How do we resolve the Brexit mess?

BrianW said:
When you're abroad, and using a different currency, do you feel somehow lost or humiliated? I think not. You soon get used to it. The only downside is the cost of changing from one currency to another because the money changers take their cut. Go into the Euro and most of the money-changing costs vanish overnight. Good for business too, for the same reason.
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It’s not simply a question of removing transaction costs though, which are typically very small now.

The fundamental issue is whether the UK economy is better served by having its own currency and independent monetary policy, or moving within a monetary union where, by definition, the UK economy would only be a partial influence on policy decisions.

The last official government assessment of this was done back in 2003 (the five economic tests), which favoured retaining monetary independence due to structural differences between the UK/EMU economies. These related in large part to the UK mortgage market, which was primarily floating rate in nature then, but this has changed markedly over the past 20 years, as indeed have lots of things.
 
Brewster's millions said:
It’s not simply a question of removing transaction costs though, which are typically very small now.

The fundamental issue is whether the UK economy is better served by having its own currency and independent monetary policy, or moving within a monetary union where, by definition, the UK economy would only be a partial influence on policy decisions.

The last official government assessment of this was done back in 2003 (the five economic tests), which favoured retaining monetary independence due to structural differences between the UK/EMU economies. These related in large part to the UK mortgage market, which was primarily floating rate in nature then, but this has changed markedly over the past 20 years, as indeed have lots of things.
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Didn't we also hold a veto /exemption on bailing out other countries within the Eu (Greece for example) which we couldn't apply if we fell under the jurisdiction of a central bank?
 
The only difference I can see is that we would no longer control our own interest rates. The Euro rate is currently lower.

I believe that if it is necessary to take money out of the economy, the straightforward way to do it is to increase income tax rather than interest rates. People would not like this, of course, but it is actually fairer. Income tax is paid in proportion to income, whereas increases in interest rates bear down disproportionately on younger people with large mortgages and (often) no great amount of surplus income.

It would require a slight change of mindset, but it would be worth it. The extra income tax could be used to reduce government borrowing, thus also bearing down on inflation. And any rise would, of course, be temporary, until inflation fell.
 
BrianW said:
The only difference I can see is that we would no longer control our own interest rates. The Euro rate is currently lower.

I believe that if it is necessary to take money out of the economy, the straightforward way to do it is to increase income tax rather than interest rates. People would not like this, of course, but it is actually fairer. Income tax is paid in proportion to income, whereas increases in interest rates bear down disproportionately on younger people with large mortgages and (often) no great amount of surplus income.

It would require a slight change of mindset, but it would be worth it. The extra income tax could be used to reduce government borrowing, thus also bearing down on inflation. And any rise would, of course, be temporary, until inflation fell.
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There’s a broader point here in that for a currency union to work properly, there really needs to be fiscal flows between participating countries / states as well.
 
Brewster's millions said:
There’s a broader point here in that for a currency union to work properly, there really needs to be fiscal flows between participating countries / states as well.
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For once I’m going to agree with you which is why when we were members of the EU we had the best of both worlds. Single market access, no trade barriers because of the customs union, easy access to seasonal Labour but we didn’t need to get involved when some of the Eurozone countries experienced difficulties over the last 15 years. It was up to the rest of the Eurozone to bail them out.
We were in a sweet spot that we’ve thrown away partly through the fears of some that ultimately we would have been forced to give up the pound and join the Euro. Ironically the much faster way of us ending up in the Euro was to leave and end up coming back with our tail between our legs a few years down the line which could well be where we are heading.
We’ve fucking blown it.
 
We were never fully bought in to the European project which meant we had various opt outs that suited the eurosceptic nature of the country and that were tolerated by the other members because of the size of the UK economy and what we brought to the table. They recognised we were better off overall with a larger critical mass even if they had to tolerate our opt outs. Unfortunately the UK eurosceptics wanted more and were quite happy to throw out the baby with the bath water so here we are - a nation diminished in almost every measurable way, busy trying to throw away all our individual rights because we can.
 
west didsblue said:
We were in a sweet spot that we’ve thrown away partly through the fears of some that ultimately we would have been forced to give up the pound and join the Euro. Ironically the much faster way of us ending up in the Euro was to leave and end up coming back with our tail between our legs a few years down the line which could well be where we are heading.
We’ve fucking blown it.
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We were on to such a fucking good thing and we unilaterally and stupidly surrendered it because enough people overestimated our national worth, the cracks of which were, ironically, papered over by our membership of the EU.
 
gordondaviesmoustache said:
We were on to such a fucking good thing and we unilaterally and stupidly surrendered it because enough people overestimated our national worth, the cracks of which were, ironically, papered over by our membership of the EU.
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I don’t think it was that our national worth was overestimated, we were one of the three leading countries of the EU and as such our national worth and influence was magnified by being in that position. Our national worth is way overestimated now though by the Brexit cheerleaders.
 
west didsblue said:
I don’t think it was that our national worth was overestimated, we were one of the three leading countries of the EU and as such our national worth and influence was magnified by being in that position. Our national worth is way overestimated now though by the Brexit cheerleaders.
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Perhaps ‘worth’ was the wrong word, but they definitely overestimated us as a nation. It must have been overestimated, and manifestly so, by the majority of those that voted to leave (and it must have logically been most people who voted for Brexit) that our institutions, national infrastructure and law making bodies were capable of withstanding an exit from the EU - and that the nation would flourish as a consequence. I accept that many won’t have cared about that, because their perception of sovereignty was paramount in their decision, but most people who voted for Brexit did so because they thought we’d be better off as a nation.

And they were wrong. Because they overestimated us as a nation.
 
I am baffled as to how so many successful business owners were successful but easy to dupe.

Oh I remember now - Greed

 
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