Tories show their true colours early

[emordnilap]

I suspect the low taxation you're talking about is corporation tax, which is ridiculously low, 10-12.5%.

I'm talking about the total tax burden on the economy, the UK is/was something like 46%, Scandinava a bit over 50%, rest of Europe just under 50% except Ireland and the new Eastern members who were around the 35-40% rate.

Fair enough. I still say we should look at the more up-to-date picture.

Plus if MNCs and the like paid median level corporation tax, that would pull Ireland up the tax take rankings.

Something like a third of all Irish workers earn under €17K pa, so they're not in a position to contribute much in the way of PAYE.

[biffvernon]

And of course cuts mean cuts in employment, since most of the money, even when spent on Trident, actually goes on wages.

Is Trident useful employment though, biff? The humungous pile of moolah spent on 'defence' would be far better off making the UK less dependent upon outside influence.

Yes, of course. It's not just cut Trident that's needed. It's cut Trident and use that manufacturing capacity to do something useful. It needs government expenditure because the useful stuff is too far off from profitability. The Barrow shipyard would be the ideal place for a the world's centre for wave and tidal-stream power plant research and development and manufacturing. The skills are there, the facilities are there all we need now is a government with vision instead of this futile "Oh dear, there's a deficit and it's the most important thing in the world so cut cut cut" mentality.

[clv101]

...instead of this futile "Oh dear, there's a deficit and it's the most important thing in the world so cut cut cut" mentality.

I don't think it's good to belittle this. It's similar to belittling climate change or peak oil. I think the UK economy has a good chance of collapsing. Properly collapsing. We currently need to borrow billions every month just to keep the show on the road, the government is trying to get the spending down at least to a level where the debt isn't increasing. If it keeps increasing, eventually the lines of credit will stop. The pound will be essentially worthless when it comes to buying things from other countries. That's an over night loss of much of our oil, coal, gas and a good lump of our food. Addressing the deficit as the government is trying probably won't work, but at least there's a chance that it'll hold together.

In terms of the 60+ million people living in the UK (the government's first priority), over the coming decade, the economy poses a bigger risk to them than climate change or resource depletion. It's also a risk that the government does actually have a degree of control over.

[biffvernon]

Compare with the debt the UK had in 1945. What did we do? Invent the National Health Service and build 2 million council houses.

I don't see how increasing unemployment helps the economy. The priority is to ensure capital and labour are used to the full. Or at least that's the conventional wisdom.

[Ludwig]

Compare with the debt the UK had in 1945. What did we do? Invent the National Health Service and build 2 million council houses.

I don't see how increasing unemployment helps the economy. The priority is to ensure capital and labour are used to the full. Or at least that's the conventional wisdom.

"The economy" in this case means government debt. It's cheaper for the Government to pay people to be on the dole than employed in the public sector.

It is perfectly possible to have a buoyant and stable economy, in terms of GDP, while maintaining high levels of unemployment. It's all about the total amount of money changing hands, not the distribution of that money.

[Totally_Baffled]

Compare with the debt the UK had in 1945. What did we do? Invent the National Health Service and build 2 million council houses.

Yep all we gotta do is treble UK GDP (even allowing for inflation) over the next 60 years and no problem!

Perhaps the yanks could pitch in with another Marshall plan too (ahh shit they owe more than us doh!, maybe it will have to be the Chinese )

[kenneal - lagger]

It's cheaper for the Government to pay people to be on the dole than employed in the public sector.

True, and that's where the job cuts mainly lie. With those ex government employees on the jobs market it will keep wage inflation low and provide a pool of cheaper labour for manufacturing and exporting industries to take up. That's the hope.

Labour kept employment costs, wages, low by allowing immigrants in to take low paid jobs and unemployment low by creating non jobs in the public sector. The whole lot was paid for by borrowing. We are now paying for that policy.

Labour's policy was designed to keep themselves in power by keeping up the illusion of the abolition of "boom & bust." The Tories/LibDems are trying to sort out the mess quickly, and early in their parliamentary term, so that, by the time it comes to election time again, the economy will be returned to growth and unemployment would be dropping. That's why they are so keen on a full five year term: they need all the time they can get.

Unfortunately, I think they will be overtaken by another resource depletion led recession as China and India gobble up their share of the few mineral resources the world has left, bumping up world prices in the process. Food price inflation is likely to be high as well as changing weather patterns take their toll on world agricultural production. The "End Times" are approaching, I think, but not in the religious sense.

