YP Letters: '˜Creating' money will only cause inflation

From: Tony Lawton, Skelton, York.
Labour leader Jeremy Corbyn takes a selfie with Labour MPs in Westminster Hall in the Houses of Parliament.Labour leader Jeremy Corbyn takes a selfie with Labour MPs in Westminster Hall in the Houses of Parliament.
Labour leader Jeremy Corbyn takes a selfie with Labour MPs in Westminster Hall in the Houses of Parliament.

THERE is no magic money tree, as we can all see for ourselves when concerned with our own personal finances.

However, looking at public finances from afar, we are tempted to believe that we do see one, but it is a mirage.

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All governments, whatever their complexion, can only supply a homeless person with so much as a cup of tea from one of three sources, taxation, borrowing, or reserves built up from the past, which individuals would call savings.

Money cannot be created and, over time, attempts to do so by printing it – which those who believe in magic seek to disguise as ‘quantitative easing’ – simply cause inflation.

Banks, whoever their owners may be, cannot ‘create’ money and can only lend what savers have lent to them – and moreover, they expect to be repaid.

All attempts to create money invariably lead ultimately to ‘inflation’ which has minimal effect on the ‘haves’ who own assets in the form of houses, land, shares etc, but a devastating effect on the ‘have nots’ who don’t.

If the leaders of the Labour Party would only get their heads around this principle, we might be able to make some sensible political progress.

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