump is lowering our taxes, YAY!” Uhhh…wait…
        Sorry to make it US- centric, I just don’t know the UK players well enough.

  8. xkeyscored

    And the good news is that now this has been done the objection to mechanisms such as green quantitative easing, which were always designed to use this process, have fallen away forever. Coronavirus has changed everything, and this time for the better.

    I couldn’t agree more. When, eventually, this virus crisis has gone away or died down, we’ll still be left with the climate and environmental crises to deal with. Not only are the objections to MMT-like monetary policy falling away, but we’re all waking up to the fact that resources can be deployed where they’re needed, regardless of the invisible hand. Future pleas to allow the god of the market to decide our fate will hopefully fall on deaf if not furious ears.

  9. Adam1

    Sadly Winston Churchill will likely be proven right again… Americans will always do the right thing– after exhausting all the alternatives.

  10. John

    In my brief and inglorious career teaching economics in the 1990s, it was and probably still is, gospel that monies loan by banks are created by the bank restrained only by the reserve requirement. The term MMT had not been invented and if it had I knew nothing of it.

    MMT makes perfect sense for a nation that controls its money supply (if that is the correct terminology) and when suddenly trillions appeared with the wave of a wand to do what the government wanted to do, it became undeniably clear. All the trips to the ‘fainting couch’ over the cost of Social security, Medicare, Medicaid and all the “social safety net” programs that offend the sensibilities of… of who? I do not know how to characterize them politely … are nothing more than ideology. Nothing more than a way to express distaste for those people who are not like them.

    Conclusion #1: If you want Medicare for All, you can have it. The argument is not about the cost, but about what do you do about all the rice bowls that must be smashed to realize it. That is a big job.
    Conclusion #2: Taxes exist to control inflation. That was the form they took during WW II and there is no reason they should not do so from now on.

    I realize I have restated what is obvious to many, but it has taken this crisis for it to smack me in the face, whack me up side the head, forcefully enough to finally understand. I would welcome correction if needed.

  11. Rodger Malcolm Mitchell

    Or, the MONETARILY SOVEREIGN government simply could issue and deposit a $100 trillion platinum coin and end all the borrowing nonsense. A MONETARILY SOVEREIGN government does not need to borrow its own sovereign currency.

    Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”
    Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
    St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e.,unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.

    Everyone knows this. The purpose of the pretense is to keep the middle- and lower-income groups down by preventing them from asking for more benefits.

    1. DanP

      Maybe we can be more specific:

      “The purpose of the pretense is to keep the middle- and lower-income groups down by preventing them from having what they need to flourish, any by using taxation to prevent them accumulating sufficient capital, thereby keeping them in the labour system”

  12. Pelham

    Why borrow from the central bank? Shouldn’t governments with their own currencies just print enough to keep their economies on an even keel? Then, when a crisis subsides, they could simply tax away the excess, if any, to keep inflation in check.

    This business of one institution borrowing from another institution that somehow keeps an account and conjures up money from nothing serves only to further obscure and mystify the workings of the financial system and continues to confuse and cruelly subjugate the public to the whims of a coven of unaccountable wizards.

    1. rob

      That is the mantra of MMT… to take something relatively simple… and obscure it with so much meaningless jargon that no one can penetrate their “doublespeak”.
      All of the real power a monetary sovereign COULD have… is there in the US if we abolished the federal reserve act.
      Skipping the middlemen who know of nothing other than wall street scams… for bankers and those who profit from money creation and enjoy first crack at the “cheapest” money… That is real “trickle down” economics

      112th congress HR 2990
      The NEED act ”
      A bill that was proposed almost a decade ago.. is STILL what we NEED.
      If anyone actually thinks MMT is a good idea… they ought to see the real version. A government that creates money.. and spends it “for the people”.. and prohibits bankers from creating money in the process of making themselves rich…
      We can’t have “real MMT” now… the Federal reserve act is in effect…
      bankers like w mosler are the hammer.. seeing everything as a nail…
      In the future we need to stop allowing wholesale misrepresentations of reality.

