Quantitative easing pays for what?

[David H]

I admit I'm still fairly lost how it works, but what stops the government filling some of its spending requirements from the artificial cash they create rather than increase taxation? Isn't money money wherever it comes from after all?

[joggerjayne]

If the Govt injects printed money into the Economy, it flows abroad ... because we don't manufacture anything, so we have to import heavily.

This leaves foreign countries holding even more GBP than they do now.

There is no huge demand for GBP because we don't export very much, and insofar as other copuntries need GBP, they suddenly have it in abundance.

So demand for GBP tumbles, and the strength of GBP collapses.

A weak GBP, in turn, means that we find it harder to buy goods from abroad, including holidays.

And the recession deepens.

[buildersmate]

In answer to your question, there is nothing to stop the Government doing as you suggest, and to do so would repeat the action of the Labour party in the 70s.
But there is a difference between injecting money into the financial system (to increase the money supply) and spending freshly printed money on Government capital projects (e.g. hospital buildings) or civil servant salary increases.
Not sure what the 1st answer means.