ddt
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Corbyn's days (very) numbered?
- Thread starter GlennB
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Vixen
Penultimate Amazing
Printing money doesn't help very much when the debt is in foreign currency.
A friend of mine writes:
'Why austerity has failed?
There is much confusion between national debt and a budget deficit. A budget deficit is the amount needed to be borrowed as tax revenues are too weak. This is then added to total or national debt. National debt is the sum of debt across decades.*
It has jumped from 0.5 trillion to £1 trillion between 2005 and 2010 owing to the financial crisis, not because of government policy, but since then austerity (Tory policy) has failed to the extent that it has risen to £1.73 trillion. National debt interest is around £45 billion or 9% of tax taken each year. This is equivalent to each working person paying £1,500 each year.*
This is the story. By 2015/6 the budget deficit through austerity was supposed to be zero. Once this happened national debt would also start to fall. This didn't happen so it was changed to 2016/7 then to 2017/8 and both targets failed. In July 2016 George Osborne gave up on it and was later sacked. Guess what? It is still going up.
Let us be clear the scale of the cuts has been severe across the public sector - so for instance 15,000 beds or 1 in 10 have been cut from the NHS and Virgin has taken over 330 outlets, but this has only managed to slow down the surge of debt.
The reason why austerity has failed is that it is based on a strategy of cutting/saving when the only way to really reduce the national debt and eliminate the budget deficit is to have higher growth which increases tax and other revenues.* The economy has been stuck here since the financial crisis which triggered the recession and austerity made matters worse not better - dragging the economy down.
Around 60% those in work earn so little (and live near poverty) that they pay little tax which adds to this problem. Many of the cuts have been counter-productive as they would have generated more growth had they not been made and reduced debt more than the cuts. Given the weakness of growth and investment in the private/corporate sector, one strategy for renewal is for the state to invest to induce growth. This is Labour's strategy.*
We cannot wait for the market to magically kick off, or as Keynes put it in the long run we're dead!' [ends]
or of course they could do something utterly radical, like raising taxes instead of seeking new and inventive ways to crush the poor so you can 'stimulate the economy' with tax cuts.
ddt
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Archie Gemmill Goal
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I'm reminded of a saying.
'Nobody ever saved their way to prosperity'
'Nobody ever saved their way to prosperity'
NWO Sentryman
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So, if Corbyn becomes Prime Minister, I wonder whether Macron will try to "europeanise" the Naylor report and get that included as a condition for Britain remaining in the single market.
Norway saved its North Sea oil money. The UK squandered it on tax cuts for the rich.
Twaddle, of the first order.
You can't back this up, and I'll bet you don't even try.
And what do tax rises do for growth? What does increasing the deficit do for growth, particularly as the the result of growth is always an increase in interest rates? What do high levels of government borrowing do to our international credit rating? And what does a change in our international credit rating do to the cost of borrowing? And what does an increase in the cost of government borrowing do to domestic interest rates? And what does a rise in those rates do to employment? And who suffers the most when employment starts to fall?
Yeah, you've fallen for a simplistic con.
3point14
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This, at first glance, seems to support the contention.
https://www.theguardian.com/commentisfree/2014/jan/13/north-sea-oil-money-uk-norwegians-fund
ddt
Mafia Penguin
Which part is "rewriting history"?
Are you denying that Norway has a hugely impressive oil fund? If that Guardian article has that part wrong, then apparently so does the Financial Times or the Economist.
Or are you claiming that the UK didn't spend the oil money but saved it like Norway did? Then it would be easy to show where that British oil fund is. Just give us a link.
Or are you claiming the UK didn't piss the oil revenues away on tax cuts, specifically tax cuts that mainly benefited the rich? Then where are those roads and hospitals and whatnot that were built with those extra revenues?
Pixel42
Schrödinger's cat
I did a cruise up the coast of Norway last year, nearly every guide on the excursions pointed out infrastructure, care homes etc that were built using oil revenue. They're very proud of the responsible way in which they used the windfall, and rightly so. I lived through the years in which our own windfall was squandered on tax cuts for the rich and watched it happen, cursing the Tories for it, don't tell me journalists are making it up.
Of course not.
Yep, that's the bit that is re-writing history. At its very peak, North Sea oil brought in about 3% of the government's income. It went into the exchequer along with all other income streams. What you are trying to do is assign that small portion of our national income to everything you don't like. I mean, why didn't you claim that it went for paying the wages of nurses and doctors, or for fighting the Falklands war, or for building the Channel Tunnel? And are you seriously saying that we've built no new roads or hospitals in the last 40 years?
You also have to get away from the nonsense of thinking that tax cuts cost money, and that tax cuts are a bad thing. Tax cuts stimulate the economy. Whilst you and your ilk want Corbyn's "soak the rich, and borrow to the hilt" approach to fund a spending-led stimulus to the economy, cutting taxes is an effective alternative which doesn't burden the next generation with more debt to service. You also have to understand that "tax cuts for the rich" started with getting rid of Labour's 97% personal tax rate. Tell me how retaining that would have helped our economy?
3point14
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Completely different subject. I didn't say anything about trickle-down. I would start with tax cuts for low to middle earners, say by raising the threshold for income tax to £20k or £25k, and/ or by cutting VAT.
Can you remember the 70s? There was a really big deal back then, with punitive tax rates (97%) driving the Brain Drain. One of the national papers had a headline "Last one out turn out the lights" or similar. Anyone with an education or who ran a business did their best to get out of the country. Unemployment was 2 million and rising.
If Corbyn and his supporters want to revisit this experiment, they will ruin the country, again. Try recruiting doctors here if they have to pay 50% tax rates when abroad they might pay 25%. "Tax the rich" is easy to say (and they are taxed already anyway), and "tax cuts for the rich" is the cheapest of cheap shots to chuck around....and both slogans reveal economic illiteracy.
3point14
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I was merely contesting your blanket statement "Tax cuts stimulate the economy". If that's the case then the most productive tax rate is zero, which seems a little ridiculous.
Yes, it's more complex than that.
Both? Pretty radical. Where will The Exchequer make up the shortfall?
The 'lights' thing was Kinnock in '92, but point taken. However, when Howe dropped Healey's income tax rates he made the exercise almost revenue-neutral by upping indirect taxes, primarily VAT. Your plan is to drop income tax and VAT revenue?
Well, for certain meanings of 'abroad'. German doctors are typically well into the 42% tax band, plus a 5.5% 'solidarity' (whatever that means
) surcharge on income taxes paid.dudalb
Penultimate Amazing
I stand corrected; but my main thrust was that the term "Anglo Catholic" does not mean "A Roman Catholic who is British" after somebody used the term to mean that.
The election campaign and aftermath have, frankly, given me some much-needed laughs.
But the funniest bit has been watching The Guardian's political commentators eating so much humble pie over Corbyn that our imports of humble pie are posing a serious threat to the health of the UK economy.
In particular, that Polly Toynbee has been squirming so hard that if you could harness the energy it would power a small town
But the funniest bit has been watching The Guardian's political commentators eating so much humble pie over Corbyn that our imports of humble pie are posing a serious threat to the health of the UK economy.
In particular, that Polly Toynbee has been squirming so hard that if you could harness the energy it would power a small town
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