so go on OOB - what has the tories austerity acheived apart from tens of thouseands of excess deaths and the stripping of public services
Both debt and deficit are up are they not?
We’re borrowing too much
There's always been two ways to solve this: reduce spend, or increase income. It was said at the time that austerity never works - you cannot cut your way out of a hole - and this seems to have been proven right again. The other option is to keep borrowing, invest wisely in things that grow your economy, and the tax take eventually brings you back into the black.
In theory either way works, but in practice austerity does not. And not only that, when you try, the net suffering in your country goes up. Have you not noticed how many more homeless people there are on the streets since 2015?
If you could simply borrow and spend your way to a successful economy, every nation in the world would be rich
And it's an extremely valid question to ask why not? The answer is to be found in the fact that in times of austerity the people who benefit the most are the very rich. The very rich tend to be in power in most countries in the world, ranging from outright kleptocratic corrupt regimes outside the west, to the supposedly 'democratic' developed countries who have learned how to game the system without looking like thieves. Funny isn't it that it's parties who represent the rich who are always telling us there is no money available, yet when their friends need it, either in the form of a bank bailout, or a bung to gain support in parliamnet, or to fight a war, it always magically appears.
I'll believe the borrowing/austerity myth when the government refuses to fight a war because they can't afford it. It never happens. As Tony Benn always used to say, if they can find the money to fight wars, they can find the money to help people at the bottom and provide a decent quality of life for everyone.
If borrowing was way too low we'd have seen negative growth, we didn't. We saw growth similar to the rest of Europe.
Of course it's entirely possible it proves impossible to spend at the rates we're being threatened/promised, especially since the mere mention of it has lowered our credit outlook.
If you could simply borrow and spend your way to a successful economy, every nation in the world would be rich
The answer is to be found in the fact that in times of austerity the people who benefit the most are the very rich. The very rich tend to be in power in most countries in the world, ranging from outright kleptocratic corrupt regimes outside the west, to the supposedly ‘democratic’ developed countries who have learned how to game the system without looking like thieves.
Linky?
...and if you can't find a credible source explain how *you* have acquired this knowledge of a worldwide conspiracy theory?
Finally, produce some evidence that explains why the Treasury Civil servants in the UK and elsewhere who must be aware of this conspiracy don't blow the whistle?
If borrowing was way too low we’d have seen negative growth, we didn’t. We saw growth similar to the rest of Europe.
But the quality of life for the poorest in society has gone down the drain. We're not to know if growth would have been higher, or the economy returned to growth sooner, if we hadn't had austerity.
There are many articles about austerity, google for some.
We’re not to know if growth would have been higher
Indeed. ...and given we don't know that, blowing 100-400bn on an experiment is irresponsible in the extreme. The UK already spends 25pc more servicing debt than it does on Social Services.
worldwide conspiracy theory?
It's called free-market capitalism. In particular the globalised flavour of it. There are many books about it. I'm sure you've read some.
The probkem with quoting Keynesian economics is that it cuts both ways. The IMF study said that every 1 unit of currency the govt cuts takes 1.5 units of currency off the GDP. So that's bad. Here's why:
The borrow and spend impending doom scenario so beloved of trickle down and supply side economists is largely a myth. It's not about debt levels, it's about affordability. If you can cover the debt, you can afford it (oversimplified but general true). Essentially if the interest rate on the debt is less than the nominal GDP you can continue to run deficits indefinitely and therefore increase debt infinitely.
Again from the IMF - in 6 advanced economies that difference has been -1.7% since 1880 and -0.8% since the 60s. So it's actually still more affordable, not less.
If you cut spending, you lower GDP by the multiplier. If you lower GDP, you lower NGDP. If you lower NGDP, you make the debt less affordable, so you have to pay back more to stay in the same place. With Les GDP, you have less money. If you have less money,your debt is less affordable and the downward spiral accelerates.
The UK already spends 25pc more servicing debt than it does on Social Services.
That's a choice, not an economic necessity.
Essentially if the interest rate on the debt is less than the nominal GDP you can continue to run deficits indefinitely and therefore increase debt infinitely.
Interests rates are low right now, they can't be relied upon to stay that way.
Interests rates are low right now, they can’t be relied upon to stay that way.
