MMTUK Policy Research Group
@mmtuk.bsky.social
The UK's first MMT policy organisation. Evidence-based research on how government spending really works. Briefings for policymakers, analysis for everyone.
So why do politicians keep talking about the debt like it's a household credit card?
Because it justifies cutting public services. Every time you hear "we can't afford it," ask yourself: who benefits from you believing that?
Full article: mmtuk.org/education/articles/uk-national-debt
Because it justifies cutting public services. Every time you hear "we can't afford it," ask yourself: who benefits from you believing that?
Full article: mmtuk.org/education/articles/uk-national-debt
Understanding UK National Debt | MMTUK
UK debt represents money the government invested in our economy but hasn't taxed back.
mmtuk.org
February 10, 2026 at 7:47 AM
So why do politicians keep talking about the debt like it's a household credit card?
Because it justifies cutting public services. Every time you hear "we can't afford it," ask yourself: who benefits from you believing that?
Full article: mmtuk.org/education/articles/uk-national-debt
Because it justifies cutting public services. Every time you hear "we can't afford it," ask yourself: who benefits from you believing that?
Full article: mmtuk.org/education/articles/uk-national-debt
"But what about inflation?"
The size of the debt doesn't cause inflation. What matters is whether current spending exceeds the economy's capacity to produce.
The real question was never "can we afford it?" It's "do we have the people, skills and resources to do it?"
The size of the debt doesn't cause inflation. What matters is whether current spending exceeds the economy's capacity to produce.
The real question was never "can we afford it?" It's "do we have the people, skills and resources to do it?"
February 10, 2026 at 7:47 AM
"But what about inflation?"
The size of the debt doesn't cause inflation. What matters is whether current spending exceeds the economy's capacity to produce.
The real question was never "can we afford it?" It's "do we have the people, skills and resources to do it?"
The size of the debt doesn't cause inflation. What matters is whether current spending exceeds the economy's capacity to produce.
The real question was never "can we afford it?" It's "do we have the people, skills and resources to do it?"
The UK had debt above 200% of GDP after WWII.
Did it default? No.
Did it build the NHS, expand education, and preside over decades of rising living standards? Yes.
The debt fell over time through economic growth, not austerity.
Did it default? No.
Did it build the NHS, expand education, and preside over decades of rising living standards? Yes.
The debt fell over time through economic growth, not austerity.
February 10, 2026 at 7:47 AM
The UK had debt above 200% of GDP after WWII.
Did it default? No.
Did it build the NHS, expand education, and preside over decades of rising living standards? Yes.
The debt fell over time through economic growth, not austerity.
Did it default? No.
Did it build the NHS, expand education, and preside over decades of rising living standards? Yes.
The debt fell over time through economic growth, not austerity.
"But won't our grandchildren have to repay it?"
No. When bonds mature, the government creates new money to pay bondholders. It always can, and it cannot default on sterling debt.
Your grandchildren inherit the hospitals, schools and infrastructure that spending built.
No. When bonds mature, the government creates new money to pay bondholders. It always can, and it cannot default on sterling debt.
Your grandchildren inherit the hospitals, schools and infrastructure that spending built.
February 10, 2026 at 7:47 AM
"But won't our grandchildren have to repay it?"
No. When bonds mature, the government creates new money to pay bondholders. It always can, and it cannot default on sterling debt.
Your grandchildren inherit the hospitals, schools and infrastructure that spending built.
No. When bonds mature, the government creates new money to pay bondholders. It always can, and it cannot default on sterling debt.
Your grandchildren inherit the hospitals, schools and infrastructure that spending built.
When you borrow, you must earn income to pay it back.
When the government "borrows," it's offering people a safe place to save, and paying interest on those savings.
It's not borrowing its own currency from someone else. It's managing how much is in circulation.
When the government "borrows," it's offering people a safe place to save, and paying interest on those savings.
It's not borrowing its own currency from someone else. It's managing how much is in circulation.
February 10, 2026 at 7:47 AM
When you borrow, you must earn income to pay it back.
When the government "borrows," it's offering people a safe place to save, and paying interest on those savings.
It's not borrowing its own currency from someone else. It's managing how much is in circulation.
When the government "borrows," it's offering people a safe place to save, and paying interest on those savings.
It's not borrowing its own currency from someone else. It's managing how much is in circulation.
Every pound of national debt is a pound the government spent into the economy and didn't tax back.
It built hospitals. It educated workers. It kept businesses afloat during Covid.
The debt is just the accounting record of that money creation.
It built hospitals. It educated workers. It kept businesses afloat during Covid.
