Why Can't the Government Create Money?

I don't want you to get the impression that I'm shouting at you. I'm merely emphasising so that no one repeats the overused, and false, examples of Germany and Zimbabwe. It simply impedes the entire discussion for no reason.

Also, I don't expect you to read the entire thread. Just my posts, at least.

Well the Post Office was until recently. As was Northern Rock - but that was a bit different, likewise RBS is majority pubically owned.

It is publically disclosed:
http://www.bankofengland.co.uk/publications/Pages/foi/disc091106.aspx

There is no long term intended solution for state ownership of banks of any type including central banks in this country.
Posted from TSR Mobile

Yes I beg your pardon, there has been some government ownership of banks during the 2008 bailout process as you mentioned e.g. UCAR intervention with Northern Rock taking over the bad bank and Virgin Money taking over the good bank, RBS state acquisitions, Fanny & Freddie in the States etc. etc. but this was just a temporary measure to stabilise a mess. There is no long term intended solution for state ownership of banks of any type including central banks in this country.




Posted from TSR Mobile

The Post Office wasn't part of the bailout process.

As per my link, the BoE is publically owned and has been since 1948.
http://www.bankofengland.co.uk/publications/Pages/foi/disc091106.aspx

Please see this Freedom of Information request:

https://www.whatdotheyknow.com/request/28738/response/74019/attach/2/D.pdf







Posted from TSR Mobile

Actually, you are deeply confused.

A) I am aware. Which is why the Sovereign Money proposal can work.
B) The government levies taxes because the public sector is funded with debt which must be paid back with interest by the taxpayer. To whom? The private banks. If the government created money free of debt, what need would there be for the income tax, or any of the other forms of taxes? The government would simply distribute a small tax levy to regulate aggregate demand, or through other technical methods.

Question: why does the government have to borrow in the first place? What is the reason for why the government (via the central bank) can't create money in line with inflation?

Stop acting butthurt. You asked a question where you stated the Bank of England is privatized organisation..

Thats says BOEN is a wholey owned subsidary of the Bank, as such, I don't see how you think BOEN owns the bank...

No where in this thread did I claim that the Bank of England is a private institution, I stated the exact opposite.



I find it hard to understand how you think a mere assertion has any explanatory power. Are you going to admit ignorance about the debt-free sovereign money proposal and make meaningful enquiries? Or are you going to make blanket assertions without making any effort to explain what you mean?

It is apparent that most people are completely oblivious to the fact that all money in the economy is debt.

My mum gives me a five pound note.

Where is the debt and when/how is it paid back?

Are you going to stop using phrases like 'explanatory power' 'meaningful enquries' you're obviously trying too hard to sound clever.

Economics is a religion with equations. Perhaps you should pay attention to the following that I've already repeated several times: money can be created in line with inflation rates.
You've been attacking an argument I haven't even made. A straw man.

What is the qualitative difference between the private banks creating money and the government creating money?

The intuitive answer would be that the nation is not indebted with the latter at the helm of money creation.

I may be understating it here but I thought it was simply so the government couldn't just do it out of political self interest (ie making people feel richer before an election) rather than out of what the economy needs. In the UK and US especially, I wouldn't put it past the governments to do things simply for their party's power and not for the good of the country. On top of this, private(ish) firms like the BoE and banks in general would try to do what's most efficient and what they genuinely believe would have the most positive effect in order to profit maximise.

Posted from TSR Mobile

Not sure if someone has already said this before but anyway.

1. Read a £10 note, it states that the queen owes the bearer the sum of £10 worth of gold, this is because in the UK money is regulated by the amount of gold held by the bank of england.
2. The reason we do this is to regulate and control economic changes.
3. If the government were to create more money than we have gold it would throw the whole system off.
4. If we pump more money into the country it will cause inflation rapidly causing an economic crash (Prices would go up faster than the inflation of peoples pay, therefore people would start to struggle to survive which would also cause small businesses that sell things at higher prices to go out of business as no one would use them, the, major companies would raise there prices as they wouldn't have the competition).
5.Even if number 4 was not to happen that fast and people pay caught up, the whole issue would start again as everyone would have more money but everything would cost more and thus money loses it's value.

Money in the UK is regulated by gold to avoid economic hardship that comes with inflation and we just pass around IOU notes from the queen.

Id like you to go and try get the gold you supposedly think your owed.
The vaults are empty Gordon sold Gold on the low.
Its not backed by anything