Summer budget 2015.
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If the economy grows as predicted
Following our global "adjustment", the UK's steady employment performance has relied entirely on such things as
minimum wage jobs
zero hour contracts
and a massive increase of small business startups, most of which will fail in the next two-three years (because that is just an enduring fact).
This type of employment provides very little tax revenue.
Peston wrote a blog about budget reduction recently
Robert Peston - BBC News
What is significant about his piece (even if you are not a fan) is that it is largely identical to one that Stephanie Flanders wrote five years ago...and of course hers has been largely validated by time.
Expect more smoke a mirrors as the government "revises" the way this stuff is all calculated during the duration of this parliament.
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"Financial repression". Low wage growth, low savings rates, illiquid debt (sorry.. 'credit'), increasing inflation.. all of those will simply vapourise the debt (here as well as in the Eurozone/Greece). The cutting of benefits and the selling off of the estate is an ideological sideshow, Westminster fluff to keep the merry-go-round nicely oiled.
I'm of an age where it won't affect me, but when Millennials start retiring and haven't done anything to hedge against the financial devastation that faces them, there'll be hell to pay. We think it's bad now? We demand low tax and 'flexible' working and that's fine. But it means in thirty years, the state simply won't have a viable revenue stream.
I'm of an age where it won't affect me, but when Millennials start retiring and haven't done anything to hedge against the financial devastation that faces them, there'll be hell to pay. We think it's bad now? We demand low tax and 'flexible' working and that's fine. But it means in thirty years, the state simply won't have a viable revenue stream.
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TOFO as the old story goes.....
1. The Emperor is not wearing any clothes and has been nude for some time.
2. The Emperor is not fat anymore.
3. The Emperor has been taking flesh wounds for a while.
4. In some parts, the Emperor has been cut to the bone, and
I believe his doctor is saying that it's going to be a long road to recovery and he may never find his old clothes again.
MB
1. The Emperor is not wearing any clothes and has been nude for some time.
2. The Emperor is not fat anymore.
3. The Emperor has been taking flesh wounds for a while.
4. In some parts, the Emperor has been cut to the bone, and
I believe his doctor is saying that it's going to be a long road to recovery and he may never find his old clothes again.
MB
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When they put me out to grass from the RAF, earned an honest crust as a VATman. We said (not entirely in jest) that it would be a good idea to abolish income tax altogether and put the whole lot on VAT.
Cuts out all tax avoidance and fiddles at a stroke; the poor pay the larger part of their income on housing, food and warmth, so zero-rate those, and soak the big-spenders on everything else !
D.
Cuts out all tax avoidance and fiddles at a stroke; the poor pay the larger part of their income on housing, food and warmth, so zero-rate those, and soak the big-spenders on everything else !
D.
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I have a mind to indulge my hobby horse...
Which is about this word..."Austerity".
Quote difficult economic conditions created by government measures to reduce public expenditure Unquote
eg
"the country was subjected to acute economic austerity"
Being a bit of an old timer, I'm struggling to remember a time when we had a governmental antonym of austerity (extravagance??) policy. For sure, we've had a few wasteful, even spendthrift governments, but it's a little bit relative isn't it? I mean I can't remember any government declaring "hey we got wads of wonga - get down here and help yourself. Most of my lifetime, somebody been cutting something, somewhere. Most of us, I would suggest, are far more familiar with austerity than the opposite.
For all that we toss the word around like it was invented in 2010...but I'm guessing even that is two years too late. It was the beginning of October 2008, close to seven years ago, that the Captain Darling decided to shell out 500 Billion (give or take the odd meaningless billion or so) big ones to the UK banks, and I'd stake his mortgage that some senior civil servant was already whispering in his shell like..."Darling, I think we need to cancel the MPA fleet and a few hospitals, because I'm not sure I can balance the cheque book, tell you what...why don't we call it "a necessarily austere reduction in public spending".
Which is all very interesting from a historical point of view (assuming you are a boring economics nerd like me), but here is the rub.
What has the previous 5-7 years of pretty painful austerity achieved in terms of deficit reduction.
errr... it depends
check out the graphs (which are sourced from the Office for Budget Responsibility)
UK debt and deficit: All you need to know - BBC News
What it seems to depend on is what branch of mathematics or statistics you favor. What it does not seem to depend on is simplistic logic like...how much do we owe? How much is coming in, compared to how much is going out?
Which is just as well...because we borrow more seven years after we started austerity and we owe more seven years after we started austerity.
So after that red wine motivated billet doux, my dramatic conclusion is...
Let's ban the word "austerity" and just see our economic reality for exactly what it is...totally ****ing normal and and no better or worse that it ever has been in the past or will be in the future, moderated by a little bit of superficial and inconsequential boom and bust (didn't someone say that was finished?)
Only by ignoring the mind****, will we be free of the mind****
Which is about this word..."Austerity".
