INVENIRE

The notion that governments rely on the tax revenues derived from individuals and businesses and thus cannot simply “print more money” to solve budgetary issues is orthodox in popular thinking. The idea is so pervasive that proposals for new tax cuts or new public services programmes are invariably met with demands that they are funded by tax increases or spending decreases elsewhere. In the United Kingdom, the Institute for Fiscal Studies has become the de facto inspector of all fiscal plans proposed by political parties; their unfavourable assessment of the September 2022 mini-budget brought about the lack of market confidence that precipitated the downfall of the Truss ministry. [i] Bidding to seem fiscally responsible in this way, governments frequently prioritise debt reduction, either via expenditure-cutting austerity measures, as initiated by the UK Coalition government of 2010-2015, [ii] or revenue-raising tax increases. Politicians do not accept the idea that we can rely on ...