If We "Paid Off" the National Debt, There Would Be No Money Left Politicians of all parties have spent decades telling the British public that the national debt is a burden on future generations, a reckless legacy we are imposing on our children and grandchildren. ...

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Most MPs have never been told any of this. They vote on budgets, spending reviews, and fiscal rules using a mental model that does not describe how the monetary system actually works.

The UK government is the issuer of sterling. It is not a household with a credit card. The rules that apply to currency users do not apply to the currency creator. This is not heterodox theory. It is in Bank of England publications.

Every pound of the national debt is a sterling financial asset sitting on someone else's balance sheet. Eliminate the debt and you eliminate those assets. The pension funds, Premium Bond holders, and insurance companies don't get protected. They get wiped out.

Who owns the national debt

This is who actually holds the UK national debt. The 'burden on future generations' is held by pension funds, overseas investors, and the Bank of England itself. Households hold 0.1% directly — though NS&I adds another £240bn not shown here.

Politicians say paying off the national debt protects future generations. The accounting says the opposite. 🧵

The Bond Market Bluff Every time someone in British politics proposes funding public services properly, the bond markets get wheeled out like a loaded gun. Spend more on the NHS and the markets will panic. Hire more teache...

14/14 The real limit is resources: doctors, nurses, teachers, builders. Not gilt yields. The government is the market's supplier, not its supplicant.

vincegomez.com/articles/the...

13/14 Keynes, BBC Radio, 1942: asked where the money would come from to rebuild Britain, he replied: "Anything we can actually do we can afford."

12/14 The bond market "verdict" is often a mechanical response to the DMO selling into weak demand. This misreading appears not just in right-wing papers (where it serves a purpose) but in left-wing press fluent in inequality but illiterate in how the sterling monetary framework actually works.

11/14 NHS satisfaction: 21% in 2024, down from 60% in 2019. Wes Streeting's response: go "further than New Labour ever did" with private sector partnerships. A planning failure repackaged as public sector failure.

10/14 Medical school places +33% in 2014-2024. Specialty posts grew < 10%. The Tories expanded the pipeline without the infrastructure to absorb it.

9/14 The real constraint on public services has never been financial. 2025: 91,999 applications. 12,833 speciality training posts. Posts up by 90. Applications up by 32,000. Qualified doctors in the UK cannot find jobs. The bond market had nothing to do with this.

8/14 What about overseas gilt holders — around a third of the market? When they sell, they receive sterling. Gold or dollars cannot be demanded. A buyer must exist in the sterling system. A "gilt strike" is not a coherent mechanism. A weaker pound is the real risk: inflation, not insolvency.

7/14 The UK government is the monopoly supplier of risk-free sterling assets the private sector depends on. The bond market is not the government's creditor. It is its customer.

6/14 Former Minneapolis Fed President Narayana Kocherlakota: Truss "was thwarted not by markets, but by a hole in financial regulation — a hole that the Bank of England proved strangely unwilling to plug." A regulatory failure, not a bond market verdict on public spending.

5/14 When the crisis struck, the Bank stepped in. Its statement said purchases would proceed "on whatever scale is necessary." It bought £19.3bn of gilts, then sold them back for £23.1bn. The "bond market crisis" generated a £3.8bn profit for the public purse.

4/14 UK yields tracked US yields throughout — same global tightening cycle, nothing to do with Truss. The crisis was a regulatory failure: pension LDI funds had grown from £400bn to £1.6 trillion with inadequate safeguards. The Bank of England knew and did nothing until the inevitable crisis ensued.

3/14 The 2022 Truss episode is held up as proof bond markets hold a veto over democracy. Look at this chart of UK and US 10yr government bond yields since 2000. Without the annotation, finding the Truss spike takes some effort.

2/14 The UK issues gilts in sterling, the currency it alone creates. UK institutions must hold sterling. They need somewhere safe to put it. Investors who refuse gilts must hold cash instead, which earns less. "Walking away" is not how markets work.

1/14 Every time someone proposes funding public services, the bond markets get wheeled out like a loaded gun. Hire more doctors? Markets panic. Run a larger deficit? Punishment awaits. This argument has dominated UK politics for 40 years. It is a bluff. 🧵

Rising energy prices will hit millions: here are three ways the UK government could shield vulnerable households Some reforms take years to deliver. These policies could be deployed almost immediately.

Rising energy prices will hit millions: here are three ways the UK government could shield vulnerable households
theconversation.com/rising-energ...

The House Always Wins On Saturday, Rachel Reeves announced seven new towns and blamed three decades of housing unaffordability on the planning system. "For decades," she said, "this country's planning system has been a direct obstacle to building new homes, ramping up costs and pricing young people out of the housing market." Planning reform, she promised, would fix it.

Planning reform alone won't fix a housing crisis rooted in monetary policy, land economics, and financialisation. Reeves is treating symptoms, not causes.

#HousingCrisis #PlanningReform #PublicFinance

https://vincegomez.com/articles/the-house-always-wins/

Radical Centrism - The most radical thing we can do is nothing The European Scientific Advisory Board on Climate Change (ESABCC) published a report last month advising EU officials to prepare for a world 2.8 to 3.3&deg;C hotter than preindustrial levels by 2100. ...

The most radical thing governments can do on climate is nothing, and yet here we are.

#ClimatePolicy #RadicalCentrism #ESABCC

vincegomez.com/articles/rad...

The Deficit Obsession is Costing Us a Clear View of the Economy It seems that whenever a government announces that they have run a deficit over a given financial period, media commentators and opposition politicians react with the same tired metaphors. We are "maxing out the national credit card." We are "burdening our grandchildren." We are "living beyond our means." What almost nobody mentions is the other side of the ledger.

Every £ of government deficit is a £ of private surplus. Until we grasp this basic accounting identity, debt debates will remain economically illiterate.

#PublicFinance #DeficitMyth #MacroEcon

vincegomez.com/articles/the-deficit-obs...

When democracy requires more than a physics degree Last week I gave a talk on public finance, and during the Q&A at the end, a physicist in the audience who is working on fusion research said something along the lines of “I still find our monetary sy...

If a physicist can model plasma at 100 million degrees but struggles to explain how Parliament funds public spending, something is wrong.

Democracy requires monetary literacy.

#PublicFinance #FiscalPolicy #Democracy

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Shadows on the wall: The monetary myths that shape British politics The Treasury tells us there is no money. The Bank of England tells us it operates independently. The OBR tells us the deficit must be closed. They have been projecting these shadows on the wall for so...

The Treasury says there's no money. The Bank of England says it's independent. The OBR says the deficit must close. None of this is true. And the proof is in their own legislation.

#UKPolitics #UKEconomy #Austerity #MonetaryPolicy #PublicFinance

vincegomez.com/articles/art...

The vexed question of whether the UK can afford Modern Monetary Theory doesn’t even make sense Modern Monetary Theory isn’t a potentially risky radical fiscal plan but simply a description of how the British state already spends

"Can the UK afford MMT?" is a category error.

MMT isn't a radical spending plan. It's a description of how the British state already works — and has since 1971.

The question isn't whether to adopt it. It's what to do once you understand it.

#UKEconomics

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