John Redwood admits it: there never was a reason for austerity | Tax Research UK

John Redwood: He has often been caricatured as an alien from the planet Vulcan (as seen on Star Trek). In this image, he appears to be broadcasting from his home.

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I have not been worried about the state deficit for sometime, ever since Mr Brown found out that the UK state can literally print money to pay its bills. Mr Osborne, originally a critic of this in opposition, then discovered its charms in office as well. It turned out to have no adverse consequences on shop price inflation, though of course it caused massive price inflation in government bonds, because it was accompanied by severe pressure against bank lending to the private sector to avoid an inflationary blow off. I always adjust the outstanding debt by the £435 bn the state has bought up, as this is in no sense a debt we owe. So our government borrowing level (excluding future state pensions which some here worry about and which have always been pay as you go out of taxation) is modest by world standards at around 65% of GDP, and at current interest rates is affordable.

Most of the state debt we owe to each other anyway. The government owes it to taxpayers who own the debt in their pension funds and insurance policies. The state can always raise enough money to pay the domestic bills backed by the huge powers to tax, and as we have just seen when credit expansion and inflation are low it can also use liquidity created by the monetary authorities.

To many who read this blog that will be unsurprising stuff. Except, that is, for the fact that it comes from far-right Tory MP John Redwood, who put it in his blog yesterday. He follows it with some usual xenophobic comments on the EU and aid, meaning the man is not reformed in any way, but what he has done is let an enormous cat out of the bag.

He has admitted there is no need for a government to balance its books.

He has admitted QE cancels debt.

He has then admitted the whole ‘passing debt to the next generation’ phobia is wrong.

And he has admitted as a result that there was no reason for austerity, the imposition of which served no economic purpose.

Spread the word.

Source: John Redwood admits it: there never was a reason for austerity

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9 thoughts on “John Redwood admits it: there never was a reason for austerity | Tax Research UK

  1. hugosmum70

    therefore people have died in vain./ others have lost their homes that they worked for and brought their kids up in etc, and are now existing on the streets, probably laying up medical conditions they never had before,which, if they survive till this lots out of power, will then bring further stretching of the NHS in the future..assuming the NHS also survives

  2. Rik

    Of course there was a reason… they just wanted to see the poor, the disabled, those on the dole, the homeless, those on ESA
    ,& those in poverty to suffer & hopefully die
    .. Lets take all their adopted cars from those transferring onto pip.. bloody cheek why should THEY have brand new cars to drive around ?

    Bunch of evil creatures… I thought Cameron
    pig sha**r was bad,, but this lot of evil pigs are the worst Government EVER… PMQ
    I was going to add more to her PMQs but I thought not as I might get arrested..

    1. Zippi

      Cameron IS bad. I take your point about Questions To The Prime Minster, though; I was telling my mother, this afternoon, how disturbed I was by some of Mrs. May;s responses, her attitude and penchant for scoring political points, whilst dismissing the issue of the question, entirely. When told that her government’s record on housing is rubbish, saying that £abour’s was rubbish, too, helps nobody. Disappointed.

  3. Carol Fraser

    I don’t like this man and would not trust him farther than I could throw him. These are probably the first honest words he has ever uttered

    1. vondreassen

      QUITE SO = Remember his grand speech at a tory conference – warning the poor and unemployed that he was ‘ – coming for them’== a truly nasty piece of scum !

  4. Growing Flame

    Redwood’s words represent a trend. In America, Trump was warned that his tax cuts for the rich would lead to one and a half Trillion dollars extra on the national debt. He never refuted this but just went ahead anyway. In recent elections in the rest of Europe, notably in Italy, Right-Wing populist parties openly campaigned on policies such as increases in Pensions, reductions in the retirement age , guaranteed income for all etc. Again, completely ignoring all the talk about having to pay off debts through austerity.

    It seems as if the only parties in many European countries which seem concerned about debt are the Left-of-Centre, Social Democratic parties that still follow the Establishment line about reductions in spending. The electoral results are clear for all to see. Fortunately, here in Britain, our own Social Democratic Party, Labour, has seen through the austerity con, and is adopting policies that favour the many and not the rich few.

  5. rotzeichen

    Some of us from the offset have tried to explain how money is created out of thin air, what Redwood is actually admitting now is because the cat is well and truly out of the bag, and can’t be put back in.

    There is absolutely no doubt in this case that fact is stranger than fiction, we were lied to that our country is just like a household and that Britain must earn money before it spends, when the reality is that our government has to put money into the economy first, so that people can earn it. The way it is done is through the private banks issuing money as debt out of thin air.

    In reality also the government found money to bail out the Banks whilst telling us there is no money for the NHS, one of the biggest deceptions perpetrated on the British people, and they are still doing it.

    The reasons are obvious for this gross deception, Thatcher’s secret 1982 cabinet papers spell out in detail how they intended to dismantle the state, In the words of Professor Noam Chomsky:
    “That’s the standard technique of privatization: defund, make sure things don’t work, people get angry, you hand it over to private capital.”

    It should be common knowledge just what these Tories are doing, tell everyone you know that life doesn’t have to be this way, the Tories are deliberately doing and it doesn’t matter to them how many unnecessary lives are lost in the process.

    This short video tells it very simply:

  6. Zippi

    Aye, there was; to screw us all over, whilst trying to discredit £abour! For how long were people repeating the line about £abour bankrupting the country? The famous… infamous note? Even TODAY, people are still saying that £abour left the country with no money! If people are ready, willing and able to believe that, they’ll be ready, willing and gullible enough to believe that, while the rich get even richer, they NEED to endure years of austerity, because the Party that they voted into government, spent all of the money. £ike I said; we’ve become a nation of sleepwalkers but the people do not realise that they’re being fed sleeping pills.

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