Coronavirus

[Mike T]

So banks and building societies just print the money to loan out do they? One wonders then why there was a Financial crisis at all in 2007/2008. All Northern Rock etc. had to do was turn on the printing presses. Job done.

Similarly with the Government. No need for taxes at all, we can just print the money and spend whatever we like. Well that might work in the fantasy world of the Guardian. Meanwhile on planet earth, that will just produce hyperinflation.

Under some circumstances you do not get significant inflation. Quantitive easing was just printing money. The money you got as a mortgage to buy your house did not exist until the bank/building society wrote a cheque. Of course at times it goes very badly wrong - hence 2008.
I found Yanis Varoufakis' book "Talking to my daughter about the economy" interesting - he thinks about printing money this way as borrowing from the future, rather than borrowing from another source. Thinking about that mortgage - we create the money by working/being paid/paying it back - in the future in other words.