{"id":490008,"date":"2026-03-22T23:19:11","date_gmt":"2026-03-22T23:19:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/490008\/"},"modified":"2026-03-22T23:19:11","modified_gmt":"2026-03-22T23:19:11","slug":"warren-mosler-criticises-westminsters-economic-leadership","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/490008\/","title":{"rendered":"Warren Mosler criticises Westminster’s economic leadership"},"content":{"rendered":"

\n Mosler, who lives in the US Virgin Islands, was speaking at Scotland\u2019s Economics Festival, a three-day event running in Edinburgh<\/a> from 19-21 March, which offered the chance for economic thinkers and activists in Scotland and beyond to challenge economic orthodoxy and offer new ideas and solutions to our economic problems.\n<\/p>\n

\n The Sunday National: What is the fundamental difference between an MMT view of the economy and a conventional, mainstream one?\n<\/p>\n

\n Mosler: \u201cEvery member of the British parliament believes they have to get money by taxing to be able to spend: \u2018if I want to spend a billion, I have to tax a billion\u2019. That\u2019s completely wrong. That\u2019s like the football stadium saying I need to get the ticket first before I can sell it.\n<\/p>\n

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\n \u201cThe people who work in operations at the Bank of England \u2013 I know many of these people \u2013 they all know that\u2019s not how it works. They know that the money to pay taxes comes from the Bank of England.\n<\/p>\n

\n \u201cThe Government spends money into the economy, then it collects a smaller sum back in taxes; that\u2019s deficit spending.\n<\/p>\n

\n \u201cNow, you might ask, \u2018why does the Government borrow in that case?\u2019 It does this to support its target interest rate. Borrowing is not to fund the Government; the Government creates money into existence just through crediting your account.\n<\/p>\n

\n \u201cSo MMT is about understanding the proper sequence: it\u2019s spend, and then tax, not the other way around.\u201d\n<\/p>\n

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\n The Sunday National: So how do you apply this MMT approach to the big economic challenges we face today? Let\u2019s take inflation, which is a big problem at the moment.\n<\/p>\n

\n Mosler: \u201cSo if you understand that a government cheque is never going to bounce, you can understand that the consequences of what the Government spends into the economy can be inflationary or it can not.\n<\/p>\n

\n \u201cFor example, when they built the Panama shipping canal, it cost a lot of government money, but it made shipping much quicker, costs went down, and so prices went down.\n<\/p>\n

\n \u201cNow, if you spend the same government money, and you use it to blow up the Panama Canal, prices are going to go up, and you are going to have an inflationary event.\n<\/p>\n

\n \u201cAnd we see this with the war in Iran today: the massive amounts of money the US government is spending on that war, $20 billion so far, is having an inflationary effect on the world.\n<\/p>\n

\n \u201cI know in the US, if we spent government money on public healthcare for all, that would be a force to lower inflation, not increase it, because the cost of health care will fall and that will reduce prices.\n<\/p>\n

\n \u201cSo you can\u2019t just say \u2018this is how much of a government deficit we are running and so this is how inflationary it is\u2019; it depends on what you are spending the money on.\u201d\n<\/p>\n

\n The US’s war on Iran is having impacts across the global economy (Image: World Economic Forum\/PA Wire)\n<\/p>\n

\n The Sunday National: The United States has the dollar, which is a powerful currency in the world. Does an MMT approach work in small countries, which have to worry more about their exchange rate?\n<\/p>\n

\n Mosler: \u201cEvery country which has its own central bank is a country where the money to pay taxes comes from it\u2019s own central bank. Every country which has this has the possibility to go to full employment.\n<\/p>\n

\n \u201cSome countries have more tools, have higher productivity, but every country can get to a situation where everyone who wants a job can have a job. Why? Because the money the Government spends into the economy, if it is used to create jobs for everyone, a lot of it will come back in taxes from employed workers, so it\u2019s not inflationary.\n<\/p>\n

\n \u201cYou need to run a deficit to get to full employment and stay there, but that\u2019s a good thing because you are making productive use of your people and growing your country\u2019s wealth.\u201d\n<\/p>\n

\n The Sunday National: The Liz Truss-led Conservative government in the UK in 2022 lasted for just 49 days. The narrative about why her government fell apart is because it announced a big plan to increase the deficit, the so-called \u201cbond vigilantes\u201d responded negatively, there was a run on the pound and the Bank of England had to step in to stop big UK pension funds from collapsing. What would be your response to that?\n<\/p>\n

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\n Mosler: \u201cTruss\u2019s government could have controlled that situation very easily. A piece of cake. If the Treasury had stopped issuing any more bonds that would have been fine, because the government isn\u2019t depending on the bond markets for funding: remember, they are spending first. The other thing the Treasury could have done is buy their own bonds back.\n<\/p>\n

\n \u201cThe problem is that Truss didn\u2019t understand monetary operations. You need people in power who understand how monetary and fiscal policy actually works, but none of the politicians do.\u201d\n<\/p>\n

\n The Sunday National: What\u2019s your view of the economic merits of Scottish independence<\/a>?\n<\/p>\n

\n Mosler: \u201cIf the UK Government<\/a> was running the country the way it could be and should be, Scotland wouldn\u2019t have an interest in independence. There would be jobs for everybody and Scotland would be prosperous.\n<\/p>\n

\n \u201cBut when things are not so good and you feel you are being mistreated, then Scotland wants to leave. That\u2019s evidence of poor leadership at the top in the UK.\n<\/p>\n

\n \u201cI think that you have a problem in Scotland now, because the UK Parliament has to approve a referendum. They approved one [in 2014], and it was close enough that they are not going to approve another one.\u201d\n<\/p>\n

\n The Sunday National: I know you have been working on a report with William Thomson, the organiser of Scotland\u2019s Economics Festival, about Scottish independence and the currency question. What\u2019s your view on that?\n<\/p>\n

\n Mosler: \u201cIf Scotland is independent, you don\u2019t want to be using someone else\u2019s currency.\n<\/p>\n

\n The analogy I would use would be setting up a bus company. You have to give out tokens for people to get a ride on the bus. Would you want to use your own tokens, or would you want to buy in your tokens from another bus company?\n<\/p>\n

\n \u201cSo you can make your own for a few pence, or buy them in and they cost maybe a couple of pounds? You would obviously want to produce your own.\n<\/p>\n

\n \u201cWhen you are using another country\u2019s currency, you would need to constantly finance your own money supply. That\u2019s a huge cost, maybe worth about 5% of GDP, and it\u2019s totally unnecessary.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Mosler, who lives in the US Virgin Islands, was speaking at Scotland\u2019s Economics Festival, a three-day event running…\n","protected":false},"author":2,"featured_media":490009,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-490008","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/490008","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=490008"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/490008\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/490009"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=490008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=490008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=490008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}