Quote difficult economic conditions created by government measures to reduce public expenditure Unquote
eg
"the country was subjected to acute economic austerity"
Being a bit of an old timer, I'm struggling to remember a time when we had a governmental antonym of austerity (extravagance??) policy. For sure, we've had a few wasteful, even spendthrift governments, but it's a little bit relative isn't it? I mean I can't remember any government declaring "hey we got wads of wonga - get down here and help yourself. Most of my lifetime, somebody been cutting something, somewhere. Most of us, I would suggest, are far more familiar with austerity than the opposite.
For all that we toss the word around like it was invented in 2010...but I'm guessing even that is two years too late. It was the beginning of October 2008, close to seven years ago, that the Captain Darling decided to shell out 500 Billion (give or take the odd meaningless billion or so) big ones to the UK banks, and I'd stake his mortgage that some senior civil servant was already whispering in his shell like..."Darling, I think we need to cancel the MPA fleet and a few hospitals, because I'm not sure I can balance the cheque book, tell you what...why don't we call it "a necessarily austere reduction in public spending".
Which is all very interesting from a historical point of view (assuming you are a boring economics nerd like me), but here is the rub.
What has the previous 5-7 years of pretty painful austerity achieved in terms of deficit reduction.
errr... it depends
check out the graphs (which are sourced from the Office for Budget Responsibility)
UK debt and deficit: All you need to know - BBC News
What it seems to depend on is what branch of mathematics or statistics you favor. What it does not seem to depend on is simplistic logic like...how much do we owe? How much is coming in, compared to how much is going out?
Which is just as well...because we borrow more seven years after we started austerity and we owe more seven years after we started austerity.
So after that red wine motivated billet doux, my dramatic conclusion is...
Let's ban the word "austerity" and just see our economic reality for exactly what it is...totally ****ing normal and and no better or worse that it ever has been in the past or will be in the future, moderated by a little bit of superficial and inconsequential boom and bust (didn't someone say that was finished?)
Only by ignoring the mind****, will we be free of the mind****
TOFO:-
Well they may well have done, but it is that which dominates economic history and which governments try to cope with rather than being the cause.
What causes it then? We do, driven in turn by our greed and fear, the most basic of human reactions to a seemingly confusing world. Or so said Robert Beckman in his book, "The Downwave, Surviving the Second Great Depression".
He famously predicted it, but timed it far too early, getting his ardent followers out of equities and property and into gilts, while the rest of us made yet more money. So they got back into the game, only to then lose their shirts with the rest of us. The lesson? "Are you feeling lucky punk? Well, are you?"
...a little bit of superficial and inconsequential boom and bust (didn't someone say that was finished?)
What causes it then? We do, driven in turn by our greed and fear, the most basic of human reactions to a seemingly confusing world. Or so said Robert Beckman in his book, "The Downwave, Surviving the Second Great Depression".
He famously predicted it, but timed it far too early, getting his ardent followers out of equities and property and into gilts, while the rest of us made yet more money. So they got back into the game, only to then lose their shirts with the rest of us. The lesson? "Are you feeling lucky punk? Well, are you?"
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TBC, I'm not suggesting that the material presence of boom and bust is questionable - I'm suggesting that it is meaningless and irrelevant to our lives.
As an economics professor at St Andrews told me in the mid nineties - "did joe public give a sh1t about any of this macro economics cr@p before breakfast TV and its business slot went on the air".
As an economics professor at St Andrews told me in the mid nineties - "did joe public give a sh1t about any of this macro economics cr@p before breakfast TV and its business slot went on the air".
I think that the real world is even encroaching on the lives of University economics professors, though those in Scotland may be more equal than others perhaps. That is why I found Beckman's book so compelling, he is always relating the cycle (for that is what it is, as old as human society) to "Joe Public".
His graph of the price of Wheat in England 1259-1975 (the book was published in 1983) shows the spikes that tripled/quadrupled the price of this most basic and most essential commodity at frequent times throughout that period. I think that Joe Public would have been very aware at those times!
On a lighter note he also plots the cycle of fashion over the booms and busts 1800-1980, as what he terms the Hemline Indicator. Ladies' apparel becomes more revealing, more daring, in the upwaves with corresponding covering up again in the downwaves.
If that isn't a convincing enough indicator of one's place in the cycle, he commends wars as sound economic pointers. Upwave wars are marked by much jingoism as the troops depart, with military bands playing and much flag waving to see them off. Attitudes quickly change though, and when the boys (and girls) come home there is much soul searching and demands to know just how such a tragedy ever occurred.
In contrast, downwave wars are resisted until they become inevitable, when a grim determination to see it through culminates in relief when it is finally over. In that regard he says WW1 was upwave, WW2 was downwave.
I think that his reasoning for the cycle is the average active lifespan of human beings, such that those who experienced the heady optimism of the last upwave only to have their hopes and wealth dashed in the ensuing downwave, are too old to influence the next generation from taking the very same course again. Of course this active lifespan has extended greatly over the years, and what was perhaps an average 50 years has in turn become 60 and even 70 years. The weasel word is of course average, hence the difficulty/impossibility of any accurate prediction. That was Beckman's Achilles heel.
