Quantitative Easing? Nurses take note of The Good, The Bad, and The Ugly

Quantitative Easing?  Nurses take note of The Good, The Bad, and The Ugly

Wouldn't it be great if those that controlled us, were honest about their intentions?

Let's also bring forward one of the main points discussed below.  Nurses have seen a real fall of 13% in their wages over the last 11 years.  Whilst at the same time the number of UK billionaires has almost quadrupled to 151 and their combined wealth has increased 3.5x by £438,000,000,000 to £605bn.  A tad shocking eh ?  So much for All In It Together. 

Quantitative Easing (QE) is a bit of a mouth full, but let’s take away some of mystery.

UK Gilts-These are issued by the Debt Management Office within the Treasury and are intended to fund Government shortfalls in revenues over expenditure.  These are sold into the wealth market and the Government receive cash to finance their shortfalls.

The Bank of England (BoE) has been buying these gilts since 2009 in exchange for cash, called QE.  This cash is not surpluses raised by Governments, but its source is from money printing.

The Bank of England is a UK institution, effectively owned by The Government.

So, in this merry go round, the UK Government sell Gilts to raise cash to meet shortfalls, and the BoE buys these gilts by printing money.  Another way of putting it, is that QE has enabled the BoE (which is effectively UK Government owned) to buy UK Government debt.  

Clever but bonkers also.  It’s like your left-hand owing your right-hand money.  The net position is a nil position, if monies owed by left hand are equal to monies due to the right hand.

So let’s look at the numbers: -

Total Government debt 2019 £1,840 bn.

Total value of QE purchases by BoE as at 2019 £375 bn.

Annual cost of interest on debt £48bn or 8% of total tax raised.

Total value of GDP Income in 2019 £2,100 bn

Since inception of QE in 2009, and the Conservative Governments since then: -

UK Government Debt has risen from £750 bn to £1,840 bn, which is a whopping great £1,090bn increase, and represents the fastest value growth in any 10-year period EVER.

In this time the economy has grown by 16% and inflation has risen by 27% so, we as a population, have become net poorer by about 10%.

You can see this with the millions of workers that had to bear the cost of Austerity e.g. Nurses had a pay rise of 15% in this period, and after inflation of 27%, a real pay cut of 12%.

However, during this same period, the number of UK billionaires has risen from 43 to 151 and their combined wealth has risen from £167bn in 2009 to £605bn today.

What a contrast!

Unfortunately, one of the side impacts of QE is that bond prices rise, and the stock market stabilized at first before continuing its upward trend.  The Banks have also done well with significant bonuses and pay rises at the highest level.  

Who, might we ask, have been the beneficiaries of this side impact?  Well, you might have guessed it.  It’s those damned pesky billionaires again.

It’s these same billionaires that control the Conservative Party and the UK media, and no wonder the right wing press destroyed Labour at the last election, and told us to continue helping them by voting TORY, and maintaining their highway robbery.

Is there any good news?

Well yes there is.  

No one has noticed this QE £375bn of debt is missing from the international money markets, so maybe we could say after 10 years of BoE GILTS ownership, that we should just wipe the slate clean.

This would not be too much of an issue, as this does not create any new money and lead to hyper-inflation, because the money is out there already.

And whilst the economy remains on the floor let’s be radically ambitious and print say £500bn of QE monies over the next 5 years.

Yes, this have the side impact of subsidizing the very wealthy, but so long as we require them to bring their monies on-shore (rather than hiding it in tax havens), and ask them to pay the proper rate of taxation, then we could raise more tax revenues.  This could be spent in a way that supports the UK people, and with the £500bn of GILTs issued we could invest in renewables in a way that enables to be carbon NIL from 2025.

Let’s just do it.

Wouldn't it be nice if the Leaders led for the benefit of the People, rather than for their billionaire supporting chummies?

Love and Peace