stooges of the Kremlin

Wings Over Scotland


The missing half of the equation

Posted on October 18, 2017 by

Readers will doubtless be startled to hear that today’s Scottish newspapers have taken a somewhat misleading approach to the facts on one of the day’s big stories.

Several of them report the findings of a commission looking into the idea of a Citizen’s (or Universal) Basic Income, a scheme which pays every adult in the country a fixed sum every year regardless of their own income, almost completely replacing the current benefits system.

(We’ll use Universal/UBI, to avoid confusion with the greedy-businessman trade body.)

The idea is that as well as reducing poverty, the administrative costs of social security are massively reduced, as is the problem of vulnerable people not taking up benefits because of the stigma often attached to them by the press.

The downside is that it’s generally more expensive. But have the Scottish press accurately reported the scale of that cost, or have they massively exaggerated it for shock value and to serve a right-wing agenda? Read on for a surprise!

The report does indeed find that a UBI could add £12.3bn to the current welfare bill. But that’s not the full story. Because UBI also removes the personal tax-free allowance (there being no need for it any more), it brings about a substantial increase in income tax receipts. And according to the report, the size of that increase is almost £9bn.

That reduces the real cost of UBI by more than 70% – from £12.3bn to just £3.6bn. Which is still a pretty large sum of money, but an awful lot more affordable than the papers want you to believe. (It’s a bit like trading your car in for £9000 at a dealer’s in order to buy one that costs £12,000 but then saying that the upgrade has cost you £12,000 rather than the true net outlay of £3000.)

It’s also progressive, with the poorest gaining proportionately by far the most:

UBI may well not be affordable for Scotland – at least while it remains part of the UK and doesn’t control its own spending. But it wouldn’t in any remotely meaningful sense cost £12bn, and the motives of anyone trying to tell you otherwise should be treated with the deepest suspicion.

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    202 to “The missing half of the equation”

    1. Brian Doonthetoon says:

      I think the biggest problem we have, in struggling for Scottish independence, is that a vast number of “the ordinary people” still think that what they see on TV news and in the newspapers is 100% true.

      That is what we’re struggling against.

    2. Capella says:

      With the saving on administrative costs – it might just be affordable. It is certainly desirable.

      As soon as I saw that £12 bn headline I wondered how long it would be before the Rev would debunk the hysteria. Tax the rich news barons then UBI is certainly affordable.

    3. Paula Rose says:

      UBI means that each person is free to take any work that comes their way without all the hassle of signing off or signing on – all this leads to greater economic activity, greater well-being and thereby saves money on health and related issues of poverty.

    4. Andy-B says:

      Who knows what progress policies Scotland could introduce, if it could only slip the ball and chain of Westminster.

      We can but dream.

    5. ronnie anderson says:

      @ Rev our cup’s over floweth with your output today, ah kin only pin wan post at ah time on F/B scot2.scot .

    6. frogesque says:

      How would this work for pensioners?

      At present, State pension payments are all over the place depending on contributions etc.

    7. ronnie anderson says:

      O/T .www.thenational.scot/news/15604946.Another__slap_in_the_face_for_the_Clyde__as_new_Type_31_frigates_WON_T_be_built_in_Scotland/

    8. Andy-B says:

      O/T apologies.

      The symbolic vote in the HoC to pause the roll out of UC.

      Result.

      In favour 299.

      Against 0.

      The majority of Tories abstained.

    9. Rock says:

      Brian Doonthetoon,

      “I think the biggest problem we have, in struggling for Scottish independence, is that a vast number of “the ordinary people” still think that what they see on TV news and in the newspapers is 100% true.

      That is what we’re struggling against.”

      Rock (2nd January 2015 – “The Ne’erday Game”):

      “Unfortunately, we have among us the most stupid people on the planet. Given the chance of 300 years, those who should have known better voted No.”

    10. ScottieDog says:

      Of course WEstminster could implement such a scheme tomorrow morning using its central bank.
      Instead of the £75BN created last year by the central bank as instructed by the treasury (even though it was acknowledged that it increase inequality) to inflate portfolios on the FTSE, a smaller amount could be given to each citizen.
      It could even be done as a one off – which is what Australia did in 2008 to avoid recession. It boosted demand. If you’re not into selling dog food, you realise that spending creates income and income over time yields more tax anyway. It worked.

    11. galamcennalath says:

      This seems to be Universal Basic Income Lite. Equates to about £3000 per adult.

      If you really want to dramatically reduce “the administrative costs of social security” you could increase the level of UBI much higher so it could completely replace the State Pension and most Benefits!

      The cost would be greater but I suspect if you did calculations as above on increased tax take and admin costs PLUS you had a more progressive income tax, it might cost less than you think.

      Now that would set Scotland on a different social path.

      Would lazy people simply not work? I reckon the vast majority of folk want to contribute to society, want to do something useful, want the dignity that comes with employment.

    12. Free Scotland says:

      There must surely be a relationship between the increased readership of Wings and the number of people who are abandoning the duplicitous dead-tree press.

    13. HandandShrimp says:

      No real surprise that the Daily Drivel prints rubbish like this but sad to see what was once a sane and balanced paper competing with the Excess in the useless stakes.

    14. Robert Graham says:

      Hell will freeze over before the media in Scotland give the SNP a fair deal , they are totally incapable of any kind of objective behaviour, everything they print , or present has to be examined because of previous disgusting disgraceful behaviour,

      The debate on universal credit is coming to an end with the Tory party MPs unduly silent it takes a certain type of psychopath with no empathy for anyone else in order to try and defend the indefensible but some of them have tried, callus b/trds every one .

    15. ScottieDog says:

      I have to say that in our current state with Scotland as a currency user (not a currency issuer, like Westminster) we have to box clever and I don’t think UBI is a realistic goal at the moment.

      Certainly by attracting investments preferably locally via regional investment banks we can encourage people to move their savings to invest in projects they can see benefiting themselves and the people around them. This is what the national investment bank will do but I believe we need that at a local level too. I would certainly move my savings to these projects (well depending on which party were running the council). There’s far more accountability in holding people’s investment in this manner.

      Other forms of investment have been used in the at the state level in America. Tax anticipation notices have been for years to help the state govt fund projects by getting an advance payment of taxes. Those who pay early benefit from a tax credit at a later date.

      Also Yanis Varoufakis proposed a hybrid currency for Greece in a similar manner to the above…
      http://www.yanisvaroufakis.eu/2014/02/15/bitcoin-a-flawed-currency-blueprint-with-a-potentially-useful-application-for-the-eurozone/

      Money raised in the above ways has to be used carefully to nurture long term jobs and growth which would in turn boost revenue.

      Bottom line is ‘broad shoulders’ equates to a currency, a central bank and the resources to back it up. This is why scotland as an independent country with its own floating currency has broader shoulders than England

    16. Brian Doonthetoon says:

      Hi Rock at 7:58 pm.

      You typed,

      “Rock (2nd January 2015 – “The Ne’erday Game”):

      “Unfortunately, we have among us the most stupid people on the planet. Given the chance of 300 years, those who should have known better voted No.””

      Rock, you are ignorant in that you conflate the two terms “ignorant” and “stupid”, displaying your lack of knowledge of the meaning of those two words.

      ??ignorant |?ign?r?nt|
      adjective
      lacking knowledge or awareness in general; uneducated or unsophisticated :

      stupid |?st(y)o?pid|
      adjective ( -pider, -pidest)
      lacking intelligence or common sense :

      I wouldn’t accuse you of stupidity but I will accuse you of ignorance.

    17. ScottieDog says:

      If you substitute the € with £ in the following link, this makes interesting reading…
      http://neweconomicperspectives.org/2013/12/exit-austerity-without-exiting-euro.html

    18. galamcennalath says:

      @Me at 8:00pm

      Total social security spending in Scotland is about £21billion. That’s after elderly care has been taken out, which is a separate issue.

      Most of that £21billion could be switched to a much higher UBI

      A bit more from general taxation and Benifits and State Pension could be absorbed into UBI.

      Paula Rose says:

      leads to greater economic activity, greater well-being and thereby saves money on health and related issues of poverty.

      Huge social benefits indeed. However, the economic kickback could make UBIMax possible.

    19. Paul says:

      I wonder how many Scotsman and Daily Express readers of today would/will benefit from UBI or similar ten years from now when their current job is lost post Brexit or is being carried out by a robot?

      These hateful rags hate their own readers the most!

    20. A survey last year by Dalia Research found that 68% of people across all 28 EU member states would `definitely or probably` vote in favour of some form of `universal basic income` granted to everyone, with no means test or requirement to work.

      Finland is trying it out, with many other countries round the world about to have trials in certain cities,

      the only political party in the world that seem to be against it are The Conservative and Unionist Party of The UK and their gimp like media gimps.

    21. Petra says:

      I don’t know what we’d do without you Stu. The only person who’s consistently, day in and day out, debunking MSM garbage. Scottish Media said to be the most biased in Europe, so that’s no mean feat. When this is all over I reckon we’ll be erecting a statue of you (not kidding) and having a crowdfunder to buy you a home here in Scotland. It’s the least we can do for you. Our “thanks.”

      This may come about sooner than you think if Dr Kirsty Hughes’, Director of the Scottish Centre for European Relations (and a former European Commission official) opinion is anything to go by (today’s National). She reckons that under the Tories either a “no deal” scenario or a hard Brexit is most likely …. “and that may lead to tough political choices for all political parties earlier rather than later in 2018. Those who have argued to keep Independence debates separate from Brexit may find that isn’t possible in the coming year.”

    22. Rock says:

      Brian Doonthetoon,

      “Rock, you are ignorant in that you conflate the two terms “ignorant” and “stupid”, displaying your lack of knowledge of the meaning of those two words.”

      In this age of the internet and W o S, only the most stupid people on earth prefer to remain ignorant.

      I am therefore correctly talking of the most stupid people being in Scotland, not the most ignorant.

      But I would admit that most of the people who vote for the unionists in Scotland are more selfish than stupid: the vast majorities of the middle classes, the British nationalist elderly and the English.

    23. heraldnomore says:

      Ah The Scotsman and the Express. You’d be astonished to find that they both had an honourable mention in the book I finished earlier this week; and did so on the tide of monumental progress for the SNP.

      Hamilton 1967 is James Mitchell’s account of the famous Winnie Ewing victory and the impact it had in taking us to where we are today. Accused of fanning the flames of nationalism back then were both those newspapers. I kid you not.

      It’s a grand wee read. Another gem from the same year was Ian Paisley at Hamilton Town Hall, 10,000 vying for the 1,500 seats, and described by the local rag (and still a rag) as “good-natured bigotry…”. I kid you not, again.

    24. Rock says:

      Petra,

      “She reckons that under the Tories either a “no deal” scenario or a hard Brexit is most likely …. “and that may lead to tough political choices for all political parties earlier rather than later in 2018. Those who have argued to keep Independence debates separate from Brexit may find that isn’t possible in the coming year.”

      Rock (28th June – “Slight reprise”):

      “The UK will have a “snap” Brexit while we are caught napping with no legislation in place for an independence referendum.”

    25. galamcennalath says:

      Talking of substantial sums of money. It can be relative. I see May has been told to get “realistic” and that “€20billion is peanuts”.

      The EU will want €60-€100, I’m sure.

      I have never ever believed the Tories could get this type of payment past the various English Nationalist elements. Imagine what the right wing press and UKIP would say!

    26. Paula Rose says:

      As the subject of the post is very interesting, I presume all folk interested in Independence and Scotland’s future will stay on topic.

    27. Rock says:

      Petra,

      “I don’t know what we’d do without you Stu. The only person who’s consistently, day in and day out, debunking MSM garbage.”

      Rock (5th February – “Truth With Ruth”):

      “The Rev. Stuart Campbell tirelessly exposes their lies day in day out.

      How many unionist lies has the “independence supporting” The National exposed in its two years or more of existence?

      Articles like these would be headline news every day in a genuine independence supporting newspaper.”

    28. Macart says:

      You have to admire their consistency. Probably not so much their honesty, empathy, professionalism or humanity, but top marks for consistency.

    29. Rock says:

      Paula Rose,

      “As the subject of the post is very interesting, I presume all folk interested in Independence and Scotland’s future will stay on topic.”

      I am 100% in favour Universal/UBI.

    30. ronnie anderson says:

      @ BDTT See you Sunday let PTC know . Sos for the PM Paula Rose i’ll try no to transgress again .

    31. stewartb says:

      Universal Basic Income, for various motives and with some differences in exact model, is gaining substantial traction as a policy in the USA, including from the ‘right’. See for example: http://www.sfchronicle.com/business/article/Why-universal-basic-income-is-gaining-support-11290211.php . (There is a libertarian agenda at play amongst some US advocates that I think we need to be wary of here.)

      Often it seems that the Scottish Conservatives and their British Nationalist allies simply want Scotland to remain unchanged, never to explore for potentially beneficial innovation. For a British Nationalist, Scotland should wait until change is imposed on us – done to us – by our imperial masters in Westminster.

    32. RogueCoder says:

      UBI not only helps to address inequality, but it provides at least a partial solution to coming employment challenges caused by “disruptive technology” (Artificial Intelligence and robotic automation being good examples) which will reduce the number of unskilled jobs in particular. Amazon is already rolling out warehouse automation and drone deliveries.

      It will also help to address (but not solve) the dire financial situation of our society’s undervalued carers who have to give up full-time work to care for loved ones.

      And there’s a larger question, one which the Tories will never admit; do we actually *need* to undertake paid work full-time? There are many issues which the free market economy is ill-equipped or unable to address. Community projects, care of the environment, and charitable causes are good examples.

      As others have pointed out here, it is unlikely Scot Gov will be able to implement UBI to its fullest potential until we get our independence and control over our own economic levers. But if even a fraction of the societal benefits can be demonstrated, it may increase support for indy as folk realise that there are far better ways of doing things than Westminster’s typically botched delivery.

    33. McDuff says:

      Rock 9pm
      Exactly.

    34. twathater says:

      Stu you are not playing fair , these rags are hardly having time to spout their heavy jackie baillie (pish) before you come along and demolish it

      These ars*wipe scribblers are spending copious amounts of time in researching their pish for you to come along and demolish it in a heartbeat its no fair next thing ye know they’l just flunk off in a huff an stoap writing their drivel ( are ye listening Davie tank top boy ) if only

    35. Brian Doonthetoon says:

      Hi ronnie anderson at 9:04 pm.

      You typed,
      “@ BDTT See you Sunday let PTC know . Sos for the PM Paula Rose i’ll try no to transgress again .”

      I wil make my presence known but Pete has a previous commitment to be in Galashiels on Sunday. Onnyhoo, I guess there will be quite a number of Wingers in Douglas on Sunday.

    36. Az says:

      Absolutely superb and straightforward debunking of yet more Metropolitan media lies. Hats off to you Stu!

      Another point about UBI, and following on from Paula Rose’s spot-on comment at 7.39pm, is that it frees up people to be far more entrepreneurial, because they have a certain security behind them.

      Remember how you wanted to open a small local café, or a healthy meal delivery service, or all those other moments when you thought “I could do this, and do it better”? Then you shrugged off the thought because of the exposure to insecurity, and the practicality of risking your capital… you didn’t open the café, you stayed in your unrewarding and unfulfilling job to keep the money rolling in.

      UBI is an economic game-changer, and strikes fear into the hearts of neo-liberals. If it does that, it must be good.

    37. Stoops says:

      UBI is a solution to poverty, and poverty demeans us all.

