The Labour Government

BrianW said:
Truss wanted to borrow money, not to invest, but to waste on tax cuts for the rich. Who would simply have taken the money and stashed it, to some extent in tax havens.

It's like going to a bank manager for a loan (when you are already in debt) to splash on a lavish party. If the plan is to extend your house you would get a better hearing.

There is also a difference between 'restrained spending' and obsession with a wholly artificial need to 'balance the books'. Because, as I said, a state is not a household. The only limit on spending is resources. If your policy needs 10,000 bricklayers when only 5,000 are available, that causes inflation.

Tax only exists to limit inflation. It takes money out of the economy that would otherwise be used to (in my example) employ bricklayers. The Government could fund itself wholly by printing (or creating) money, but inflation would soar - really soar. This is why the 'taxation is theft' brigade is economically illiterate too.
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Staggering that they’ve managed to persuade people that this isn’t true as well. The ‘credit card is maxed out’ is slavishly adhered to with very little challenge from any commentators.
I’m just grateful that the Attlee government understood the value of investment and infrastructure even though we were in a far, far worse situation..
 
The Light Was Yellow Sir said:
Staggering that they’ve managed to persuade people that this isn’t true as well. The ‘credit card is maxed out’ is slavishly adhered to with very little challenge from any commentators.
I’m just grateful that the Attlee government understood the value of investment and infrastructure even though we were in a far, far worse situation..
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People are still peddling trickle down/voodoo economics a d the laffer curve when we have decades to show its horse manure.
 
The Light Was Yellow Sir said:
Staggering that they’ve managed to persuade people that this isn’t true as well. The ‘credit card is maxed out’ is slavishly adhered to with very little challenge from any commentators.
I’m just grateful that the Attlee government understood the value of investment and infrastructure even though we were in a far, far worse situation..
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Just a pity about Chancellor Stafford Cripps announcing that the income tax rate would have to rise to 91%. Labour out of gov for 13 years.
 
KS55 said:
Just a pity about Chancellor Stafford Cripps announcing that the income tax rate would have to rise to 91%. Labour out of gov for 13 years.
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During which the Tories kept the top rate at 91%...

You'll need to re-read whatever source you got that from (and compare rates to before Labour got in in 1945)
 
Vic said:
During which the Tories kept the top rate at 91%...

You'll need to re-read whatever source you got that from (and compare rates to before Labour got in in 1945)
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The reason for the British complete ignorance of economics is the failure to distinguish it from party politics, just as you have done here. My comment was about the difficulty of increasing investment against a background of debt and a high tax burden. Cripps’s actions lacked consistency as almost every chancellor since the war has done. The debt incurred in 1946 was paid off in 2006. In those years, especially the 50s, the failure to invest is at the root of our modern economic malaise.
Incidently, the bank rate during the war was 2% and the income tax rate was 50% with supertax taking the top rate on high incomes to 98%.
Cripps followed a policy of austerity raising the income tax rate steadily during his time.
A modern example: Reeves has just cancelled a large proportion of planned investment in AI. How many jobs will that cost us in ten years time.?
 
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KS55 said:
The reason for the British complete ignorance of economics is the failure to distinguish it from party politics, just as you have done here. My comment was about the difficulty of increasing investment against a background of debt and a high tax burden. Cripps’s actions lacked consistency as almost every chancellor since the war has done. The debt incurred in 1946 was paid off in 2006. In those years, especially the 50s, the failure to invest is at the root of our modern economic malaise.
Incidently, the bank rate during the war was 2%.
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Yet weren't you blaming a Labour chancellor for a tax decision (for which you offer no reference) for Labour being out of power for 13 years? Were you not implying that Labour taking postwar loans was a bad thing, even though debt as a % of GDP then fell by 1951? It's hard to speak about "complete ignorance of economics" without knowing the political views of the economist.
 
Vic said:
Yet weren't you blaming a Labour chancellor for a tax decision (for which you offer no reference) for Labour being out of power for 13 years? Were you not implying that Labour taking postwar loans was a bad thing, even though debt as a % of GDP then fell by 1951? It's hard to speak about "complete ignorance of economics" without knowing the political views of the economist.
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I was implying none of what you say. Again, you are driven by party politics. I was pointing to the actions of a chancellor, not a labour chancellor, his party is irrelevant. Your last sentence says it all: it is complete nonsense. What was the party of Adam Smith?
 
