Quote:
Originally Posted by bitontheslide
Corbyn doesn't seem to have grasped that the banks generating the income is what pays for the nurses etc salaries in the first place. This is where labour fall flat on their face. They have no concept that incentivising through bonuses etc creates wealth and encourages people to work harder rather than creating the expectation that everyone deserves everything handed to them on a plate
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The Bank of England generates/prints money but remember, TBE is government owned and can therefore print as much money as it wants. Printing too much money though, would create QE and QE would create inflation, so it has to be heavily regulated. Other banks can create money when they lend but only under strict government regulations and the banks who print money to lend, are wholly responsible for collecting that personal debt.
The bank do not pick up the bill for money spent into the economy (including nurses salaries!) but the government (who own the TBE) have to re-claim currency by tax. Remember, money has no real intrinsic value until it becomes currency. The government bank circulates Money into the economy to turn that money into currency.
Spending comes before tax and tax doesn’t have to be re-paid in full because all money comes with a promise to pay. Therefore, all government debt represents is government spending not yet cancelled out by tax.
There would be no fiat money without taxes.