      There is a culture of thought which dictates: “There is only so much wealth in the world and I must gather as much of it as I can to me and mine”. It makes you believe that you must have more than your peers, that you must out do them to be successful.

      There is enough to go round and provide everyone with a decent, dignified life without fear of hunger, homelessness or shame.

      What I can’t understand is why everyone would not want to live in a world like that.

    38. Arbroath1320 says:

      As chart 2 shows in Stu’s piece the less you earn then the more you benefit. Well that’s my take on it, in which case any politician worth their salt who “claims” to be a Socialist or Left leaning and supports balancing the inequality in today’s society MUST support this idea of U.B.I.

      I have every suspicion that Messers Sarwar, and the other one, will be all too happy to support this along with their Economic shadow “minister” Jackie Baillie.

      I hope everyone will excuse me if I do not hold my breath waiting for anyone in Labour to stand up above the parapet of anti SNP bashing to show solidarity with this idea.

    39. Street Andrew says:

      For the benefit of anybody reading this days posting and discussion who doesn’t quite ‘get’ what Universal Basic Income means and how it makes sense (and that would have included me until relatively recently) I recommend a very readable book on the subject

      (Readable in my terms means it isn’t stuffed with figures and graphs which I can’t be bothered with.)

      Utopia for Realists. By Rutger Bregman

      It’s a very interesting read. Order it at your local library and then it will be available for other people to read aswell. There is at least one copy available in Angus.

    40. Paula Rose says:

      UBI and local currencies will lead to a market economy that is fair for all small and medium enterprises – that is what most aspire to, to have a life worth living for them and their families, that is what independence means.

    41. Dr Jim says:

      Scotland’s the same as England the SNP must stop this trying to be different stuff, bloody windmills in the sea for electricity windmills up hills it’s not on not allowing proper nuclear fuel, we need to get back to normal hating folk who are different, bigotry, sectarianism and stop all this society stuff, we don’t want it I tell you, it has to stop, it’ll all lead to this independence nonsense and I for one am not having it, British till I die and God save the Queen, not this caring country malarkey

      Get real Scotland and don’t be taken in by these SNP frauds who keep doing things it’ll only encourage them to do more, no good can come of it

      I am a proud fought in three wars wounded British patriot from Essex retired to Scotland for free prescriptions and free tuition for my grandchildren and will vote NO if it all happens again, this is my country

      The above people are still out there and they want foreign folk thrown out of Britain because they can’t speak English while they haven’t seemed to notice they’ve come to Scotland from England and can’t speak Scottish and we haven’t thrown them out

      As to the Scottish media, I don’t have sufficient saliva to cover them

      Tad annoyed ordinary person from Bishopbriggs

    42. Robert Peffers says:

      @Andy-B says: 18 October, 2017 at 7:41 pm:

      “We can but dream.”

      Where’s your ambition, Andy-B?

      We can and we will more like but do not be too impatient for that way leads to failure.

    43. stewartb says:

      For info/interest, brief summaries of UBI pilots internationally:

      http://basicincome.org/news/2017/05/basic-income-experiments-and-those-so-called-early-2017-updates/

      This is also another useful source:

      http://basicincome.org

    44. ronnie anderson says:

      what ah fekin farce from Stv & the Labour Leadership debate , well rehearsed . Brian Rix would be proud .

    45. Derek Henry says:

      The SNP just kep on getting themselves in a mess because they don’t know how the monetary system operates.

      The answer is really quite simple.

      A currency-issuing government can always create employment for those who need it, since it is able to buy any resources that are for sale in its own currency. When you understand this basic principle of the monetary system, it follows immediately that it is the government that chooses the unemployment rate. Whatever the private sector does, the final responsibility for employment creation rests with the government. The government can always ensure full employment with a combination of conventional public sector employment supported by a Job Guarantee (an unconditional, fixed wage job offer to anyone who desires to work).

      The advocacy of the Left for a Basic Income Guarantee amounts to surrendering to the neoliberal myth that the government should not use its spending capacities to provide jobs to the unemployed. The moment you claim full employment is obsolete, you are already advancing neoliberal ideas.

      Fortunately, more and more people are learning how the monetary system actually works in reality.

      The debate within the NHS is being turned on it’s head because of this new understanding.

      http://www.progressivepulse.org/economics/is-world-leading-nhs-healthcare-an-affordable-proposition/

      It really is excellent and a great learning tool if you are interested to actually learn how it all works.

      If you don’t learn it. You might as well stop posting on Wings because all you are doing is using the same language and framing than the neoliberals.

      The fact that most of you believe that taxes would fund the UBI is insane. It shows just how little knowledge voters have. Their brains have been turned into paper mashe by 15 min soundbites over a 40 year period.

    46. Graeme mcCormick says:

      UBI of £10000 per person could be provided in Scotland by charging £7.124 per square metre the built environment and floor space as an Annual Ground Rent. This charge would also raise sufficient public funding to allow for all existing taxes to be abolished.

    47. Derek Henry says:

      If you really want to understand how a job guarentee would work in reality then you have pour a cup of tea and read this economic paper that is currently working its way through the European Parliament.

      ‘Maximizing Currency Stability in a Market Economy’ that Warren Mosler co authored with Professor Damiano Silipo.

      https://docs.google.com/viewer?a=v&pid=forums&srcid=MTI2MDM2MTYyNTA4NzgyNzg0NzUBMDk0Mjc1NzM2NTQ2Mjg5MjI3MjABei1McXpUUXpBZ0FKATAuMQEBdjI&authuser=0

      It is superb !

    48. Tackety Beets says:

      A year or so back , The Swiss narrowly failed to get their form of UBI introduced.

      I recall the vote was very close?

      Anyone know anywhere where it has actually been introduced ?

      At first I thought “O my giddy aunt …..”

      When in truth , as per posts above , PR etc , it is without Q a great concept.

      Puts an end to the derision of “yon folk doon the pub everyday , when I have to work”

      Canna wait , pity I’m too old to benefit ……Doh!

    49. yesindyref2 says:

      @ronnie anderson
      It’s a well worded article 🙂

    50. t42 says:

      Sad news for Kurdistan after the independence referendum.
      Iraq (under USA authority), Iran, Turkey, all sent in over 1000 tanks today to quash independence. Over 100 kurdish killed so far and people fleeing Kirkuk as the enemy tanks roll in.
      Reports of a numbers of peshmurga fighters committing suicide and committing public self immolation. They spent months, and over 700 lives clearing the area of ISIS at the request of the Iraqi/USA governments, only to be double-crossed.

      https://www.reuters.com/article/us-mideast-crisis-kurds-iraq-kirkuk/kurds-block-iraqi-forces-access-to-kirkuk-oil-fields-iran-shuts-border-crossings-idUSKBN1CK0BX

    51. yesindyref2 says:

      Basically speaking the ambition of any government should be that everyone who works pays some taxes, and that everyone should have an incentive to work to get more money than whatever benefits they have give them. Which implies use of something like UBI for everyone without means testing – hence the “U”.

    52. Cactus says:

      There is always midnight…

    53. Hamish100 says:

      dr jim,

      Surely your from kill ma colm?

      full of wannabbee labour politicians — well council leaders who support clean cut sarrwaar

    54. Derek Henry says:

      When the government spends it writes a cheque on its account held at the Bank of England. The cheque is deposited into an account of a commercial bank. The commercial bank reserves rise by exactly the amount of the cheque as the Bank Of England debits the treasury account and credits the account of the commercial bank for the size of the cheque.

      Fact 1: Government spending increases aggregate bank reserves.

      Therefore, when the treasury receives funds into its account at the Bank Of England the reverse is true. For example if a tax payer sends a cheque to HMRC. The tax payer’s bank and the banking system as a whole loose an equivalent amount of reserves. As HMRC deposits the cheque into the treasury account at the Bank Of England.

      Fact 2: The payment of taxes decreases aggregate bank reserves.

      So if the government ran a daily balanced budget whereby the government spending was offset by taxes. There would be no effect on bank reserves.

      However, this is impossible to predict with the millions of transactions that happen daily. This can vary by £millions. Government spending and taxation will never off set themselves. This causes huge problems for the Bank Of England. As commercial banks are required by law to hold an amount of reserves against some fraction of their deposits but earn no interest on reserves above this amount. Therefore the commercial banks would prefer not to hold substantial excess reserves.

      Fact 3: Government spending will leave them with more reserves than they desire and taxation will leave them with fewer reserves than is required.

      This is where the overnight interbank market comes into play. This allows commercial banks to rid themselves of excess reserves or get hold of reserves that they need. When there is excess reserves in the system caused by government spending the commercial banks will attempt to lend reserves in the interbank market.

      Which also means when there is a shortage of reserves in the system due to taxation. Commercial banks will look to get hold of reserves in the interbank market to meet their requirements.

      The problem is when at the start of the day they all had an equilibrium of reserves. Lending reserves will not help them to get rid of the excess reserves. When the system is flush with excess reserves there will be no bids for the excess. Which means the overnight interest rate will fall to zero.

      Likewise when a shortage of reserves persist nobody will be willing to sell what reserves they have and if they do it pushes the overnight interest rate higher and higher.
      This process does not only effect the overnight interest rate as it is the anchor for all other interest rates.
      Fact 4: Government spending and taxation put different kinds of pressures on the overnight and other interest rates. By adding or draining reserves. Although some commercial banks might be able to eliminate their shortages or excesses it is impossible for the banking system as a whole to do so.

      The only way the banking system as a whole can do this is if the government steps in to do the adding and draining of the reserves for them. They do this by selling or buying government bonds.

      In order to keep a positive overnight interest rate, either the Bank Of England or the treasury would be forced to sell bonds to drain excess reserves. Commercial banks who do not earn interest for holding excess reserves would be falling over themselves to exchange non interest reserves for interest bearing treasury bonds.

      The reverse is also true in order to lower the overnight interest rate they would be forced to buy bonds back from commercial banks to add to the reserves. Commercial banks who get punished for not holding enough reserves would be falling over themselves to sell their non interest reserves for interest bearing treasury bonds.

      As you can clearly see from these daily operations between HM Treasury, The Bank Of England and the commercial banks. It is impossible to do a reserve drain ( taxes and issue bonds) before a reserve add ( government spending and buying bonds). It is impossible to do it in reverse.
      The Treasury always spends first and collects taxes later ( how else would tax payers get their hands on £’s to meet their tax liabilities)

      Infact, taxes are not capable of funding government spending when they are paid using high powered money ( by cash or cheque in a fiat money system) In order for HM Treasury to “get its hands on” the proceeds from taxation it must place these funds in the treasury account at the Bank Of England. As it does and as described above the banking system as a whole loses an equivalent amount of desired or required reserves immediately. The equivalent amount of high powered money is destroyed.

      Similary, reserves are drained and high powered money is destroyed immediately when the treasury issues bonds. In contrast government spending from the treasury account creates reserves and injects the equivalent amount of new money ( M1,M2 etc and high powered money.)

      Fact 5: We can quickly conclude from the operations that the adding and draining of reserves is used to control the overnight interest rate.

      Fiscal policy is to do with determining the supply of high powered money. Both taxation and bond sales drain reserves from the banking system. Neither provide the government with money with which to finance its spending. Both taxation and bond sales lead ultimately to the destruction of high powered money.

      An analysis of reserve accounting clearly shows that all government spending is financed by direct creation of high powered money. Bond sales and taxation are merely alternative means by which to drain reserves/ destroy high powered money. The choice then is between alternative methods for draining reserves in order to prevent the overnight interest rate from falling to zero.

    55. Connor McEwen says:

      T42 @ 11.43

      A very violent equivalent to a Scottish dugs Brexit

    56. yesindyref2 says:

      @Derek Henry
      Transaction pairs. For each and every debit there is an equal credit.

    57. Derek Henry says:

      @ yesindyref2

      Yes, for every liability there is an asset.

      People need to learn to look left on a balance sheet it is where all of the assets are.

    58. CameronB Brodie says:

      IMHO, new approaches are needed to tackle income inequality, as neo-liberalism tends to discourage inclusive social integration.

      Universal basic income far from reality of UK’s existing social security system
      Policy debate about Universal Basic Income (UBI) is increasing in the UK. The idea is not new, and has always had advocates and critics. But current interest is due to the increasing emphasis on conditionality and sanctions in the benefits system and the growing insecurity of paid work. Debates focus on arguments for and against related to principles and practical issues. A full UBI is very unlikely to be introduced in the UK in the near future, however, given public attitudes towards benefits and the means-tested emphasis of the social security system.

      ec.europa.eu/social/BlobServlet?docId=17531&langId=en

      Citizen’s Income: Rights and Wrongs

      Abstract
      A Citizen’s Income, or a Basic Income, is not a new idea but
      it has been receiving increasing attention. There is confusion about the idea and an attempt is made to distinguish different concepts. Then a full Citizen’s Income is examined in relation to four key criteria: the justice of an unconditional benefit; the possibility and fairness of a simple individual benefit; economic efficiency; and political feasibility. On all four criteria, Citizen’s Income fails. It is concluded that Citizen’s Income is a wasteful distraction from more practical methods of tackling poverty and inequality and ensuring all have a right to an adequate income

      http://sticerd.lse.ac.uk/dps/case/cp/casepaper200.pdf

      Frequently Asked Questions
      The following FAQ’s are based on Philippe Van Parijs’s Background Paper to BIEN’s 9th Congress in Berlin, Basic Income. A simple and powerful idea for the 21st century.

      http://basicincome.org/basic-income/faq/

    59. Cactus says:

      Ahhhhh ha ha ha, ha ha…

      Dat’s interesting.

      Dat’s funny.

      Mr Bunny.

      iSCO.

      X.

    60. Cactus says:

      Karma on the 17, C bro.

      Plus two.

      Si.

    61. Derek Henry says:

      @ yesindyref2

      Yes, every liability has an asset. People need to learn to look left on a balance sheet it is where all the assets are.

      http://heteconomist.com/exercising-currency-sovereignty-under-self-imposed-constraints/

    62. Derek Henry says:

      @ CameronB Brodie

      The debate has been going on for nearly 15 years.

      Job Guarentee v UBI

      Job guarentee is far superior in every way.

      https://medium.com/modern-money-matters/tagged/basic-income

    63. Derek Henry says:

      A Basic Income Guarantee does not reduce poverty !

      http://bilbo.economicoutlook.net/blog/?p=36105

    64. Petra says:

      O/T

      For those who don’t buy the National.

      Scottish Independence Convention (info, in brief, taken from the National):

      There’s a few seats still up for sale for the Scottish Independence Convention on Saturday 4th November in the Usher Hall, Edinburgh. Entitled Build: Bridges to Indy the conference will focus on what the independence movement needs to do to persuade Scots to back independence.

      1000 tickets have been snatched up. Organisers were then persuaded to open up the upper levels with most seats now taken (just checked and there’s some left).

      Among the confirmed speakers are Alex Salmond, Jeanne Freeman, Maggie Chapman, Alan Bisset, Catalan activist Anna Arque, Dr Iain Black, Marshall Scott, Liam Stevenson, George Kerevan, Dr Marsha Scott and a senior researcher from Oxfam GB Katherine Trebeck.

      (I’d imagine that some of the key members of SIC will also be there)

      Part one focuses on voter research conducted by Dr Iain Black of Heriot-Watt University – commissioned by SIC. “SIC has invested in some public opinion research work to find out what No voters are really saying about us. The results are fascinating

      The second part of the day focuses on groups of voters who were deemed to be demographically important in 2014 whom the Yes side is said to have lost.

      Third part – focus on currency and public finances.

      Final part of the day will address how everything so far can be used by the movement and how to organise the future.

