@Disequilibria: Yea but we were told we had to live within our means and we're not doing that yet, we were told austerity was the cure and now it seems it's not, that's a bit like saying chemotherapy is the cure to someones cancer and then stopping the chemotherapy before the cancers gone.
Being a public servant since 2008 (and being in it since 2005), the last 7 years of so called austerity have achieved diddly squat and damaged so many. They keep telling us its for the best and that 'we're all in it together' yet the deficit has barely gone down. We may as well have invested the money into public projects and received the growth from that instead! Sent from my SM-N915FY using Tapatalk
You mean the deficit that was 11% of GDP now being 2.6% of GDP, with total (local and national) government spending as a percentage of GDP down from 48% in 2010, down to around 41% now. We now have a debt to GDP ratio that is falling rather than rising. Seems like most of what were needed has been done. Well we could do with more fiscal control than is being advocated and it looks like we are getting a longer term decrease in the size of the national debt that we'll pay for in the long run.
Try telling that to people who have barely had a pay rise in a decade, let alone one that matches the rate of inflation. Try telling that to people who have had their disability support cut and, despite having serious mobility problems, have been told that a first-floor flat - in a building with no lift - is suitable housing. Try telling that to people who have been judged to be fit for work despite being certified medically unfit to do so. All these are consequences of austerity. Do the ends really justify the means? Was austerity really the only solution to reducing national debt?
Try increasing taxes but results may vary depending on what tax you raise and we have done that to some extent. Try cutting different things. But if national debt just keeps increasing the cost will be passed down the line, it's only delayed spending, then there's ricardian equivalence to go with that..
Or how about we get megacorps like Apple, Amazon, etc, to actually pay the same amount of tax that an SME without expensive lawyers/accountants would have to pay. Consumers with less money are less likely to spend the money they do have, they're more likely to tighten their belts and reduce spending (and thus reduce the amount of money going into the economy). I'm not an economist, so I'm not going to trot out some revolutionary proposal to keep wages & consumer confidence high whilst simultaneously reducing the deficit. All I'm saying is that taking money out of someone's pocket, or taking away the support they desperately need, in order to pay for the largesse and global-scale gambling that got us into a mess is simply unfair no matter which way you look at it. "But dat deficit tho" is all well and good for MPs with generous expenses/living allowances, but it totally ignores the human cost paid by the poor, the marginalised, and ordinary working people.
Ah, no. Even when the 2008 crash (caused by a global market fail, not profligacy by Labour) is excluded from the data, the Conservatives still borrowed more than Labour. Moreover: Labour repaid debt more than the Conservatives. By these measures, they come out as fiscally more responsible.
Ermmm yeah you didn't read it did you. Nexxo explains it for you nicely above Sent from my SM-N915FY using Tapatalk
Next time let's just increase our GDP rather than me (and then nexxo) having to deal with a load of ****ed up kids who get 0 support until it's all too late. Oh yeah and I've had one cost of living rise since 2008 (which was a paltry 1%) no wonder my and nexxo's sectors have huge issues with recruitment and retainment. Sent from my SM-N915FY using Tapatalk
What, being a more productive country? OK, I know that France manages to be more productive than the UK on shorter working hours, and Germany exports more to the world --including the Commonwealth-- than the UK does, but surely the UK is the fifth largest economy --no wait, the sixth...
You don't necessarily have to raise the tax rate. If you pay higher salaries in government funded jobs for example you can get a lot of people away from in work benefits and they would also pay more income tax, plus have more disposable income, which they would spend on something on which the government gets vat (not even to mention keep shops open etc). The private sector then has to follow the lead and raise salaries as well. The problem is that the government is too scared to lead the way and thinks it needs to follow the private sector into the abyss of abusing temp min wage agency workers who then still need government handouts to survive.
And 1997 brown implemented the conservative plan until 2001 gaining a surplus before abandoning it. Governments usually spend the first few years with their deficit influenced by the last government. It's very difficult to attribute borrowing one way or the other. Very difficult to compare in £ terms because the economy grows also. Not as simple as increasing "just increasing our GDP" I've said before and will say again. Corporation tax is an outdated tax, with high compliance and collection costs which when collected the burden falls on the employees of a company rather than the company itself. Better yet would be to abolish the tax and add the 17% to dividend and capital gains taxes. What's the point in taxing carried over cash retained within a firm for solvency and investment. Just tax the company whenever it makes someone money. It'd collect more tax, attract more investment, make it harder to avoid, cost less to comply with, reduce inefficiencies etc Well that was part of an argument to make against austerity in 2010-13. However even then ricardian equivalence, more spending now means higher taxes later therefore people just save the extra spending, the proportion of consumer spending that is on imports, increased saving ratios in such times. All makes keynesian multipliers much lower than people think. Also issues with the effects of extra spending being lagged, lack of shovel ready projects. My middle ground would have been same cuts (roughly), and in the 2010-13 period move the money to infrastructure and house building spending (usually has higher multipliers) and then cut that out after 2013 and seen where we go from there. As unemployment has fallen to effective full employment temp workers will decrease. Likely part of the reason for keeping people in employment was the flexibility of the UK labour market.