True. The ratio also doesn't stay constant, point data swings all the way from +5 to -5
I think 140 years of data showing a trend of -1.7% tells you that interest rate changes over the long term aren't an issue.
Growth has been lower than the rest of europe for most of the austerity times. come on - at least get the basics right.
Indeed. …and given we don’t know that, blowing 100-400bn on an experiment is irresponsible in the extreme. The UK already spends 25pc more servicing debt than it does on Social Services.
So what's your solution? Slash spending? Who're you going to leave on the scrapheap? Which kids are you going to select for disadvantaged upbringing?
Just out of curiosity, why, on numerous news outlets (including the BBC and guardian) are the Conservatives described as having the biggest spending plans in recent Conservative history while Labour have the greatest borrowing plans in recent Labour history. Both will be borrowing and both will be spending, so why is the spin lopsided making the tories sound generous while labour sound irresponsible?
Of course increasing tax to somewhere near the european average would bring in huge sums.
so why is the spin lopsided
It's an interesting question. I noticed that the Tory that accused Labour of spending their way to a 1.2 trillion pound debt (or was it billion? Doesn't matter either way because it was based on nothing)
Wasn't pulled up for not having anything to back up the claim. Further, when pressed on his own partie's spending plan,, which he might know something about, and whether that might also run up a large deficit, he stated he wasn't going to bandy figures about. And was allowed to get awat with it.
So…
Tory Brexit bad, Labour Brexit good.
Labour borrowing bad, Tory borrowing good.
Is that the current state of the big two campaigns?
What we need is to stop Brexit, use the positive financial benefits of that, increase income tax and corporation tax, introduce wealth taxes that can’t be avoided by buying an island or living for enough of the year on someone else’s, and invest in Britain.
What we need is to stop Brexit, and use the positive financial benefits of that, increase income tax and corporation tax, inteoduce wealth taxes that can’t be avoided by buying an island or living on someone else’s, and invest in Britain.
Wouldn't hurt. 2nd week maybe have a look at fixing inequality.
I’d hope the increase in taxation and investment would be formed in a way aimed at addressing just that. Shift the taxation burden (and target investment) so that the benefits of stopping Brexit, and of our economy more generally, were shared in a way that seeks to address those areas and people who have been treated as second class since at least 2008.
If we push inequality back to the 3rd week we could abolish the notion of money the 2nd week. By 3rd week everyone will be working for the good of each other instead of personal reward.
Also on austerity - how much was given away to the rich in tax cuts? How much was spent on bombing brown people? How much has been wasted on brexshit nonsense
Shackleton
Subscriber
why is the spin lopsided making the tories sound generous while labour sound irresponsible?
I can't possible imagine.
outofbreath
Member
If you could simply borrow and spend your way to a successful economy, every nation in the world would be rich.
Well, of course it's not simple. You have to borrow wisely and spend well, it requires at least fiscal competence which all too many political parties lack. It also requires the ability to pursue a plan past the next local/eu/general election. And it's easier to break than it is to sustain, if another party comes into power- and by breaking the process midcycle they can ensure it fails to reap the rewards and depict the policy as a failure. (just as it's far harder to build a national public service than it is to sell it for a quick buck) And of course, not all countries have the access to cheap borrowing that we do.
So aye, it's not simple, hardly anything worth doing is. Just about the only spending policy that is simple, is slashing away like a maniac without a care for damage. I think we've had enough simple.
Labour spending bad, Tory spending good.
It’s shameless.
cromy ^^^ every tory who's been on the media today trotting out the £1.2 trillion labour spend lie has been directly challenged by the programme host on the number and how it's been calculated.
No credible answer from any of them.
Are you referring to Kwasi Karteng on Sky? He was directly challenged by Sophie Ridge on both points; first, being unable to stand up the £1.2trillion; second, refusing to discuss tory spending plans and deficit impact.
All other tory politicos have been equally challenged every time they attempted to make that spurious claim about labour spending plans.
What programme were you watching or listening to?
Yup, came across as a complete fraud on BBC news when questioned… but… the headline was still their invented claim… lots of people won’t look further than that.
re you referring to Kwasi Karteng on Sky? He was directly challenged by Sophie Ridge on both points; first, being unable to stand up the £1.2trillion; second, refusing to discuss tory spending plans and deficit impact.