[2 As and a B]

Labour kept employment costs, wages, low by allowing immigrants in to take low paid jobs and unemployment low by creating non jobs in the public sector. The whole lot was paid for by borrowing. We are now paying for that policy.

In the good old days you could have been shot for inferring that counting tractor production was a non-job.

[biffvernon]

If economic growth is what you want then using the market to employ resources efficiently is the way to go - you employ the cheapest labour. That's just what Ken criticises the last government for doing.

Let's face it, the Troy agenda is to shrink the size of government. Same old same old, but this time they are hiding behind the fig-leaf of national debt.

Remember debt = loan. If national debt is high is just reflects the willingness of players to lend to the government.

[Ludwig]

If economic growth is what you want then using the market to employ resources efficiently is the way to go - you employ the cheapest labour. That's just what Ken criticises the last government for doing.

But he's also criticising it for expanding the public sector recklessly with national debt.

At the time, I agreed with Labour's policy of spending on public services. I assumed it was mostly being financed by high tax revenues from the booming economy, rather than by borrowing.

Since I've learned more about economics, and discovered PO, I can see Labour's policy for the irresponsible and dangerous one that it was.

Given the extraordinary times we live in, any responsible government would be looking to bring down the national debt. I don't think the way the Tories are tackling this is very fair, and I think that they'd be cutting spending even if times were good; but I'm not convinced their cuts would be so stringent if Labour hadn't had us living beyond our means for so long - and if PO and the concomitant end of growth didn't mean that servicing the national debt has to be a priority.

Let's face it, the Troy agenda is to shrink the size of government. Same old same old, but this time they are hiding behind the fig-leaf of national debt.

To call our national debt a fig-leaf is rather missing the scale of the problem.

Remember debt = loan. If national debt is high is just reflects the willingness of players to lend to the government.

It's more than that. If we default on our loans, the pound becomes toilet paper and we can't import anything.

This is why I fear there will be a fast crash. All it takes is for the pound to lose most of its value over the period of a few weeks or months, and virtually overnight we find ourselves with no oil and not enough food.

[2 As and a B]

Don't worry Ludwig. I'm sure that, even as I write, Biff is planting lots more money trees.

[emordnilap]

Whatever the arguments, the thread title has said it all.

[the_lyniezian]

As someone who knows a guy who was pushed off incapacity benefit onto Jobseeker's Allowance despite clearly (to those who know him) not being up to holding down a job with the condition he has, I'm not on the side of the people who want to try and push people too hastily off it. Now if it was giving lazy dole scroungers like me an extra kick up the backside, it might be a different story. (Might as well be honest.)

Another cut the Tories, if what I hear about their pre-election revelations are anything, probably won't be easily making is the diproportionate funding which arms exports recieve, including to nations with poor records of human rights and the like. Something a group I was in has been campaigning for an end to for years now, and there are arguments such that the talent pool can, and ought to, be re-directed into more peaceful ventures, possibly including renewable energy and other technologies.

[kenneal - lagger]

Another cut the Tories, if what I hear about their pre-election revelations are anything, probably won't be easily making is the diproportionate funding which arms exports recieve,

I don't think that arms exports are subsidised. They may have export guarantees, a form of insurance, but not subsidy.

I agree we could be better employed somewhere else, such as renewables, but, and the old cliche comes out, if we didn't sell them arms, the French (or should that be "someone else") would. Our arms sales are usually more high tech though and go to rich governments rather than selling Kalashnicovs to terrorists. Am I looking at the world through rose tinted specs?

[the_lyniezian]

Another cut the Tories, if what I hear about their pre-election revelations are anything, probably won't be easily making is the diproportionate funding which arms exports recieve,

I don't think that arms exports are subsidised. They may have export guarantees, a form of insurance, but not subsidy.

Will have to double-check. It's definitely some sort of government support, which probably incurs a financial cost that can be cut.

I agree we could be better employed somewhere else, such as renewables, but, and the old cliche comes out, if we didn't sell them arms, the French (or should that be "someone else") would. Our arms sales are usually more high tech though and go to rich governments rather than selling Kalashnicovs to terrorists. Am I looking at the world through rose tinted specs?

Rich governments are little better than terrorists in practice if they carry out injustices on their own people. Terrorists usually have the disadvantage of being illegal, little better than murderers in most cases. But in some unstable countries (Somalia?) what is legal? What of Hezbollah which is actually a Lebanese political party?

The old 'someone else would' argument is silly, and is no moral justification for supporting atrocities. Can you imagine a thief, say, getting away with it by saying 'if I didn't steal this, someone else would'?