And. There is a magic money tree; since 2009 the Bank of England has grown £453,000,000,000 of it but decided to give it to the bankers not nurses.
For once a really good article in the Guardian.
Okay; before I say this, I've pointed out lots on here that the evidence is clear that, historically, Labour are NOT worse at managing the nation's finances; the stats are plain. I'm not a Tory, and I would no more vote for them than fly. That said, the quoted article is financially illiterate.
What she's talking about is quantitative easing, which people went ballistic about, as it was "printing money!" and would therefore lead to massive inflation. That showed a fundamental misunderstanding of modern finance.
In the past, trying to boost the economy by pouring in money tended to devalue the currency and cause inflation, yes. That was the reason money used to be linked to the price of gold (the gold standard) and you could literally rock up at the bank and get the money changed for a chunk of shiny. In Ballet Shoes Streitfield talks about the Fossils having gold sovereigns, worth a little more than base ones because of the inherent value. Once they stopped doing that, currencies could go off the deep end.
When they decided to inflate our economy in the global economic crisis, they decided the best way to do it was to increase liquidity and get the markets moving, and they did that via, as has been said, a magic money tree which bought up financial assets from the private sector with money that did not previously exist. This was done not because they were keen to help banks out, but because if inflation began to rise at unmanageable levels, the bank could sell those assets off, and then delete the money, which would immediately deflate the economy again.
Buying financial assets meant the bank was able to keep control of it, and recall it again if the economic circumstances demanded that. It was a built-in brake against hyper-inflation, and anyone who knows anything about the Weimar Republic - the financial collapse that led to Nazi rule, when people had to cart their rent in wheelbarrows because notes had so little worth - knows how essential that was. If the money had been spent on public services, and especially in pay packets, it would not be recallable. It would be gone. And so, therefore, would the built-in safeguard of being able to delete the fruits of the magic money tree.
It was the only way to save the economy without risking even bigger problems down the track.