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KS55 said:
I was implying none of what you say. Again, you are driven by party politics. I was pointing to the actions of a chancellor, not a labour chancellor, his party is irrelevant. Your last sentence says it all: it is complete nonsense. What was the party of Adam Smith?
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Well, I asked about the political views of the economist. You mentioned party.

Was Smith writing about economics or moral philosophy (or "political economy") without expecting it to influence the policies of whover governed?
 
Vic said:
Well, I asked about the political views of the economist. You mentioned party.

Was Smith writing about economics or moral philosophy (or "political economy") without expecting it to influence the policies of whover governed?
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“Whoever governed.” Precisely.
 
BrianW said:
Truss wanted to borrow money, not to invest, but to waste on tax cuts for the rich. Who would simply have taken the money and stashed it, to some extent in tax havens.

It's like going to a bank manager for a loan (when you are already in debt) to splash on a lavish party. If the plan is to extend your house you would get a better hearing.

There is also a difference between 'restrained spending' and obsession with a wholly artificial need to 'balance the books'. Because, as I said, a state is not a household. The only limit on spending is resources. If your policy needs 10,000 bricklayers when only 5,000 are available, that causes inflation.

Tax only exists to limit inflation. It takes money out of the economy that would otherwise be used to (in my example) employ bricklayers. The Government could fund itself wholly by printing (or creating) money, but inflation would soar - really soar. This is why the 'taxation is theft' brigade is economically illiterate too.
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I don't see how this changes things.

Where does government borrowing come from? When the government borrows they borrow through market instruments such as bonds. Organisations such as pension funds invest in those bonds but they only do so on the basis of their longevity and stability, they do not care about the political aspects or the party in power.

Therefore if the government does anything that increases risk then the markets will be spooked or the cost of those bonds will increase. The markets were spooked because of the simple fact that Truss wildly and blindly promised something that she couldn't fund. It's like Blackburn trying to buy Messi, the people supplying the loans would certainly think twice about lending that money!

I understand that you're making the spend to grow argument but do you realistically think in this global climate that we can spend and then grow at a greater rate than currently? I say no, the global economy is on its arse, therefore where is UK growth going to come from?

This argument only makes sense if UK growth is less than everybody else and austerity is holding it back. It's really hard to make this argument given the UK is currently growing faster than say Germany and most other major countries in Europe.

If the economy doesn't grow and we become further indebted then what happens when COVID #2 comes along in 5 years, or war, a housing crash or something else? Considerable additional spending is therefore clearly reckless but I do agree restrained spending is needed however Labour have been in power for just 2 months, give them a chance.
 
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TinFoilHat said:
www.bbc.co.uk

No blank cheques for trade unions over pay, says Reeves - BBC News

The Conservatives say Labour has lost control of public sector pay and is "being played by" the unions.
www.bbc.co.uk www.bbc.co.uk

The Robot has spoken

Explains why the RMT haven't been given a new pay offer.
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She knows that if she gives in completely public pay will spiral and she keeps telling everyone that will listen that we can't afford it and we probably can't.

I'm just waiting for the unions to strangle the life out of the country.
 
mexico1970 said:
She knows that if she gives in completely public pay will spiral and she keeps telling everyone that will listen that we can't afford it and we probably can't.

I'm just waiting for the unions to strangle the life out of the country.
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More chance of being offered a soapy tit wank by the deputy PM.
 
gordondaviesmoustache said:
He’s fucking right though, isn’t he?
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He is, but they as a pep up to the nation he could still tell Ofgem to get fucked and freeze energy prices.

but they won't and only so long can he say "oh well we're skint" as all labour are doing is help feed the negative agenda of them tgat has been planned for a while by mamy of tge wankstains like Oakenshot and Grimes claiming he and tge party are already going back on pre election comments, which encoueage cunts on the right who are trying to use to sow seed of doubt and whip up protest.

People react better to positivity and optimism than pragmatism.

He could say things are gonna get worse, but we will help with this, unfortunately he is too stuffed shirt and just tells the depressing news as it is with no sense of hope.
 
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Well, we knew the last year before the election the Tories (deliberately or not) were in Scorched Earth mode, not least with unfunded tax cuts. Still, you'd hope that there might be some "sunlit uplands" to encourage people. There are still some on the Brexit thread who think that went well.
 
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