The miraculously expansive public accounts for 2023 presented at the beginning of the current month of October by the Minister of Finance, María Jesús Montero, are of the utmost importance for the country, given the worrying degree of uncertainty and precariousness prevailing. At first glance, and despite the fateful crossroads at which we find ourselves, it would seem that there is money for everything and everyone, everyone. In other words, don’t worry, no one will be left behind. And there will be, of course, lower taxes, grants and scholarships for a tube, in addition to more than generous increases in pensions. Wow, this is lol.
The other side of the coin presents a darker picture. The public debt, which is already through the roof and with these budgets will reach the stratospheric category, condemns future generations, in the best of cases, to little more than misery and company. The rain of Next Generation funds coming from Brussels, although substantial, is not, will be, nothing more than a drop in an ocean of very rough waters. Then there are: the exorbitant deficit, a mammoth as outdated and ineffective civil service, public health in the ICU and public education on the verge of a nervous breakdown. Not to mention runaway inflation, the war in Ukraine, the terrifying rises and falls in the price of gasoline, gas, electricity, flour, sardines… and a long etcetera.
So, in view of such a bleak economic situation, one wonders where the hell the government will get enough money to fill Curro Jiménez’s bulging saddlebags, which are the budgets. Does the minister know? Do you know? Is it that the Government has a clandestine printing press that prints 24/7/365 legal tender bills?
An interesting and necessary book by the British economic historian Robert Skidelsy, (Money and Government, Yale University Press, 2019), illuminates us on these very basic questions that, however, remain beyond the understanding of the vast majority, which includes not a few of our political representatives and some other active economist. And it is that the world has changed since the crash of 2007-8, but not everyone has heard about it.
Since then we have learned that printing banknotes does not necessarily generate inflation or that a rising unemployment rate leads to higher wages. Even so, always according to Skidelsky, the textbooks in the Faculties of Economics do not include these changes. The teaching is based on immovable “truths” outdated, outdated, which reject out of hand any daring theory considered heterodox. What’s more: in Great Britain -or here- the gap between the harsh economic reality and public debate continues to widen, an extreme that translates into a divided and very seriously broken society.
Conservatives argue that they no longer have the funds to cover prohibitive spending on health or education. But are they right? Considering that practically all the money that changes hands in Great Britain has been created by private banking, in the form of credits, and not by the official Bank of England and the Royal Mint, as almost everyone mistakenly thinks, it would seem that they are wrong. A study has revealed that no less than an alarming 85% of British MPs have no fucking clue where the money comes from.
Simplifying a lot, what matters is not so much how the money is generated, but how and what it is spent on. Doubling the national gold deposit will not lower the price of bread if wealthy families bury the gold in their backyards or if it is used to line the hull of an atomic submarine with gold.
The approval of budgets is the most important task of any government. If, for whatever reason, you can’t gather the necessary support, that’s a bad thing, a very bad thing, especially in these difficult times. It seems that this year, Pedro Sánchez, once again, is going to achieve it, even if it is just by the hair. Unfortunately, the same cannot be said of the very weakened Government of Catalonia, which apparently is not aware of the seriousness of the situation, perhaps because of the “differential fact”.
It’s all a matter of preferences and not so much where the money comes from, since in real life you don’t play with Monopoly money. Betting on a chimera knowing that it is, can only lead to the ruin of an economy and a country. Therefore, it is convenient not only to take into account the teachings of heterodox thinkers, but also of those who are perceived as traitors, lest they are precisely the ones who can help us get out of the quagmire before it is too late.
