Debt is control

Nick Macpherson, former Permanent Secretary to the Treasury has tweeted:

Writing off NHS trust debt only justifiable if correlated with high pressure areas, eg London. Otherwise an inefficient way of addressing resource constraints. Of course, it adds another 0.7% to national debt/national income ratio. This crisis is becoming expensive. #soundmoney

Which comment is, as many will detect, complete junk.

Firstly ‘#Soundmoney’ is sound just so long as government creates it – so there’s no problem there then. If government is writing it off that is absolutely inherent in its ability to create it in the first place….

In the end NHS’ supposed debt is a result of insufficient finance in the first place and as we are now realising, finance is created by government.

Debt is a control, long used by banks of course, but for the last 40 years or so governments, so often influenced by, and even made up of bankers, have used the same technique: debt gives the creditor control – specious though it always is.

The technique is to slice and dice what government itself is in charge of and then arrange the system so as to suggest that a previously unenvisioned debt to another pseudo governemtal agency means that you cannot have what you need.

That Hancock, not as a Treasury Minister, but Health Secretary, is writing off this debt, at a stroke, he has, I suggest, exposed the chirade of any debt at all.

Debt is, in short, a preferred weapon of control.


  1. Graham -

    Seems he has just realised it’s complete junk and has deleted the Tweet. And he was one of the economic “brains” in the Treasury, fortunately now retired. Although whether the Treasury has embraced the reality of Government created money is moot.

    As you say, Debt is control, and has been used as such for centuries. Another of Nick’s wise Tweets about NHS: “absent Treasury control, they would spend…spend…spend and, with no failure regime, the taxpayer would pick up the bill.” And now we see some of the results of “Treasury Control” in the current crisis.

    Do they repent their stupidity? Do they even recognise it?

  2. John Hope -

    Absolutely right. With any luck the Coronavirus will see off once and for all these Treasury nut jobs ‘ …. resource constraints ‘. Where did he get that from , the nutters at the Adam Smith Institute with their free market bullshit. It’s getting down to brass tacks now thank goodness.

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  5. Sean Danaher -

    the last few David McWilliams podcasts have been interesting. He had Yanis Varoufakis on last week for example and is very much in favour of helicopter money and printing vast quantities at present – seems a very MMT based approach.

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