Deficit Owls has posted the video from England called Money for Nothing.
We made this video essay as a pseudo Q&A to explain how the UK monetary system works. It’s based on 10 years of factual research. We explain money creation, tax, deficit, banks, fraud and debt.
Just be aware that the narrator has the pedagogical style of making firm statements in the beginning, and then later taking back some of the assumptions you might have inferred by what he said. I don’t particularly like that style, but he does say some things a little differently from the way you have heard it explained by USA proponents of MMT. Perhaps his style might suit your learning style better.
At first, I got hung up on his claim that the Government has to sell bonds to make up the difference between what it collects in taxes and what it spends. According to my understanding of MMT, this is completely false, unless Great Britain has a law like the USA does that says the central bank cannot give money directly to the treasury. If that is true, then it is only the law that requires the Government to sell bonds. There is no reason why this law has to exist, if the government didn’t want this law. This video initially and incorrectly leaves open the possibility that there is some law of economics that requires bond sales.
This is the impression I got from the first half of the video. Half way through the video, just after I stopped to write my above comment, he essentially did say that the need to sell bonds to make up the deficit is just a policy decision. This essentially negated (or clarified) what he had said earlier about the need to sell bonds. I don’t particularly like the pedagogic style of explaining something and then partially negating it later.
He did it again on another topic. I think his explanation of money creation by private banks is a little flawed. What he left out is what happens when a borrower takes the loan money out of the bank to spend it with someone who uses a different bank. This is when the lending bank has to be concerned about whether it has the money to cover the withdrawal because the recipient of the borrower’s payment is not going to put that money back into the same bank. He says nothing about the help (a loan) that the bank might need from the central bank to cover any shortfall.
The way I look at it, one of the businesses private banks are in his getting money wholesale, and lending it at retail. If the money that gets lent stays within the community of one bank’s customers, then it is really inexpensive for that bank to make a profit. When the lending bank does not have to pay anything for the money it created when it made the loan, then the interest it charges the borrower is almost all profit.