What they’ll say about QE

In time to come people will ask, “Did you really just turn on the printing press, and let it rip?”
We’ll say, “Oh, yes. Three hundred and seventy five billion worth. We know a good thing.”
“Wow! And what did you spend it on? Cathedrals? Bridges? Space exploration?”
“Nah, we just gave it away to the bankers.”
“Really”, they’ll ask. “Why was that?”
“Convention. When high street lending seized up, we needed to get money into the system, we printed tons of the stuff and bought gilts from the high street banks for massively over-the-top prices. That way they had money to start lending again.”
“So at least you got them lending again.”
“Well, no. Not quite. It turns out that the people asking for loans were unrealistic. Like the ones you see on Dragon’s Den who don’t know what day of the week it is. The £375 billion we gave to the bankers ended up in the stock market instead. But the good thing is that the bankers absolutely loved it. Money for free.”
“But why didn’t the realistic companies want loans?”
“Because they were all cutting back. Austerity scared them shitless, so they didn’t want to invest, which caused more austerity and so on.”
“But surely, you could have built 200 St Paul’s Cathedrals with that kind of money. At £30m a mile, we could have had 12,500 miles of motorways. Eleven new HS2 train lines could have been built. The economy would have taken off with that kind of money.”
“True, but it would have looked like a Plan B. So we knocked that one the head straight away.”
“So you gave £375 billion to the bankers rather than be seen to do a plan B?”
“You bet we did. The bankers loved us for it. The stock market went ape.”
“So did that solve the problems?”
“It made sure there was enough money in the economy. The problem was that it didn’t cause the money to move about. There was no circulation. The money went to one part of the economy and kind of sat there. The money was sticky.”
“Wow. Well I think that was a major cock up. The electorate must have been furious?”
“Nah. They didn’t understand it. The politics worked out fantastic for us Tories.“

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