Gower Initiative for Modern Money Studies

First government does not spend by printing money. What makes us richer are the resources that are mobilised by both government and private spending. At the global level all financial liabilities and all financial assets offset each other, cancelling to zero. What remains are the resources harnessed, the stuff built etc etc.

Good question. The answer is simply that our ancestors ran a commodity based currency system: a silver standard. However, for centuries they utilised systems to bypass the silver constraint, such as ‘tallies of pro’. The ancient Exchequer of Receipt was in effect a clearing house for such financial instruments. Given the abandonment of commodity currency and sterling convertibility (think ERM exit in 1992), sterling is simply a token, a tax credit, if you will, of which Government is a monopolist. Thus there is no intrinsic financial constraint. But, as you rightly point out, the constraint is in real terms. Government is limited by the availability of real resources at a price it’s prepared to pay. This is what MMT simply observes, which is far from being an elaborate joke.

The money comes from MPs votes. It’s called ‘Money from Parliament’. You are an MP and should know this, it is your job after all.