The Magic Money Tree and the Tories. #Corbyn4PM #EconomyunsafewithTories. Richard Murphy

Richard Murphy  This is an attributed reblogging of the beginning of two very important analysis carried out by Richard Murphy. The analytic chickens of the screeching Tory´s are coming home to roost. 

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I was interviewed twice on the radio on Friday evening to discuss John McDonnell’s new fiscal rule, once on LBC and the other on Radio 5. In both cases the interviewers were quite explicit in stating that it was known that Labour always borrowed more than the Conservatives and that was why the electorate could not trust them with the economy. I knew that evidence I had prepared a year ago did not support that view in recent years (post 1997) but I decided to see if this claim really had any substance to it all at all. This blog is about my findings. There is a note on data sources at the end.
The first task was to secure data on borrowing by year from 1946/47 onwards: this data covers a 70 year period. Labour was in office for 28 of these years and the Conservatives for 42.
The next task was very simple: I  calculated the total net borrowing in Labour and Conservative years and averaged them by the number of years in office. All figures are stated billions of pounds in all the tables that follow and in this case are in original values i.e. in the prices of the periods when they actually occurred:
Screen Shot 2016-03-12 at 20.22.49
The Conservatives borrowed more, not just absolutely (which is unsurprising as they had more years in office), but on average.
This though, is a bit unfair: the value of money changes over time. So I restated all borrowing in 2014 prices to eliminate the bias this gives rise to. This resulted in the following table:
Screen Shot 2016-03-12 at 20.28.21
In current prices the Conservatives still borrowed more (much more) overall, and on average, by a long way.
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Tax Research UK Blog by Richard Murphy is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

There is a magic money tree, so why did politicians lie about it throughout 2016?


One of the most common claims of recent years is that ‘there is no magic money tree’. David Cameron did it:

He claimed to tell a plain truth that there was no magic money tree. He said those who thought there was put at risk the whole future of the economy.
But David Cameron lied about this. As the Telegraph has said:
The well repeated line that “there is no such thing as a magic money tree” is heard almost everywhere. Even Prime Minister David Cameron has uttered this phrase.
But it’s completely untrue. If the will exists, the central bank can issue unlimited amounts of currency.

Creative Commons License
Tax Research UK Blog by Richard Murphy is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.


“The financial crisis of 2007 to 2008 occurred because we failed to constrain the
financial system’s creation of private credit and money.”

For some reason, this video is no longer publicly listed on the PM website? (See Memory Hole series of posts.

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