Go figure, as they say. If anyone is interested, the ISBN is 0 903852 38 1.
His graph of the price of Wheat in England 1259-1975 (the book was published in 1983) shows the spikes that tripled/quadrupled the price of this most basic and most essential commodity at frequent times throughout that period. I think that Joe Public would have been very aware at those times!
On a lighter note he also plots the cycle of fashion over the booms and busts 1800-1980, as what he terms the Hemline Indicator. Ladies' apparel becomes more revealing, more daring, in the upwaves with corresponding covering up again in the downwaves.
If that isn't a convincing enough indicator of one's place in the cycle, he commends wars as sound economic pointers. Upwave wars are marked by much jingoism as the troops depart, with military bands playing and much flag waving to see them off. Attitudes quickly change though, and when the boys (and girls) come home there is much soul searching and demands to know just how such a tragedy ever occurred.
In contrast, downwave wars are resisted until they become inevitable, when a grim determination to see it through culminates in relief when it is finally over. In that regard he says WW1 was upwave, WW2 was downwave.
I think that his reasoning for the cycle is the average active lifespan of human beings, such that those who experienced the heady optimism of the last upwave only to have their hopes and wealth dashed in the ensuing downwave, are too old to influence the next generation from taking the very same course again. Of course this active lifespan has extended greatly over the years, and what was perhaps an average 50 years has in turn become 60 and even 70 years. The weasel word is of course average, hence the difficulty/impossibility of any accurate prediction. That was Beckman's Achilles heel.
Go figure, as they say. If anyone is interested, the ISBN is 0 903852 38 1.
Last edited by Chugalug2; 24th Jul 2015 at 19:50. Reason: Unintended double entendre
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Chugalug,
Your: "too old to influence the next generation from taking the very same course again".
Alas, 'tis true (they all think we're gaga !).
The same truth is embodied in the old aphorism: "The trouble with the human race is that it doesn't read the Minutes of the Last Meeting !"
Danny.
Your: "too old to influence the next generation from taking the very same course again".
Alas, 'tis true (they all think we're gaga !).
The same truth is embodied in the old aphorism: "The trouble with the human race is that it doesn't read the Minutes of the Last Meeting !"
Danny.
Danny, I fear that you undermine the very theory that I have espoused, for I guarantee that No One thinks you gaga in this forum!
I, on the other hand have been advised hereabouts to, "Shuffle off in your carpet slippers Granddad, and go suck on your pipe". Keep on proving me and the rest of the world wrong, Danny, and we might all learn to respect our elders and revolutionise the economic model simultaneously.
I've just remembered that we've been round this buoy before, and in doing so learned about "Winchester Bushels" (the units that Beckman's Wheat Price graph used) in that best of all threads, the Gaining RAF Pilots Brevet in WW2 one (with all due respect and apologies to the OP of this one).
I, on the other hand have been advised hereabouts to, "Shuffle off in your carpet slippers Granddad, and go suck on your pipe". Keep on proving me and the rest of the world wrong, Danny, and we might all learn to respect our elders and revolutionise the economic model simultaneously.
I've just remembered that we've been round this buoy before, and in doing so learned about "Winchester Bushels" (the units that Beckman's Wheat Price graph used) in that best of all threads, the Gaining RAF Pilots Brevet in WW2 one (with all due respect and apologies to the OP of this one).
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Wisdom of the Ancients.
Chugalug (your #73),
Glad to know "that No One thinks you gaga in this forum!" (Give it time !)
Puffed a pipe myself from wartime to handing in my F 1250 in '72. When faced with an awkward question or problem, you could always win time for the answer by taking a minute to fill, tamp down and light said pipe before replying. In that way you could get a totally undeserved reputation for Wisdom and Considered Judgment. (And it is impossible to smoke a pipe and panic at the same time).
As for "....to respect our elders and revolutionise the economic model....", the youngsters of today (present company excepted, of course) would do well to heed the sound financial advice of Mr. Micawber........ ('oo's this Micawber geezer ?)
Bushels (and Pecks). Weren't you supposed not to Hide your Light under one, or something ?
Danny.
Glad to know "that No One thinks you gaga in this forum!" (Give it time !)
Puffed a pipe myself from wartime to handing in my F 1250 in '72. When faced with an awkward question or problem, you could always win time for the answer by taking a minute to fill, tamp down and light said pipe before replying. In that way you could get a totally undeserved reputation for Wisdom and Considered Judgment. (And it is impossible to smoke a pipe and panic at the same time).
As for "....to respect our elders and revolutionise the economic model....", the youngsters of today (present company excepted, of course) would do well to heed the sound financial advice of Mr. Micawber........ ('oo's this Micawber geezer ?)
Bushels (and Pecks). Weren't you supposed not to Hide your Light under one, or something ?
Danny.