    2. Rodger Mitchell

      Yes, it’s an unnecessary process that dates back two centuries. Today, the actual purpose is what you said, “to further obscure and mystify the workings of the financial system and to confuse and cruelly subjugate the public to the whims of a coven of unaccountable wizards.”

      That is exactly the purpose. It has its basis in Gap Psychology.

  13. Synoia

    “The object of the bully is to lift himself by stepping on others.”

    From a description of Gap Theory.

    Seems to define Trump well. ‘You’re Fired.”

  14. HotFlash

    OK, so, just spitballing here; What is the govt decided to create a new currency, call ’em whackdoodles. Every US resident, man woman or child, gets W 1,000 (or some number) deposited to their postal or central bank account every month. Whackdoodles are legal tender for all debts, public and private, and backed by the full faith and credit of the US government, and are worth $1 USD. Concomittantly, the $ USD is no longer legal tender, although perhaps it can be exchanged among willing buyers and sellers. $USD can only be exchanged for whackdoodles at the rate of $1,000 per month by any human person (not corporations) and Old Dollar holdings are also taxed at 50% per annum (or some number), although the govt will purchase certain needed assets — housing stock, for instance, and apartment buildings — at 10 cents on the dollar, to be run as cooperative housing. Rents should be strictly controlled in any case.

    So, everybody can pay for rent, groceries, haircuts, and other normal living expenses, businesses can pay staff, in whackdoodles. Jillionaires can buy and sell bonds and yachts and paintings to each other in Old Dollars, if they choose — sales taxes apply — but their fortunes are largely quarantined from the real economy.

    This would constitute a basic income guarantee, not a job guarantee. I cannot think of any reason that anyone should have to perform a useless, socially destructive, environmentally unsound, or just plain awful job *at all*. Surely we need to mine less, ‘produce’ less, extort less and being jolted to that might be the silver lining in the pandemic. I also have found that working in a cooperative and voluntary way is very pleasant, and have observed that most people I know or know of find useful things to do without being forced (“work or starve”), some socially beneficial, some for personal pleasure, some both. And yes, there will be some grifters, but pro’ly nothing on the scale of Steve Mnuchin.

    Anyway, just doodling for now, and I can’t figure how foreign exchange would work, but maybe in the coming era, it won’t be needed. An old lady can dream.

  15. Michael K

    The authorities are instituting MMT without knowing it. Before anyone can seriously argue about “rolling the money presses”, much of the MMT program will have become a fait accompli. We can then move on to a job guarantee.

    Never let a good crisis go to waste.

    1. notabanktoadie

      We can then move on to a job guarantee. Michael K

      Disagree. While people have an inherent right to WORK for themselves*, working for others is a PRIVILEGE that should be earned. Working for others should also be entirely voluntary as far as having the resources to meet life’s essentials and even prosper if one should apply himself.

      So let’s enable all people to work for THEMSELVES (and for their families) and let government and the private sector hire the best people they can.

      *And that implies that all people should own land they may work (for food) and work on and that we have a just** finance system.

      **Including an equal Citizen’s Dividend to replace all fiat creation beyond that created by deficit spending for the general welfare.

      1. Adam Eran

        A typical neoliberal reply reminding us that people need to lift themselves up by their bootstraps. It ignores the fact that 90% of new businesses fail. So what do we do with those 90% of the self-employed who can’t make it…or are perhaps terrible gardeners on their land? Cattle prods? Incarcerations? Looks like we’ve been trying that already…and here we are…

        1. notabanktoadie

          Looks like we’ve been trying that already…and here we are… Adam Eran

          Really? Gee I must have missed out on my share of an equal Citizen’s Dividend to replace all fiat creation for special interests such as for the banks and asset owners. /sarc

          Try reading ALL of a comment before you think you know what it says, eh? Including the footnotes?

  16. Spatchcock

    The government has been able to borrow from the Bank of England for centuries using a facility known as the Ways and Means Account. This is still available contrary to the beliefs of some folk. It was used in the aftermath of 2008 and expect it will be called upon imminently….

Comments are closed.