The Labour Government

[The Light Was Yellow Sir]

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.

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..

 

[BayernMan]

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..

People are still peddling trickle down/voodoo economics a d the laffer curve when we have decades to show its horse manure.

 

[KS55]

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..

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.

 

[Vic]

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.

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)

 

[KS55]

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)

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.?

 

[Vic]

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%.

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.

 

[KS55]

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.

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?

 

[Vic]

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?

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?

 

[TinFoilHat]

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

The Robot has spoken

Explains why the RMT haven't been given a new pay offer.

 

[KS55]

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?

“Whoever governed.” Precisely.