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Share your dilemmas and get honest opinions from other Mumsnetters.

Where do people think money comes from?

383 replies

MrsBlobbyOnLockdown · 19/04/2020 20:37

Everyday we are hearing pay the NHS an extra 30% pay them £26 per day extra is the latest one.

I’m not disputing they deserve it of course they do & if we had an endless supply of money it’s the first place it should go.

But seriously, where do people think all this money is coming from?

What are your thoughts

OP posts:
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8
Thisisworsethananticpated · 19/04/2020 22:42

It was the wrong call to lock down

It’s going to be very bloody awkward to be the ONLY country that doesn’t lock down !

Every single developed
Country is locked down .

Putting aside the morality of it , England’s reputation would be mud if we prioritised the economy first

perfectstorm · 19/04/2020 22:44

@justanotherneighinparadise we did print a lot of money in the last recession. It’s called quantitative easing. The problem with lots of extra money floating about is it causes inflation. Ie you might have £100 in your hand but you go to the shop and find a cucumber is now £25 and your favourite bar of chocolate £50.

That's not actually correct. It used to be, when money was quite literally printed, but now it's fiat - electronic - money, there is a built-in recall system.

Quantitative easing works like this: the Bank of England, being a central bank, buys up stocks in eg pension funds or gilts, and in doing so creates money that didn't previously exist. It's not true, as a previous poster said, that all banks can do this. They can't. Lloyds can only lend what they have themselves available to give. They can't create new currency. But a central bank, controlled by a government, can. The Federal Reserve, or the Bank of England.

So they buy these stocks, shares, or whatever and that pumps extra money into the system, easing strain and boosting the economy. They do this at a point when economically, the market forces are making inflation very low - even risking deflation, as happened in Japan in the last century - and therefore yes, it does slightly boost inflationary pressures. But when they printed currency and sent it out into the world, they had no way to control that inflation - hence the term runaway inflation. In Weimar Germany, after WW1, there were stories of people needing wheelbarrows to carry all the notes to pay their rent. But with electronic money, the solution is built in. If inflation starts to rise, that usually means the economy is starting to move again, so all the Central Banks need to do is sell the assets they bought using that newly created money, and then delete the money. Bam. Money gone, which in turn creates deflationary pressures, and reduces that inflation level.

That's how quantitive easing works.

PickAChew · 19/04/2020 22:45

You sound like Trump, now, Xenia.

runrabbitrunrunrun · 19/04/2020 22:47

If nurses earned a really good wage then some wouldn’t be doing the job for the right reasons.

TheMagiciansMewTwo · 19/04/2020 22:47

I think a better question is where do you think money comes from? Because you seem to consider funding the NHS is a fantasy even though as PPs have explained the lack of funding isn't about a lack of money but about misplaced priorities.

Beansandcoffee · 19/04/2020 22:49

The next generation will pay this debt. They have been told to stay indoors to protect the elderly, they have had their exams cancelled, their job interviews cancelled, their 18th birthdays cancelled but they will pay increased taxes, reduced pensions and work until they are 75.

ButterbuttSquash · 19/04/2020 22:49

@DontStandSoCloseToMe said all I wanted to say, but far more concise.

Alsohuman · 19/04/2020 22:51

As any overtime is counted as a separate contract of employment, and therefore as a second job. So we would pay 40% tax on that

When did this start? It certainly wasn’t the case when I worked in the NHS.

jasjas1973 · 19/04/2020 22:51

Just printing money doesn’t work

Oh but it does! (if backed up by suitable stimulus measures) Zim and Germany are poor examples as they also had far deeper issues, Germany - the Versailles treaty and Zim - a despotic murderous tyrant!

The answer to the GFC in 2008 was QE and it kept employment in the west high, ok wages haven't gone up but inflation is low and mortgage rates v low. Uk has a weird tax system that encourages inequality which has made our situation worse than most.

Sunak has said that despite all this borrowing and probable additional QE, taxes wont go up, they might for the self employed but then they fiddle their way out of paying too much in anycase and want a bailout, so too right they should have to pay more.

Not paying NHS staff or having a great healthcare system is a false economy, you then either have to go private and that costs a bomb OR wait around for 18months as your cancer becomes stage 4.

goldfinchfan · 19/04/2020 22:55

House of Lords demanding, yes demanding that they remain being paid £330 per DAY for doing sod all........
take their money away and give that to the nurses.

firstimemamma · 19/04/2020 22:55

@Alsohuman

"You can’t find out where your tax goes, it all goes into one pot. If we knew where our individual tax went, we could choose what it was spent on."

You're mistaken, we got a letter from hmrc with an exact breakdown of what our tax money went on. It was as black and white as x% benefits, x%refuse collection etc and it was in a pie chart. We are in the uk. I assumed everyone else got one once a year but apparently not.

