Thread by @t0nyyates

Hopefully this dangerous view won't gain ground on the left, or anywhere. To a first approximation, BoE money creation can't be expected to finance more than a fraction of a percent of GDP.

https://twitter.com/AaronBastani/status/1372579355797417993

'Austerity' was a 'scam', but not because we could have set aside inflation targeting and gone for determined monetary financing. We have to expect that most of the balance sheet growth of the BoE will be reversed as a hoped for normalization of the economy materializes.

h/t @JoMicheII whose views seem to be pretty similar.

@AaronBastani has got the wrong end of the stick from @andyverity 's broadcast segment, and I can understand why. BoE may be a patient creditor, but it's also a temporary one.

That is what the BoE has said; and that is what we think would be required if the inflation target - which the government itself gave the Bank is not at some point to be set aside.

The reason govt finances are not like the household's is - first order - not because of BoE money printing being there as a backstop. It's for the reasons I wrote here in my thread below, and the @prospect_uk piece linked in it.

Set out here:

https://twitter.com/t0nyyates/status/1372910493363539974

Moreover, if the belief emerged that the govt did view the BoE this way, demand for the money the BoE creates would fall. The liquidity BoE money confers on its holder depends on the BoE not being used to fill occasional holes in govt finances.

Having said all that 👍to @andyverity for introducing @BBCNews watchers to this pandora's box. It's a big step forwards relative to the 2010-2015 period.

Now we are at least talking monetary economics and public finance - the diversity of conclusions about which I have concealed here, favouring my own view - and not credit card analogies.