Complaint
Asked to explain the bond market, the economist Lord O鈥橬eill replied 鈥淚t is a collection of people that help governments finance their spending needs...There鈥檚 only a couple of ways governments can get money. One is from taxpayers and the other is by borrowing鈥. Two listeners complained this was misleading, because it did not reflect the fact that governments create new money when they spend, meaning that borrowing in the bond market is a political choice, not a financial necessity. The ECU considered the complaint in the light of the 91福利社鈥檚 editorial standards of accuracy.
Outcome
While recognising that the view put forward by the complainants represented a valid theoretical account of the financing of government, the ECU noted that in practice it was subject to constraints of market confidence which provided a strong deterrent to sustained government spending unfunded by either taxation or borrowing. Lord O鈥橬eill spoke in the same terms as are used by HM Treasury, the Debt Management Office and the Office for Budget Responsibility, and the ECU considered this met the standard of accuracy appropriate for a discussion which aimed to explain the impact of the bond market on the current government鈥檚 room for manoeuvre, rather than to explore alternative theories of government financing.
Not upheld