Another huge misunderstanding is that government expenditure ideally should not exceed - or even should be less than - government receipts. But if government was taking off us more than it spent it would be sucking the life blood out of the economy!
@runningmate – ‘.. if government was taking off us more than it spent it would be sucking the life blood out of the economy ..’
Probably misunderstood, but is this Mr Micawber approach too simplistic
Doesn’t this ignore borrowing, PFI (off balance sheet) etc. and all the other little tricks Governments get up to – resulting in more being spent than received?
... borrow and hopefully trust inflation to extinguish the debt over time - hence nervousness over deflation
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Fractional reserve banking ...
Have a look at this
https://www.accountingweb.co.uk/blog-post/fractional-reserve-banking-pri...
Another huge misunderstanding is that government expenditure ideally should not exceed - or even should be less than - government receipts. But if government was taking off us more than it spent it would be sucking the life blood out of the economy!
RM
Ignore borrowing ...
@runningmate – ‘.. if government was taking off us more than it spent it would be sucking the life blood out of the economy ..’
Probably misunderstood, but is this Mr Micawber approach too simplistic
Doesn’t this ignore borrowing, PFI (off balance sheet) etc. and all the other little tricks Governments get up to – resulting in more being spent than received?
... borrow and hopefully trust inflation to extinguish the debt over time - hence nervousness over deflation