Politics Thread (encompassing Brexit) - 21 June 2017 onwards

[Guest MattP]

9 minutes ago, toddybad said:

Hard Brexit has been confounded by some harder realities

https://www.theguardian.com/business/2017/jul/02/hard-brexit-confounded-harder-realities

 

Look I'm not advocating borrow ever increasing amounts with no limit. The labour plan was to tax corporations and the top 5% to increase public sector spending without increasing the deficit and then to borrow one significant whack of cash on top for capital projects. Spending needs to increase whether it is tax rises on the wealthiest (as this allows recirculation of this money into the real economy rather than see it locked in investments) or borrowing, or a combination of the two.

 

It's been said a thousand times in the past but you can't cut your way out of recession. Well I'd say what we've seen is that you can't cut your way out of depression. There is no moral justification for destroying public services when there are ways of growing the economy to get it into a stronger state that doesn't rely on borrowing (at least to the same extent) in the future.

 

I realise you don't like my call to accept short/ medium term deficit but you surely must be able to see that we're getting nowhere as things stand - society is literally undergoing death by a thousand cuts. 

The idea that that Labour manifesto wasn't going to increase the deficit was of such fantasy there is no point really mentioning it - that would be the case in an economic boom as well let alone a time where many believe a hard Brexit (which the manifesto committed to in saying freedom of movement must end if the definition is leaving the single market) will hit the public purse.

 

I've said it before and I'll say it again as you don't take it in, the country is not in a recession. It isn't. 

 

I'm all for hearing all ideas to grow the economy buy the idea you do it just by "spending more money" doesn't seem to work when you look around the World.

Edited 2 July 2017 by MattP

[Guest]

20 minutes ago, MattP said:

The idea that that Labour manifesto wasn't going to increase the deficit was of such fantasy there is no point really mentioning it - that would be the case in an economic boom as well let alone a time where many believe a hard Brexit (which the manifesto committed to in saying freedom of movement must end if the definition is leaving the single market) will hit the public purse.

 

I've said it before and I'll say it again as you don't take it in, the country is not in a recession. It isn't. 

 

I'm all for hearing all ideas to grow the economy buy the idea you do it just by "spending more money" doesn't seem to work when you look around the World.

But you can't seriously be suggesting that we don't spend any more money? That would mean allowing the cuts that haven't yet struck to happen and not putting any more into health or education - both of which are being destroyed. 

 

Even if you don't want a deficit surely an increase in taxation would be the answer? Properly fund core public services - even if you don't fund the exras that would be nice - but take a bit more in tax? 

 

I'm trying to find out just how severe your belief system is. Surely if the country can't educate, medicate or look after its people then there really is no point to politics at all?

Edited 2 July 2017 by Guest

[Alf Bentley]

Latest data on consumer spending, saving and personal debt is all pretty grim: https://www.theguardian.com/business/2017/jun/30/britons-savings-at-record-low-as-household-incomes-drop-says-ons

 

"The consumer-driven momentum that has kept the British economy afloat since the Brexit vote is declining rapidly, with new data showing households in the grip of the most protracted squeeze on living standards since the economic crisis of the mid-1970s.

Against a backdrop of rising prices and stagnant wage growth, incomes adjusted for inflation have now fallen for three successive quarters, the first time this has occurred since the International Monetary Fund had to bail Britain out in 1976.

At the same time, the amount being set aside as savings has now slipped to just 1.7% of disposable income – the lowest level on record, and a fraction of the near-10% average for the last 50 years. Just a year ago, it was more than three times the current rate.

The new data from the Office for National Statistics shows that in the first three months of 2017, the mounting financial pressure on consumers brought the UK’s strong performance following last summer’s Brexit vote to an abrupt halt.

On Thursday, separate figures showed an unexpected jump in consumer credit. Households borrowed an extra £1.7bn in May - £300m more than had been expected – on credit cards, personal loans and car finance. A survey of consumer confidence also showed a steep decline. Despite saving less and borrowing more, consumers still reined in their spending, contributing to economic growth confirmed today at just 0.2% – the lowest of any of the major G7 industrial nations.

Spending in the shops, new car sales and property transactions have all showed signs of weakness, and the Bank of England has expressed concern about rising levels of consumer debt".

 

That makes a very strong economic case for ending austerity before the shit really hits the fan. It also makes a strong political, even party political case for the Tory Govt doing it. No wonder that Hammond & Gove are advocating it - they're not stupid (I'm increasingly getting the impression that May is). I actually thought they'd use the DUP situation as a handy means of easing up on austerity. Rather than just offer an extra £1bn to N. Ireland, they could have loosened the purse-strings nationwide. This would have shown some humility after the election result, it would have prevented other parts of the UK carping about special deals for N. Ireland and Irene Foster wouldn't have been bothered, I imagine, so long as she got extra cash for N. Ireland. It would have counteracted a dangerous decline in household finances and in economic growth - and would have reduced any haemorrhaging of votes away from the Tories.

