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No need for it to be inflationary at all. It could be, it could be deflationary or neutral depending where you set the UBI and what tax rate you have above the UBI
It's extra money pumped into the economy without any stabiliser.
Doesn't address inequality, doesn't offer a pathway to employment, and works within capitalism rather than resolving issues associated with capitalism itself.
All that said I'd sooner have anything than were we are going. But none of this likely under Labour
There was an article about "business leaders" and there actions after covid, with there back to the office dictates and cutting staff, which I read last year (unfortunately can't remember the source). It stated that the back to the office commands and staff cutting actually had a negative impact on business performance of the companies, but because the companies had gone through a tough period the shareholders expected action, and this is how they demonstrated "leadership strength" to the shareholders even though the actions were damaging.
IMO it is this logic of needing to make a display of actions that appease establishment dogma even though those actions are counter productive are what blocks UBI, shorter working weeks and investing in the nation (instead of just supporting asset inflation).
Interesting article regarding the cut in Winter Fuel Allowance.
Appears to be a Treasury initiative offered to each new Chancellor as a way to save money, Reeves being the first to agree to it
Pensioners, in general though not of course exclusively, vote Tory.
Folk with young children are more likely to vote Labour.
The last Labour government tried to address childhood poverty.
The Tory governments since tended to look after pensioners in preference to children and younger generations.
I think I got that right, and if so it’s not rocket science as to what is happening.
I think I got that right, and if so it’s not rocket science as to what is happening.
Yeah, agreed. The article suggests that successive Tory Chancellors have shot it down, and with Reeves looking to blame the Tories for financial incontinence the Treasury found a willing patsy. I wonder if she feels had.
I wonder if she feels had.
Why would she? I don't think Reeves gives much of a shit about pensioners and neither should she. With the triple lock they are more than adequately supported and there are far bigger priorities like child poverty (what chances of removing the two-child cap after the winter fuel payments?). Providing a universal benefit to hundreds of thousands who are very well off is unjustifiable. If it was down to me I'd means-test their pensions too.
its also soon enough after the election that it won't be a big mention in the next one. By the time the next vote comes around a quarter of the pensioners today will have died and been replaced with new ones (who will have never received the payment), and the actions of a government 4 years ago will be barely remembered.
Like MMT?
Ha ha. Good one.
Remember 'we already do MMT' - the stabiliser is unemployment currently. With the correct political lens you would look at the stuff in the state that could absorb the money first - rather than giving income to people with money, like we do now.
Worth remembering we've had barely any inflation at all spending money into the economy on the state - unless there was a huge supply shock.
But.
Came on to say another month - another stagnation of GDP 0.0% for July.
I'd say a deficit of 49bn is not enough to make the economy grow. Weird that.
Not Labour's fault of course yet - but the growth will not occur without spending on the correct things.
Keep watching the path of this government as they keep the Tory economics in play.
Remember ‘we already do MMT’ –
No we don't. The govt spends money in a way that theories like MMT agree with. (how else could they, as that's the reality) MMT is specific form of large deficit spending as a reaction to a particular set of circumstances, like for instance; a COVID19 led economic recession. I'd no more trust any politician with a [nominally] unlimited budget or non-fixed money creation abilities when the economic circumstances don't require it, or can cope with it, than I'd trust my dog not to eat all the biscuits.
No we don’t. The govt spends money in a way that theories like MMT agree with. (how else could they, as that’s the reality) MMT is specific form of large deficit spending as a reaction to a particular set of circumstances, like for instance; a COVID19 led economic recession. I’d no more trust any politician with a [nominally] unlimited budget or non-fixed money creation abilities when the economic circumstances don’t require it, or can cope with it, than I’d trust my dog not to eat all the biscuits.
This totally incorrect.
You've basically just misrepresented a body work to make a point.
Can you direct me to where MMT says any of the bit you just made up? (A specific form of large deficit spending?)
It's categorically not. Do you have a number where deficit spending mysteriously becomes MMT?
