News:Politics
In this Podcast we will be talking to Phil Armstrong from The Gower Institute and ask the question does money grow on trees?
During the economic crisis of 2008/2009 money seemed to appear from nowhere to bail out the Banks from the crisis of debt. It was called quantitive easing. And now during the crisis of Covid billions of pounds have been found to provide back up for those suffering the economic consequences and to fund the National Health Service.
And now many ask if it can be done now then why was it not done before. And others ask - are we not building up a national debt that will have to be repaid someday?
Well these two crises above are producing a new group of economists who argue that there is no such thing as national debt. Currency sovereign countries if they want money can create it by the flick of a computer switch. The only restraint on them is inflation. If inflation begins to rise then they can use fiscal policies to control it.
This new school of economics is called Modern Monetary Theory or MMT and it is a growing discipline that is fast challenging the monetarist theorists that influenced politicians like Regan and Thatcher leading to a period of austerity for many.
We will explore this and see if money does indeed grow on trees.
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