 

Elliott does highlight one moderately positive indicator: a slight growth in the service sector. This seems to be mainly in retailing, hotels & restaurants. On the face of it, that conflicts with the overall decline in household finances and consumer confidence. But I wonder if the spending is by foreign tourists attracted by cheap prices due to the slump in the pound - or even Brits who can't afford to go abroad so are spending at home? Both would make sense. I remember that the domestic tourist industry did well out of that when household finances were dire after the 2008 crash. If this extra spending is by foreign tourists, maybe we could all get jobs as pedlars, flogging nick-nacks to rich foreign tourist on the beach or in the street? 

[Guest]

17 minutes ago, Alf Bentley said:

Latest data on consumer spending, saving and personal debt is all pretty grim: https://www.theguardian.com/business/2017/jun/30/britons-savings-at-record-low-as-household-incomes-drop-says-ons

 

"The consumer-driven momentum that has kept the British economy afloat since the Brexit vote is declining rapidly, with new data showing households in the grip of the most protracted squeeze on living standards since the economic crisis of the mid-1970s.

Against a backdrop of rising prices and stagnant wage growth, incomes adjusted for inflation have now fallen for three successive quarters, the first time this has occurred since the International Monetary Fund had to bail Britain out in 1976.

At the same time, the amount being set aside as savings has now slipped to just 1.7% of disposable income – the lowest level on record, and a fraction of the near-10% average for the last 50 years. Just a year ago, it was more than three times the current rate.

The new data from the Office for National Statistics shows that in the first three months of 2017, the mounting financial pressure on consumers brought the UK’s strong performance following last summer’s Brexit vote to an abrupt halt.

On Thursday, separate figures showed an unexpected jump in consumer credit. Households borrowed an extra £1.7bn in May - £300m more than had been expected – on credit cards, personal loans and car finance. A survey of consumer confidence also showed a steep decline. Despite saving less and borrowing more, consumers still reined in their spending, contributing to economic growth confirmed today at just 0.2% – the lowest of any of the major G7 industrial nations.

Spending in the shops, new car sales and property transactions have all showed signs of weakness, and the Bank of England has expressed concern about rising levels of consumer debt".

 

That makes a very strong economic case for ending austerity before the shit really hits the fan. It also makes a strong political, even party political case for the Tory Govt doing it. No wonder that Hammond & Gove are advocating it - they're not stupid (I'm increasingly getting the impression that May is). I actually thought they'd use the DUP situation as a handy means of easing up on austerity. Rather than just offer an extra £1bn to N. Ireland, they could have loosened the purse-strings nationwide. This would have shown some humility after the election result, it would have prevented other parts of the UK carping about special deals for N. Ireland and Irene Foster wouldn't have been bothered, I imagine, so long as she got extra cash for N. Ireland. It would have counteracted a dangerous decline in household finances and in economic growth - and would have reduced any haemorrhaging of votes away from the Tories.

 

Elliott does highlight one moderately positive indicator: a slight growth in the service sector. This seems to be mainly in retailing, hotels & restaurants. On the face of it, that conflicts with the overall decline in household finances and consumer confidence. But I wonder if the spending is by foreign tourists attracted by cheap prices due to the slump in the pound - or even Brits who can't afford to go abroad so are spending at home? Both would make sense. I remember that the domestic tourist industry did well out of that when household finances were dire after the 2008 crash. If this extra spending is by foreign tourists, maybe we could all get jobs as pedlars, flogging nick-nacks to rich foreign tourist on the beach or in the street? 

The political class are so out of touch with reality they just don't see these things coming. 

 

The bank of England were reported to be concerned about near record personal debt the other day. They had noticed a slowdown in debt generation and become concerned that consumer confidence has taken a knock. They completely fail to see that rising prices, rising rents, rising bills and falling wages has meant people borrowing just to survive. People are maxing out their credit is what is happening.  somehow they just don't see this - presumably decision makers earn to much to see this reality. 

Edited 2 July 2017 by Guest

[Rincewind]

IDS. Whats his game. Seen something where he is supposed to have said that he was an uncaring bastard' during his time as head of the DWP. He has now said that the Work Assessment program did not work and has flaws. He said he was looking for ways to change it before he left. Has he turned into a Socialist? I remember him saying there was nothing wrong with the way it was run even going as far as refusing to meet representatives of disabled groups to discuss the matter and appealing against High Court rulings that had reversed decisions. Can anything this man says be believed?

He also said that the way assessments are done are simply work or not work. No in beteen like a certain number of hours. I have been saying the same thing since 2010. as well as lawyers, doctors and people that have done the tests but he ignored or refused to accept numerous reports.

ATOS and now Maximus are privately companies paid for by the government with taxpayers money. I would guess that they are paid by results, that is taking people off the benefit system. So it would not 'benefit' them not to pass fit more than it fails. However the appeal success rate is above 75% of those that do appeal. The appeal process however is long and drawn out and for many distressing. Many do not appeal because of this but the government is happy because they are off the benefit system which makes their figures look good.