Yeah, probably. I saw a fair bit in fits and starts so it all started to bleed together. If it was, I thought she let the "not going to bandy around facts and figures" go rather than point out that he had done exactly that in slagging off labour but was now refusing to engage. She did challenge him a bit throughout but I thought failed to go after that bit of hypocrisy hard enough.
’d hope the increase in taxation and investment would be formed in a way aimed at addressing just that. Shift the taxation burden (and target investment) so that the benefits of stopping Brexit, and of our economy more generally, were shared in a way that seeks to address those areas and people who have been treated as second class since at least 2008
I think that is part of the equation. For it to genuinely work, I think we have to change attitudes, which is the other half and much harder.
For instance, perhaps we could make it impossible for anyone who suggest benefit claimants should be put down to ever receive a penny in government money in salary expenses fees etc. Also bar them from holding public office of any kind for life and make it ground for failing the fit and proper person test for being a company board member.
If we did that sort of thing, we might actually make some headway not just in making a more just society but also demonstrating to people who have been pushed out and made to feel they aren't part of the wider society. Which also couldn't hurt.
For it to genuinely work, I think we have to change attitudes, which is the other half and much harder.
Maybe, but maybe not. I think most people dislike "fat cats" and think they should pay their fair share. I also think most people also don't like "big multi-national corporations" avoiding paying their taxes. These two things are opposite to what Tories want - the problem is convincing people to vote along those lines. But people say things like 'oh well I don't trust Corbyn' or '1970s/Venezuela blabla', without ever having really considered it. We're tribal first, gullible second and rational a distant last. This is the real problem. The best policies don't win, the best PR image wins. This is an absolute travesty, and completely ruins democracy as you cannot vote well on things you don't understand.
There is a pretty simple solution. If people don't really understand poltics we can teach them in school. We don't need GCSEs, just a few small modules explaining the basics. Politics, so people know the difference between left and right; economics, so people understand stuff like like free trade, labour movement or fiscal policy. And philosophy, so people can hear ideas about what government should be aiming to do. No-one gets taught these things so it's up to us to teach ourselves (which most don't) or glean things from the news. And as we know, the news can be nothing more than a mouthpiece - which is where we get "I just don't trust 'im" in place of a rational thought process.
This is the real problem. The best policies don’t win, the best PR image wins. This is an absolute travesty, and completely ruins democracy as you cannot vote well on things you don’t understand.
That's certainly true, although the same can be said in the other direction too. You cannot tax the rich and corporations to a 'fair' amount because they will simply spend their money on tax minimisation. It's pretty well established what those levels are and that taxing beyond that will be counterproductive. That's a reality that you just have to live with, however unfair it is. So the appeal to voters who want them squeezed hard is just as disingenuous.
Fat cats don't realise how fat they are and how far away from other people their reality is. They are ignorant in the nicest sense of the word and so far attempts to rectify that have failed.
Creating a system which is much less susceptible to those influences will be a good start. It would probably get more people more involved, if they thought they had a genuine role and a voice that counted for something. The info. on whats wrong and suggestions on how to fix it get dismissed as social justice warrior foaming at the mouth delusions. Just look at the abolishing private schools debate
fixing all that is about as likely as curing the common cold though.
You cannot tax the rich and corporations to a ‘fair’ amount because they will simply spend their money on tax minimisation.
Simply whacking up corporation tax or income tax - yeah, it's problematic. It's been tried, after all. That's why we need new ideas. It won't be easy though, not when people with the money are appealing to people's base instincts. That's why the bottom line is education - it always is.
You can tax people and corporations much more and more fairly. You outlaw the tax dodges. any company like starbucks for example that tranfers profits overseas to avid tax simply get taxed on turnover to a punative level. they soon will stop
On thing that would help greatly on tax evasion is to beef up the tax inspectors. they recover more money than they cost.
they recover more money than they cost.
They do. Although they tend to pick the low hanging fruit. Often average individuals and small traders who are clumsy in their attempts to evade tax, or make genuine mistakes.
The rest get away with it because the gov't simply can't afford to pay the types of people who come up with the avoidance strategies, to turn cop. Plus they are massively outspent on solicitors, accountants and barristers if they ever do get to court.