      Eddi Reader and Capercaillie will provide entertainment.

      Followed up with an official after-party organised by Edinburgh Yes Hub.

      Tickets cost £15, concession £8 (£5.50 on the upper circle).

      SIC have announced that 60 free tickets are available for unwaged people who need a helping hand to get them to the conference. To claim them e-mail Shona at info [at] theconvention [dot] scot with the subject line “FreeTickets.”

      Tickets purchased at http://www.usherhall.co.uk/whats-on/build-bridges-indy

    65. yesindyref2 says:

      @Derek Henry
      Stepping stones maybe, even if there’s a change in direction when in the middle of the pond! Start with something easily achievable, and that gives a good start to anything that comes after. Course, it would help being independent and in control over currency issue, and “debt”.

      The main problem I see in the Independence movement is that those who talk about wealth creation are shouted down as Tories, whereas those who talk about spending are hero(in)es.

      What people seem to fail to realise is that not only can the two be totally mutually compatible, but that they could actually be the same thing.

      YES needs “Tories”!

    66. Az says:

      galamcennalath @ 8pm

      I disagree about the pension being removed by UBI. All other benefits yes, except extra for people who would currently qualify for PIP or DLA (or would qualify in a more human system). Under UBI, it’s easy to supplement your income with part-time or casual work, or indeed a full-time and well-paid job.

      IMO the pension should be protected and guaranteed, and set a level that is a good bit higher than the UBI. To me at least, there is logic in creating a UBI only for those of working age.

      I’d like to think that an independent Scotland, when we finally get there, will revive an actual “pot” for pensions.

    67. David says:

      Might be a good thing and it might not be. You pull one strand of the economy and it affects many other strands in the web.

      The more people can have when not contributing to the economy the less incentive there is to contribute. The more money there is freely available the more expensive things become. Once you take a step forward with welfare its very hard to take it back politically regardless of how bad an idea it turned out to be.

      There needs to be less welfare in general. Its jobs and work thats needed, not more reasons to do fuck all and let Mr & Mrs taxpayer pick up the bill.

      I know – we dont like the people whose taxes pay for everything on this comments section, we also dont like basic economics or financial savvy, so i’ll be quiet 😉

    68. Alex Clark says:

      I’ll be honest, I don’t get the UBI thing. It sounds good but…

      Maybe I better go away and educate myself a bit more.

    69. Derek Henry says:

      @ yesindyref2

      What YES needs is to educate the voter to understand how it works and as soon as most people know that.

      The Budget deficit and national debt = everyones savings to the penny.

      The narrative, language and framing will change. Those that have controlled the false naarative over the last 40 years will be finished.

    70. Az says:

      @ Derek Henry

      I’m pretty sure most Wings readers are indeed aware that spend comes before taxation. You’ve criticised a few for speaking the other way round, but perhaps you’re overlooking that Scotland is not independent, nor does it have its own currency.

      Scotland is currently forced to live as if it has to tax first and then spend, living on a block grant as it does. Part of me senses this is deliberate, to further confuse the masses about currency and economic reality.

      I take issue with your assertion of this being neo-liberalism. It is surely in fact a statement of logic that capitalism is grinding to a halt. There is no further growth available to the world (which is different to saying Scotland could take a bigger slice of pie, so to speak, and grow in itself). It is surely logical that between stagnant demand, pressures to stop exploiting every natural resource still left, and increased mechanisation/robotics/AI inevitably reduces the man hours of work available.

      This does not have to be A Bad Thing. Citizens could feasibly enjoy a good standard of living, yet most only working for 15-20 hours a week. That extra free time involves inevitably more spending on leisure activities, as well as good quality times for families and the like.

      For me, it’s difficult to see how you “guarantee” jobs, without having to invent jobs, or have people doing mind-numbing work only fot in reality for a robot, in this day and age.

    71. Paula Rose says:

      All those office staff making life hell for claimants are unionised and pay a due to guess who.

    72. Derek Henry says:

      @ Az

      If scotland has it’s own currency and central bank the pension issue is easy to solve.

      We would just use the Ways and Means Account is just an infinite overdraft with the Central Bank, and it grows over time to balance the net-savings of the non-government sector just as the Gilt stock does now.

      The new Scottish Treasury would simply not issue any Gilts any more. Any funding of private pensions in payment should be done by offering annuities at National Savings, which would also have the neat side effect of ‘confiscating’ net savings and making the deficit go down.

      It’s irrelevant what interest the central bank charges on the ‘Ways and Means’ account since any profit the bank makes from it goes back to the Scottish treasury anyway. So it can 50% if that gives the necessary level of satisfaction to mainstream economists.

      What you have is a standard intra-group loan account between a principal entity (Treasury) and its wholly-owned subsidiary. Normally those sort of loans are interest free for the fairly obvious reason that interest charging is utterly pointless, and they are perpetual for the same reason. Rolling over is totally pointless.

      Any term money can then be issued to the commercial banks directly by the Bank of Scotland – up to three month bills.

      Currently, If you are a member of a pension scheme then the savings of the current generation, plus the interest on Gilts and any income from the other assets owed pay the pensions of the current generation of pensioners. They are all, in effect, private taxation schemes that circulate money around the system.

      You’ll note that when there was a threat of people failing to save in pensions, the government introduced compulsory retirement saving – which is of course a privatised hypothecated tax.

      So in essence rather than the assets of a pension scheme being used to purchase Gilts, the assets would be used to purchase an annuity from the government dedicated to an individual. The result is that rather than the private pension receiving Gilt income from the state, to then pass onto the pensioner, the state would cut out the middleman (and their cut) and pay the pensioner directly as an addition to the state pension.

      There’s a whole private pension industry out there literally doing absolutely nothing of any real value. They can’t provide a guaranteed income in retirement without state backing in the form of Gilts. So what is exactly the point of having them?

    73. Suzanne says:

      galamcennalath says:
      18 October, 2017 at 8:00 pm

      Would lazy people simply not work? I reckon the vast majority of folk want to contribute to society, want to do something useful, want the dignity that comes with employment.

      Just think of what could be done free of the constraints of having to find a job though, if what you wanted was to help keep our rivers and streams clean, or run a free cab service for elderly people living out in the wilds, or any number of other things that you couldn’t do if you had to do the 9-5.

      And imagine the boost to morale for those who wouldn’t have to worry about being paid a pittance and working three jobs while trying to run a family too. A good life / work balance. Dignity. Less stress and fewer stress-related illnesses. Reassurance.

      The possibilities are endless.

    74. yesindyref2 says:

      @Derek Henry
      Indeed, but what part of YES is going to do that?

    75. Ken500 says:

      A few years ago. (UK Gov) in Scotland costs £16Billion. £10Billion welfare/benefits. £6Billion OAP’s. Scotland paid less (pro rata) because people on average die younger in Scotland. (UK Gov ) Pensions in Scotland (pro rata) cost less than the rest of the UK. The rest of the UK spent £78Billion on (UK) Gov pensions. Scotland 1/12 of the UK. The rest of the UK were spending £1/2Billion more pro rata.

      Scotland pays (UK) Gov pensions from tax revenues raised in Scotland. £58Billion+ a year. The (UK) Gov pensions/welfare are paid from Scottish tax revenues raised in Scotland. Funding will be less on average because there is now higher employment levels. Less people will be relying on benefits. Now vulnerable people are being left with out money for up to six weeks.

      The Tories are behaving, absolutely disgracefully. Starving people to death. Hope the Tories rot in hell for what they are doing to people. It is disgusting. The Tories never change. They just get worse. They will die off. Their members average age is now reported to be a 72 year old men. Young folk have no interest in the Tory party. Any left when Cameron got the dunt. For the disastrous EU policy. What a fool they make of themselves.

      £3Billion looks lower than £10Billion. Or would it be part of the approx less than £10Biilion? spent on welfare benefits. payments. It could part of the basic, universal income system.

      The Tory tax on the Oil & Gas sector is 40% since Jan 2016. The Tories have been running down the Oil and Gas sector down since 2010. One person is now doing three person’s former jobs. Amalgamation. More people are stressed and ahxiety. They vote Tory? After they lost their jobs.because of high Tory taxes. Corporation tax is under 20%. 120,000 jobs are lost. There could have been full employment in Scotland. There are 103,000 unemployed in Scotland.

      Some say they don’t want to pay more taxes on six figure salaries. About £20 a week would help the NHS and Education. Most of them got a good education with lower fees and loan repayments. They also get good treatment when using the NHS. Everyone who uses the NHS appreciates the excellent treatment they receive. When people are ill or sick they appreciate the good treatment they get from the NHS.

    76. Az says:

      @ Derek Henry

      That’s all well and good, but my principal point is that we do not have a central bank nor our own currency, so the conversations about UBI right now, are of course within the UK and the current devolution settlement.

      I don’t disagree with anything you said about pensions, although I was speaking specifically about the state pension once we’re independent. A recreated “pot” is in inverted commas because of course it’s not really a pot… However I still believe that it is prudent and of value to have a certain amount of money ringfenced and used to add value to itself, not necessarily through Scottish gilts (although I’ll bet we could get a better return on those than the currently loss-making UK gilts) but other linkages such as an oil fund or a renewable fund or how about simply an energy fund.

      There may well come a time when usuary is outlawed in the reasonably near future, which would mean funds not growing in value. However it does not remove the effects of inflation. That would call for more creative solutions, a situation we are not yet facing, and no doubt a solution will present itself on the journey towards that possibility.

    77. Robert J. Sutherland says:

      Alex Clark @ 00:46,

      One advantage I find particularly convincing is the aspect that RogueCoder @ 21:14 touched upon: under the current economic system, ever-increasing automation will push an ever-increasing proportion of the population into workless poverty. Not just a disaffected “underclass” of the poorly-qualified as is happening already, but encroaching into high-qualified professional sectors also.

      UBI is the means by which everyone has a stake in society. A social glue. Rather like any other universal benefit.

      The level can’t be too high or it would act as a deterrent to anyone seeking paid employment and it all has to be funded somehow, so the level it operates at, and the means by which it is funded, are probably the two most crucial aspects.

      I note that in Stu’s Table-1 (and as galamcennalath @ 20:00 has already pointed out), no account appears to be taken of the potentially large saving in bureaucratic costs from not having to administer the current very complex gamut of means-tested benefits with all sorts of unintended consequences. This may be part of the attraction for libertarians, but not in of itself at all a bad thing, I would say.

    78. Az says:

      Oops I said “although I’ll bet we could get a better return on those than the currently loss-making UK gilts”

      of course what I meant was offer a better return to investors.

    79. yesindyref2 says:

      @Derek Henry
      Job Guarentee v UBI

      Job guarentee is far superior in every way.

      Can’t go with that one at all, it takes no account of the increasing move to automation and roboticisation.

    80. Robert J. Sutherland says:

      Suzanne @ 01:10,

      Yes, that’s all part of the unintended consequences. (And sometimes also intended consequences, one suspects.)

    81. Still Positive says:

      Derek Henry – various posts.

      I, and am sure many others would appreciate your posts if you could convert your points to diagrams which are easily understood, not only by us here but by the wider population.

      I failed Economics twice in first year uni and my Advisor of Studies wisely counselled me to stick to language-based subjects which I did. My degree is English, French and Politics.

    82. Petra says:

      Thanks to the contributors who have taken the time to present / discuss the pros and cons of UBI. Still trying to make sense of it all especially in relation to what goes on in banks overnight, lol. A real eyeopener and highlights that I’ll need to start doing my homework, ASAP.

      ………………..

      @ Boris at 12:50am ….” Mason”

      Well it looks as though he’s holding onto his Councillors job, on top of being an MSP, to keep the SNP out and then has to hire a “caseworker’ because he can’t cope! Who pays for the caseworker? Us? High time the 74 year old Tory cut out his carry on and got back to his scuba diving, sailing and hill-walking, full time.

    83. yesindyref2 says:

      @Az
      Perhaps the fact that it’s being talked about now means it’s closer to Independence tham many think. Cheer Down!

    84. Cactus says:

      All Scotland wants now is the quickest route out of the Westminster mad hoose.

      Scotland has ‘learnt’ from the past.

      Think about Scotland.

      Vote to dream.

      @Hey Reese, tell all, click!

    85. Derek Henry says:

      @ AZ

      It shows you’ve never read the literature on it that’s been built up over the last 20 years.

      All main points over the last 20 years are covered in this series. yes, including robots. A UBI does not reduce poverty ! A basic income guarantee is a neo-liberal strategy for serfdom without the work.

      Is there a case for a basic income guarantee – Part 1

      http://bilbo.economicoutlook.net/blog/?p=34448

      Is there a case for a basic income guarantee – Part 2

      http://bilbo.economicoutlook.net/blog/?p=34454

      Is there a case for a basic income guarantee – Part 3

      http://bilbo.economicoutlook.net/blog/?p=34462

      Is there a case for a basic income guarantee – Part 4 Robot edition

      http://bilbo.economicoutlook.net/blog/?p=34475

      Is there a case for a basic income guarantee – Part 5

      http://bilbo.economicoutlook.net/blog/?p=34479

      Once you’ve read those we can have plenty of fun debating it.

      We can’t even agree what other basic incomes are as in pensions, child benefits, unemployment benefit because voters can’t accept people getting something for nothing and not contributing to the economic pie. These types of basic incomes get cut all the time.

      I suppose the 3 questions along with reading the mini series above you have to answer is

      1. Why should a person receive £75 per week for just surfing all day. When they provide nothing to the economic pie we all share and contribute to ?

      2. Why shouldn’t a person get paid £375 a week for their families and will providing public purpose via a job guarentee that we all benefit from ? Who then have a better chance to get a better paid job in the private sector as the economy picks up again. As they’ve gained more skills than they would have learned on a UBI at £75 per week ?

      3. What would have happened in 2007 during the financial crash if.

      a) UBI paying £75 per week had been introduced in 2002 ?

      b) A job guarentee paying £375 per week had been introduced in 2002 ?

      Remembering that the automatic stabilisers pushed the defict to 10% of GDP which never targeted anything anyways. Apart from mainly paying unemployment benifit to the millions that lost their jobs.

      Instead of the monopoly issuer of £’s using the £’s on the automatic stabilisers. Which would have been a better use of those £’s a) or b).

      I’ve also posted links further up the thread that destroy the UBI each and every time.

      Here they are again

      https://medium.com/modern-money-matters/tagged/basic-income

    86. CameronB Brodie says:

      Derek Henry
      Thanks for the tip, I’ve not really looked into UBI or basic income. I guess I’m just a natural born SJW. 🙂

      Neoliberal Policies, Income Distribution Inequality and the Financial Crisis

      Abstract
      In the last 20 years, the within countries income and wealth inequality has continuously increased. This trend largely depends on the diffusion of neoliberal policies which, along with financial globalization, is among the causes of the recent international financial crisis. Neoliberal financial globalization (Washington Consensus) went along with reforms of labour and financial markets which caused income and wealth concentration to rise. All this contributed to the growth of debt bubbles in several countries and, after 1990, gave rise to a series of local financial crises that eventually ended in the global crisis of 2008. The austerity-based response of the EU governments to the crisis is another example of policies prescription based on neoliberal theories that cannot work. The example of Latin America countries, which in the 2000s abandoned the Washington Consensus view and have been able to reduce inequalities, shows us that alternatives to neoliberal policies are feasible.

      http://www.tandfonline.com/doi/abs/10.1080/07360932.2014.951376

      Unexpected connections: Income inequality and environmental degradation
      http://www.shapingtomorrowsworld.org/hauptInequality.html

      IDEOLOGY, NEOLIBERALISM AND SUSTAINABLE DEVELOPMENT

      Abstract: This paper examines the interactions between issues such as ideology, neoliberalism, institution-building and sustainable development. The central focus of the paper is to demonstrate that the neoliberalism hasn’t succeeded just because it is an economic strategy which better serves the interests of the capitalist class (though it must be stressed that this fact has obviously contributed) but mainly because it has been promoted as an attractive economic strategy by respected, well organized and transnationalized institutions all around the globe, and understand the reasons behind this institutional support. After reviewing the interrelationships between the Bretton-Woods institutions and their relationship with the concepts of neoliberalism and sustainable development, the paper concludes claiming that the so-called neoliberal ideology operates behind the discourses of growth, progress and sustainability and that it is in charge of softening domination by diffusing legitimating ideas and granting concessions to subordinate forces, thus implying significations and values that transcend the possible manipulation of the world as an object.

