@vincegomez.com
Writing on monetary systems, public finance, and why the gap between official economic narratives and lived reality keeps growing. Tracking where political choices get dressed up as natural constraints.
🌐 vincegomez.com
@vincegomez.comPresenting deficit reduction as an unavoidable necessity, rather than a political choice about who bears the cost of a weaker economy, obscures decisions that are actually up for democratic debate.
@vincegomez.comThe Times quotes Bailey stating market "doubt" directly forces yields and "tightens monetary and financial conditions," implying markets dictate fiscal space.
@vincegomez.comThe FT attributes rising interest costs to "higher interest rates" without noting the BoE sets the policy rate.
@vincegomez.comExpect plenty more failing grade E/F commentary in the run up to the Budget like we have seen in the FT and The Times this week. 🧵
@vincegomez.comThe letter: www.theguardian.com/business/202...
And if you'd rather watch than read, the whole cycle (the vote, the issue, the tax, the gilt) in one film:
vincegomez.com/how-money-wo...
@vincegomez.comBefore Healey's budget: my letter in the Guardian on the household myth. Parliament votes, the Treasury instructs the Bank, the Bank credits accounts. Taxes come after. And the "black hole"? Every pound the government "borrows" ends up as someone's savings. No hole required.
@vincegomez.comI don't know his thoughts on MMT. Elliot does understand the mechanism though. As the video shows, Alan Greenspan also understood the mechanics and I'm pretty sure he wasn't an MMT'er! Our monetary system is governed by laws and conventions, not economics. We need to start there.
@vincegomez.comElliott's column, well worth a read:
www.theguardian.com/commentisfre...
@vincegomez.comElliott ends on Keynes. So do the films: "Anything we can actually do we can afford." The question is never "can we afford it?" It's "do we have the people and resources to do it?"
@vincegomez.com"But the markets will take fright." Tested against the 2016 referendum: sterling fell 16% at its worst; inflation peaked at 3.1%. In 2022, with no political shock, it hit 11.1%. A number to watch, not a reason to do nothing.
@vincegomez.com"Black holes" are measured against the fiscal rules. Since 1997 Britain has set itself ten sets of them and scrapped nine: a policy the Treasury writes and rewrites, not a law of nature.
The second film reads the payment chain out of the Act:
vincegomez.com/how-money-wo...
@vincegomez.comA household uses pounds. The government issues them. It can't run out of pounds. It can run out of nurses, builders and engineers, and spending past what they can supply brings inflation. That's the real limit.
@vincegomez.com"There is no such thing as the nation's credit card." – Larry Elliott in the Guardian last week.
Here's the mechanism behind that, from the Acts, the Treasury's accounts and the Bank of England, in a 12-minute film 🧵
@vincegomez.comSix weeks separate Andy Burnham's pledge to rewire the state from his declaration that he leads "a government grounded in fiscal responsibility". The captain changed; the course did not.
#UKPolitics #UKEconomy #PublicFinance
https://vincegomez.com/articles/changing-captain-or-changing-course/
@vincegomez.com“Take economic planning away from the Treasury. They know nothing about it.” Aneurin Bevan, 1951. Seventy-five years later, this has aged remarkably well.
