Last week, the IMF released its so-called Fiscal Monitor October 2018.
Apparently the British government, which issues its own currency, has ‘shareholders’ who care about its Profit and Loss statement and the flow implications of the latter for the Balance Sheet of the Government.
Anyone who knows anything quickly realises this is a ruse. There is no meaningful application of the ‘finances’ pertaining to a private corporation to the ‘finances’ of a currency-issuing government.
A currency-issuing government’s ‘balance sheet’ provides no help in our understanding of what spending capacities such a government has.
A currency-issuing government can always service any liabilities that are denominated in its own currency.