[gippy]

Originally Posted by MashinBenzin

I don't think you understand how government debt, issued by the BoE, works.

you definitely don't. It paid for covid by instructing the BoE to spend that money, who then created it, and bought the bonds which the treasury issued.
And seeing as the BoE is effectively the governments bank, it cannot owe money to itself.
I'm not surprised you don't understand this, as i say, most people don't have a clue how it works.
There's a whole host of resources i could give but there wouldn't be any point really.
It requires a complete changing of your frame of reference.
You first have to understand what banks do, how they create money through issuing loans, and understand how the government is not a household, and whenever it runs a deficit, it actually creates a private sector surplus - it's part of the national accounting identity.
You'd also then have to understand how GDP is calculated.

Taxes do not pay for anything. Taxes destroy money - that is the purpose of a tax. Their primary use is to control inflation, and to generate incentives/distribute the money supply; They serve as a drain on the money supply. but in terms of government requiring 'our taxes' in order to spend on public services, this is entirely wrong.


The good thing is, slowly but surely, people are begining to realise this, as they wonder how covid was paid for and how government could 'magic up' a ton of money.

You ought to check out what QE is, and then go and do some research around how government actually used BoE to 'pay for covid'. Check out the BoE website - useful resource.

[gippy]

Originally Posted by 335dX

Sorry....WHAT?

It’s already been paid for? Are you a complete moron or are you pretending?

Please explain to me how, as a tax payer, I won’t be paying for what the government has borrowed since March last year in the next, oh, I don’t know, 25 years maybe?

because that's not how it works. The government is not a household, and it doesn't have to pay back any of that 'debt' that it's created. It's not the same as a debt you or i have, when a bank creates a commercial loan (which is also created out of nothing).
refer to the post i just responded back to Mashin.
I'll leave it there, not going to waste any further time on this

[Watsey]

Originally Posted by gippy

this is a common misunderstanding, but no, taxes are not required to pay for any of it. Most of the government debt was borrowed from the bank of england...it's own bank. That debt is effectively private-sector surplus, required to pick up the slack for the dramatic fall in aggregate demand due to the pandemic. Most government deficits actually create new money, or offered as bond instruments; which is again, in the publics interest.

most people unfortunately don't understand how any of this works though, and as in 2010 after the financial crisis, it'll be used to justify all kinds of nonsense policies.
though i'm sure you will here Sunak and his bros cry about the need to 'pay for covid'. It's already been paid for.

He recently came out with a video talking about how there is 'only taxpayer money', a line thatcher used to good effect in the 80's. Astute? He is utterly clueless about how government finances work.
More like, trying to protect his mates, whilst inequality continues to thrive, exacerbated even further by covid.

I don't know how old you are but, whatever the number is, I'm amazed you've made it this far.

[gippy]

Originally Posted by Watsey

I don't know how old you are but, whatever the number is, I'm amazed you've made it this far.

oooh, hit me where it really hurts. ouch!
excellent response though.

i knew my post would trigger this sort of response, i did it anyway just to see how deluded people still are about how the monetary system works.
And lo and behold, you lot definitely are.
You're all stuck on the gold-standard way of thinking, in essence.

[Tengocity]

Originally Posted by gippy

you definitely don't. It paid for covid by instructing the BoE to spend that money, who then created it, and bought the bonds which the treasury issued.
And seeing as the BoE is effectively the governments bank, it cannot owe money to itself.
I'm not surprised you don't understand this, as i say, most people don't have a clue how it works.
There's a whole host of resources i could give but there wouldn't be any point really.
It requires a complete changing of your frame of reference.
You first have to understand what banks do, how they create money through issuing loans, and understand how the government is not a household, and whenever it runs a deficit, it actually creates a private sector surplus - it's part of the national accounting identity.
You'd also then have to understand how GDP is calculated.

Taxes do not pay for anything. Taxes destroy money - that is the purpose of a tax. Their primary use is to control inflation, and to generate incentives/distribute the money supply; They serve as a drain on the money supply. but in terms of government requiring 'our taxes' in order to spend on public services, this is entirely wrong.


The good thing is, slowly but surely, people are begining to realise this, as they wonder how covid was paid for and how government could 'magic up' a ton of money.

You ought to check out what QE is, and then go and do some research around how government actually used BoE to 'pay for covid'. Check out the BoE website - useful resource.

@MashinBenzin thats those 15 years you spent working at the BoE wasted then if you don't understand how it works you moron!

Better not let your current employer know that you don't know how banking works...