Just read about some country using data from trade suppliers to track down the tradies working under the table.
You can tax people and corporations much more and more fairly.
Having the will to try would certainly go some way but no matter how draconian you are willing to be, if you want to have some sort of economy you are going to have to be pragmatic, sadly.
Your best chance probably lies with public opinion. If you can get people to demand it and embarrass the companies into behaving better, that's your best chance. It has worked to some degree in a small scale.
When do we find out where the Brexit Party are unleashing their loose cannons?
Can we ask them how much they agree with the last lunatic thing that Ann Widdecombe said in lieu of a published manifesto?
Nigel's Garage jalopy is looking like an MOT fail before it leaves the forecourt.
I was rather hoping to have a candidate here, but it seems unlikely now - will there be any anywhere outside of Stoke on Trent?
It’s pretty well established what those levels are and that taxing beyond that will be counterproductive
Go on… actually, no, don’t bother… take it to the Laffer Curve thread.
You have absolutely no idea whether increasing the highest rate of income tax and the level of corporation tax for larger companies by a few % points would be counterproductive at all… you’re just guessing… it isn’t an absolute, and depends greatly on what else is going on at the time. Which is why I started with stop Brexit before mentioning tax levels. Make Britain a better county to do business with and from, and use tax and investment to ensure that benefit is shared.
I was rather hoping to have a candidate here
The worry is, that Farage’s Brexit Party are dropping to a campaign focused on Labour voters in areas where that might help the Conservative Brexit Party, and quietly downing tools in seats that might negatively effect the Conservative Brexit Party vote.
You have absolutely no idea whether increasing the highest rate of income tax and the level of corporation tax for larger companies by a few % points would be counterproductive at all
We have data for both those cases because corp tax has reduced recently and revenue increased, and the higher rate of income tax has changed twice in the last 10 years and revenue was neutral.
any company like starbucks for example that tranfers profits overseas to avid tax simply get taxed on turnover to a punative level
Pretty sure turnover taxes are illegal under EU rules. [1] It's not really a big deal 'cos VAT is a close approximation to a tax on turnover. Either are great taxes IMHO 'cos they're impossible avoid. (Note avoid, not evade.)
[1] IIRC that's why Ireland swapped it's turnover tax for VAT when it joined the EU. Hungary has had a few goes at introducing turnover taxes and has been prevented every time IIRC.
We have data
Take it to the Laffer Curve thread.
You can not claim from that data what you seem to be claiming.
As I said, and I repeat, I am not advocating just increasing those tax rates, I am advocating government takes an action to boost the economy (stop Brexit) and increases taxes slightly on larger companies and high earners (to take advantage of the improvement in the trading fortunes of those who most immediately benefit from an announcement to stay in the EU) to ensure all benefit.
Pretty sure turnover taxes are illegal under EU rules.
Do we know why?
You can tax people and corporations much more and more fairly.
It's more complicated than that. There's a limit to what people consider fair, and that is based on their attitudes towards taxation and public spending. In say Scandinavia, governments spend more, but they can get away with promising to spend that much because people value the idea of taxation and public spending and are prepared to vote for it.
Public attitudes dictate government, to an extent - that's democracy. However, people in the UK whinge about public services AND whinge about taxation. The media has managed to plant seeds of excuses in people's minds - 'I'd pay more tax but they just waste it' is something that you hear.
Either are great taxes IMHO ‘cos they’re impossible avoid.
They are regressive though. A multi-millionaire pays the same tax on a litre of diesel as someone on the breadline.
They are regressive though.
True, but you could for example increase the indirect tax rate paid on the fuels used in private jets and helicopters, but reduce the indirect tax paid on those things you consider are purchased more by someone “on the breadline”…
…or more simply, use our direct tax and benefits systems to help those “on the breadline”, and invest in the services that they need.
True, but you could increase the indirect tax paid on the fuels used in private jets and helicopters, but rescue the indirect tax paid on those things you consider are purchased more by someone “on the breadline”
That's exactly what I was talking about.
Cool. Just a reminder that direct taxes can be regressive (some of our NI rules and rates are) and indirect taxes can be progressive… it’s not a simple rule that the opposite is always the case.