Bankers Bonus Cap.

No, this would be economic suicide on behalf of the central bank that prints the money as it would indicate the government cannot finance itself any other way (and so is printing money).

It is being released into the economy through a multiplier effect increasing overall money supply.

That money goes to a builder who spends it in the real economy. Some goes on materials whereby the owner spends in the real economy. Some goes on electricians who then spend it in the real economy and so on.

So eventually, it would cause inflation and the government can't do this every time it wants to finance a project otherwise inflation would be out of control.

It's better to borrow money from investors with surplus capital like high net worth individuals, pension funds, hedge funds etc (by issuing bonds) and investing it as this is cheap, effective and causes zero inflation (and allows pension funds to make a return).

To be clear, the investors get the principal and the interest payments - the bank takes a small fee for issuing the bonds (debt securities) across financial markets.

Edit: if you kept the money and spent it waiting for it to return to respend that would not work either as the maturity you would have to wait for that return would be too long. Also, when it was spent on the hospital it will land in a bank eventually and then it becomes subject to the deposit multiplier effect (where banks increase the money/credit supply when they extend loans through fractional reserve banking).

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Yet our hospitals continue to run just fine.

HAHAHAHA!! That's the best thing I've heard all day. You really had me going there! Are you kidding me?! Have you not seen the massive spikes in A&E departments missing their targets, the droves of hospitals failing CQC inspections, the huge waiting lists for psychological therapy, the chronic understaffing on wards leading to crisis after crisis in quality of care (e.g. Mid Staffs). You've got your head in the sand mate, the NHS is falling apart around our ears and your screaming 'rubbish' whilst Rome burns.

The shift from mercantile system of economics to the more modern day system means banks are as integrated into society as much as agriculture.

I'm far from a supporter of centralised government. I's rather government involvement be cut back in day to say life.

Not anymore anyway.. although, they still make more pa than the average worker. Base salaries are ~£30-40k (not including bonuses).

What do you think happens when people take mortgages? The money supply increases, banks don't actually own that money they have the freedom to create money out of thin air, which is why the system collapsed in 2008 banks don't lend money they actually have. So the UK is borrowing money from banks that they create out of thin air when we could just skip the middleman and do it ourselves? This is how we know our government is run and owned by the banks.

Yes, I know how the banking system works dude, haha. Technically, they don't create it completely out of thin air, they actually have to have something to lend primarily and then this multiplies the credit supply as it filters through the economy through various banks. The central bank can control this through a reserve requirement.

I don't see how that supports your point though. See my previous post as to why that would be economic suicide if the government/central bank started printing money to finance projects.

Commercial banks are allowed to operate through a fractional reserve system as it helps the economy grow faster and allows credit to be more easily available.

This isn't the case for the government printing money to finance projects causing inflation when it can just borrow the money at practically zero interest over the long-term.

You cannot print billions of pounds every time you want to finance something - the first investment would take so long before you saw a return that you would have to keep printing money all the time.

This would cause the economic system to dysfunction as those in the economy with capital surpluses would not be able to invest meaning money would just be sitting around all the time - and not being put to an efficient use.

The economy would stop functioning because everyone in the economy relies on the government to print money (that people are sitting on already) to finance any problems.

For example, most people would be left with no pension as pension funds invest heavily in government debt generating a return to pay for people's pensions. In your world, this would collapse as the pension would be worthless due to excess inflation having generated zero return over fifty years.

But I guess your solution to that would be for the government to print more money to pay for everyone's pension? Causing mass inflation meaning the government just never stops printing money to keep up with inflation. It just wouldn't work.

The UK government does not borrow money from commercial banks that create money out of thin air.

The UK government borrows money through investment banks, from investors which investment banks assist with by issuing financial instruments such as bonds (debt securities) across financial markets.

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You make it sound like i was intending to do it multiple times this would be a one off thing simply to end the reliance on borrowing money to pay for things we should really be able to pay for. To not do this would be stupid why waste money paying interest when we don't have to?

Because raising capital on markets is the quickest, cheapest and easiest way to invest in large projects which doesn't have dire economic consequences. You can't just go round printing money to finance stuff, because then the existing debt gets devalued.

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NHS isn;t a one off 'project' the NHS etc are things we pay for every year.

Exactly - so you can't print money to do everything on it all the time.

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You clearly don't understand what i am saying, so you are indicating that currently the government is unable to hold enough capital pay for stuff it has to borrow EVERY time it has to pay for something. This makes no sense as we only have a deficit of £150billion a year we still have another £500 billion a year or so of spending that is covered by our taxes.

I assumed you were saying our cash flow was so bad that we can't pay for anything with money we always borrow then pay it back when our taxes come in. So obviously the response to cash flow problems is to keep a large sum of money in reserve to end any cash flow problems hence print money.

Biggest bunch of lies i've heard all day.

You clearly don't understand what i am saying, so you are indicating that currently the government is unable to hold enough capital pay for stuff it has to borrow EVERY time it has to pay for something. This makes no sense as we only have a deficit of £150billion a year we still have another £500 billion a year or so of spending that is covered by our taxes.

I assumed you were saying our cash flow was so bad that we can't pay for anything with money we always borrow then pay it back when our taxes come in. So obviously the response to cash flow problems is to keep a large sum of money in reserve to end any cash flow problems hence print money.

Don't let facts get in the way of a good rant right? You might want to spend a day in a hospital, and speak to the staff. Whilst you're at it, have a look at the recent CQC inspections and Francis report. I have, as it's my job to. I've been working in the NHS for nearly a decade, you have no clue what you're talking about and accusing people of lies who, most likely, are more experienced than you. Typical, blinded by ideology thinking; the kind which this government specialises in.

I know plenty of people that work in hospitals, I am living with 3 medical students next year, my sister was doing midwifery for 2 years (before she randomly dropped out..), I know lots of nurses never have i heard about any of these so called problems you insist exist.

Because they probably know nothing about economics and the way the world actually works. They may learn the practical skills to be a doctor but under the UK market construct, they don't finance themselves. Ask auditors, economists and bankers as they are probably in a better position to give you this sort of information.

I always thought you got a bonus based on performance.

Given they managed to stuff up the business, why should they be rewarded for a cockup?

Because while the bank overall may not have done well that does not mean individuals which performed exceptionally should not be rewarded at market rate.

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