[isleaiw1]

Originally Posted by gippy

you definitely don't. It paid for covid by instructing the BoE to spend that money, who then created it, and bought the bonds which the treasury issued.
And seeing as the BoE is effectively the governments bank, it cannot owe money to itself.
I'm not surprised you don't understand this, as i say, most people don't have a clue how it works.
There's a whole host of resources i could give but there wouldn't be any point really.
It requires a complete changing of your frame of reference.
You first have to understand what banks do, how they create money through issuing loans, and understand how the government is not a household, and whenever it runs a deficit, it actually creates a private sector surplus - it's part of the national accounting identity.
You'd also then have to understand how GDP is calculated.

Taxes do not pay for anything. Taxes destroy money - that is the purpose of a tax. Their primary use is to control inflation, and to generate incentives/distribute the money supply; They serve as a drain on the money supply. but in terms of government requiring 'our taxes' in order to spend on public services, this is entirely wrong.


The good thing is, slowly but surely, people are begining to realise this, as they wonder how covid was paid for and how government could 'magic up' a ton of money.

You ought to check out what QE is, and then go and do some research around how government actually used BoE to 'pay for covid'. Check out the BoE website - useful resource.

You do just come on here trolling don’t you? At least one person you have insulted works in the banking sector. Now explain to me what your qualifications and experience are so that I can determine who I believe.

[isleaiw1]

Originally Posted by Tengocity

@MashinBenzin thats those 15 years you spent working at the BoE wasted then if you don't understand how it works you moron!

Better not let your current employer know that you don't know how banking works...

I am going to ask for my money back for my degree too as that’s definitely not how it was explained to me....

[sahajesh]

Persona?

[Tengocity]

Originally Posted by isleaiw1

I am going to ask for my money back for my degree too as that’s definitely not how it was explained to me....

Bugger off you old git, you never paid for your degree back then!
Even I didn't have to pay for mine. Not that it's worth the paper it's written on!

[Tengocity]

Originally Posted by sahajesh

Persona?

No, worryingly I think he's for real

[MashinBenzin]

Originally Posted by gippy

you definitely don't. It paid for covid by instructing the BoE to spend that money, who then created it, and bought the bonds which the treasury issued.
And seeing as the BoE is effectively the governments bank, it cannot owe money to itself.
I'm not surprised you don't understand this, as i say, most people don't have a clue how it works.
There's a whole host of resources i could give but there wouldn't be any point really.
It requires a complete changing of your frame of reference.
You first have to understand what banks do, how they create money through issuing loans, and understand how the government is not a household, and whenever it runs a deficit, it actually creates a private sector surplus - it's part of the national accounting identity.
You'd also then have to understand how GDP is calculated.

Taxes do not pay for anything. Taxes destroy money - that is the purpose of a tax. Their primary use is to control inflation, and to generate incentives/distribute the money supply; They serve as a drain on the money supply. but in terms of government requiring 'our taxes' in order to spend on public services, this is entirely wrong.


The good thing is, slowly but surely, people are begining to realise this, as they wonder how covid was paid for and how government could 'magic up' a ton of money.

You ought to check out what QE is, and then go and do some research around how government actually used BoE to 'pay for covid'. Check out the BoE website - useful resource.

Have worked in and around banking, on all continents, for decades. And i suspect that I've spent rather more time in Threadneedle Street and in meetings with HM Treasury than you have.

But you just carry on spouting rubbish and patronising, if that's what floats your boat. One day you'll reach adulthood, maybe.

[isleaiw1]

Originally Posted by Tengocity

Bugger off you old git, you never paid for your degree back then!
Even I didn't have to pay for mine. Not that it's worth the paper it's written on!

My employers paid for my second one. And my professional qualification..... and then I taught economics to trainee accountants! Those two were worth doing

[MashinBenzin]

Originally Posted by Tengocity

No, worryingly I think he's for real

Imagine if he's actually like this in real life

[Ennoch]

Originally Posted by MashinBenzin

Have worked in and around banking, on all continents, for decades. And i suspect that I've spent rather more time in Threadneedle Street and in meetings with HM Treasury than you have.

But you just carry on spouting rubbish and patronising, if that's what floats your boat. One day you'll reach adulthood, maybe.

This is the same crap spouted by independence warriors up here in Scotland (Gippy's nonsense, not yours!). I work in finance but luckily not in the actual financial side, that shit just makes my head hurt (I have a practical problem solving head, not a coding or accountancy one). However, my understanding of the current situation we find ourselves in is that at least all these other countries are doing the same QE measures which means that our currency, while devalued against the reserves, is devalued alongside all the other main global currencies and thus the relative devaluation is moot, or negligible. Happy to be educated though.

On a different budget related note, I just discovered today that your higher tax threshold down south is £50k, not £40k as it is up here. I'd love to know where this extra money they're taking from me is going because it sure as hell ain't in education, healthcare, council services or roads! Well I do, it's a slush fund for independence campaigning, but still it does rather annoy me that we get surplus from Westminster over and above what we pay in and the country still manages to crumble.

