Another interesting letter from H M Treasury:
….the Treasury does not require the Bank to create money, neither does money created by the Bank of England need to be paid back via taxation. Rather, the Bank creates money to supply notes to the economy as well as creating money under its monetary and financial stability objectives. In all cases, the creation of money is backed by assets.
So we have some money created by the Bank of England which does not need to be paid back via taxation. Just simply for monetary and financial stability…
Presumably we could increase the ‘national debt’ purely on the basis of “money created by the Bank of England [which does not] need to be paid back via taxation.”
That is surely progress.
So that indicates, I suggest, that at least some money is not part of the supposed ‘national debt’.
That again is progress (if philosophically dubious!)
But backed by which assets?
What are these?
Unsurprisingly, I have asked for further clarification.
All in all this rather looks like an eighth reason why we never tax and spend...