      “We need to radicalize the imaginary as an antidote to the total imposition of neoliberal technocratism in the common sense.” (Lander, 1971)

      http://humangeographies.org.ro/articles/72/7_2_13_3_cervantes.pdf

    87. Derek Henry says:

      @ Still positive

      The diagrams are in the links

    88. Cactus says:

      Aye, here’s the other half:

      🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂

      🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂

      🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂

      🙂 🙂 🙂 🙂 🙂 🙂 🙂

      🙂 🙂 🙂 🙂 🙂 🙂

      🙂 🙂 🙂 🙂

      🙂 🙂 🙂

      🙂 🙂

      😉

    89. Derek Henry says:

      @ AZ

      We don’t need to be indpendent to create our own currency we can just copy what the Italians are doing

      Italy is experimenting with giving tax-cuts to its citizens in exchange for public services?such as pulling weeds and cutting grass. Wow. What an amazing idea! The government issues a tax credit, and uses it to pay a citizen in exchange for the citizen’s services to the government. The government could even make this arrangement more formal by printing the tax credits on pieces of paper called “LIRIES” (or something like that) and paying for the weed-whacking services with this “cash.” That way the citizen who’s earned the “LIRIES” has the option of using them as payment to another citizen (who’d also like a tax-cut) for, say, a bag of potatoes. So, the first citizen pulls some weeds, gets paid in “cash” and then uses the “cash” to buy her dinner. If you thought about it, you could possibly run an entire economy in this fashion. The only thing you’d have to worry about, of course, is that the government might run out of the tax-credits it needs to pay the citizens to do the work! If that happened, where could the government possibly get more tax-credits? Could it collect tax-credits as “taxes”? Could it borrow them from all the street-sweepers and weed-whackers who’ve earned them? (In which case it would have to pay “tax-credit interest”?which just seems to exacerbate the problem!) Hmmm. I’m going to have to think about that one. But in the meantime, doesn’t this mean that any Eurozone country has the option to stay IN the Eurozone while at the same time operating its own local economy using its own local “sovereign” currency?

      Italy, is now experimenting with paying for public services with tax credits. Presumably, this is happening because Italy doesn’t possess enough Euros to pay its citizens to provide all the goods and services needed to maintain and run the public sector of its social economy. And Italy can’t “create” the additional Euros it needs because that prerogative is the exclusive right of the EU Central Bank which Italy, even as a sovereign member of the EU, has no control over. But, as the news article explains, Italy still needs to have the grass mowed and the weeds pulled in its public gardens. So it has decided (out of desperation, the article implies) to pay the gardeners with tax-credits. The gardeners are willing to do the work in exchange for the government’s tax-credits, because it means the Euros they earn (in other ways) can then be used to purchase goods and services rather than for paying their taxes. So, in practical terms, it is “just like” getting paid in Euros.

      This, in fact, is way more interesting than it seems. In fact, it might even be mind-expanding! Here’s why:

      Presumably, the tax-credit payments described take the form of notations on the gardeners’ tax account. An hour’s worth of weeding is noted as 15 Euros worth of extinguished taxes. If the gardener has a tax liability of, say, €3750, her taxes would be completely paid after providing 250 hours of weeding and pruning. After that, obviously, she’d have no more incentive to provide any services in exchange for the tax-credits. So the amount of services Italy can obtain in this fashion is directly limited by the amount of tax liabilities it can impose on its citizens.

      It would be possible, however, to structure the tax-credit payments in another way which would have a very different outcome. Instead of making the payment as a credit notation on a citizen’s tax account, the Italian government could issue paper tax-credits and pay them to the citizens for their gardening services. To be specific, this would be a piece of “official” paper, signed with an important signature, on which was printed something like the following:

      The Sovereign Italian Government promises the bearer of this paper ONE EURO of credit on taxes owed to the Sovereign Italian Government.

      This amounts to exactly the same thing as making a direct credit on a citizens’ tax account, but we now have set in motion a curious set of subsequent economic actions: Now, after an hour of weeding, upon receiving her 15 paper tax-credits?for convenience, let’s call them “PTCs” and give them the symbol ??the gardener can choose to do the following. She can put the PTCs under her mattress for safekeeping until the day her taxes must be paid. Or she can use the ?15 to purchase a lasagna dinner at her neighborhood trattoria. The owner of the trattoria is willing to accept the PTCs in exchange for the lasagna, garlic bread, and wine because he, too, has to pay taxes to the Italian government. So, for all practical purposes, receiving the PTCs is just the same as receiving Euros for him as well.

      Now we have to ask an important question: Is the amount of services Italy can obtain by issuing and “spending” its paper tax-credits still directly limited by the amount of tax liabilities it can impose on its citizens? In other words, if every Italian citizen theoretically has received enough PTCs to pay their taxes with—either having received them directly from the government for providing public services, or having received them from other citizens in exchange for lasagna dinners—will the citizens’ willingness to exchange real goods and services in exchange for the PTCs come to a halt?

      Crucially, the answer is No. This is because the act of “embodying” the tax-credits in exchangeable pieces of paper has given the PTCs a usefulness in addition to their usefulness as tax payments: This additional usefulness, of course, is the ability to use them to buy goods and services from other Italian citizens and businesses. Thus, the number of paper tax-credits in “circulation” could vastly exceed, at any given time, the total actual tax liabilities of the Italian citizenry. The PTCs would continue to be accepted for lasagna dinners, because the Trattoria owners know they can use the PTCs they receive to subsequently buy Italian shoes and motorcycles— in addition to using them to pay their taxes.

      It will no doubt have dawned on most every reader that what we’ve just created is “money.” Specifically, we’ve created what is called “fiat money”—which happens to be the kind of money the world has been using now for the past half century (ever since the U.S. formally abandoned the gold-standard in 1971). Having thus conjured a rudimentary image of fiat-money to life we should quickly make some important (and perhaps startling) observations about it.

      Observation 1: How does the PTC “currency” come into existence? The sovereign Italian government creates it. Paper tax-credits are not created by Italian banks, nor are they borrowed from China—or even the EU Central Bank. They are printed by the Italian government. Note: PTCs could also be created by the Italian government digitally—that is, with keystrokes that enter numbers in an electronic ledger of account. In either case, the point is ONLY the Italian government has the legal right to create them. Why? Because that is the prerogative of sovereignty and the definition of fiat money.

      Observation 2: How many PTCs can the Italian government create and spend? Or, to rephrase the question more precisely, how many times can the Italian government promise to accept one of its paper tax-credits in exchange for a Euro’s worth of taxes owed? The answer is simple: as many times as it wants! It doesn’t matter if all the taxes have been paid in full—it can still issue and spend the promise over and over again. The citizens will continue to accept the promise in exchange for real goods and services for two reasons: first, they know other Italian citizens and businesses will accept the promise as payment for lasagna dinners and, second, they know for sure that taxes due will come around again—and soon.

      Observation 3: If (as observation 2 suggests is possible) the Italian government just keeps issuing and spending its paper tax-credits (fiat money) to buy goods and services from its citizens, won’t the number of PTCs in circulation keep growing until, inevitably, the price of things in the Italian economy begins to skyrocket? A lasagna dinner that used to cost ?15 suddenly costs ?150! In other words: Inflation. The answer, of course, is Yes. So what can the Italian government do to keep a lid on the inflationary pressure created by its continued issuing and spending of PTCs? Two things:

      The government can continue to collect taxes from the citizens (or, if necessary, even increase the taxes in collects). Taxes will remove PTCs from circulation, reducing the number of them available in the market-place to buy lasagna dinners and Italian shoes. Taxes, then, have a dual virtue in a fiat money system: they continuously reinforce the citizens’ desire to earn the government’s paper tax-credits—and they drain the paper tax-credits out of the market place, helping to keep prices stable.

      2. The government can also create special savings accounts that citizens can put their excess PTCs in. The accounts would earn interest (paid by the government with new PTCs)—but the agreement would be that the citizen would leave their “old” PTCs in the account, untouched, for a period of time—say 10 years. This means a large number of PTCs which would otherwise be competing to pay for lasagna dinners would be replaced with a much smaller number of PTCs (the interest payments). The net result will be fewer PTCs buying goods and services in the market-place. If you want, you could call these special savings accounts “government bonds.”

      Historical Note: When the U.S. was in the midst of mobilizing to fight WW2 it was issuing and spending historical quantities of U.S. paper tax-credits (fiat dollars) to pay U.S. citizens to build battleships and bombers—and to pay the recruits in its growing army and navy. Inflation was, indeed, starting to become a problem. So what did the government do? Two things: it increased taxes, and it issued War Bonds. It even imposed a requirement that workers take a percentage of their pay in War Bonds. By 1943, inflation was brought back under control.

      Observation 3: What happens to the PTCs when they are presented to the Italian government as tax payments? The mind-money framework we learn from early childhood “tells us” that the taxes collected by a national government are what the government then uses to pay for public goods and services. Crucially, however, this IS NOT TRUE with a fiat-money system. Looking at the paper tax-credit system we’ve just described, it’s clear that (by logical necessity) the government FIRST issues and spends the paper tax-credit, then it accepts it back as a tax payment. At that point of taking it back, the tax-credit is of no further use to the government. It is simply cancelled: it becomes a particular citizen’s tax liability with a line drawn through it. If the government needs to spend another paper tax-credit, it simply issues a new one. (It is actually easier and more efficient to issue new tax-credits than to “recycle” old ones.)

      Observation 4: Is it logical for a sovereign government to borrow the paper tax-credits it has issued? Please try, for a moment, to wrap your mind around this question! Here is something that ONLY the Italian government can create, and something it can create as many of as it needs, at any time it needs them. Why would it ever want, or need, to “borrow” them from the Italian citizens? It is, therefore, illogical to imagine the Italian government ever being “in debt” to its citizens! The Government Bonds we mentioned previously are not a “debt” the Italian government owes to anyone—they are savings accounts which hold the citizens’ excess PTCs for a specified period time. When the bonds “mature,” the PTCs are simply transferred back to the citizen. In a fiat money system, therefore, it is illogical (and irresponsible) to imagine or describe U.S. Government Bonds as being the government’s “debt”—or, more specifically, to talk about that “debt” as being “unsustainable,” or to suggest the government cannot pay its citizens to undertake and accomplish some important task because it will “increase the government’s debt.”

      Having made these observations, it appears the Italian government has stumbled on an actual solution to the “austerity” it has been forced to impose on itself by the European Union. Except we must now confront the fact that the rules of the EU do now ALLOW Italy to issue and spend its own sovereign fiat currency! The only “money” Italy is allowed to use is the Euro—and the only way the Italian government can obtain Euros is either by collecting them as taxes from its citizens, or by borrowing them from the European Central Bank, which has the exclusive prerogative of issuing them. And these methods of obtaining Euros to spend are falling short of what Italy needs to pay its citizens to do. So…. Italy has decided to pay its citizens with tax-credits, and then (why not?) with paper tax-credits. And then, presumably, the EU says, “Whoa, hold on here! It looks like you are printing your own money, which is not allowed by our rules!”

      We could then proceed to an International Court in which Italy claims it isn’t breaking the EU rules because it isn’t printing “money” but is simply issuing tax-credits. The EU would then have to argue that “tax-credits” are, in fact, what “money” is! In making that argument, it would be forced to explain everything we’ve just explained which would, in turn, reveal and establish not only the absurdity of the Eurozone monetary system, but also that the whole world (including the U.S.) is misunderstanding and mismanaging its money system—and unnecessarily making a vast majority of the world’s citizenry miserable in the process.

    90. Cactus says:

      One more time.

      🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂

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      😉

      Full wing.

    91. Derek Henry says:

      Inflation is a none issue because the job guarentee replaces the job of the automatic stabilisers.

      If you really want to understand how a job guarentee would work in reality then you have pour a cup of tea and read this economic paper that is currently working its way through the European Parliament.

      ‘Maximizing Currency Stability in a Market Economy’ that Warren Mosler co authored with Professor Damiano Silipo.

      https://docs.google.com/viewer?a=v&pid=forums&srcid=MTI2MDM2MTYyNTA4NzgyNzg0NzUBMDk0Mjc1NzM2NTQ2Mjg5MjI3MjABei1McXpUUXpBZ0FKATAuMQEBdjI&authuser=0

      It is superb !

      The real issue is understanding the difference between effective demand and aggregate demand.

      Here’s an anology I like to use.

      The problem of correctly watering my garden.

      So let’s start in a depression era, and assume I’ve been away from home for a few days and it’s been really hot and sunny (in Manchester no less!). All my plants are dry and gasping for water, so I can whack the sprinkler on across the whole garden, immediately providing a much needed boost in aggregate water levels.

      However, as I get near to the point of correctly watering all the plants, some start to saturate and waterlog. In some perfect theoretical construct of a garden, this would not occur – a combination of gravity and osmosis would ensure that as long as the aggregate volume of water was correct, water would disperse from the overwatered areas to the dry areas and everything would get just what it needs.

      Unfortunately in the real world, this won’t happen. Some parts of my garden drain much better than others (damn Cheshire clay), some dry quicker depending how much shade they have, while some of my plants are much more susceptible to drying out than others – my tomatoes need water every day while fruiting, whereas the potatoes can survive days without.

      The mainstream obsesses over the problem of waterlogging, and determines that it is vital that I turn the sprinkler off the second I sense any plant getting too much water. It posits that unfortunately there is a necessary trade-off between that and some plants dying of too little water, and suggests that in this scenario, any specific interventions I make in the garden will lead to disaster, and all I can do is encourage flexibility in the vegetable market.

      Perhaps I can retrain my tomatoes to behave more like potatoes, or suggest they move from their nice sunny spot by the fence, to the shady spot behind the runner beans where there’s no shortage of water.

      Meanwhile, academic vegeconomists all over the world spend thousands of fruitless hours devising ever more complex models to compute the absolute amount of water I should use, taking in to account their predictions of the weather (which they can never get right), the mix of vegetables (which changes from year to year and depends on the random germination of seeds – which they never get right) and the composition of the soil (which depends on the compost I’ve used this year – which they never get right). Despite the complexity of these models, all they ever come up with a slight variations as to how much I should leave the sprinkler tap on.

      After that, my poor old tomatoes are left to their own devices. C’mon, I’ve incentivised you to be a potato!

      But the targeted demand approach says we can do much better than that. It deals with the fact tomatoes are and always will be tomatoes and need the sunny patch by the fence to grow.

      It still uses the sprinkler, and set at a level where waterlogging shouldn’t occur. But then rather than worrying about measuring the amount of water used, and comparing this to some notional target, it checks each plant individually to see if is getting enough water. If it isn’t, it tells me to pick up the watering can, and specifically water that plant. Happy tomatoes!

