Make the magic money tree work for everyone, not just the rich | Letters
Tory politicians now frequently accuse Labour of believing in the existence of a "magic money tree" that will enable a Labour government to "pay for it" (Front page, 3 June). They hope that none of us will remember that in its 2014 Q1 Quarterly Bulletin the Bank of England published a graphic and explicit account of the facts of money: almost all money comes into this world "out of thin air", conjured into existence by the book-keeping act in which "whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower's bank account, thereby creating new money". This had for very many years been well understood by bankers, but for some reason most of them had been too shy to admit such facts outside a small circle of consenting adults.
The secret of political understanding is that most accusations hide guilty secrets. In this case the money tree is by no means a fantasy: it is the very real tree of quantitative easing, a tree that has dropped billions of pounds of new money into banks and financial institutions. The resulting inflation of asset values has allowed the few to become obscenely wealthy while the Tories have increased the national debt by nearly 800bn since 2010.
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