The Tax Justice’s Network ran a blog on Thursday answering the journalists’ typical question (drawing, as usual, on journalistic domestic household experience) about additional government expenditure: “How are you going to pay for it?”
Long ago I tried to persuade my MP, who sits – I should now say used to sit – on the Health Select Committee (all of whose members were concerned at the mounting lack of resources being provided for the NHS) that he should suggest Quantitative Easing for the NHS. He didn’t, worse luck.
But if he had, I think it would have been a pretty easy ride. It might go something like this.
Journalist: Where will the money come from to pay for these extra resources for the NHS?
Response: Quantitative Easing.
Journalist: But isn’t that just for banks?
Response: Who said that?
It was provided as it was regarded as essential to the country’s survival. So it is not any different for the NHS.
J: How much do you need?
R: 4 or 5 billion.
J: That’s an awful lot.
R: Compared with the 435 billion for the banks it’s nothing.
J: When will it be paid back?
R: In the future possibly – but probably never.
J: How can you not pay it back?
R: in the same way as the banks have had ten times as much rolled over for the last 10 years. Which they’ve never paid back and are extremely unlikely to. And they are Private Companies.
J: But we cannot do it for everyone.
R: Well if you cannot do it for everyone we must ask the private banks to pay back our government’s money because we need some of it for the NHS.
J: But the banks are essential to our economy.
R: So are you saying the NHS is not essential to our economy?
J: Well not exactly. But it is a lot of money.
R: But just a tenth of what the banks are getting. And that is to provide extra care for everyone in the UK and not just for City financiers.
J: But the economy has to prosper in order to pay for the NHS.
R: Well we know it isn’t prospering if we can’t afford to pay for the NHS, so we need either some extra QE for the NHS or for the banks to pay back some of theirs – you’ve already admitted the economy isn’t prospering so clearly City QE isn’t working for the general economy. Use QE for the NHS and GDP would be bound to improve – by definition.
At the very least what could be called the QE response to the “How are you going to pay for it?” question should begin to frame a different discussion and shine a bright light towards the true origin of money.
But is John McDonnell – or indeed any politician – listening?