The Magic Money Tree

NewsFlash – George Osborne has discovered the Magic Money Tree:

From the Huffington Post 

“George Osborne, the British Chancellor, has publicly disagreed with his prime minister on a fundamental issue of monetary policy – in an official Treasury report.

The prime minister recently argued that “There’s no magic money tree to fund” what he called “this ever more wishful borrowing and spending”.

But his Chancellor, George Osborne, disagrees.

The disagreement is aired in one of the documents tabled by the Chancellor on budget day. It’s titled: “Review of the Monetary Policy Framework.” – and is tucked away in the bundle of documents issued last Wednesday.

In paragraph 3.34, the Treasury makes plain that the monetary authorities could finance increased government spending on infrastructure “through the creation of money“.

Taxpayers, the Treasury makes clear, are not the only source of finance for governments – as neoliberal economists would have us believe.

There is a money tree, and it’s called the Bank of England.”

(hat-tip to Richard Murphy)