The UK has run deficits for 44 years of the last 50 Do you have a special indication of which ones are MMT?
(I think you're conflating Q/E with MMT. Lots of people do. But its not the same thing at all.)
There is nothing absolutely nothing inherent in MMT that differentiates the size of the spending from one day to another. MMT says you can spend what you need within the constraints of inflation and resources available.
MMT is not a reaction to a particular set of circumstances - that in itself are simply political choices, not MMT.
Here is the original MMT paper and nowhere does it say what you've made up about reacting to a set of circumstances or particular form of deficit spending.
https://moslereconomics.com/mmt-white-paper/
I’d no more trust any politician with a [nominally] unlimited budget or non-fixed money creation abilities when the economic circumstances don’t require it, or can cope with it, than I’d trust my dog not to eat all the biscuits.
Then get used to it because that is what you've got within the confines of the supply and appropriations act. But it's not normally one politician is it?
Democracy is the bit the you put your trust in to remove the politicians that don't do a good job. Etc.
https://twitter.com/GeorgeWParker/status/1834115755933131178?t=NntdlB1cyzZ4Cc2jYA6G5w&s=19
Wonder what is the actual problem here?
This totally incorrect.
A central tenant of MMT is that money creation is limited only by inflation, That you can create money as long as it doesn't drive inflation. That's the sine qua non definition of large deficit spending right there. ergo it's useful to drive an economy that has faltered, but is unlikely to be useful to an economy that is already at growth or is sustainable. QE is just an asset swap and while you can have QE under MMT or other heterodox theory, the two aren't the same, although 'yer man Murphy likes to conflate the two anyway.
While every govt runs a deficit, not one successful govt has utilised an unlimited one. MMT just assumes away any issues with monetary conflict (legislative bodies and central banks) and proposes nothing to deal with the problems associated with financial instability in an open economy with flexible exchange rates, (money as commodity) The idea you can't go bankrupt is just a technicality that's largely meaningless - ask anyone from Weimar Germany is he appreciated the after effects of the country not going bankrupt. Ask any economy that defaulted on it's international loans, or ask any country who's currency drops in value...There is Sri Lanka of course but MMT advocates will invariably cite "special reasons" why it isn't MMT.
I think what does my head most about MMT advocates is that not one of them can seem to recognise that if any govt can create money, the very next one can destroy the very same money. Economic stability driven by budget setting between successive govts of different stripes is a cornerstone of the democratic systems that don't fail. it's part of that pesky peaceful democratic handover of power. Yes, we might not get everything that we want, but we're not taking home our wages in wheel-barrows either, so there's that.
Wonder what is the actual problem here?
Having dealt with FoI's, i'd say the breadth and depth of the information requested, and the impact disclosure at this time may cause, or require specific personnel dealing with the FoI more time to evaluate the request and provide the information.
I'm amazed they've not just kiboshed the request due to time and cost constraints gathering the information at this time.
QE is just an asset swap and while you can have QE under MMT or other heterodox theory, the two aren’t the same, although ‘yer man Murphy likes to conflate the two anyway.
QE also tends to be hand in hand with quantitative tightening, i don't believe MMT has a similar mechanism.
Anyone watching the parliament channel at the mo? 201 on Freesat.
House of lords talking about cycling.
Looks like cyclists are going to be trampled on by the house of lords!
Cyclists should use cycle lanes because they cost money and were built for cyclists!
LibDems are going to ban all electric bikes! Make everyone wear high Vis clothing and helmets! Winky eye.
Cyclists should use cycle lanes because they cost money and were built for cyclists!
Easy enough for me, there is not a single, not one, cycle lane where I live and ride.
That means you will be banned from riding your bike! Winky eye.
Luckily there as many police as there are cycle lanes so I will just continue to ride my bike trying not to get killed by the many dangerous drivers I encounter on every ride (having no police works both ways!)
UBI would totally be inflationary because private landlords would just put rent up and house prices would go up leaving everyone with the same disposable income whilst funnelling money to the asset-rich. It needs rent controls, although I'm not sure what you'd do about house prices.
