Small bites: The Government always has money

You hear it all the time "How will they fund it?", "Where will they find the money?","The Government will be broke", "There's no magic money tree", "We can't spend our way out of this", and of course there was that silly prank letter the late Tories loved to trot out from Labour saying "There is no money."

It's absolute bullshit.

If you don't believe me, let me walk you through it real quick.

The Bank of England is how the Government issues money. They issue the money. They literally make the money, physical and digital. How can the people who literally make the money, run out of money? Does the Bank of England run out of that weird plastic they use instead of paper? Do they stop typing numbers into a machine?

Obviously not. There is aways money.

So if the government always has money, why do they even need taxes?

Compliance and inflation. Governments need you to owe them something so they have a social hold on most of us in order to essentially coerce us into doing work that produces stuff for the country and makes society work. Sounds kind of tin-foil-hatty but that has been the order of business since the establishment of monarchs of all flavours. The monarchs needed a way to keep nobles and others from competing with their influence. If commerce required the monarch's coin, the monarch controlled the flow of commerce.

The other thing you pay taxes for is to control inflation. There are a number of things that go into the bells and whistles of dealing with inflation, and taxing people more or less is one of them.

When you tax people more, they buy less and therefore slow down national productivity. If you tax them less they spend more and increase national productivity. Using this tactic, governments can slow down or speed up the rate of inflation. If you need proof, just look at what all that Pandemic spending by governments around the world did to global inflation.

There are other levers against inflation, but I'll save those for a future small bite.

Just remember: If they're telling you a lie about the government not having money, it's because they want to justify taking something away from you. The Government literally makes the money. It cannot run out. But you can.

So why are these lying bastards lying to us now? Austerity lets them take your money to pay themselves and their rich friends. By doing this, austerity transforms extremely low interest and favourable public government debt into precarious private personal debt than decreases your standards of living. It's a form of state robbery.

If our public services don't work, you have to spend your money on a private alternative, increasing your likelihood of using credit and building debt. Unsurprisingly, this hurts national spending and keeps inflation low. This helps already rich people borrow large sums very cheaply, and also gives them an advantage in the market for asset wealth. If the average person can't afford to buy a house or start a business, that's less competition for them. Meanwhile, they own most of the things you have to spend your money on, building their own wealth via your poverty and increasing debt. Debt which is also owned by the wealthiest.

Austerity is a form of wealth transfer from the poorest to the richest. This is the core at the heart of the cost of living crisis and why no establishment politician has been able to fix it. The inequality, and your decreasing living standards, are an intentional part of the design. They need you to believe they can run out of money so you don't ask where the money is actually going.

The government always has money. We need to make sure we're the ones they're using it for.