Usually with the Murphmonster it’s easy enough to see what true and obvious economic point it is that he’s misunderstanding to reach his erroneous conclusion. But here I’m afraid I’m mystified even as to what that is.

He shows us a piccie of a £10 note then says:

All of our money is ultimately based on the government’s promise to pay. So you think George Osborne is right to reduce the national debt? Why? Do you want to destroy our money? And how do you think the economy will do without it?

What? It’s fiat money. The value is based upon our willingness to accept it. Hyperinflation (as opposed to mere inflation) is when we won’t. That government willingness to pay, these days, being just that they’ll swap your tenner for two fivers if you ask nicely.

What this has to do with the national debt is unknown. There have been countries with successful fiat currencies and without a national debt (I think Oz was one for a time?).

Or, to take another example, the Bristol or Brixton pounds, LETS, all sort of other arrangements: they’re not linked to the national debt in any manner although people will accept them in exchange for goods and services of value. That being a useful definition of money. And there’s no central bank, issuing authority or debt standing behind gold: yet I am absolutely certain that you can use gold in many parts of the world. Drop a Krugerrand on the bar in the Savoy and they’ll feed and water you: might be a bit of head scratching first but I’m absolutely certain they will.

There just isn’t an connection between the existence of something that can be used, is used, as money and the existence or not of a national debt.

Which leaves us with the question: what the fuck it it this time that he’s failed to understand? What has he garbled to get to this position he’s got now, that the government should borrow more to spend on PCS members so as to avoid the country being bereft of money?