Yes rent controls are needed irrespective of UBI as are a lot more state owned houses with lower rents to start with. UBI will clearly never, ever happen and rent controls don't seem much more likely. Better off people also wouldn't be any better off with UBI as for example if I was given £15, 000 a year of UBI I would be expecting to be paying £15,000 more in tax.
Not really worth a discussion though is it with Starmer as PM and it is not in the "change" he is promising and he need to get all the "tough" decisions out of the way first before he can do anything.
UBI would totally be inflationary because private landlords would just put rent up and house prices would go up leaving everyone with the same disposable income whilst funnelling money to the asset-rich. It needs rent controls, although I’m not sure what you’d do about house prices.
Absolutely.
You can't just not 'target' money that enters the economy. It has to go on the real deficits in society. Plenty of places for it to fix. UBI doesn't address any particular issues with inequality and capitalism itself.
(Talking about money - Starmer likes his free gifts doesn't he?)
I think it's possible that Reeves might get the boot within a year if her budget goes in the direction they're indicating and the popularity keeps on collapsing.
The thing that is becoming clear about these deeply stupid Centrist (Neoliberal) policies is that they're extremely ideological - dare I say ideologically pure - in the fact that they don't recognise the evidence of what austerity delivered.
We were told that Starmer couldn't do progressive policies because the right would attack him - ahem he's offering up a myriad of right-wing horse-shit and he's getting hammered by the press.
May as well done the good stuff?
Here's ex BoE economic advisor (Andy Haldane) speaking total pragmatic sense on government investment on Ridge. That said the BoE are part of the problem too as an institution owned by government.
What Starmer and Reeves are running with will damage the economy and real lives far more than the knee-jerk of the unimplemented Truss budget that most people imploded over.
You can’t just not ‘target’ money that enters the economy. It has to go on the real deficits in society. Plenty of places for it to fix. UBI doesn’t address any particular issues with inequality and capitalism itself.
Except it does. Almost every study and experiment has shown a few neutral results but the majority show a benefit for communities and individuals.
https://en.wikipedia.org/wiki/Universal_basic_income_pilots
The problem with modern capitalism is the 'work or starve' model it functions on. That is the root of the problem. If you take away the ability of corporations to make people destitute you take away much of their leverage in terms of setting wages and working conditions.
Suddenly workers are negotiating from a position of strength and capitalism starts to resemble actual capitalism where the fair price for labour can be found through both sides negotiating without leverage.
Quite apart from all that, it recognises that everyone contributes to society, whether they are getting a wage for their work or not. Many people in society perform essential roles that go unpaid and in most cases unrecognised. It's just the right thing to do.
I think it’s possible that Reeves might get the boot within a year if her budget goes in the direction they’re indicating and the popularity keeps on collapsing.
I think that Starmer, or at least his advisers, are prepared to take a huge drop in popularity. The next general election is another 5 years away and Starmer announced last week that he was prepared to take measures which he said would be unpopular.
The very latest opinion poll has Labour on 29%>
Yes rent controls are needed irrespective of UBI as are a lot more state owned houses with lower rents to start with.
And there is already a government agency dealing with the residual controlled rents from the previous rent control legislation, so not an unknown problem for the Civil Service/government to sort out.
It is interesting to see that the UK Prime Minister is seeking advice on how to deal with asylum seekers from Italy's equivalence of Nigel Farage.
And no, the UK Prime Minister is no longer a Tory.
And no, the UK Prime Minister is no longer a Tory.
I reckon with every day that passes, and every pathetic cowardly policy decision, press release and speech which doubles down on austerity and neo-liberalism, we can see that Starmer is just as bad as the tories, if not worse. He better have some rabbits to pull out of the hat following his doomsday budget otherwise he's going to be out at the earliest opportunity*. He won't though, because the view that it's all just a performance to hoodwink tory voters is a fantasy. He really does believe all this stuff.
