[noir-york]

Yes, of course. The point is that Keynesian macro and appropriate tax policies are a much better policy response than austerity can ever be.

The UK has the advantage of printing its own currency so it can engage in monetary financing if the situation warrants it; an option not available to Euro economies.

[throwaway_pdp09]

> are a much better policy response than austerity can ever be.

I have my serious doubts. Spending large amounts of money wisely or blowing it wildly can look the same (HS2?) but the outcome is different.

> The UK has the advantage of printing its own currency

I'm not an economist - how does this work? Is this any different from a person getting indebted on a credit card? Honest question.

[noir-york]

> I have my serious doubts. Spending large amounts of money wisely or blowing it wildly can look the same (HS2?) but the outcome is different.

Austerity takes money out of a contracting economy making the situation worse, creating a vicious cycle, and whats worse hollowing out govt services (NHS, policing, education). Austerity is dangerous on a number of levels.

> Is this any different from a person getting indebted on a credit card? Honest question.

Yes, its completely different. Debt creates a liability, it needs to be paid back.

Monetary financing - aka helicopter money - is precisely the opposite.

The central bank "prints" money: it can be credited to the govt's account, or the CB can directly credit household bank accounts with money created from thin air. No new liabilities are created.

The problems with monetary financing is that it can get addictive; its use outside of situations of extreme economic distress is the biggest risk with its use.

[throwaway_pdp09]

I dunno about austerity. Seems the way it was done in the uk was wrong in that most of the weight fell on the poorest. Your description of helicopter money sounds wrong - if it's so great why not do it more often. Inflationary at the very least. There have to be liabilities to it. It doesn't add up, do you have any references? TIA

[noir-york]

> Your description of helicopter money sounds wrong - if it's so great why not do it more often.

Because it undermines CB policy and leads to hyper inflation and ruining the economy. Some CBs are legally proscribed from engaging in helicopter money for good reason.

> There have to be liabilities to it.

You mean balance sheet liabilities? None. The money is recorded as an asset "receivable" on CB balance sheet.

It does add up :D Japan has been doing it for a decade (for the wrong reasons unfortunately).

For layman overview; most mainstream financial news sites like the FT and Bloomberg do a good job:

https://www.bloomberg.com/news/articles/2020-05-05/how-long-...

https://www.ft.com/content/fd1d35c4-7804-11ea-9840-1b8019d9a...

[throwaway_pdp09]

Thanks, will read these tonight