The government has no money of its own?

The state has no source of money, other than the money people earn themselves. If the state wishes to spend more, it can only do so by borrowing your savings or taxing you more. It is no good thinking that someone else will pay – that ‘someone else’ is you. There is no such thing as public money; there is only taxpayers’ money.

So spake Margaret Thatcher – adding that it was a ‘fundamental truth’ – at the Blackpool Conservative Party Conference of 1983

She was wrong of course.

All money is the government’s. The UK government is the sole provider of all of ‘our’ money

What government doesn’t have any of is actually effort and labour – that, it has to hire in and it creates money for that purpose in order that the collective whole can benefit from the mutual and co-operative endeavours that are the result of all of us having to pay tax.

Now if Thatcher had said as she should have, that the government has actually got all the money but has no labour which it has to hire in, that would have been correct.

But the neoliberal financialisation of our society might have been stopped in its tracks.

The deification of her misunderstanding has been Conservative philosophy ever since and I’m pretty certain that subsequent Labour oppositions and indeed governments, were persuaded to believe much the same thing.

Sunak yesterday, delivered an appropriately influenced, complete mess and that, it seems to me, is a summary of why we are in such a shambles.

Comments

  1. Neil Wilson -

    Sunak is frustrating. We could move from Furlough to Full Employment tomorrow and solve the whole problem in one shot.

    PAYE needs to capture the bank account details of the employed – along with the hours worked on that PAYE scheme. That is then associated with an NI number and checked to make sure the addresses are UK based and tie up.

    We then top people up at the living wage up to 35 hours per week if they have an NI number that has been paid in the last year, but are not currently receiving sufficient money. Essentially we create a default PAYE scheme everybody is enrolled upon paid directly from the Ways and Means Account at the Bank of England.

    Get rid of class 2 and class 4 NI and require the self-employed to run a PAYE scheme and they can be brought into the scheme as well.

    Then anybody who is on the default PAYE scheme is added to the famous “volunteer list” as labour for government to use as it sees fit. A reserve army of workers.

    1. Peter May -

      Good ideas – although being put on the ‘volunteer list’ doesn’t sound very voluntary!

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