Magic Money Tree?

[suzieseaside]

Rishi Sunak seems to be coming up with some good ideas, but how come money seems to be no object?

I know little about money and economics, it would be nice to have more but I have never been sufficiently interested to learn about financial stuff, investments etc.

Coronavirus is supposed to be causing serious economic damage, worse than the great depression and probably worse than Brexit which some have warned will be a financial disaster. We have had years of austerity and reasons for spending cuts, so how come the Chancellor seems to have found a Magic Money tree?

Are we printing money? Don't we need to balance the books? Can someone explain in simple 'economics for dummies' language please?

[cee-dee]

There is no Magic Money Tree. As Enoch Powell once said "The Government's got no money". What he meant was that all "government money" came from the taxpayer.

Apart from using reserves, at the moment, the Government are set to borrow vast sums of money to pay for all the schemes going on at present.

The money can be borrowed in a few ways. Some might be borrowed from the International Monetary Fund, some might come from Government bonds of some sort. These are repayable in a set time (with interest of course).

Sooner or later, the taxpayers will have to cough up to pay for it all. Watch the fur fly then?

[astrologica]

I think I read somewhere that they are using quantitative easing...in other words, printing money. They have borrowed up to the hilt. I'm sure that other governments have done the same, in order to survive. The interesting thing is that since 1931, Sterling has been a Fiat currency. I read once, sorry I don't have a link, that Fiat currencies are unstable and ultimately will fail. I was very interested in this subject a few years ago...I wish I had kept links to the research that I did. Bitcoin is another currency that intrigues me...I just cannot see how it has any value! Must dash.....I need to print a few ££££'s!

[cee-dee]

Hmmmmm....:-

https://en.wikipedia.org/wiki/Quantitative_easing

[fallen-archie]

I recently received notification from a bank which I have shares into say that the interest rate payable to me this year would be a whopping 0.01%, why therefore does borrowing cost so much, not that I have too borrow but I notice on the tv that loans can cost so many % that I do not understand why my money never makes anything like that?

[cee-dee]

I think the same too. If they can't make money out of what we've got on deposit, it's time they gave up and did something else?

Perhaps we should become loan-sharks?