Jeremy Hunt’s maxing out the credit card nonsense

Photo by kuhnmi. Wikimedia Commons

Jeremy Hunt is saying we cannot max out the national credit card this morning. This is total nonsense. There is no national credit card. Instead it’s the job of government to make the money we use. And since it can always make that money, it can never max out on credit.

Hunt wants you to believe that we max out the national credit card. But no government can do that because it’s an organisation unlike any other, with its own bank, which means it has no credit limits. Instead, the question is should it be creating more money for the common good now?

The answer to that is that of course the government should be creating more money right now. When households have less to spend, and when business investment is falling so banks aren’t lending and exports are knackered by Brexit, only government spending can get us out of recession.

But Jeremy Hunt does not understand the macroeconomics of running a national economy. Instead he pretends he’s running a household or business. They can’t max out the credit card without consequence. But governments don’t have credit cards, for a start.

Nor do governments have credit limits. There are no rules that say that they should either, and many governments borrowings a lot bigger than those the UK has. Instead, the role of government is to spend when no one else is able to do so to prevent the harm recessions cause.

Either Hunt does not understand this, or he does and he is lying. I think it is the second option. Why would he do that? To make things worse, of course, so he can crush the NHS and education and so prepare them for privatisation at cost to us all.

Hunt and this government are deliberately creating a recession they want you to believe is unavoidable. But they are not telling the truth about its causes and why austerity is needed, when it isn’t. And never believe there is no money, because that is never true for the government.

But more importantly, never forgive them for imposing the hardship and suffering to come on millions when none is needed. I won’t. Please don’t either.

Originally tweeted by Richard Murphy (@RichardJMurphy) on 13/11/2022.

You can read more from Richard on his blog.