Cameron's economic policies will kill, not cure - look what's happened to Ireland

[ymu]

cuts in public spending lead directly to private-sector job losses: the government spends half as much again on buying goods and services from the private sector as it does on its own pay bill

http://www.guardian.co.uk/commentisfree/2010/sep/08/cuts-derailed-alternative-unions

So for every £100 spent on public sector wages, £150 is spent in the private sector purchasing goods and services. Has Osbourne ever put forward a credible explanation for how cuts in public sector funding are going to create jobs in the private sector?

 

[kyser_soze]

Well, there's also the fact that Germany didn't cut public spending and are emerging rather strong. And Keynes, of course. But he was an idiot, obviously.

That would be because the Germans don't start their own spending cuts until next year, along with France and Italy.

You seem to be thinking that because I've said I don't think much of this article that I support the cuts. I don't.

 

[Spanky Longhorn]

Why are you bothering to make the effort to insult me if i'm not worth the effort? It seems more like you have identified your bogeyman and you want to engage in a bit of bashing to demostrate what a loyal dogmatist you are to your held views.

Is it amateur psychology hour round your way?

 

[ymu]

Loss of good paying manufacturing jobs (UK US et al) and the loss of the ability to raise taxes from large corperations and wealthy individuals (as they would simply up sticks and leave) has been one of the fundamental underlying causes of this crisis.

We are left with a choice of cuts or debt, not raising wages and taxes.

The worst of this crisis is being held at bay by US deficit spending. When that goes even the Germans are going to feel the pain.

Most of them wouldn't upsticks and leave - that's TaxAvoidersPayers Alliance propaganda bullshit. Family and roots are much more important to most people than replacing their supercar with a slightly newer supercar. Only a tiny minority earn enough to make it thinkable - it's about 0.6% on £150k+. The super-rich don't pay their taxes anyway. Tax still has to be paid on income earnt in the UK regardless - which is why Usain Bolt won't run here, but any company wanting to exploit the UK market has to pay taxes here (well, theoretically, anyway). If they ignore the market, it will be exploited by a domestic company which does pay taxes here, and which will find it harder to hide its earnings overseas. Win-win, IMO.

 

[moon23]

That would be because the Germans don't start their own spending cuts until next year, along with France and Italy.

You seem to be thinking that because I've said I don't think much of this article that I support the cuts. I don't.

Well, there's also the fact that Germany didn't cut public spending and are emerging rather strong. And Keynes, of course. But he was an idiot, obviously.

Also Germany only had a deficit of EUR 18.7 billion in 2009, they are doing well becuase they haven't had to cut spending. Instead their deficit has more than doubled so now in 2010 it amounts to EUR 42.8 billion. They can actually afford a Keynes model and take with increasing public debt to see them through a rough patch.

This contrasts with the UK where borrowing accounts for about 12% of our economic output, more than any other EU member state.

 

[butchersapron]

Why is their debt relatively small then? Go on, you're nearly there.

 

[moon23]

Is it amateur psychology hour round your way?

There are far more interesting questions being asked by people on this thread who are contributing to the actual discussion. So i'm going to ignore your posts from now on.

 

[littlebabyjesus]

What ymu said about the super-rich. The very wealthiest types who would 'up sticks' are likely to already be non-doms paying a pittance of a flat rate in any case. Let them leave. In fact, let's help them pack their bags. The UK, and London in particular, has for far too long been the destination of choice for robber-barons, the Russians being the latest wave to swamp us with their dirty money. They contribute nothing to the culture of the country and virtually nothing to the economy, but contribute towards the asset bubble that makes the rest of us suffer.

 

[butchersapron]

They can leave, we'll have the money though. Capital controls please.

 

[littlebabyjesus]

75% tax on the profit from property sales. That would do it.

 

[kyser_soze]

Most of them wouldn't upsticks and leave - that's TaxAvoidersPayers Alliance propaganda bullshit. Family and roots are much more important to most people than replacing their supercar with a slightly newer supercar. Only a tiny minority earn enough to make it thinkable - it's about 0.6% on £150k+. The super-rich don't pay their taxes anyway. Tax still has to be paid on income earnt in the UK regardless - which is why Usain Bolt won't run here, but any company wanting to exploit the UK market has to pay taxes here (well, theoretically, anyway). If they ignore the market, it will be exploited by a domestic company which does pay taxes here, and which will find it harder to hide its earnings overseas. Win-win, IMO.

Indeed. Where was the supposed exodus of banks and bankers to Zurich and Dubai? I suspect leafy Surrey has a stronger pull&hold than Europe's Most Boring City and a collection of tall buildings in the desert...

 

[ymu]

Why is their debt relatively small then? Go on, you're nearly there.

Tantalising, isn't it.

 

[ymu]

75% tax on the profit from property sales. That would do it.

90% in Belgium, IIRC. It's why they never have a sniff of a bubble. Impossible for an investor to make money out of. As should be the case with all life's essentials. Housing, utilities and food are too important to let the casino capitalists get a sniff at them.

 

[littlebabyjesus]

Belgium got rid of the very highest tax on property sales a few years. House prices have since been soaring.

