I cannot be alone in being furious about the story in the Guardian this morning about funding for the NHS. As they report:
NHS bosses have accused the chancellor, Rishi Sunak, of breaking a pledge to give the health service “whatever it needs” after he refused to provide a £10bn cash injection needed to avoid it being crippled by a second wave of the coronavirus.
They add:
They have warned ministers that without the money the NHS will be left perilously unprepared for next winter and the second spike in infections which doctors believe is inevitable. Nor will they be able to restart non-Covid services or treat the growing backlog in patients needing surgery.
And they note:
The NHS England chief executive, Simon Stevens, has told the Treasury that it needs at least £10bn in extra funding this year to cover the costs of fighting the virus and reopen normal services. The money would mean the NHS could create extra beds in hospitals, keep the Nightingale facilities on standby, send patients to private hospitals for surgery and provide protective equipment for frontline staff.
You get the feeling by now. What we have is the Treasury saying that we cannot afford another £10 billion for the NHS. And what the NHS is saying is that without this £10 billion then, to be blunt, a great many people are going to die, whether of COVID-19, or other causes. In addition, there will be a lot of unnecessary suffering.
It is important to put this in context. During the current year the government expects to have a deficit of £300 billion. At the same time, and by no coincidence, the Bank of England is going to undertake £300 billion of quantitative easing. What that means is that the Bank of England is going to buy every single penny of government debt issued this year to fund that deficit. The result is that the UK national debt will not increase by one penny as a result of the coronavirus crisis. But, despite this fact (for fact it is) the Treasury wants to deny the NHS the funding that it requires to meet the health care needs of this country.
To be blunt, the Treasury is saying that there is a choice. That choice is between deaths and deficits. And it is saying that the choice has to be more deaths, and less deficit. That is the consequence of having the Treasury committed to economic thinking that suggests that the government is like a household and that when deficits increase spending must be cut. This argument is the surest sign that the logic of austerity is still alive and well and living in Westminster.
But that logic is wrong. What modern monetary theory (MMT) says is that so long as there is unemployment in an economy then the government can run a deficit to meet all the demand for public services without there being any risk of inflation. We face the likelihood of up to 6,000,000 people being unemployed in the UK right now. And that means there is almost no chance of inflation and that every job we can get is valuable, including those that will be paid for by the extra £10 billion that the NHS needs. Funding those jobs is costless: it is simply a matter of increasing the amount of money in the economy, by upping the loan account balance between the government and the Bank of England, which is itself owned by the government.
What we are facing, then, is an occasion when the economics you believe in is not just about a minor theoretical spat between conflicting academics. It's actually about life and death, and the deaths in question may well be those of people that you know.
We can afford to prevent those deaths.
We can put doctors and nurses to work.
We can have the resources required to beat the second coronavirus outbreak.
We can treat all the people whose conditions have gone on attended over the last few months.
The money to do this, which will be of advantage to us all, can be created simply at the choice of the government. But, the Treasury does not want to do that. As a result it is, quite literally, condemning some to death, others to suffering, and more to agony.
Quite literally none of those deaths, any of that suffering, nor a moment of excess agony is required for want of money at present: we can have all the money that we need and the economy will not suffer as a result. But people will die unless we create the money that is required.
The choice now is deaths or deficit, and the Treasury is choosing deaths.
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When will the politicians that have our lives in our hands be confronted with this understanding, this knowledge about this choice, in the court of public opinion? It’d be great if today’s Sunday talk shows on TV and radio were to frankly discuss these facts and choices, instead of all the usual hand-wringing about government debt and ‘we can’t afford it’.
No doubt some people will look askance at what I am about to say but it seems that a people’s declaration of war against its own Government would be appropriate at this time in terms of self -defence
Mind you, many will be down at their newly re-opened pubs, though I know of many who will not be going.
There is no excuse for any of this at all – none – as you say. The only hope is that one day those in the Treasury answer to God – and I don’t even know whether he exists or not.
In the twisted world of this Government, handling a crisis well is determined by how you manage to maintain your original malign & destructive intentions and meet the requirements of your funders, rather than how you get the people who even voted for you through the crisis safely.
Disgusting.
England especially got us into this mess,my friends and family being robbed to save some greedy parasites saving offshore accounts,that has cost 1000,s of lives.When threatened by the E.U.wanting to clean up ,including offshore havens,people less tax or no tax. These people have given themselves wage rises,special funding to work from home(that lasted 2 months?) £50,000 extra for their pensions.Told lies to get Brexit done used dark money to bribe the public,and used money from other countries in elections and referendums,(illegal) NULL and Void!! We are still waiting for the monies used in the last election on 12th December. Besides printing more money,they also have trillions over seas,so why the need to borrow,excessive expenditure on matters that are not important,but still sacrifice the people. CORRUPTION WITHOUT CARE!!?
Not all those claims ring true
Meanwhile they are proposing to employ hundreds more in job centres – presumably to harass people for not spending the entire week applying for non existent jobs!!!
I imagine the failure to fund the NHS is about forcing people into the private sector. If you assume that this Government wishes to privatise the NHS then some of what they have done re setting up private labs etc starts to make more sense.
“we can have all the money that we NEED and the economy will not suffer as a result” – this is such an important line. To constrain spending on needs (not wants) is a dereliction of government and the social contract. Speaking of which, can we have a social contract video please?
