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August 03, 2015

Comments

Bob

"Government taxing and spending does not create and destroy deposits. That does not happen in the process. It transfers deposits from tax payers to the recipients of government spending."
But can you not see that it creates deposits for recipients and destroys taxpayer's deposits? You can call this a "transfer."
Can you at least try to understand the MMT view, squinting and through rose tinted glasses?

Dinero

You give to much special status to the government in your comment.

Any one who takes out a bank loan has access to a money printer.

If the BoE bank rate is below the interbank rate then the BoE will lend the reserves to the bank in the form of notes on request and they will be printed and then delivered via the bank to the borrower.


Bob

"Any one who takes out a bank loan has access to a money printer."
Indeed, but you have to keep up with the payments. So yes, but not in the same way.
MMTers would reform the banking system:
https://www.3spoken.co.uk/2013/05/making-banks-work.html?m=1

Dinero

You give too much special status to the government in your comment.

Anyone taking out a bank loan has access to a printing press. If the interbank rate is higher than the BoE rate, then the BoE will lend the bank the reserves, in the form of notes if requested, which will then be printed and then subsequently delivered via the bank to the borrower.

As a side note - Some government bodies have overdrafts with banks, but they are tiny compared to the main body of government spending.

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