And public services whose wheels are about to come off. Reducing the defect is not in and of itself a useful outcome. Worse, if you achieve it by starving the public budget you end up with an even bigger debt to repay once you need to rebuild infrastructure rather than maintain it. Save money by skipping oil changes and service intervals on the car. Works great until your engine decides it wants to be a pile of metal shavings instead. Or you can increase taxation, keep funding public services properly, and operate at breakeven. If you kill off public services, those services don't suddenly stop being needed, they just have to be performed in a much less efficient manner by smatterings of private entities (loss of economies of scale, and profit that must be skimmed off is pure waste). The taxes you 'save' paying end up being spent on those private replacement services, and inevitably it costs more. We can see this very clearly with the US healthcare system as an example: costs more per capita even with 'competition' due to the massive overheads, and provides far less coverage of the population.
I don't see much evidence that infrastructure has particularly declined in quality with the current cuts. Most is current spend cuts. Also if something is not a public good or not a natural monopoly and instead run by the private sector on the market then even with profit margins it is going to be run more efficiently in the private sector, usually. You also have diseconomies of scale, only natural monopolies have Constantly increasing returns to scale (LRAC curve that decreases as more is produced). The US healthcare system is a mess because of government interference in things that shouldn't be regulated and lack of interference in things that should. If you wanted to run a private health insurance system then you wouldn't do it like the US have. Also worth noting that California did a costing of single payer free at the point of use and it came to $400bn. The US system is much more complicated than people think and is far from free market. There is general agreement among economists of all stripes that the deficit and debt burden has to be reduced, the only disagreement is what time was/is the right time. Usually split by keynesian/ new liberal lines. Also raising taxes is not very easy. Those that raise revenue are politically hardest to raise, those that raise negative revenues are usually politically the easiest. Also people forget (I just did) that a good deal of the growth from pre 2008 boom years was an economy running above potential growth, with inflationary pressures simply dumped into increased houseprices, imports and so on. Labour increased public spending because of what appeared at the time a "miracle" of economic growth, much of the increase on the public sector payroll and wages, the "miracle" turned out to be a mirage and it is unclear whether we can or will get this back.
The publicly run rail network would (the one in the north east, can't remember its name) like a chat. It was returning a healthy profit back to the exchequer unlike the rest of our rail network which is the most expensive in Europe because for some reason this government doesn't see it as an investment unlike almost every other developed economy in the world. Oh and then the government gave it back to the private sector again... Edit: no evidence of decline? I'm not trying to be rude but wtf!? Watch the news? Read any reputable sources? I can give you anecdotal and objective sources by the dozen if you wish? Sent from my SM-N915FY using Tapatalk
Reduce inefficiencies? It's really not that simple Have you been listening to Jeremy Hunt? That means cuts. Again I can give you examples of these 'efficiency savings' and then you tell me if they're efficiency savings. Increasing GDP is fairly simple. You invest in things that make your populace more productive (be that in a variety of ways) but often through infrastructure projects and investment in your populace via education, training, skills or any other method you'd like. The tories have a desire though (and this deficit just gave them an excuse) to reduce the size of the state. Under labour it was ~40 it's currently 38% and with the last budget that is projected to drop to 36%. It's an ideological war, it's not based on any 'facts', those are just used piecemeal and selectively to back up their own policies. Sent from my SM-N915FY using Tapatalk
Isn't that 2.6% a forecast, IIRC it was 3.5% a couple of months ago, also wasn't the deficit more like 10% of GDP, that's not to say getting it down isn't a good thing, it is, but like i said if austerity was the cure and we're not yet cured why stop the treatment. Either the treatment was little more than a placebo and didn't work or it works and we need to continue with the treatment until there are no longer signs of the deficit tumor. As someone who worked on our rail infrastructure before it was privatised i can tell you cuts always lead to a decline in quality, the public rarely get to see that decline until things get really bad and/or things start going wrong. You say it's just current spending cuts but from experience, speaking from a safety point of view, those are the worst as it means everyday and planed maintenance suffers, it cost money to keep things running safely and when there are cuts that thing that should have been replaced 5 years ago gets postponed, staff are asked to do the best they can.
So it's OK that Grandad's Tool Shop, employing no more than 20 people, pays proportionally more taxes than Apple or Amazon do, simply because they can't afford the lawyers? It's not a question of whether you think Specific Tax A/B/C is a good idea or not, it's about getting these vast corporations to operate under the same laws & regulations that everyone else does. Why should they get special treatment and special loopholes written for them? And don't use terms like "ricardian equivalence" or "LRAC curve" - or at least clearly explain the concepts if you can't avoid it. Clearly you're dealing with lay people who have never academically studied economics, and throwing out jargon like that with no explanation or context makes it sound like you're employing the "if you can't dazzle them with brilliance then baffle them with BS" tactic. I know that's probably not what you're trying to do, but it's easily interpreted that way.