      What’s more, if for any reason the run-off from my specific watering flows elsewhere in the garden, causing too much water in aggregate and I notice any saturation, I can always turn the sprinkler down a notch, safe in the knowledge if some other plants now lack water as a result, my targeting watering can will deal with the situation. Happy broad beans!

      What’s more, because my garden is now much more stable, my vegetable growing is at maximum productive output and I’ve discovered making specific interventions in the garden isn’t the disaster the mainstream assured me it would be, and I can consider longer term structural changes. Perhaps building a run-off towards the tomatoes so they’re less likely to require the watering can intervention, or improving the drainage by the rhubarb so they won’t waterlog so quickly.

      And of course, the garden never reaches a permanently stable equilibrium – there’ll always be jobs to do, and I’ll always need the watering can occasionally – but hey, it’s a lot better than the mainstream system and it gets me out the house.

      Aggregate demand is a curve. Effective demand is a point on that curve where it intersects current aggregate supply. As you push for higher effective demand, it creates more supply until you become supply limited. That is the effective demand limit.

      We’re always at effective demand, but not necessarily at the effective demand limit. A Job Guarantee adds extra supply of public goods as well as extra demand, which shifts the limit upwards because it is not constrained by profit optimisation.

      Effective demand is the point D on the aggregate demand curve where it is intersected by aggregate supply. But the supply curve is an indication of preference, not a mechanism to force demand where it needs to be. So there may be potential supply for which there is no demand. The classic one being labour.

      So just increasing demand isn’t enough. It has to be demand for which there can feasibly be a supply. In the labour market that means creating jobs for the people as they are where they are.

      If you demand 1,000 doctors when all you have are care workers, then you’re not going to improve matters one jot. If you demand doctors in Cornwall, when the spare ones all want to live in London then you’re not going to help anything.

      You have to manage both curves to get the dynamics to move them where you want them to go. They won’t shift all the way naturally.

    92. geeo says:

      I notice Derek Henry is back and patronising as ever.

      How not to get folk to read your over long posts,masterclass.

    93. Cactus says:

      Six minute gap dh dude.

      🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂

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      Nice script.

    94. Derek Henry says:

      What I’d really like to see created by a genius is an educated comparison from the crash until today. The difference between the money the government spent on

      a) Government spending on goods and services and the ability for people to still save

      b) Automatic stabilisers

      A total figure of how much they had to spend after the crash to save the economy.

      Compared with

      a) Government spending on goods and services and the ability for people to still save

      b) If a job guarentee was in place at the time.

      If it was possible to get those figures for 2008 to 2016 and compare them the job guarentee would win the arguement hands down. Not only could you show how much was needless wasteful spending by the automatic stabilisers but you could show what you are actually getting with a job guarentee. You know exactly the price and the hours worked never mind the public purpose value.

      As you showed what would happen in 2009 then 2010 then 2011 etc when you compared the two it would lead onto at least another dozen arguements that again the job guarentee would win hands down. What the job guarentee would be up against is the slowest recovery on record. And in real economic output terms as in GDP and productivity the job guarentee would be miles ahead after the first year.

      It would be interesting to see how many years it would take the actions of the automatic stabilisers at that time to catch up with the actions of the job guarentee at the time in economic terms. Like a boxing match with automatic stabilisers in the blue conrner and the job guarentee in the red corner. They would have to stop the fight in the first round.

      What’s even crazier is when you compare the two none of this takes into account all of the public purpose work carried out and the community nice things to have over those years provided by the job guarentee and the fact that the whole time we never issued any bonds at all. As we were using the ways and means account as an overdraft that the government paid interest to itself in a sense.

      The job guarentee would win the arguement by a country mile if we could show this in action with educated figures in some way. Nothing else comes close.

      It makes the automatic stabilisers obselete.

      Let’s face it what would your family rather of had in 2007. if you lost your job due to the crash ?

      a) A UBI paying £75 a week

      b) A job guarentee paying £375 per week providing public purpose that benefits the community. Learning a different variety of skills giving you a better chance to get back into the private sector and a higher wage.

    95. Robert J. Sutherland says:

      geeo @ 02:03,

      I rather liked his first one @ 01:45. I found it quite illuminating, even if it didn’t in the end explain why several governments through the ages have nevertheless ended up presiding over periods of gross inflation and real economic collapse. People (and the governments which they necessarily populate) respond to more factors than pure economic theory.

      His second epistle was a little too artificial an analogy for me, alas. If I understood it even a little, it seemed in the end to depend on intervention at a micromanagement level to function, and therein may, I suspect, lie its Achilles heel.

      But it’s late.

      (And I fear none of it will motivate anyone new to vote “yes” either…)

    96. Derek Henry says:

      Not to mention the health and mental support that the job guarentee gives from losing your job one day and stepping into another soon after.

    97. Cactus says:

      Annie did it on the magic number too.

      I bequeath thee a mini-Wing:

      🙂 🙂 🙂 🙂 🙂

      🙂 🙂 🙂 🙂

      🙂 🙂 🙂

      🙂 🙂

      😉

    98. Az says:

      @ Derek

      Apologies – it’s late and I couldn’t red your post directed at me beyond the basic explanation of the “tax credit” currency idea in Italy.

      At that point I felt that wasn’t the greatest idea, because it must undermine the return in taxation to the Italian government – a government in the situation where they DO have to raise taxes in order to spend.

      Therefore if their economy is struggling but people are earning these 1 euro of tax credit IOUs, the revenue collected obviously must shrink yet further. It could work short-term, if there is some payback in the economy by having cleaner streets etc, but really I think it is part of a downward spiral and rather imprudent.

      But hey – economics is as much about opinion as it is hard fact.

    99. Derek Henry says:

      @ Geeo

      The kid gloves approach simply doesn’t work.

      Here, we are all these years later still trying to get independence because 90% of Scotland still believes taxes fund government spending and we can run out of £’s.

      patronising as ever ?

      I would replace patronising with ANGRY !

      Unless of course you want to stay wrapped up in cotton wool and remain a currency slave to London ? I can treat you like egg shells if you like ? if that’s what you want ?

    100. geeo says:

      If you want to help, Derek, stop acting like you are the font of all economic knowledge.

      I don’t get it…why are you not running the country ?

      Hmm….

      “SNP STUPID” makes a change from “SNP BAD” I suppose.

    101. geeo says:

      Apologies if this has been posted earlier…

      “Uk should SUPPORT Catalan independence” says former uk diplomat !!

      UK should support Catalonia independence, says former diplomat https://www.rt.com/uk/407115-catalonia-independence-spain-brexit/

    102. Az says:

      @ Derek

      While I quite agree that there is a requirement to educate the public about the workings of a sovereign fiat currency, I feel that this audience here is reasonably well-versed, and your efforts are perhaps wasted preaching to the choir, so to speak.

    103. Derek Henry says:

      @ Robert J. Sutherland

      explain why several governments through the ages have nevertheless ended up presiding over periods of gross inflation and real economic collapse.

      Very simple they borrowed in a different currency most of the time which is something you never do if you have your own currency.

      As for the countries with high inflation I can explain 2 Zimbabwe and the Weimar Republic. The two the fiscal conservatives throw about all the time.

      Maybe this inflation thing is harder to get going than it looks? And what did go on in the German Wiemar republic, where if you parked a wheelbarrow full of money thieves would take the wheelbarrow and leave the money? Turns out it was those pesky war reparations that caused government deficit spending to soar to something like 50% of GDP annually, with most of that whopping deficit spending used to sell the German currency and buy foreign currency to pay their war reparations.

      As expected, that drove their currency down the rat hole in short order, and kept driving it down, causing that famous bout of hyper inflation that didn’t end until that policy ended. And when all that ended and policy changed the inflation stopped dead in its tracks. In one day.

      So how about Zimbabwe? Turns out they had a tad of civil unrest that dropped their productive capacity by about 80%, but government spending stayed high and too much spending power with too few goods and services for sale drove prices through the roof. Not to mention rumors of insiders using the local currency to buy foreign currencies for personal gain (sound familiar). They gave all the productive farms to the soldiers who had no idea how to farm and farming collapsed but they were still spending the same.

      Applying this to the US to replicate the Wiemar inflation Congress would have to increase the deficit to about $8 trillion a year and then sell those dollars continuously in the market place, using them to buy the likes of yen, euro, and pounds. And replicating Zimbabwe would mean some kind of disaster that wiped out 80% of the US real productive capacity and then continuing to spend federal dollars as if that never happened.

      China gives us an interesting contemporary data point to consider. Deficit spending in China has been running over 20% per year when you include state lending to state owned enterprises, local governments, and other entities where repayment isn’t a factor, making that lending, for all practical purposes, pretty much the same as deficit spending. The only time the US deficit spending got that high, with pretty much the same growth rates, was during World War II. And while considered high, China’s inflation seems to have peaked at about 6%, a far cry form hyper inflation, also, interestingly, much like the US during World War II. And note during World War II, the Fed was entirely accommodative, much like the the Fed is today, buying Treasury securities to keep long term rates low.

      What all this tells me is that run away inflation, whatever that might mean, isn’t something hiding around every corner waiting to pounce. In fact, it takes a lot of work to get there.

      Japan, the US and the UK have spent gazillions trying to hit the 2% inflation target rate for decades now.

    104. yesindyref2 says:

      @DH
      “Very simple they borrowed in a different currency most of the time which is something you never do if you have your own currency.”

      Denmark this year reapaid all its foreign currency denominated debt using reserves, apparently, and now will denominate all debt in its own currency, the krone. Mmmm, linky …

      http://uk.businessinsider.com/denmark-central-bank-says-country-has-no-foreign-debt-2017-3

    105. Derek Henry says:

      @AZ

      It allows them to circumvent the 3% rule and the austerity that has been imposed on them. That’s the whole point.

    106. Derek Henry says:

      @ yesindyref2

      183 years to pay it back. What do they do the first chance they get denominate all debt in its own currency.

      Many countries do borrow in a foreign currency but it is risky as hell and how they quite quickly get into trouble.

      It all depends if they have a floating or fixed exchange or pegged rate as well.

      We borrowed $’s from the IMF and got into big trouble and if they knew at the time we didn’t need to it would have saved us a lot of trouble.

      Italy would have defaulted if Warren never rode to the rescue. Their central bank didn’t even know how it worked.

      Pages 94 – 97

      http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

    107. Az says:

      @ Derek

      I feel in that last response that you’ve overlooked the shrinking tax returns such a system must produce. That suggests the following year there will be even more people earning IOUs, and that phenomenon repeating year after year.

      I should point out here that Italy recently reduced its national rate of corporate tax a whopping 3.5%, from 27.5% to 24% (with local corporate tax unchanged @ 3.9%). I’d politely suggest to them that they’re losing out on tax revenue in two ways. While I understand the motivations for CT reduction, I disagree with them.

    108. liz g says:

      AZ @ 2.29
      I for one am always glad of a reminder of how currency Actually works.
      We all need to be well versed in it for when we are in conversations with potential yes voter’s.
      And being able to point them to a Recent post is also,I think, very helpful.

      And don’t be forgetting that we never know when new readers will check out this site.
      Therefore demonstrating on a regular basis that we have conversations that show we have a realistic grasp on our currency going forward is all to the good don’t ye think?

      So please don’t pick apart another winger attempting to inform the group…..as long as it is accurate it’s all good.
      Just say thank you Derek and move on to your own contribution eh!

    109. Derek Henry says:

      @ Geeo

      The SNP have been both stupid and bad. Let’s face it. It has only taken them 80 odd years to work out the only way independence will work is if we float our own currency and create our own central bank.

      We approached Alex to help him with the currency question.

      We being the UK MMT group and Professor Bill Mitchell from Australia. We never heard anything back and you saw how that went. It was a disaster we would have had Alistar darling crying. We have people at St Andrews, Cardiff and Leeds university. People from all walks of life.

      We are on the verge of setting up MMT groups in England, Wales, Northern Ireland and Scotland It’s all being decided the best way to do it as we speak. At Univesrity College London last night. We’ve been on renegade inc.

      We work closely with Stephanie Kelton who was Bernie Sanders economic advisor and on the US budget commitee and most of the US MMT group.

      Dirk Ehnts from the Bard College in Berlin is making huge strides to get the truth out there.

      They are all making great strides especially in the US and breaking into the mainstream media and they have a huge following because people are learning the truth how the monetary system really works.

      MMT group in Italy is also getting bigger by the day.

      Labour have started their own MMT group as Bill was at their conference. We’ve presented at a few Labour meetings around the London area.

      Labour are really starting to run with the truth and starting to understand it. The SNP are oblivious to it all.

      If you want to help start the Scotland MMT group then get involved with the UK MMT group.

      You can join via a link at the bottom of this article

      https://medium.com/modern-money-matters/the-bond-economy-d339993a4906

    110. yesindyref2 says:

      @Derek Henry
      Do you have someone who could speak at the Scottish Independence Convention on 4th November at Usher Hall in Edinburgh? If so perhaps you could contact them and offer a speaker. Maybe consider having a group for Indy, under their umbrella, which won’t work if it doesn’t have diversity.

    111. Derek Henry says:

      @AZ

      I think you are missing the crux of the article.

      2 points

      a)What the idea is trying to reveal is the fact that tax-credits are money! The U.K. pound is a tax credit good for the cancellation of one £’s worth of U.K. taxes. When the tax-credits are embodied as a “legal tender” paper currency?and subsequently in digital form as well?citizens can then use them to pay for things other than taxes.

      Even if a citizen owes zero taxes to the sovereign government, that citizen can still use the paper tax-credits to buy the same lasagna dinner as he could if he did owe taxes. So all citizens have the same incentive to earn the paper tax-credits (money) whether they owe taxes or not.

      b) Since no tax is levied on TC’s, the tax savings makes them an attractive alternative to Euros.

      From an accounting perspective consider the business selling the lasagna dinner – on tallying the books for income tax assessment TC’s received through lasagna sales do not count as income. Given the costs of lasagna production remain accounted for in euros, the lasagna providing business will record a net EU loss on TC sales transactions, thus a (welcome) reduced income tax liability – and an incentive to buy supplies ‘local’.

      From a business operation point of view, pay for stock/inventory in euros, sell in TC’s – pay minimal income tax, but live well on the ‘black’ economy. Carried to an extreme conclusion, no-one would need euros except to import necessities from other EU ‘states’.

      Voila – one’s own domestic currency – now, as you suggest, for some ‘domestic’ inflation and corruption control they might just need an accounting system that flies below the EU currency accounting radar.

      Perhaps an expiry date on the TC’s to expedite circulation/prevent accumulation.

      Obviousley. the EU will clamp down on it and try and make it illegal and say italy is printing their own money. Because of the lost tax revenue and extra spending as they’ll smash the growth and stabilty pact.

      However, then what an oppertunity italy has to show the rest of the country what a con job the Euro actually is. Then they’ll leave the Eurozone.

      Or if we implemented the same thing here we could show what a farce the £ is and how it keeps us a currency slaves.

    112. yesindyref2 says:

      @DH
      While such a TC scheme might be interesting, it needs acceptance to get anywhere. There was a scheme started in Ayrshire that sounded interesting called Ayrshire LETs, the idea being a barter scheme without money. I never tried it, I preferred to be paid in £s which I could definitely spend anywhere, and save if I could afford it, secure in the knowledge that in 10 years time I could take them out and use them.

      https://sites.google.com/site/ayrshirelets/

      Speaking personally even with an SG scheme of TCs if possible, I wouldn’t accept TCs, pay me in £s, euros, dollars, or you don’t get the goods.