*How long before labour MPs start rebelling en-masse and briefing against him? I give it 6 months.
But then Italy has reduce small boat crossing in the Med by 60%, so should the PM who's made that part of his election strategy not talk to people who've manged to do what he wants to achieve himself? Even if its to look at it and say "well, won't be doing that", he shouldn't bother becasue ideological differences?
Isn't that going to be pretty limiting in a globally interconnected world if you're not going to speak with the heads of govts in other countries if you don't agree with them politically?
which doubles down on austerity and neo-liberalism,
But it's not austerity is it? Austerity was a ideologic policy to actively reduce the size of govt by 'pretending' that it was either unaffordable or not necessary, whereas Reeves (like Brown) is saying, we want these services, but becasue of Tory mishandling of the economy, we can't afford them. Plus, we live in a neo-liberal world, might not like it or think its a particularly great system, but it is what we've got.
Austerity was a ideologic policy to actively reduce the size of govt by ‘pretending’ that it was either unaffordable or not necessary, whereas Reeves (like Brown) is saying, we want these services, but becasue of Tory mishandling of the economy, we can’t afford them.
So as long as the Starmer and Reeves say they want good public services without the need to deliver them that's ok? Come on Nick, you know the excuse of 'we can't afford it' is bollocks. Following the current playbook serves two main purposes, it scores (at least they think it does, IMO it's backfiring) them political points by pretending they can't do anything because of the incompetence of the tories, and it keeps the city and corporate establishment who don't want anything to change quiet. Starmer has created a 'government of service' all right, but service to who? Certainly not the working people who voted for him.
But then Italy has reduce small boat crossing in the Med by 60%, so should the PM who’s made that part of his election strategy not talk to people who’ve manged to do what he wants to achieve himself?
Would you be saying that if it was Rishi Sunak discussing the issue of asylum seekers with a far-right leader?
These are the sort of fascists that we are talking about:
Come on Nick, you know the excuse of ‘we can’t afford it’ is bollocks.
If you want something to be a sustainable, over the long term - not just this parliament, that the next Tory govt isn't just going to put a stop to; is to make it cost neutral, to make it so that it becomes part of the day to day departmental spending budget which is 'paid for' by taxation, not spending money from capital budgets or emergency funding, or some other 'wheeze' without any sort of restriction or discipline on spending. If you want to see what it looks like when Govts try to do what you suggest, then all you need to do is have a look at Kwarteng's mini-budget tax reduction scheme in 2022.
He said exactly the same thing, we can afford it, and we're going to do it.
whereas Reeves (like Brown) is saying, we want these services, but becasue of Tory mishandling of the economy, we can’t afford them.
It's exactly the same thing. Just a different back story.
Nothing new about lying about the previous government's handling of the state.
It is also worth remembering that despite the Tories going on an austerity drive they still spent loads of money.
A few of the progressive economists double down on the totally inept direction taken by the Labour party in a letter in the FT.
https://twitter.com/sjwrenlewis/status/1835595902695723195?t=hBGGocYqbXj9fjNhzjL62A&s=19
And finally Starmer showing totally lack of awareness by enjoying all these gifts. Lammy trying to defend it all - just the icing on the cake.
What a terrible terrible start to the Labour government's first few weeks - cementing the popular idea 'they're all the same.'
What an utter shit show. All of these things would have been avoidable.
Plus, we live in a neo-liberal world, might not like it or think its a particularly great system, but it is what we’ve got
There are degrees of capitalism.
Current version is not fit for purpose for the majority of us - Labour were elected on change.
This is a cop out.
By the way Neolibralism can only thrive because the government sets the price level. It doesn't exist by accident.
If you want to see what it looks like when Govts try to do what you suggest, then all you need to do is have a look at Kwarteng’s mini-budget tax reduction scheme in 2022.
Nonsense.
This argument is so weak. That we are all supposed to lie down and take it because a screwy set of Tories tried to implement something that the BoE dragged their heels to fix within days?
It's not even an accurate record of events to make it a parallel.
