I guess the gig is up. One of the few European nations that is sovereign in their own currency has “run out of money” according to their leader, David Cameron (via the FT):
“Dear Chief Secretary, I’m afraid to tell you there’s no money left”.
Time to pack it in Britain. You’ve officially run out of money. Or so they believe. I guess it’s time for more tax increases and austerity since it’s been working out so well for the rest of Europe. Sadly, their leaders don’t even seem to realize that the money to pay taxes comes from the government’s spending. And so it is that a nation with a printing press has run out of money….Like we’ve always said, this is one way an autonomous currency issuer can “run out of money”. By deciding they don’t have it to spend….
You’d think after watching their neighbors go through this crisis that it would have dawned on the British that they’re in a uniquely powerful position as a currency issuer and not a currency user (like much of the rest of Europe). Or maybe they’re just loyal to their European brethren and feel that since some of them are tightening their belts that everyone should tighten their belts. But more likely it’s just bad politics poisoning the drinking waters over there….The human tragedy that is neoliberalism continues to spread around the world like the plague.
H/T Warren Mosler.