    113. yesindyref2 says:

      @DH
      I forgot to say, try the links, they don’t work, which presumably means the whole idea didn’t work either. The idea came up 11 years ago.

    114. Derek Henry says:

      @ yesindyref2

      I’d love to do it.

      I’ve apporached Robin Macalpine many a time. He’s just not interested.

      He dosen’t get it. MMT goes against everything he was ever taught because he was taught that we still use a gold standard and still use fixed exchange rates. What students get taught now at Oxbridge and Harvard etc.

      It’s like asking him to give up his lifetime of work.

      He’s went with Ricahrd Murphy instead. We taught Richard MMT which he now uses. Bill schooled Richard on tax at a meeting in London and it is Richard who has wrote a book about tax. He wasn’t happy.

      If you put Bill Mitchell Richard Murphy into youtube you can watch the whole debate. Ann Petifor was there as well.

      I don’t have letters after my name which could be the problem when it comes to events like that in Edinburgh. It gives the speaker more authority.

      I work in a bookies in Glasgow but could go toe to toe with most of them. I’m all self taught and it has taken me 6 years to get the understanding I have now.

    115. Derek Henry says:

      @ yesindyref2

      I’d love to do it.

      I’ve apporached Robin Macalpine many a time. He’s just not interested.

      He dosen’t get it. MMT goes against everything he was ever taught because he was taught that we still use a gold standard and still use fixed exchange rates. What students get taught now at Oxbridge and Harvard etc.

      It’s like asking him to give up his lifetime of work.

      He’s went with Ricahrd Murphy instead. We taught Richard MMT which he now uses. Bill schooled Richard on tax at a meeting in London and it is Richard who has wrote a book about tax. He wasn’t happy.

      If you put Bill Mitchell Richard Murphy into youtube you can watch the whole debate. Ann Petifor was there as well.

      I don’t have letters after my name which could be the problem when it comes to events like that in Edinburgh. It gives the speaker more authority.

      I work in a bookies in Glasgow but could go toe to toe with most of them. I’m all self taught and it has taken me 6 years to get the understanding I have now.

      Bill give me permission to use his weekend quizes to teach people.

      http://bilbo.economicoutlook.net/blog/?cat=12

      I asked Rev If I could do a weekend quiz on here. He never got back to me.

    116. Derek Henry says:

      @ yesindyref2

      It is so annoying and makes me so angry that the independence movement have spent all their lives moaning that they couldn’t get on mainstream TV or that it was biased. So they had to make their on platforms like common weal and wings and all the other social media websites and blogs

      Yet, they do the exact same to us and don’t allow us a voice when we could really help them.

      So we’ve decided to take matters into our own hands.

    117. Derek Henry says:

      Bill’s economic blog has a HUGE following and was voted one of the best last year worldwide.

      He gives me permission to use his quizes on here and REV did not get back to me.

      I mean c’mon what’s that all about ??

      I’ve gave him Stephanie Kelton video’s to put up as a guest post. Heard nothing back.

      REV would have voted for Bernie if he lived in the US.

      He’s going to end up backing the wrong horse. Time will have passed him by. MMT is changing economic thinking world wide.

      Stephanie came to London last year and got the bank of England to introduce the sectoral balances approach. Wynn Godly and Mark Lavoie came up with it at Cambridge before Thatcher closed the Cambridge economics department down.

      Wynn ended up teaching at the Levy institute that teaches MMT in the US.

    118. yesindyref2 says:

      @Derek Henry
      I’ve already had the odd blast at SIC below the line on the National, for what that’s worth, so I’ll do the same about MMT, though I think I already mentioned it once. I think by the way BfS have it in an article, checks …

      … no, not quite, it’s block-chain and crypto-currency, but it’s a bit revolutionary so they might be open to the idea. Gordon MacIntyre-Kemp.

      http://www.businessforscotland.com/three-transformational-ideas-scotlands-economy-society/

      It is a problem that unless you’re a known name or have a title “they” are not really interested in your opinion. Yet it’s grassroots punters like us do most of the work, and get to hear the types of things the undecided and noes might be interested in, which varies from one to another. I did offer to contribute to something dear to my heart, but apart from an initial acknowlegement and being passed on, never heard anything since. But I could stop some of the errors that appear from being openly voiced.

      *shrug*, YES wastes its talent, while ego-trippers trip up.

    119. Derek Henry says:

      @ yesindyref2

      MMT is what is, not what might be.

      http://bilbo.economicoutlook.net/blog/?p=35836

      It’s not a theory it describes how the monetary system is set up. Nothing more, nothing less then from that it debunks the lies and framing and propaganda the fiscal conservatives have used for the last 40 years to hide the truth.

      Most people knew how it worked it’s just after we came off the gold standard nobody updated the economic textbooks.

      And the fiscal conservatives have used that to their advantage ever since.

    120. yesindyref2 says:

      @DHL “And the fiscal conservatives have used that to their advantage ever since.

      Basically yes, with us as collateral they collect on time after time after time.

    121. Derek Henry says:

      @ yesindyref2

      90% of the population believe the government finances operates like a household budget. As long as that continues the Tories will keep winning elections.

      Once we get set up in earnest, we are going to change that.

      REV should have been chipping away at that years ago. There’s way too much time attacking Labour and the Tories about things that don’t really matter on here.

      Debunk the economic basics that the fiscal conservatives have used for 40 years and they’ll be finished off for along time to come. Everything Labour and the Tories do flows from those lies.

      If REV has been debunking that when he started. When it came to the currency question during the referendum debate everybody would have been on board with the correct solution.

      Anyways, bedtime. If I can sleep I have achilles tendanitis.

      Catch ye.

    122. Ghillie says:

      Paula Rose @ 7.39 pm

      Yes folk being able to take on whatever work came their way without worries would be hugely beneficial and lead to far greater numbers doing what you can, when you can.

      Especialy useful for folk who are not always in perfect health or those who are called upon to be carers in sporatic bursts.

    123. yesindyref2 says:

      @Derek Henry
      Yes, me too (bedtime that is), nite nite.

      Rev’s blog though is mostly about media, though he has had some articles from other contributors. It’s a tricky one, the likes of Bella or commonspace might be interested, but then they have their own political nuances.

      What would help to get Rev interested is some nudging from those on his twitter feed you see every so often, maybe if you check that out and contact one or two of them. And another thing to do is to do a wordpress blog – they’re easy, and if you get stuck, post your problem on off-topic. Then you can do an article and just do a link to it, and hope someone tweets it on Rev’s twitter thing!

    124. Ghillie says:

      Derek Hendry, I think you will find that THAT is indeed Rev Stu’s greatest forte.

      Many many many of his incredibly well researched debunking articles have indeed covered the financial arguements and torn them to shreds.

      Rev Stu doesn’t ‘chip away’ at Unionist fallacies. He slams them with hammers. No nonsense survives.

      As for ‘way too much time on attacking Labour and the Tories for things that really do not matter on here’. Seriously?

      I’ll leave it to folk cleverer than me to post a few sample links to bring you up to speed.

      LOTS of catching up to do once you’re awake 🙂

    125. Ghillie says:

      Have our Gish Gallopers evolved into:

      Jackie Baillie Gallopers ? 🙂

    126. yesindyref2 says:

      @GhillieL “Gish Gallopers

      If you’re talking about DH, then maybe you should try this 3 question quiz with true or false:

      http://bilbo.economicoutlook.net/blog/?p=36897

      and remember that like it or not, GERS and the economy are CURRENTLY set to be hot topics in Indy Ref 2, unless there are some idea of how iScotland could do things differently.

      I got 3 out of 3 on that one, not so on another one I only got 1 🙂

    127. Petra says:

      @ Derek Henry at 3:58am ………… “We approached Alex to help with the currency question… We never heard anything back…”

      Didn’t Alex have Joseph Stiglitz (and others) advising him? Isn’t he a world expert? Don’t you rate him at all?

      And getting back to basics for people like me, (background in nursing, teaching, sociology and psychology) with little knowledge of economics, could you let me (us) know what you think of the GERS figures / Fraser of Allander economists?

    128. yesindyref2 says:

      Damn, I only got 2 right when I did it again 🙁 Got the 3rd one wrong for some odd reason. I think I forgot about the balance sheet! Time for bed, said Zebedee.

    129. yesindyref2 says:

      @Petra
      My feeling without understanding it that much, is that MMT could make GERS as it stands totally irrelevant. Which would, from a different angle, be the same as Richard Murphy’s view.

      Apparently Stiglitz did consider it, but stuck to the “straight and narrow” instead. Which to be honest was probably the correct decision for Indy Ref 1, there was too much else for people to take in. Same as our own currency, right enough …

    130. yesindyref2 says:

      @DH
      Damn, made a mistake of briefly looking at “MMT is what is, not what might be”.

      Doesn’t help Derek, because it begs the immediate question:

      “If it is what it is [what we’ve got now], why bother finding out about it, as there’s clearly nothing needs to be done, no changes in policy needed, and no help”.

      Which, for people interested in change rather than theory, is an off-putter.

    131. Petra says:

      @ yesindyref2 at 6:50am …. “GERS”

      Thanks for that. And as you say in your next post, “If it is as it is (what we’ve got now) why bother finding out about it, as there’s clearly nothing needs to be done, no changes in policy needed and no help. Which for people interested in change rather than theory, is an off-putter.”

      And that’s it in a nutshell for me yesindyref2, if I’m reading you properly.

      As already mentioned I don’t have much of a clue about economics other than what I HAD to study in relation to Sociology. It was the only part of the course that bored me witless and I’m left with nothing more in my head now than the names of economic models such as Keynesianism, Monetarism and Marxism.

      And to be honest I think that the vast majority of the people living in Scotland know as little (or as much, lol) as me. If we can set up a Central Bank, have our own currency and MORE than anything demolish the GERS myth that should do it. Add to that say comparing Scotland to successful countries with similar sized populations, preferably with less resources than we have, should do the trick.

      People aren’t interested in theories. They want facts. They just want the sums to add up, imo. To know that we can afford to pay pensions, run our NHS and so on and it looks as though Nicola (her economists) has been working on that. Maybe I’m being too simplistic, but that’s how I see it.

    132. Nana says:

      ‘Multiple Tory rebellions’ likely over EU Withdrawal Bill
      http://archive.is/Qr6Hc

      EU leaders aim to let Theresa May down gently over trade talks
      http://archive.is/sB54p

      Cold shoulder, cold supper for Theresa May at Brussels summit
      http://archive.is/MbOHh

      http://www.politico.eu/article/antonio-tajani-slams-theresa-mays-e20b-offer-as-peanuts/

    133. Petra says:

      Carles Puigdemont has until 10:00am today to renounce his plans for Independence. If not Rajoy will seemingly implement Article 155 and transfer powers from Barcelona to Madrid.

      And what then? Is Rajoy going to have Puigdemont arrested? Will people take to the streets? It’s not looking good. Is there no one out there willing to help them and put a stop to this? Absolutely hellish to say the least.

    134. skintybroko says:

      Sorry O/T but last year someone produced a spreadsheet showing the comparison between the greedy yoon mps and the 56 snp mps at westminster showing that the SNP MP’s made 80% more contributions in debate (hence were in London more often) and claimed £1.6m less in expenses – would be good to see a comparison with the latest bunch of chancers – can anyone remember who did that?

    135. Macart says:

      You’ll like this Nana. 🙂

      For those who had a bit of a sneer at Scotland’s contribution to the space industry.

      https://archive.is/4a0AA

    136. Les Wilson says:

      May is touting a deal for EU residents, nothing on paper as far as I know, definitely nothing signed. Would the EU take at her word?
      I rather doubt it.

      Also no hint of sorting the reciprocal a health agreements for expats living abroad. Many who moved abroad, sold up here to create a better life, mostly in retirement.

      House prices across areas that are popular with Brits, particularly in France have fallen dramatically which means they may be forced to sell at a substantial loss, with no guarantee they will be able to find a home in a reasonable area for them on their reluctant return.

      Many will be badly financially burned due to this Tory mess, and they do not seem too concerned about the damage to these people.
      Shame on them. Tories that are only concerned about their own pockets, nothing new there.

    137. Les Wilson says:

      Our thoughts must be with Catalonia today, it is a worrying situation. Yet again, involving an ex colonial power with a Conservative government. With that in mind, anything could happen.

    138. Nana says:

      @ Macart

      Well well, I can hardly wait for Prof Tompkins’s comment on this. If I recall he spent quite a lot of time on twitter sneering. Seems to be a unionist trait sneering.

      @ Les

      Twitter thread on the letter to EU citizens

      https://twitter.com/cliodiaspora/status/920780194205626368

      Guardian story archived

      http://archive.is/ft2ru

    139. FTDMail says:

      Complaints to IPSO submitted.
      Have one going back and forth with the DM right now. Anything that ties them up and frustrates their newsroom works for me. Might be a good idea to keep up IPSO pressure. If nothing else it consumes work hours at their offices that they could be spending writing more SNP Baaaaaad nonsense…

    140. Petra says:

      Great links Nana in particular Indyref2/Democracy, InstituteforGovernment and Bloombergs. Then we see that as veterans as suffering terribly, starving in fact, Tory parasites are charging us for lolling in their baths or using their own companies to set up their websites.

      The good news of course is that Angus MacNeil has managed to get a passport for that wee girl, fantastic for her and her grandparents, and Theresa May is going to get a boot up the backside.

      Well that’s me got the news for the day (the only place to get it other than the National/SH), read over my breakfast, now time to head out.

    141. Les Wilson says:

      Bbcs Trying hard this morning to make the efforts that the SNP have a “future” problem in funding our ferry’s to the Islands.
      They have spent lots of tax payers money subsidising these ferry routes they say, tax payers need more clarity yady yay.

      Suggestion seems to be that a lot of money has been spent, and only 18% more visitors have arrived, implying that what is spent is not working.

      We have heard in recent months that the Islands are booming, but today that also seems to be a bad thing. No emphasis that the islanders themselves also frequently use these ferrys, and they are a big boost for them as well as commerce across the islands.

      Just usual SNB bad crap from the state propagandists.

    142. Petra says:

      @ skintybroko at 8:35am …

      I’m in a rush SB, but if you check out the Commons Library you’ll find the info there.

    143. Macart says:

      @Nana

      Can you remember the last time a representative of any unionist party expressed pride in any homegrownd achievement?

      The credit always has to be elsewhere because… reasons.

      (sigh)

    144. Nana says:

      @ Macart

      Sadly the answer to that is No. I live in hope that maybe some day soon………..

      A few more links. I’m spoiling you lol

      Scots haggis exports to Canada to resume after 46 years
      http://archive.is/PLLaH

      http://scotgoespop.blogspot.co.uk/2017/10/for-seventy-ninth-time-yes-snp-can-be.html

      http://www.eureferendum.com/blogview.aspx?blogno=86640

      https://www.thenation.com/article/have-20-years-of-nato-expansion-made-anyone-safer/

    145. skintybroko says:

      Thanks Petra

    146. Jonny says:

      North Sea oil and gas costs to double if Brexit talks fail: https://www.nakedcapitalism.com/2017/10/uk-oil-gas-costs-rise-100-brexit-fails.html

      So not only have they thrown away 50 years of eggs the golden goose laid, they now want to shoot the goose.

    147. Liz Rannoch says:

      O/T

      Channel surfing – The Wright Stuff – 10.45am discussing Douglas Ross (red card). Phone in as well I think.

