Thread by @tonywestonuk

This isn't actually MMT. However, its half way there, and demonstrates beyond any doubts at all, that the government can and does create money. Understanding of MMT is the next step, after watching this. (1/x)

After watching this, a question that might be asked is how did the bank end up lending this money to the government? Well what follows is a case of accounting gymnastics designed to conceal the truth. I will outline the steps. (2/x)

1. The government wants to spend £10bn on PPE.

2. It asks the Bank of England to credit £10bn to Hancock's neighbours bank account.

3. Hancock neighbour, loving this windfall, puts it into a savings account.

(3/x)

4. The bank (call it NatWest) uses this money to buy some government gilts.... The government then uses the money to cover the £10bn spending

5. The Bank of England then re-purchases those gilts from Natwest. So, the BoE now gets the debt, and NatWest gets its money back. (4/x)

All of this can be simplified:

1) The Bank of England simply paying out the £10bn to Hancocks neighbour .

2) Hancocks neighbour putting it in the bank.

We end up in the same place, with NatWest having £10bn.

And the Gov, owing itself £10bn, or in reality, owing nothing.

This is MMT. It's exactly what is going on. Just simplified.

But, the thing is, when put this way, Riski Sunek can no longer show how much the country is in debt, and how 'Difficult decisions need to be made'

And thats why they overcomplicate. To pull the wool over our eyes.