The Conservative Party

[Brewster's millions]

Strange that we could print as much money as we wanted (Quantitive Easing) after the global financial crash to bail out the bankers but now when its 'public services' at risk ... we are 'maxing out' the credit card.

From a fiscal perspective, QE doesn’t print money, it just swaps one form of government liabilities for another. This helps reduce borrowing costs when rates are super low but it wouldn’t help now I’m afraid.

 

[The Light Was Yellow Sir]

Could you explain what they could do, or point towards an explanation of the alternative?

I assume the credit card max argument is "we can't borrow more" as the debt interest would just be higher.

The government has no credit card, it doesn’t have a credit limit and it can, literally, create money out of thin air to pay its bills.
The national debt is just money that the government guarantees to someone who is, therefore, saving. It effectively supplies the money we all use to buy stuff and, if it suited the government, could be taxed out of existence.

 

[bluethrunthru]

Today programme interview with Hunt: "they're calling you the fiscal drag queen".

He interviews well

 

[SkyBlueFlux]

Once they started using the ‘credit card is maxed out‘ analogy, there’s absolutely no point to them. If Reeves, Starmer and the like don’t understand about national debt in a country that has a ‘fiat currency’ then they’ll be just as useless, I'm afraid.
They won’t tax the rich, they won’t spend on public services, they won’t invest in infrastructure, they won’t invest in local councils and they won’t invest in the NHS and/or a care service.
If people want a Tory government they might as well vote for one, not get one by the back door...

I’ll probably vote for Labour but they are losing me big time with this absolute shite about maxing the credit card. Untold damage has been done to this country and its understanding of how things work by politicians inaccurately comparing macroeconomics to household finances. It’s not just some catchy campaign slogan it’s fucking disinformation. If you think the debt burden is high and borrowing more in a high interest rate environment will erode our ability to service other parts of the budget then SAY THAT. Speak to the electorate as if they were adults for a change.

I was fucked off when the Tories talked about it like this and I’m equally fucked off by Labour doing it.

 

[The Light Was Yellow Sir]

I thought Labour’s response to what was essentially a very minor tweak to fiscal policy was unimpressive, lacked imagination and was essentially bereft of any genuine insight.

Unfortunately for the very many lefty types on here, I’m afraid that Liz Truss and the fallout that followed has done the ultimate number on you all, and the scope for a party of any persuasion to do anything radical on fiscal policy over probably the next couple of Parliaments is now essentially nought. Falling bank rate will offer up a bit of wiggle room - that could come before the election - but that will quickly be swallowed up by the NHS in all likelihood.

The role of the OBR has been made sacrosanct - Labour has already committed to legislate to ensure this - and the OBR’s world view isn’t going to change any time soon. Radical policy change is off the agenda and a series of over-hyped minor tweaks is all you’re going to get regardless of who is in power.

The orthodoxy of the very, very rich is now massively ingrained into uk politics and shows no signs of shifting with neither of the 2 main parties seemingly having a clue about challenging this myopic view.

 

[blueparrot]

Once they started using the ‘credit card is maxed out‘ analogy, there’s absolutely no point to them. If Reeves, Starmer and the like don’t understand about national debt in a country that has a ‘fiat currency’ then they’ll be just as useless, I'm afraid.
They won’t tax the rich, they won’t spend on public services, they won’t invest in infrastructure, they won’t invest in local councils and they won’t invest in the NHS and/or a care service.
If people want a Tory government they might as well vote for one, not get one by the back door...

Labour might not be the Labour you want but to say Labour are anything close to this tory party is nonsense. They are miles apart and a Lbour government of any sort would be far far better than this tory party.

 

[bluethrunthru]

 

[Phil1]

Labour might not be the Labour you want but to say Labour are anything close to this tory party is nonsense. They are miles apart and a Lbour government of any sort would be far far better than this tory party.

It certainly seems odd that people are faltering when it comes to voting Labour.
Like the last 14 years of awful government that’s dripping with corruption and politicians who are as inept as we’ve ever seen, didn’t happen.
Labour will be left without a pot to piss in when they take charge, I’m not sure what people are expecting them to do.

 

[Lowtower]

Like, just look at that, its not fucking normal is it? The way he acts and speaks, like the most condescending tone you will ever hear, out of touch with any other normal human.

Not saying that the Starmer-trons are much better, but at least there's a couple of normal ones knocking about in the Labour Party*

*Still not voting for them though after all thats happened since 2019.

 

[SkyBlueFlux]

Strange that we could print as much money as we wanted (Quantitive Easing) after the global financial crash to bail out the bankers but now when its 'public services' at risk ... we are 'maxing out' the credit card.

As Brewster highlighted QE isn’t actually printing money. It’s creating a “digital pool” for repurchasing of financial instruments which pushes up their demand and injects liquidity into the system. The idea is that this then generates economic activity in the country at large because this liquidity is used to stimulate greater rates of lending. This is somewhat inflationary and could cause asset prices to bubble, but the inflationary impact is managed by the fact that money only ever enters the every day economy through lending and investment. Creating a similar pool that injects that liquidity straight into the consumer economy directly as cash to pay for services would be highly inflationary and is how you end up in Zimbabwe.

On borrowing - at risk of being overly simplistic, there’s “good borrowing” and “bad borrowing”. Liz Truss is a prime example of bad borrowing, hers was netted off against tax cuts. That is basically borrowing to service the every day running costs of the country and that spooks the markets because it is borrowing with no potential of a return. The Tories borrowing over 14 years has generally been bad because it’s been caused by really tepid economic growth from underinvestment and lack of productivity. It’s a gradual creep of underperformance.

Borrowing is fine as long as the borrowing you are doing leads to some kind of improvement in the underlying economics and generates a return. Investing in infrastructure is one example - say it costs £XBn to build a train track but that could improve the economics by £YBn. If Y>X, then that’s good borrowing. Labour’s task is to borrow in a smart way to build the economy and create the headroom that allows them to put further investment into every day services. This is very difficult to do in our current position and I don’t envy them.

But as you can see it’s all a bit more complex than some absolute shite about a credit card being maxed.