    148. Baldeagle58 says:

      As always Nana, thanks for the links.
      They go down well with a coffee before starting work.

    149. TheWasp says:

      O/T

      Just a wee heads up, oor Douglas Ross and his job/hobby are going to be discussed on the Matthew Wright show on channel five in the next hour. Anybody who wanted to phone in or message them with their views are very welcome

    150. TheWasp says:

      Sorry Liz Rannoch, missed your post.

    151. frogesque says:

      O/t

      Anyone watch the STV Slab prospective leader’s debate last night?

      Personally couldn’t be arsed listening to the drivel but was wondering if this sets a precedent for an annual event.

    152. Baldeagle58 says:

      frogesque says:

      19 October, 2017 at 9:39 am

      O/t

      Anyone watch the STV Slab prospective leader’s debate last night?

      Personally couldn’t be arsed listening to the drivel but was wondering if this sets a precedent for an annual event.

      Annual Event?! You’re hopeful that the new Branch Manager will last a whole year!

    153. Robert Peffers says:

      @Petra says: 18 October, 2017 at 8:43 pm:

      ” … and having a crowdfunder to buy you a home here in Scotland. It’s the least we can do for you. Our “thanks.”£

      We could always set Stu up in the Scottish Crown Estates Property of Holyrood Palace. After all if the Queen of Scots doesn’t defend the legal Sovereignty of the People of Scotland Scots law says we have the legal right to replace a Scottish Monarch with someone best able to do so.

      To date the current Queen of Scots has not exactly defended Scottish Sovereignty and the authority of the truth of that claim is none other than the then UK Prime Minister who attested to her purring on hearing the result of Indyref 1.

    154. Derek Henry says:

      @ Petra

      You’ve just desribed MMMT in a nutshell. The job guarentee is it’s centre piece. The monetary system is what it is you just have to expose the truth.

      Government is a currency issuer; people and firms are currency users.

      Government can always create as much new money as it needs.

      Government spending is new money; all of it is newly issued currency.

      Taxes do not fund government spending.

      Taxes remove money from the economy and help prevent inflation.

      Taxes help the government create a better and fairer society.

      Borrowing does not fund government spending.

      Borrowing is a political choice and a form of corporate welfare.

      Borrowing is used to maintain the base interest rate at a value above zero.

      Base interest rates above zero benefit the rich and powerful.

      Base interest rate changes are not very good at balancing the business cycle.

      Base interest rates should be allowed to fall to their natural level of zero.

      Deficits are neither good nor bad and can continue indefinitely.

      Deficits are not a burden on future generations; neither is the national debt.

      Deficits are necessary for any country that imports more than it exports.

      Surpluses may be necessary for a country that exports more than it imports.

      Surpluses strip wealth away from the current generation.

      Surpluses are not a suitable mechanism for balancing the business cycle.

      Savings held by the private sector can only ever come from government spending.

      Savings accumulated in any period exactly match the deficit for that period.

      Savings remove money from the economy and help prevent inflation.

      Government is never constrained by money, by the market or by globalisation.

      Government is only ever constrained by the availability of real resources.

      Government can buy any unused resources in the economy without risking inflation.

      People who want a job, or who are underemployed, are unused resources.

      People who want a job can always be employed to further the public purpose.

      People who want a job can always be offered work via a Job Guarantee.

      The Job Guarantee provides a proper job at a living income to anyone who wants one.

      The Job Guarantee leads to better jobs in the private sector.

      The Job Guarantee balances the business cycle and helps prevent inflation as it replaces the automatic stabilisers.

      The how to pay pensions after we gain independence piece further up the thread by not issuing bonds at all. Is a massive improvement, after all issuing bonds is just another left over from the gold standard.

      Also, how do you reduce foreign sterling savings that makes up part of the deficit ?

      https://medium.com/modern-money-matters/tagged/foreign-trade

      We’ve been doing a lot of work on that.

      The Gers report is irrelevant because The UK does the tax collection across the UK. Scotland is nothing more than a glorified county council. If you did the accounts for North Yorks County Council you would find it too has a ‘deficit’ that is filled by the block grant and whatever ‘borrowing’ HM Treasury permits.

      Here’s the gory details: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/479717/statement_of_funding_2015_print.pdf

      So the leakage out of the arbitrary line of the Scottish border within the Sterling currency zone is to anywhere else in the world (including the rest of the UK) – and the rest of the UK saves a lot of Sterling. That leakage, plus any net savings within Scotland, is what causes the Scottish government sector deficit.

      In the currrent set up. Ultimately in the same way that Greece needs to tax German savers, Scotland needs to tax UK savers. To have the power to do that you need UK savers saving in Scotland’s currency which the Scottish government can control and if need be tax. Otherwise Scotland will run out of money as it all drains to the rest of the UK.

      Using past figures you can see it.

      The actual deficit components are here: Net lending (+) and net borrowing (-) by sector

      https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/quarterlysectoraccounts/quarter1jantomar2016#net-lending-and-net-borrowing-by-sector

      Which shows for that quarter all the saving in Sterling was being done abroad. Which is why we had a big current account deficit.

      Remember that savings is essentially voluntary taxation. It frees up resources to purchase. Which is why you don’t worry about the numbers, you worry about the unemployment and you worry about the level of capital investment in productive capacity.

      Which are the first two rules of functional finance.

    155. frogesque says:

      Looks like Spain has stated the crackdown on Catalonia.

      Westminster will be watching closely.

    156. Derek Henry says:

      @ Petra

      So once everyone on wings convinces the Scottish Population that what they are told are myths about the monetary system.

      Then the SNP wins independence

      What is the best way to use the real monetary system in an independent Scotland ?

      The answers to that is what we’ve been working on for the last decade.

      With a short summary here and I mean short.

      https://medium.com/modern-money-matters/running-a-modern-money-economy-ada9682a5fb9

    157. heedtracker says:

      Never mind Spain, Clyde shipbuilders getting UKOK shafted etc. That Scottish haha tory linesman’s got a long way to go before he reaches peak Englsih tory arsehole. Well not that long really .

      Stinky old Graun,

      Health & wellbeing
      Pass notes
      Why does Tory MP Tim Loughton spend an hour in the bath every morning?
      The ex-minister says the shower is ‘one of the greatest sources of stress in the world’. Let’s hope he never has to face one of his own government’s disability assessments
      Conservative MP Tim Loughton
      Splish, splash … Tim Loughton, lusting after a warm bath, earlier. Photograph: Gareth Fuller/PA

      Wednesday 18 October 2017 14.46 BST

    158. Derek Henry says:

      @ indyref2

      The First International Conference on Modern Monetary Theory was held from September 21-24, 2017 at the University of Missouri-Kansas City (UMKC)

      It was a huge success !

      https://twitter.com/BinzagrInfo

      A few days after here’s just one of the fantastic projects that have come out of it.

      http://neweconomicperspectives.org/2017/09/hy-minsky-low-finance-modern-money-civil-rights-consumer-debt.html

    159. Ken500 says:

      Puigdemont will get the jail. He will be put in jail. Unless he denounces his actions. He has broken the Law in Catalonia/Spain as well. He is just a charlotan who does not have the necessary vote. A crook. 2.3Million out of 5.5Million electorate. 7.5Million population. 1.5million under 18 years. There are 1/2 million missing from the electorale role? (Six million?) Approx 1/3 of the population support Independence on really low turnouts. The Ref on having a Ref turnout was 30% + He lost but went ahead anyway. There are reports it had to be passed by 90 votes in the Catalonian Parliament. He got 72.

      Everything Puigdemont has done doesn’t have the support of the majority but he is claiming 90% majority on a 43% turnout. Not democratic. Not justifiable. Now the Independence grouping are falling out. When the opposition are boycotting the vote. After the vote he started talking about thinking about others. Maybe he should have thought about others first. When he pushed ahead with it. Then there was talk of reconciliation. A bit late. Suddenly realising what he and his cronies had done. Trying to backtrack. Politicians in Spain/Catalonia are a bunch of corrupt crooks. The Spanish/Catalonian people are delighted when they go to jail. Nothing makes them more pleased. They despised all politicians. Maybe that is why the turnouts are so low.

      It is reported Puigdemont owns the National TV station. spewing out the propaganda. He was a journalist and Mayor of Girona. There is no open and free democracy in the world were that would be allowed. The Spanish Gov had to borrow €Billions from the EU to bail,out Catalonia,

      The financial/housing crash happened on the Costas including Catalonia/Barcelona. They caused the crash with the Pozzi schemes Robbing ZEU citizens and foreigners. They lost €Billions in worthless property holiday/home deals. Lost their pension and there life saving etc. Perpetuated on the Costas. The mediterranean coast. The rest of Spain had to bail them out. The poorer rural areas suffered the most. The burden fell on the poorer they suffered the most.

      Catalonia one of the wealthiest parts of Spain was protected by the bail out (Like London). They suffered the least. The money still had to be paid back to the EU and the ECB. The Catalonian politicians were objecting to paying £4Billion into the Federal Gov administration. There is some kind of retribution from the wealthiest areas to help the poorer in a Federal system. The Spanish Supreme Court upheld the judgement and they do not have to pay it.

      Most Spanish politician/Mayors are corrupt crooks. They have major local power and can run it as a fiefdom. There is a scandal, practically every other week. Even one another up. There are shooting weapons avaiable in Spain. For farmers etc. Weapons are available. They go to jail. If charged and found guilty. It doesn’t matter who they are. Lawyers, politicians, mayors, bankers, ‘business’ cons, criminals, royals. All can go to jail. Two top bankers. Heads of Bankia and another one ? went to jail. In the UK they are given knighthoods and £Billions of public money. The Police are often brutal. There are International criminals based in Spain. Catalonian Independence support the same as Brexit. A third. A major opposition. Just like Brexit, Catalonia could bring the Euro down. Cause hardship all over the world. Bring the world economy down. Increase the migrant crisis. Illegal wars makes more people struggle to survive.

      Scotyish and Catalonia Independence movement are nothing the same. To diffent to compare, without considering the differences.of course both Catalonia and Spain want to remain in the EU. They are in the Eurozone. The EU and the ECB guarantee their debts. There is higher support for Independence in Scotland 50%? Scotland will win it by a majority. Fair and square. It will be done for Scotland to grow and prosper and become a fairer more equal county. With major EU rights of access until full membership comes about and is restored. If required and requested.

      The Police in the UK can be just as brutal . The miners strike. They corral innocent protesters for hours, That is their official tactics. Not letting them go to toilets or getting water or food for hours. Detaining youngsters for hours (protesting student fees etc). The London riots people were sent to prison for minor incidents. Draconian measures imposed by Cameron who wanted everyone to hug a hoodie,

      The attack on the Press and the Guardian mail room. For printing the truth. Cameron and Clegg threatened the editor with prison unless there was a change of editorial. The only paper with freedom of editorial because of it’s constitution. The owners forfeited £Millions to keep the Guardian neutral. All to no avail. Now an Oxbridge elite cabel of liars. The editor was sent upstairs. A new editor appointed who would follow the official line. The Westminster Press Office controlling the Press won again. A ‘D’ notice slapped on again. It is not even allowed to be reported.

      That is how Westminster keeps the secrets and usurps the rule of Law. The Official Secrets Act used to govern and hold all Westminster secret, illegal dealings. Including illegal wars. 100 years cover up. The Westminster action being called out all the time by the UN and International Law. Being broken all the time by Westminster unionist crooks and charlatans. They make the Laws and break the Laws. They think they are above the Law. They are not as they will find out very soon. They will get voted out and Scotland will have ut’s Independence to go on and progress like most other properly run EU countries with whom Scotland has much in common. The auld alliance etc. When France and Scotland fought against brutality of an enemy State.

    160. Abulhaq says:

      Independence is a prize of greater value than the entrail readings of economists and their pseudo-science. You simply cannot commoditize national sovereignty.

    161. heedtracker says:

      So from Glasgow Herald’s,

      18th October
      Shipworkers say government has betrayed Clyde yards as BAE systems signs deal over cut price type 31 frigates
      Stephen Naysmith

      to

      Severin Carrell Scotland editor of the Guardian,Thursday 19 October 2017 07.00 BST

      Stonehenge
      Stonehenge builders feasted on animals brought from Scotland, study shows
      Analysis for Feast! exhibition suggests workers ate hog roasts and beef stew made from animals taken to Wiltshire by boat

      https://wingsoverscotland.com/wp-content/uploads/2013/02/salmondbell.jpg

      Britnat propaganda in Scotland, is certainly predictable.

    162. yesindyref2 says:

      @Petra / @Derek Henry
      The thing is about MMT is YESser need something simple we can use. So for instance, if we can say “if the government needs more money it doesn’t borrow it from commercial banks, it just borrows it from the central bank which then prints more money to give to the government, and the nett effect is zero – no debt – no deficit”, then if true, that’s good to go.

      But theory is just going to give glazed eyes and a “NO thanks!”.

    163. Lenny Hartley says:

      Les Wilson re Islands, coming from Arran I have noticed the massive difference RET has made to our economy, I’m old enough to remember Tumbleweed blowing through Brodick on the Tuesday after Sept weekend until Easter. Now the Island is busy year round , albeit less so in the Winter not all down to ferry pricing, the Auchrannie resort bring in a lot but mainly ferry pricing with over 800,000 passenger and 200,000 car journeys last year on the Ardrossan to Brodick run alone. Don’t know what percentage increase but if boots on the ground say anything it’s significant. The economic Impact on the Island has been immense. Off course the Yoons complain saying we can’t afford the subsidies , might be correct with around 70% of the additional taxation the policy brings going straight to Waste-monster . Would you believe it? there are still people who say that RET has done nothing for the Island, these are probably the same sort that think that Scotland would be an economic basket case if we were Independent. Remember , the .North British branch of the Labour Party and the Tories were against RET, so it’s no surprise that the Yoon MSM has started scare stories against it.

    164. Lenny Hartley says:

      Ken500 you talk some pish at times, so getting battered over the head and drags down stairs by the hair when you are in a queue to vote makes you a no voter, utter pish as mr Peffers would say.

    165. Ken500 says:

      The UK/US print money. QE to bring down the debt. Lowering people’s. Lifestyles. Hoping they will not notice. Theybdo. . Except for the richest who are given special dispensation. Gov suuported tsx evasion. They don’t notice but just get even richer on the backs of the poorer.

      The UK and the US are the most endebted unequal countries in the world. They people are not happy and will vote the govetnments out. Thirty years into the wilderness once again for the Tories. Off with their stolen loot of public which will have to be prised from their clutches if there is any justice.

      The US voters can start voting Trump out very shortly.(December? ) If they want to – Senate elections. Two senators from each State. 100. The 2/3 majority is needed to pass through legislation. Although there is a Presidential veto. A Presidential prerogative. The Senate can vote matters down,

      It is State legislation which governs most people day to day lives. Local taxes. Two tier tax system Federal taxes. A blanket 10%? of wealth. State taxes a progressive form of redistribution? based on income. A payroll tax for employers? Many States provide a good free Medicare health service fir the elderly. A state medical care for those who can’t afford better provision.

      The US sells strong drugs over the counter. People self medicate and can die because of the dangers of over prescription. More people die of drug misuse of strong medication. Easily available. Plus illegal drug use. Availability of non controlled substances. People die. More people die of gun crime. Then terrorism. 18,000 die in gun crime against each other. 26,000 people die every year. Link between drug/alcohol misuse and crime. Most voilent crime is committed under the influence of drink and drugs. It woukd not be committed if people were sober.