[gippy]

Originally Posted by MashinBenzin

Have worked in and around banking, on all continents, for decades. And i suspect that I've spent rather more time in Threadneedle Street and in meetings with HM Treasury than you have.

But you just carry on spouting rubbish and patronising, if that's what floats your boat. One day you'll reach adulthood, maybe.

and yet you show a distinct lack of knowledge.
Worrying.

But yeh, if it makes you feel superior by using an argument from authority fallacy, and saying i'm "spouting rubbish", feel free.
It's a poor position though.

[isleaiw1]

Originally Posted by gippy

and yet you show a distinct lack of knowledge.
Worrying.

But yeh, if it makes you feel superior by using an argument from authority fallacy, and saying i'm "spouting rubbish", feel free.
It's a poor position though.

So what’s your experience that makes you right when everyone else is wrong? Make a case for your views..

[gippy]

Originally Posted by Ennoch

(I have a practical problem solving head, not a coding or accountancy one).

and that is part of the issue unfortunately......you need some understanding of accounting to recognise how all this works, it is totally interwoven with double entry bookkeeping. For instance, when you go into a commercial bank for a mortgage, they don't take savers money and lend it to you. They create it, from nothing. At that point, an asset is created on the banks balance sheet (the loan), and the deposit account (the liability).
Just that fact alone blows peoples minds, but in 2014 the BoE were kind enough to write a paper on it, which you can find here:
https://www.bankofengland.co.uk/-/me...205CE476E01654

Once you get the double entry bookkeeping, it's a short journey to understand how the government finances work. The great thing about covid is, through all the new money creation done by the BoE last year, it has made people more aware. So rather than disguard my posts as 'nonsense', it'll be worth your time to look into these things a little more before being so dismissive.

[MashinBenzin]

Originally Posted by gippy

and yet you show a distinct lack of knowledge.
Worrying.

But yeh, if it makes you feel superior by using an argument from authority fallacy, and saying i'm "spouting rubbish", feel free.
It's a poor position though.

I'm sorry that you are so gullible, but haven't got the will to bother trying to educate you (not least as I know that you don't want to learn other than from your chosen alternative sources).

[robwils]

Originally Posted by Scoobyd

Likewise... you simply don't need a lifetime allowance when you already have an annual allowance. It effectively punishes growth. Have been wanting rid of it for years. Yet another over complication in the world of pensions that should be put in the bin.

Yes I’m trying to understand what this means to me. I doubt I will hit it if I stay in until my final salary pension is paid as it’s calculated at 20 x annual pension ?

However to transfer out the multiple is far higher 30+.

I assumed it would just tax the bit above the 1.1M at 55%, bit like the move from basic to higher rate tax. So for every £100K above the benefit would only be £45K into pot. How would the annual pension be taxed if it were above LFA.

[Wills2]

Originally Posted by 335dX

Please explain to me how, as a tax payer, I won’t be paying for what the government has borrowed since March last year in the next, oh, I don’t know, 25 years maybe?

Not part of the spat you're having with the poster but we the tax payer have always been paying for what the government does pandemic or not, I was "paying back" the bill from WW2 in the 90/00's just like anyone else, there is always something to pay for that will never change.

Each generation pays for the previous one generally and I have no issue with that, but unless you're paying 20k+ a year in tax you're often not paying anything off as you cost more than you give.

[isleaiw1]

Originally Posted by gippy

and that is part of the issue unfortunately......you need some understanding of accounting to recognise how all this works, it is totally interwoven with double entry bookkeeping. For instance, when you go into a commercial bank for a mortgage, they don't take savers money and lend it to you. They create it, from nothing. At that point, an asset is created on the banks balance sheet (the loan), and the deposit account (the liability).
Just that fact alone blows peoples minds, but in 2014 the BoE were kind enough to write a paper on it, which you can find here:
https://www.bankofengland.co.uk/-/me...205CE476E01654

Once you get the double entry bookkeeping, it's a short journey to understand how the government finances work. The great thing about covid is, through all the new money creation done by the BoE last year, it has made people more aware. So rather than disguard my posts as 'nonsense', it'll be worth your time to look into these things a little more before being so dismissive.

I am an accountant. And I taught it. Run that double entry by me again.

They pay out the money (so credit to their reserves to reduce the asset) and create an asset of the amount due to them. Now explain how that works for the govt borrowing money to give to business as furlough payments etc becomes an unrepayable liability....

Even WW2 had to be paid for, or did you miss that....

[Watsey]

Originally Posted by gippy

and yet you show a distinct lack of knowledge.
Worrying.

But yeh, if it makes you feel superior by using an argument from authority fallacy, and saying i'm "spouting rubbish", feel free.
It's a poor position though.

Can you explain to "us" (the stupid ones in this farcical discussion) how working closely with HM Treasury puts MashinBenzin in a "poor position" to challenge your statements ?