It was Belgium I was thinking of when I said that, though. It's a very very sensible way to keep house prices down without penalising anyone – you can have provisions whereby you can offset the price of a new house against the tax if you're just moving home, but you kill speculation dead.

 

[moon23]

Why is their debt relatively small then? Go on, you're nearly there.

It was relatively small, it's increasing a lot now because they have followed a Keynesian economic recovery plan. As a result they are now having to plan their own public cut back to reduce their deficit.

 

[moon23]

75% tax on the profit from property sales. That would do it.

Idiocy, for starters it would result in placing most of the country in negative equity on their mortgages and result in complete stagnation of the housing market.

 

[Yossarian]

I liked the Hari article in the OP a lot - not sure what he means by a "Thatcher-on-mephedrone crusade" though, Thatcher on meph is a pretty horrifying thought...

 

[moon23]

90% in Belgium, IIRC. It's why they never have a sniff of a bubble. Impossible for an investor to make money out of. As should be the case with all life's essentials. Housing, utilities and food are too important to let the casino capitalists get a sniff at them.

They are too important to cut them off from investment by making it impossible to turn a profit from any of them.

 

[littlebabyjesus]

Idiocy, for starters it would result in placing most of the country in negative equity on their mortgages and result in complete stagnation of the housing market.

No it would not. If you are in negative equity, you pay 0 tax when you sell.

That is the beauty of such a policy. It could be introduced right now and nobody, nobody, would be unfairly penalised.

BTW, we already have complete stagnation in the housing market, in case you hadn't noticed.

 

[kyser_soze]

http://www.bloomberg.com/news/2010-...ebt-rating-cut-by-standard-poor-s-to-aa-.html

http://www.ft.com/cms/s/0/1a5f27d2-b02d-11df-939d-00144feabdc0.html

In a slightly different light to the article in the OP...

 

[moon23]

What ymu said about the super-rich. The very wealthiest types who would 'up sticks' are likely to already be non-doms paying a pittance of a flat rate in any case. Let them leave. In fact, let's help them pack their bags. The UK, and London in particular, has for far too long been the destination of choice for robber-barons, the Russians being the latest wave to swamp us with their dirty money. They contribute nothing to the culture of the country and virtually nothing to the economy, but contribute towards the asset bubble that makes the rest of us suffer.

It's not just a case of individuals leaving, but rather businesses. Already manufacturing has left because our labour market is no longer competitive and it’s cheaper to make things overseas. Decreasing corporate taxation would go some way to compensate against our comparatively high labour costs.

Driving out the financial sector and other industries with high-taxation or protectionism would be pointless. The spending power of the super-wealthy is more important than the income gained through any attempts at punitive redistributive taxation upon them. If a wealthy Russian buys a yacht here then we get to build and sell it to them. Much of our economy is based on providing a high-level service industry for a wealthy elite.

 

[littlebabyjesus]

Yet Germany has considerably higher labour costs than the UK and has a much much bigger manufacturing sector.

How can that be?

 

[littlebabyjesus]

Much of our economy is based on providing a high-level service industry for a wealthy elite.

This is bollocks. If it were true, it would be an appalling situation that ought to be remedied as a matter of urgency.

 

[moon23]

No it would not. If you are in negative equity, you pay 0 tax when you sell.

That is the beauty of such a policy. It could be introduced right now and nobody, nobody, would be unfairly penalised.

BTW, we already have complete stagnation in the housing market, in case you hadn't noticed.

Yes everyone who has invested money in property would be penalised, which these days is not just a wealthy elite but many people who invested in property as a retirement plan.

 

[littlebabyjesus]

Yes everyone who has invested money in property would be penalised, which these days is not just a wealthy elite but many people who invested in property as a retirement plan.

You mean people who hoped to take advantage of an asset bubble in order to finance their retirement on the backs of the generation coming after them? Sod them. There is no god-given right for your house to go up in value. In fact it is bad for society for it to do so.

 

[Blagsta]

Well done you've learnt to retort to childish abuse at the first sign of deviance from what you dogmatically hold to be the truth.

ironic

 

[moon23]

Yet Germany has considerably higher labour costs than the UK and has a much much bigger manufacturing sector.

How can that be?

Because they specialised into high-tech manufacturing, and benefit from cheap exports thanks to being the Eurozone.

 

[Blagsta]

Why are you bothering to make the effort to insult me if i'm not worth the effort? It seems more like you have identified your bogeyman and you want to engage in a bit of bashing to demostrate what a loyal dogmatist you are to your held views.

even more ironic

 

[moon23]

ironic

My posts are not personally abusive.

 

[littlebabyjesus]

But in the UK, you advocate 'lowering labour costs' instead. Lowering labour costs, btw, means one thing only – lowering wages. Wages are the single largest expense for most employers. Lower wages and you lower tax returns from workers, reducing the ability of the state to provide the training and infrastructure to promote high-wage work.

What you appear to want to see is the reduction of the UK to a low-skill, low-wage economy with huge inequality of income, in which one of the main options open to the poor is to do low-paid work to service the whims of the super-rich. Why not just reintroduce the institution of 'going into service' while you're at it.