Sorry for being pedantic and off-topic, but rest assured that it isn’t your tax that is paying for furlough (and any other measure that’s keeping the show on the road e.g. stamp duty freeze), but what comes out of giant printing press at the Bank of England.
Surely that all needs to be paid back at some point though, by taxpayers and corporations etc?
If you look at the debt rising every second, not just in UK but anywhere, I’m not alone it doubting that it ever will be paid back. It’s all funny money.
Admittedly there are some wild views out there among economists and so called economists about the future, but what you hear quite frequently is that some sort of correction will hit us probably in the next decade.
Someone said all this borrowing is deferred taxation.
I agree. it will need to be repaid at some point.
I’m not going to pretend to be any sort of financial expert, but I very much doubt it will be as long as the next decade, it will be much much sooner.
As you say it’s an odd situation where so many countries will have huge debts, but assume it will be done like the 2nd World War which we only just paid off I think.
Is this a time when it’ll pay be someone who doesn’t actually have much in the bank!!! Or anywhere else…
ok, it’s our taxes, our future taxes and devaluation of our savings which is paying for furlough.
As to whether it will be repaid - after the financial crisis the Bank engaged in a bigger program of quantitative easing than it did due to covid. This was followed soon after by austerity.
If the price hikes by some local shops are anything to go by, inflation figures will pick up sharply indeed.
Austerity was a political choice, it actually happened at the same time as taxes were frozen or cut.
I haven’t had a sit down coffee in ages, I think I’m going to try it out tomorrow!
That’s true, although tax receipts were increasing, which seems more relevant. I just thought it’s simplicity might be convincing. It’s probably not worth debating macroeconomics here .
Hooray for the
It is far from certain to be paid back. The Ways and Means account at the Bank of England is essentially the government’s overdraft:
Am pretty sure that there has not been a repayment on that account in recent history. There is no need to.
This is a chart of the ways and means account advances. It’s effectively unused. The article is verging on being fake news. I hadn’t heard of the authoring organisation until now. Positive Money - RationalWiki
Ok, well talk to HM Treasury about it being “fake news” if you want as that is the source for the article. The facility exists and stands at £370m as per your chart.
Hadn’t heard of RationalWiki until now but interesting to see:
A more balanced article on Positive Money to be found here:
£370m is 0.37% of the £100bn+ spent on furlough.
My issue is that the article ignores many of the source announcement’s relevant details using only selected details to attempt to convince the reader of something. For example:
BoE: “As a temporary measure, this will provide a short-term source of additional liquidity to the government if needed…The government will continue to use the markets as its primary source of financing, and its response to Covid-19 will be fully funded by additional borrowing through normal debt management operations”
Article: “UK central bank becomes first in the world to adopt direct monetary financing to fund government spending during the coronavirus crisis. This move demonstrates once and for all that the government need not depend on private markets to finance its spending.”
The wikipedia entry was created by user Reissgo, real name, Michael Reiss, who also writes articles for Positive Money Michael Reiss (guest author), Author at Positive Money. The question of balance is open.