      The US is culling itself backed up by the US administration. Politicians are killing their own citizens and innocent people all over the world. Nearly half of all tax revenues raised every year goes on the Military. A military/totalitarian State. Killing machine. Illegally Killing and maiming innocent people all over the world. Either military or monetary trying to retain world dominance but failing. However there is a lot of collateral damage. Along the way.

      Trump has put the cat among the pigeons. No one knows where he will turn. Chaos and confusion is cluttering up the chain of command. Stalling the proceedings. A constant change around of personal and policies. Utter confusion. $Trillions in debt, The highest in the world waiting to go over the cliff. Taking the world down with it. Unless politicians get a grip. It would be laughable if it was not so tragic. Affecting so many people adversely.

      No more UK poodle and they can keep their nuclear weapons. Illegally dumped in Scotland. They will be going with Brexit in any case. When England/Wales leave the EU. They were the ones that voted for it. Good luck, good bye and good riddance.

    166. Dave McEwan Hill says:

      Ken500 at 10.28

      I have real difficulty with you repeated harangues about Catalonia most of which have absolutely nothing to do with the inalienable right of the people of Catalonia to vote for whatever political status they freely want to enjoy.

      The Spanish Government has no right in international law or by the terms of the UN Charter to refuse them this.

      That is the point. Nothing whatever to do with your diatribe.

      We had people from Cowal out there for the vote. They watched at polling stations as the Spanish actually prevented hundreds of thousands from voting and those who did were very often frightened

      That’s OK is it in your book? That means the vote was invalid?

      Did you know that the Spanish government gave free travel on all public transport across Spain for Spaniards to go to Barcelona to join demonstrations against Catalonia?

      Here is the question. Does any regime have the right to deny a free,democratic vote to its people?

      Don’t give me any “constitution” or “legal” shit. A constitution and its laws do not come down from some god thing and are not ever forever. They are the products of agreed popular will. The only have legitimacy and validity if the people who exist under their conditions agree with them. International law, the UN Charter and the EU Commission on Human Rights all reinforce this. The EU Commission does not allow a state to use force against its peoples.

      If a majority the people of Catalonia do not agree with the provisions of the Spanish constitution (cobbled together in some haste to end the Spanish Civil War) it has no validity in Catalonia and they are not bound by it.

      This is correctly and legitimately established by a democratic referendum. That is all.

      (Of course we all know the Spanish Government is preventing a democratic and legitimate referendum because they know that Catalonia will vote in majority for independence and Spain will lose its most economically valuable area – sound familiar)

    167. Ken500 says:

      Over 3.5 million voters 800 incidents. More people get hurt crossing the road by proportion. The Catalonian politicians started it. Inviting violence by not listening to the majority. People’s wishes sweptbaside. The Police were out numbered majorly. The Spanish/Catalonian police are violent in any case. It is best to avoid them, especially drunken Brits. It does not make it right but keep it in proportion. One incident does not equate to the overall behaviour. The Police should be censored but don’t hold your breathe. They have been carrying on like that for ever with impunity also in Catalonia, Isolated incidents but still unnecessary. Foreigners complaints just get neglected. Crime rates are still low in Spain. Lack of taking complains seriously? Low detection?

    168. Dave McEwan Hill says:

      Ken500 at 11.33

      Diversionary rubbish.
      Answer the question.
      Do people have the right to democratic referendum?
      (particularly if held by the government they actually elected)

    169. Ken500 says:

      The right of the Catalonia people are not being upheld in the constitution of the Law. That Is the problem. Totally one side non majority. The rest wishes are being swept aside. That is not right in any way shape or form. This is not haranguing the Catalonian people. It is haranguing the Catalonian/Spanish politicians. Trying to manipulate the people. The Spanish/Catalonian people harangue then as well. It is supporting the majority of people whose wishes are being swept aside. For what ever reason some (the majority) are not interested in Independence in Catalonia. They do not vote. but their wishe are not being heard. 1/2Million are not registered for whatever reason. They must be considered not swept aside. If people believe in deomocrscy, which seems to be in short supply in Spain. With resulting major difference and difficulty. Affecting the EU economy.

      The constant comparison to the Scottish Independence movement (without proper consideration) could damage the Scottish Independence Movement. greatly. Put off people in Scotland voting for it. Or thinking it is a waste of time. That is the problem. When it could improve Scotland and the Scottish economy do greatly. It totally legit but could get caught up in the Spanish/Catalonian melee with injustice comparison. Spain is still a wonderful beautiful country with great people and lifestyle. Most do not like confrontation. The politicians should listen, especially in Catalonia. They know they have overstepped the mark with total intransigence and manipulation, Not wanting to pay their dues or listen to the majority. They might want change but not like the way it is being done.

    170. Ken500 says:

      The people’s vote rejected an IndyRrf, The majority did not vote or boycotted the vote. A 30% + turnout. Claimed as a 90%? Victory, The majority did not turn out to vote or boycotted the vote. The majority did not vote to hold a Referedum on Indy. 2,3 million out of and electorate of 5,5 million. A population of 7,5 million, 1/2 million not registered. 1.5 under 18 years.

      The majority did not vote for it. They did not vote for Independence either. Turnouts of 30%/40%. On average a 1/3 of the population support it, That is what is causing the difficulties. A backlash. How can they push it through. They do not have the majority backing, It would be difficult enough if they had but they do not. The EU/ECB guarantee their debt. Tgeyvwill hsve sonething to say about it if it threatens the eurozone. They will not stand back and let it happen. Bringing the euro and the economy down, That is what is worrying France and Germany,

      Best to leave then to it and wish them good lluckl Thry have to mediate. It may bring the changes that they want but they might have compromise. Better to leave them to it. They will survive.

      To stop the constant irrelevant, irrational comparison with the Scottish Independence movement.

      Same as Brexit. 1/3 support it. That is the Tories problem. They no longer have a majority. How can they push it through. 17Million, out of a 45Million electorate. 62 Million population. Million+ ? of whom did not get a vote. UK residents were denied a legitimate relevant vote. No taxation without representation.

    171. Rev. Stuart Campbell says:

      “There needs to be less welfare in general. Its jobs and work thats needed, not more reasons to do fuck all and let Mr & Mrs taxpayer pick up the bill.”

      Boy are YOU going to be embarrassed when you find out about automation. There will be less and less need for human labour every year in the future. That’s a problem we need to address now.

    172. Ken500 says:

      @ Dave McEwan Hill if you want to act illegally or support illegal action in other places that is up to you. The UN international bodies are there to uphold international Law of majority support. In a democracy. Confront diviant behaviour, That is what the EU and UN are doing sticking to these priniciples. If you don’t like it. They will not change for you. People can’t bleat about legitimacy, sovereignty and Law but totally ignore it in a situation where it doesn’t suit them. That is hypocritical.

      You either believe in it and the majority consistently. Or you don’t. Cannot flex the argument on it’s head when it doesn’t suit. That an illegitimate argument and above the Law. That people say they support. That is what Westminster does, They make the Laws and break the Laws. Then try and change the Law unlawfully when it does not suit. All their arguments about upholding the Law in tatters. Acting illegally. They are not an legitimate honourable Gov but dishonest. They will not get away with it because of the Law courts, the EU and UN.

    173. William Wallace says:

      Boy are YOU going to be embarrassed when you find out about automation. There will be less and less need for human labour every year in the future. That’s a problem we need to address now.

      Coupled with advances in artificial intelligence/neuro-dynamic programming maybe we won’t have to worry about addressing it at all if the owners decide we are superfluous to requirements and a drain on dwindling resources. The dystopian nightmare has officially begun.

      Except for viewers in Scotland… 😉

    174. crazycat says:

      @ yesindyref2 at 4.43 am

      I knew a number of people who participated in the Ayrshire LETS scheme. The “currency” was Thistles.

      I’m not sure that objects were ever bartered; it appeared to be more about services. Outwith the scheme, a hairdresser (for instance) could give someone a haircut in exchange for that person painting a wall for the hairdresser.

      With LETS, the painter could paint someone else’s wall, and that person could mend the hairdresser’s car. The scheme kept a record of this, so that the favours balanced overall.

      The problem for the people I knew was that the demand for their services vastly outweighed their desire/need for other people’s. So they built up massive credit, and eventually had to be reimbursed with conventional money, which defeated the object of the exercise.

    175. Fred says:

      Imperialist nonsense! So the Irish, the Americans, the Portugese, the Argentine, Mexico, Chile, Peru, Uraguay, Paraguay, Venezuala, Columbia, the Spanish Netherlands etc’ etc’ etc! should never have become independent nations? because it offended some inbred, God-given, chinless wonder of a hereditary monarch or some shite constitution which never came down the mountain with Moses! (check the US right to bear arms!)

      The English are indeed lucky that the Spanish Armada was a flop or they might be getting the Catalan treatment dished out today! Spain is a cobbled-up imperial hang-over (like the UK) not a country. It would be Moslem now if the dice rolled differently 500 years ago & the vigorous application of mass-murder was dished out to the non-Christians. If the Inquisition was brought back by Franco’s successors, who would be the least surprised.

    176. Les Wilson says:

      Any real news from Catalonia, most are at best, hours ago, deadline past so what is happening now?

    177. Nana says:

      @ Les Wilson

      Here’s the latest video at 5.09am

      Why the independent Republic of Catalonia will be a reality before the weekend!

      http://www.youtube.com/watch?v=1KnOkDxcyqI&feature=youtu.be&a=

    178. Petra says:

      @ Derek Henry says at 10:01 am …. ”Petra …. You’ve just desribed MMMT in a nutshell. The job guarentee is it’s centre piece. The monetary system is what it is you just have to expose the truth…”

      Derek I see that we’ve moved on, on the site, so just trying to catch up now.

      Thanks for the links. I’ll check them out later when I get more time. Maybe even think of pulling out my old Uni books re. economics and try to make sense of them (if I ever get the inclination, lol).

      ……………………………….

      @ yesindyref2 says at 11:09 am …. Petra / Derek ….”The thing is about MMT is YESser need something simple we can use. So for instance, if we can say “if the government needs more money it doesn’t borrow it from commercial banks, it just borrows it from the central bank which then prints more money to give to the government, and the nett effect is zero – no debt – no deficit”, then if true, that’s good to go. But theory is just going to give glazed eyes and a “NO thanks!”.

      And there’s a Richard Murphy article to that effect yesindyref2 that I was impressed with. Really taken aback with in some parts. Over the moon with in fact, such as the following.

      Richard Murphy: ”Before anyone says this is not possible because bond markets will not permit it, I stress that this is not true. We now know that a government with its own currency and central bank that only borrows in its own currency can never go bankrupt. This is for a simple reason, which is that if a government is in this situation it can always create all the money it needs to pay its debts…”

      http://www.thenational.scot/politics/15449866.Richard_Murphy__Get_the_currency_and_the_tax_system_right_and_indy_Scotland_could_flourish/

      …………………………………

      @ Robert Peffers says at 9:54 am …. ”Petra … We could always set Stu up in the Scottish Crown Estates Property of Holyrood Palace. After all if the Queen of Scots doesn’t defend the legal Sovereignty of the People of Scotland Scots law says we have the legal right to replace a Scottish Monarch with someone best able to do so. To date the current Queen of Scots has not exactly defended Scottish Sovereignty and the authority of the truth of that claim is none other than the then UK Prime Minister who attested to her purring on hearing the result of Indyref 1.”

      Well there’s no doubt that Stu the Bruce is doing a far better job for the Scots, could fill her boots and more, but would he want to live in Holyrood Palace? I can’t really envisage him rattling around in there Robert, lol.

      And while we’re on the subject, if you read this at all, you mentioned previously that the Queen has to make an oath to the Scots every year (if I picked you up properly). Could you elaborate on that if you get the time Robert?

    179. Dave McEwan Hill says:

      Ken500 at 12.38

      The United Nations Charter.

      “All peoples have the right to self determination. By virtue of that right they freely determine their political status”

      What part of that do you not understand?
      Answer the question.
      Do you think it is democratically acceptable to prevent people voting for their rights or voting to change their laws and constitution

    180. Petra says:

      O/T … However relates to another broken promise.

      ‘Tory minister tells Scotland to cheer up over cancelled £1bn energy project with 600 jobs.’

      http://www.thenational.scot/news/15607701.Tory_minister_tells_Scotland_to_cheer_up_over_cancelled___1bn_energy_project_with_600_jobs/

      ……………………………………..

      ‘Kevin McKenna: The 45% haven’t gone away – and that’s enough to terrify all Unionists.’

      http://www.thenational.scot/politics/15602479.Kevin_McKenna__The_45__haven___t_gone_away_____and_that___s_enough_to_terrify_all_Unionists/?ref=mrb&lp=23

    181. yesindyref2 says:

      @crazycat
      Thanks for that, good to know what happened but a shame. I guess to work it would need goods as well as services.

      But it’s also good to know for sure it was legit, I did do some internet checks including the originator before putting a link on a website I have, as I thought it was indeed legit.

      An idea ahead of its time!

    182. yesindyref2 says:

      @Petra
      Thanks for that, we get to read so much stuff it’s hard to remember where from and why, but that’s why I posted about Denmark – I knew it was significant, but not exactly why. So it’s because Denmark now is in the wonderful position of just creating more money (within reason) and can’t go bankrupt! Sounds good to me. A model for iScotland to aim for, as Sturgeon thinks in other ways as well.

    183. ScottieDog says:

      @yesindyref2
      Denmark has denied itself such freedoms somewhat by pegging its currency to the euro.

      With Derek’s remarks in mind, I sound like a stuck record but we need to progressive economists to be up on stage with the better together flat earth economists to call them out for what they are.
      SIC needs a progressive group of economic advisors.

      Interesting viewing – bill Mitchell at labours fringe event at their recent conference..

      http://bilbo.economicoutlook.net/blog/?p=37027

    184. Paula Rose says:

      Local currencies have actually been around for a long time – on a regional basis using Derek Henry’s model would be very interesting, alongside UBI the future would indeed be bright.

    185. Derek Henry says:

      @ yesindyref2 and Petra

      The thing is about MMT is YESser need something simple we can use.

      Which is what we’ve doing and is going to get rolled out nationwide. No matter what MMT meeting you go to everybody will watch the same presentation.

      Solving the Political Problem

      http://neweconomicperspectives.org/2017/10/solving-political-problem.html#more-11157

      We know what needs to be done.

    186. Rock says:

      McDuff,

      “Rock 9pm
      Exactly.”

      I haven’t seen you posting recently.

      Don’t be put off by the clueless pompous armchair pundits posting here who behave as if this blog belongs to them and only their opinions count.

    187. Paula Rose says:

      The connection between a local currency and regional rate rebate is an interesting area.

    188. William Wallace says:

      @ Rock

      You coming to Dundee on the 11th text warrior?

      Eh’ll beh ya a pint if you show up iy 😉

    189. ScottieDog says:

      @Paula Rose
      “The connection between a local currency and regional rate rebate is an interesting area.”

      I’ve been posting suggestions on the SNP’s policy site but never hear anything back and the most recent proposals they put up for viewing date back to beginning of 2016. Disappointing really as these proposals are aimed at improving economic growth.

    190. FTDMail says:

      Hey Rev, do you have a link to the findings of the commission? Just went looking for it but can’t find it online…cheers

    191. FTDMail says:

      hi Rev, do you have a link to the findings of the commission? Just went looking for it but can’t find it online…cheers

    192. STuart says:

      The article says, ‘ Because UBI also removes the personal tax-free allowance (there being no need for it any more), it brings about a substantial increase in income tax receipts’. Not entirely sure what that means, Who pays this substantial increase?



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