I’ll add to the list
I know that deaths or deficit or is catchy but here and in your twitter blog it gets a bit confusing because it’s not clear exactly what choosing the deficit means or what choosing deaths means. I would say that choosing the deficit means the government wants to reduce the deficit, but by contrasting it with death and saying the government has chosen death over the deficit you are saying that is the wrong choice, which makes choosing the deficit the right choice, which means choosing the deficit means choosing to not be bothered about an increase in the deficit, which doesn’t really fit.
From the government’s perspective in choosing the deficit they are choosing not to increase it but this doesn’t fit your dichotomy, because it means they are choosing both deaths and the deficit. From your perspective you don’t want so much to choose to increase the deficit, you want to save lives and you aren’t bothered about what that does the deficit. From your perspective you don’t want deaths which means you do want to choose the deficit, which means that choosing the deficit means an increase, so depending on the government’s perspective or yours choosing the deficit could mean a decrease or an increase.
You seem to switch meanings yourself when you say in your tweet blog that the government is choosing lattes over deaths. So you are saying when the choice is deaths or the deficit the government is choosing deaths, which means choosing deaths means choosing an increase in deaths, but when the choice is lattes or deaths the government is choosing lattes which means choosing deaths means choosing a decrease in deaths, i.e. the opposite of what it means in your first dichotomy. I know exactly what you mean because I have read your blog for years and I know your views, but someone less familiar with your views might be more confused. It might not be as catchy but I believe it would be clearer to say the choice is between lives or the deficit, and the government is choosing the deficit. If you have to keep the alliteration then I believe it would be clearer to include a qualifier and say the choice is to reduce deaths or reduce the deficit, and the government is choosing to reduce the deficit – here there is no uncertainty about what the death choice means – again, less catchy but clearer, so I prefer lives or the deficit because it’s simpler and clearer.
I’m happy for you to disagree, but it seems most people get exactly what I mean
Many hundreds of retweets on Twitter today suggests that the argument resonated clearly enough
Its be or not to be or kun faya kun. He loves shakespeare a lot and many be islamic eschatology.
Part of thee need for the extra cash in the English NHS is to “send patients to private hospitals for surgery”. Hmm!
Watch this space…..
Indeed
Even if you assume the number of COVID cases drops to near zero, distancing measures means that the NHS capacity will be reduced. There is already a very long waiting list, reduced capacity means this will just grow exponentially. Therefore additional capacity is needed – and apart from the Nightingale hospitals where else other than the private sector can it come from in the short term?
It was reported in the Guardian as follows : ‘ The row piles pressure on Sunak to find more money for the NHS ahead of his summer statement ‘ . I sent an email to Katherine Viner ( the editor ) this morning containing the following sentence ‘ ….cast your mind back four months to the beginning of the pandemic in the UK and then track the funds that have been created – the furlough scheme, rate grants, bounce back loans – being just the main ones. The guesstimates of the likely total is around £300 billion. NONE of that money existed at the beginning of March 2020 . It was created like all government money on the computers inside the Treasury. It was not ‘ found ‘ anywhere least of all in the vaults of the Bank of England .’ I urged her to have her journalists watch my film in yet another attempt to stop this perpetuation of the ‘ how are we going to pay for it ‘ nonsense.
Any reply?
Not yet Richard . I’ll let you know if she replies .
Yes, I’ve written in on a number of occasions to ask that the editors step in whenever a clanger is dropped.
It’s amazing how often the first paragraph of these pieces will include something along the lines of: “…at the cost to the taxpayer”.
I’ve tried to convince the Guardian that the veneer of legitimacy this lazy journalism lends to the myth becomes an insidiously divisive tool, which pits those who are seen as the ‘beneficiaries’ of this money creation against those who then are misled to feel it is actually paid for by money coming directly out of their pockets.
You could argue that this ‘useful idiot’ position adopted by the media lends credence to the Tories’ ‘divide-and-rule’, handbag economics mythology and their subsequent facile messaging (e.g. the reductive strivers vs. scrivers narrative).
It is easily soluble by the newspapers, but you never hear back.
Slightly O/T but confirmation that the economy ALWAYS took precedence over public health matters abounds in this:
https://bylinetimes.com/2020/07/03/sagegate-how-government-neutered-science-to-save-the-economy-and-chase-the-ghost-of-herd-immunity/
It may be worth pointing out that the £500 billion welfare bandage for the banks in 2008 – as per the Bank Of England inflation calculator – put its value at end 2019, it’s last calculable date, at £672.15 billion. Throw in the 6 months of this year and you have the not too shabby number of close to £680 billion.
I have written to the Guardian about giving more time to MMT previously. I wrote very nicely.
I got nothing back. Zilch. They don’t seem to want to know. I don’t rate Viner anyway.
Part of the problem on the NHS is that the Treasury dont trust simon stevens.
He wants to indulge in a madcap reconfiguration of the NHS costing c£25bn : the net effect of which will be to speed up consolidation, close A&E departments, reduce staffing ,capacity and make the NHS less resilient.
Stevens is using the COV19 as cover for his plans for the NHS.
Its more complicated than NHS vs Deficit.
A reminder that Sunak, despite the smart suit, brushed hair and articulacy is a product of his background. A Goldmans Sachs baker, steeped in neo-liberal economic thinking with zero chance of the leopard changing his spots.
His enthusiasm for ‘free trade zones’ with their track record of tax avoidance and being a haven for nefarious activities, whilst doing little for the real economy reflects his interests and instincts.
On which, more tomorrow…
#Robin Stafford:
“A reminder that Sunak, despite the smart suit, brushed hair and articulacy is a product of his background. A Goldmans Sachs baker,”
I do wish Goldman Sachs had stuck to baking . . . .
Me too
I guess butcher might have been a more appropriate mistake!