The debt is just the accounting record of that money creation.
February 10, 2026 at 7:47 AM
Every pound of national debt is a pound the government spent into the economy and didn't tax back.
It built hospitals. It educated workers. It kept businesses afloat during Covid.
The debt is just the accounting record of that money creation.
It built hospitals. It educated workers. It kept businesses afloat during Covid.
The debt is just the accounting record of that money creation.
(9/9) Here’s the step-by-step explainer: mmtuk.org/education/ar...
How Money Actually Works: Step-by-Step | MMTUK
Once you understand that money is created by the state and that taxes create demand for it, the rest of how the economy works follows as a matter of pure logic.
mmtuk.org
February 9, 2026 at 7:47 AM
(9/9) Here’s the step-by-step explainer: mmtuk.org/education/ar...
(8/9) Once you see how money is created, a lot of political clichés look different.
And you can ask better questions about jobs, public services, and investment.
And you can ask better questions about jobs, public services, and investment.
February 9, 2026 at 7:47 AM
(8/9) Once you see how money is created, a lot of political clichés look different.
And you can ask better questions about jobs, public services, and investment.
And you can ask better questions about jobs, public services, and investment.
(7/9) This doesn’t mean “deficits don’t matter” or “spend without limits”.
The real limits are resources (people, skills, energy, materials) and inflation.
The real limits are resources (people, skills, energy, materials) and inflation.
February 9, 2026 at 7:47 AM
(7/9) This doesn’t mean “deficits don’t matter” or “spend without limits”.
The real limits are resources (people, skills, energy, materials) and inflation.
The real limits are resources (people, skills, energy, materials) and inflation.
(6/9) So for the UK Government the sequence is:
Spend → money exists in the private sector → tax deletes some of it.
This is the opposite of how you experience money: earn first → then spend.
Spend → money exists in the private sector → tax deletes some of it.
This is the opposite of how you experience money: earn first → then spend.
February 9, 2026 at 7:47 AM
(6/9) So for the UK Government the sequence is:
Spend → money exists in the private sector → tax deletes some of it.
This is the opposite of how you experience money: earn first → then spend.
Spend → money exists in the private sector → tax deletes some of it.
This is the opposite of how you experience money: earn first → then spend.
(5/9) Third: taxes don’t work like a household bill.
Taxes remove pounds from the private sector. They help drive demand for the currency and manage access and distribution to wealth and resources.
Taxes remove pounds from the private sector. They help drive demand for the currency and manage access and distribution to wealth and resources.
February 9, 2026 at 7:47 AM
(5/9) Third: taxes don’t work like a household bill.
Taxes remove pounds from the private sector. They help drive demand for the currency and manage access and distribution to wealth and resources.
Taxes remove pounds from the private sector. They help drive demand for the currency and manage access and distribution to wealth and resources.
(4/9) Second: In exactly the same way, government spending adds pounds into the economy.
When the UK government spends, it credits bank accounts. That increases private sector balances.
When the UK government spends, it credits bank accounts. That increases private sector balances.
February 9, 2026 at 7:47 AM
(4/9) Second: In exactly the same way, government spending adds pounds into the economy.
When the UK government spends, it credits bank accounts. That increases private sector balances.
When the UK government spends, it credits bank accounts. That increases private sector balances.
(3/9) This surprises people because we’re taught banks “lend out savings”.
In practice, banks create new deposits when they lend (within rules, capital requirements and the central bank’s rate).
In practice, banks create new deposits when they lend (within rules, capital requirements and the central bank’s rate).
February 9, 2026 at 7:47 AM
(3/9) This surprises people because we’re taught banks “lend out savings”.
In practice, banks create new deposits when they lend (within rules, capital requirements and the central bank’s rate).
In practice, banks create new deposits when they lend (within rules, capital requirements and the central bank’s rate).
(2/9) So: how does money actually get into the economy?
First: most money is created by banks.
When a bank makes a loan, it creates a deposit in the borrower’s account. New pounds appear as numbers on a balance sheet.
First: most money is created by banks.
When a bank makes a loan, it creates a deposit in the borrower’s account. New pounds appear as numbers on a balance sheet.
February 9, 2026 at 7:47 AM
(2/9) So: how does money actually get into the economy?
First: most money is created by banks.
When a bank makes a loan, it creates a deposit in the borrower’s account. New pounds appear as numbers on a balance sheet.
First: most money is created by banks.
When a bank makes a loan, it creates a deposit in the borrower’s account. New pounds appear as numbers on a balance sheet.
Thanks Eddy! 💪
February 7, 2026 at 1:02 PM
Thanks Eddy! 💪