We can't spend X because of the Truss budget. Baloney.
You will see - as the economy doesn't grow that doing what they're doing Labour are going to deliver a mess.
Would you be saying that if it was Rishi Sunak discussing the issue of asylum seekers with a far-right leader?
No, of course not. Starmer is going to look at what Italy is doing with a different mindset that Sunak isn't he. He's going to have to calculate how his own MPs and party will react to it, who'll take a different view to Sunak's band of particular nutters. Even if the Italian's Albanian scheme isn't as bonkers as Rwanda, it's still going to get a guarded response, so I'd imagine that Sunak and Starmer will take away different things from meeting with her.
These are the sort of fascists that we are talking about:
Who're now in charge in Italy though. So Starmer shouldn't meet with Fascists? Or presumably neither dictators or Authoritarian leaders or any other tin pot autocrat. Would that include Nicolas Maduro as well, for example? Should he not deal with the world as it is, rather than how he'd like?
Who’re now in charge in Italy though. So Starmer shouldn’t meet with Fascists?
You would make the same excuse if it was Rishi Sunak talking to fascists about the best way the UK should deal with asylum seekers?
, to make it so that it becomes part of the day to day departmental spending budget which is ‘paid for’ by taxation, not spending money from capital budgets or emergency funding, or some other ‘wheeze’ without any sort of restriction or discipline on spending
Unfortunately for this argument - all government money comes from exactly the same place.
It's called the Consolidated Fund it's a current account - not a savings account.
There is no money in it at the start of the day and is zero by the end of play too.
The limitation on spending is inflation not some made up nonsense that the market tells a democratic government how to behave.
Neither Starmer or Sunak have any influence over who the electorate of another country elect to be their governments. So worrying about the politics of the leader of Italy isn't a worthwhile use of time or energy is it, given how other leaders of other countries that we do routinely speak with behave. If Italy have managed to resolve an issue that troubles a wide selection of the voting public, and it's not entirely illegal and bonkers - like the Rwanda scheme, then I'd expect this country's leadership will at least pay it passing interest.
If Italy have managed to resolve an issue that troubles a wide selection of the voting public, and it’s not entirely illegal and bonkers
Thats the problem. Unsurprisingly the approach chosen by a hard right government might not be palatable to anyone else.
Lets quote a former head of the UK border force.
"So, it’s going to be hard for the UK to use Italy’s success as a model for stopping the boats. Not least because it involves a raft of human rights violations and accords with pretty unpalatable countries "
Their approach makes the Rwanda one look positively benign.
Neither Starmer or Sunak have any influence over who the electorate of another country elect to be their governments.
That wasn't the question. I asked how you would feel about Rishi Sunak having a nice little chat with far-right leaders about asylum seekers and how to best deal with the "problem".
The Italian far-right couldn't give a toss about asylum seekers drowning off the coast of Italy, as my link concerning the former Italian deputy prime minister proves, they just want them out of their country.
Should a "Labour" politician be talking about asylum/immigration issues to far-right racists like that? Especially when you consider how quickly the centrists are to condemn when anyone on left associates with foreigner politicians they don't approve of.
Should Starmer be discussing with Nigel Farage how the UK should tackle the issue of asylum seekers? After all lots of people "voted" for his far-right racist party, and that apparently is a game changer which you have to respect.
I asked how you would feel about Rishi Sunak having a nice little chat with far-right leaders about asylum seekers and how to best deal with the “problem”.
Differently to Starmer; like I said up thread, for the reason I gave up thread.
I guess the longer form answer is: Do you ignore what they've done just becasue they're fascists? Is everything they do so contaminated, that in this particular issues, they're always beyond the Pail. The answer to that I suppose, is looking at how they've achieved the 60% reduction, if it's "we don't care, we just make sure they don't come to Italy" then there's nothing to be learned. If by their extreme views they've stumbled across a way of doing it that other countries can take lessons from and implement them in a way that's compatible with their own views, then that's a different conversation innit.