Pumpkinpie1 · 19/04/2020 22:59

Perhaps it’s time to follow Denmark’s lead. Don’t give tax breaks etc to companies registered in tax havens ? That way money goes back 8nto our economy and isn’t siphoned off. Too often big companies are paying dividends to share holders with one hand whilst begging for taxpayers money to help them.
Shut off these loopholes

Alsohuman · 19/04/2020 23:20

You're mistaken, we got a letter from hmrc with an exact breakdown of what our tax money went on. It was as black and white as x% benefits, x%refuse collection etc and it was in a pie chart

No, you’re mistaken. Refuse collection comes out of council tax, so that breakdown wouldn’t have come from HMRC. It would have come with your council tax bill.

Savingshoes · 19/04/2020 23:22

Same as where the magic money came from when they suddenly had money for extra equipment.
It wasn't long ago that they didn't have the money to employ more staff, certain drugs were off the menu because of costs/postcode lottery etc.
£26 for a cleaner in a hospital would definitely be a good start who are putting themselves at just as much risk as the rest of hospital staff.
Nurses are skilled workers who have done degree entries and then worked up from there. It would be great if this was comparable to degree level equivalents in other fields.

Verily1 · 19/04/2020 23:25

We need to tax wealth rather than income.

Theresnobslikeshowb · 19/04/2020 23:26

As ds told me when he was 6- the hole in the wall.

bettybattenburg · 19/04/2020 23:28

As any overtime is counted as a separate contract of employment, and therefore as a second job. So we would pay 40% tax on that.

The same happens (or used to happen) with teaching assistants covering for teachers at some schools, it's a separate contract so they did two hours cover and get your £5 extra and then pay 40% on it. I know some others didn't claim for it if they only did a bit as it meant they paid NI on their other income too and so they were worse off.

Bessica1970 · 19/04/2020 23:42

@firsttimemamma
Have you seen your fiancé’s payslip with the £2000 tax?
In the kindest way possible - it sounds like he’s talking nonsense ( possibly to cover overspending?).
My apologies if this isn’t the case, but that amount of tax is unfeasible unless that was the cumulative total.

BubblesBuddy · 19/04/2020 23:46

Degree level nurses earn more than quite a few degree holders. Research into the best paying degrees has been done. Doctors and Economists are top. Nurses generally don’t need the same entry qualifications as students at the LSE or med school. They don’t pay much back in terms of student loans and I don’t see why this is seen as such a barrier to doing a degree. Many grads earn less than them, so they have seen the value of a degree but earn less. Are people in care homes not worth any extra pay? Just nhs staff?

I would prefer to see the NHS changed with regard to funding. There isn’t enough money to do everything the way we currently do it.

There will be a much lower tax take now snd the younger people will be working for longer with less pension at the end. The current situation makes the bank situation 12 years ago pale into insignificance. The money eventually has to be found. It might take 60 years. That’s what I’ve seen forecast. It’s catastrophic. The unemployed is over 3 million with possibly millions more to come. It’s going to be seriously bad. In fact if you are a nurse at least you will have a job. As will most in public service. Business people will be the hardest hit.

BubblesBuddy · 19/04/2020 23:54

£2000 in tax (income tax and NI) is what would be paid on earnings of £6700 a month. So £80,400 a year. I think most paramedics would be very pleased to be earning that!!

biwinoone · 19/04/2020 23:59

Good question. I was thinking something similar the other day. Considering that many people have lost their jobs and will have to stay at home for the foreseeable future, the government will have to step up and support them. Exactly how long will that be sustainable for. We will have to borrow money, but other countries are going through the same problem ad every one will have to borrow money. Banks will have to probably step up and produce money from thin air...which is what current currency exactly is but it will have a sever impact on the economy. And even if every is given enough money, will we have enough food to go around as the farms have no help. Is the government going to try and force people to go work on farms? It's just all so complicated and feels like dominos falling.

tontie · 20/04/2020 00:01

People always thinks money comes from someone other than themselves

True dat!

Student133 · 20/04/2020 00:02

A few points here regarding economics. Labour functions just like any commodity, for a given skill set there is a supply of people who can provide the operation, and there is a given amount of labour that needs doing at any one time. This is an amoral mechanism, and is why those who we value highly in society may not receive the financial compensation we may like.

For example my mother is a very experienced nurse, with decades of experience, however because a nurse can only look after a limited number of patients at a certain time, she doesn't receive 'high' wages, as no matter how good she is, she cannot care for 10 000 patients. However a code writer for apple may design a program used by hundreds of millions of users, thus vastly increasing the ceiling price of their labour. It's also why a soldier receives a low wage, though its incredibly brave and dangerous, nearly the entire age cohort could be mobilized, so the supply of labour is massive. This is very simplified, but I'm sure will give some insight as to how it works.

tontie · 20/04/2020 00:05

Look at Amazon, apparently they have taken $10,000 a second during the lockdown.

Daftodil · 20/04/2020 00:06

The next generation will pay this debt. They have been told to stay indoors to protect the elderly, they have had their exams cancelled, their job interviews cancelled, their 18th birthdays cancelled but they will pay increased taxes, reduced pensions and work until they are 75.

100% agree @Beansandcoffee