Rishi Sunak, our current Chancellor, took over the job when his predecessor, Sajid Javid, was in effect forced out. Sajid Javid was ‘fiscally conservative’—he believed in keeping a tight hold on the government’s purse strings. Rishi Sunak was then an unknown quantity, but he has since shown a contrasting willingness to distribute funds, in the form of the Covid-19 furlough scheme, pretty liberally—for a Conservative, anyway.
Sadly you can never be sure that Prime Minister Johnson’s words reflect his real intentions, but he seems not to be averse to spending government money either, though the Guardian suggests that his words in this regard should be taken with a pinch of salt.
And yet, and yet… They have been both promising to spend and actually spending unprecedented sums of money, without the customary dire warnings about ‘paying it back’ through higher taxation. Curious!
And here’s another thing. The Quantitive Easing exercise was not a one-off. Since Gordon Brown’s £200bn in November 2009 the Bank of England has paid off £375bn in July 2012, £435bn in August 2016, £645bn in March 2020 and £745bn in June 2020—making £2.4tn in all. It’s almost as though as soon as the government has ‘borrowed’ money to regularise (as they see it) its spending, the Bank of England comes along after them and pays it all back.
Could it be that the MMT message is beginning to get through?
Could it even be that Johnson/Cummings had a master plan all along, and that replacing Javid with Sunak was no accident?
Strange and interesting times!
Update 5th October
Ah well, I should have known better.
Today he told the Conservative Party Conference that, ‘… the party could not argue there was “no limit on what we can spend”, nor that “we can simply borrow our way out of any hole”’. This sort of claptrap really is inexcusable. There is no limit to what the government can spend. And in the present situation there’s zero risk of inflation. So because of the government’s deficit phobia people will go to work to support their families and some of them will contract Covid-19. Well done Rishi!
Odd too, that he should use the phrase ‘no limit on what we can spend’—distinctly MMT-ish. I still can’t help wondering if he’s less ignorant than he makes out, but you can’t stay Chancellor of the Exchequer unless you toe the party line.