[Sunday supplement]: Where does money come from?

Published: Sun, 05/17/20

At a time when the government is giving away lots of money the obvious question is 'Where does this money come from?' We often hear questions such as 'How will we pay for it?'

Some people still believe that the government spends 'taxpayers money' which couldn't be more wrong.

Others, worryingly, suggest that taxes will have to increase when the pandemic is over to 'repay' all the money the government has created and borrowed, which would only create further economic hardship (see below).

So this Sunday I thought I'd share a short, 20 minute video, about where money actually comes from.

Stay safe.

Noel Guilford

PS As the video explains, tax takes money out of circulation. During the recovery this is the exact opposite of what is required. For the economy to recover it needs businesses and consumers to spend as much money as possible . Raising taxes will have the opposite effect. Unfortunately too few in politics and the media (and most civil servants in the Treasury) don't get this.