| Ah, "alternative theories"... The sources to support my claims are everywhere. You are claiming that I am not providing sources that water is wet. Just look up information on your country finances and borrowing, these are usually public information. Look up treasury bond, guilt, etc. These are all extremely basic stuff... Econ 101. Even the simple existence of bonds and bond auctions demonstrates that foreign nations do use financial markets to borrow and that they do have creditors. It seems to me that it is used to provide a backing to political agendas by those who have exhausted other, failed, ideas.
When the UK government (and most governments at this point) increases borrowing to record level to pay for the Covid crisis this demonstrates that borrowing is used to pay for spending. If the money borrowed goes into spending it cannot be that it is to remove money from circulation... What I called out as patently false is indeed patently false. I'd be also wary of any theory that calls itself "modern". That's a classic rhetorical trick to imply correctness and that those who do not agree are not modern... |
Today the overwhelming majority of money is digital and producing more doesn't require the government to have enough metal to mint coins. They simply need to change numbers in a spreadsheet
The "borrowing" you're referring to is not a transfer of physical assets. The money doesn't "go" anywhere, because they only exist as abstract representations in a spreadsheet
The government of the UK has chosen to only spend an amount equal to the one removed from selling bonds, but there's is literally nothing preventing them from doing it without that step
If the government want to spend more money than they get in through bonds and taxes, they can just do it
If they wanted to remove money from circulation they would simply issue bonds and not have an equivalent spending at the same time
It's two independent operations, that seems connected if you have a mental model that a government runs a household budget
That the UK base economic decisions on that assumption does not change the underlying mechanics of the transactions or invalidate MTT as a model for describing economical systems