Edited 2 July 2017 by Rincewind

[Guest MattP]

14 minutes ago, toddybad said:

But you can't seriously be suggesting that we don't spend any more money? That would mean allowing the cuts that haven't yet struck to happen and not putting any more into health or education - both of which are being destroyed. 

 

Even if you don't want a deficit surely an increase in taxation would be the answer? Properly fund core public services - even if you don't fund the exras that would be nice - but take a bit more in tax? 

 

I'm trying to find out just how severe your belief system is. Surely if the country can't educate, medicate or look after its people then there really is no point to politics at all?

I want to eliminate the deficit ASAP - if it was up to me I'd be cutting public services even further, slashing foreign aid and probably cutting corporation tax even more hoping for another boost go the treasury. I'd imagine the electorate would never vote for that though so I'd never get a mandate to do so.

 

Raising taxes on all is an option but the Lib Dems stood on there and we saw how that went down. (We actually have the highest taxation for 40 years I read today, will link when I get home, not sure more is the answer)

 

I'm very fearful about the economic state and @Alf Bentley post above doesn't hold much optimism in the short term. 

[Buce]

3 minutes ago, MattP said:

I want to eliminate the deficit ASAP - if it was up to me I'd be cutting public services even further, slashing foreign aid and probably cutting corporation tax even more hoping for another boost go the treasury. I'd imagine the electorate would never vote for that though so I'd never get a mandate to do so.

 

Raising taxes on all is an option but the Lib Dems stood on there and we saw how that went down. (We actually have the highest taxation for 40 years I read today, will link when I get home, not sure more is the answer)

 

I'm very fearful about the economic state and @Alf Bentley post above doesn't hold much optimism in the short term. 

 

Whatever happened to trusting the Tories with the economy?

 

Another myth exploded.

[Guest]

8 minutes ago, MattP said:

I want to eliminate the deficit ASAP - if it was up to me I'd be cutting public services even further, slashing foreign aid and probably cutting corporation tax even more hoping for another boost go the treasury. I'd imagine the electorate would never vote for that though so I'd never get a mandate to do so.

 

Raising taxes on all is an option but the Lib Dems stood on there and we saw how that went down. (We actually have the highest taxation for 40 years I read today, will link when I get home, not sure more is the answer)

 

I'm very fearful about the economic state and @Alf Bentley post above doesn't hold much optimism in the short term. 

Well thank god you're not in charge matt. Taking that action would send us tumbling into a recession we'd struggle to come out of with even higher personal debts, collapsed public services, mass unemployment and no economic levers to save ourself. What you've just proposed would be national suicide even beyond brexit. Honestly, that is the most ridiculous thing I've ever seen presented as serious political opinion. 

Edited 2 July 2017 by Guest

[Rincewind]

9 minutes ago, toddybad said:

Well thank god you're not in charge matt. Taking that action would send us tumbling into a recession we'd struggle to come out of with even higher personal debts, collapsed public services, mass unemployment and no economic levers to save ourself. What you've just proposed would be national suicide even beyond brexit. Honestly, that is the most ridiculous thing I've ever seen presented as serious political opinion. 

A little harsh.

[Guest]

2 minutes ago, Rincewind said:

A little harsh.

Only a little. 

Cutting the public sector further would see a breakdown in those services. Unemployment would go up as public sector workers are laid off and the private sector would face reductions in public sector procurement and spend by public sector workers. It would hit the whole economy. 

This obsession with the deficit is crazy. Being prepared to destroy public services is crazy.

[Rincewind]

I saw a video/rdoc a while back from someone saying that our debt will never be paid off. It may have been some economist but it seems there are thousands of them all with different views. I think it would solve the problem if we took what we paid the experts and put that into the treasury.

[Guest]

Just now, Rincewind said:

I saw a video/rdoc a while back from someone saying that our debt will never be paid off. It may have been some economist but it seems there are thousands of them all with different views. I think it would solve the problem if we took what we paid the experts and put that into the treasury.

National debt doesn't work like other debt. 

[DJ Barry Hammond]

56 minutes ago, MattP said:

I want to eliminate the deficit ASAP - if it was up to me I'd be cutting public services even further, slashing foreign aid and probably cutting corporation tax even more hoping for another boost go the treasury. I'd imagine the electorate would never vote for that though so I'd never get a mandate to do so.

 

Raising taxes on all is an option but the Lib Dems stood on there and we saw how that went down. (We actually have the highest taxation for 40 years I read today, will link when I get home, not sure more is the answer)

 

I'm very fearful about the economic state and @Alf Bentley post above doesn't hold much optimism in the short term. 

 

I expect a big pointer to why the economy is looking ropey is because the new generation of middle earners that normally provide that everyday spending power inside an economy have been hit in all directions.

 

Debts from university take away their spending power initially, then housing where high rents take away more OR if you want to buy; the need to raise that deposit / the cost of future mortgage repayments restricts this cross section further.

 

Then we have pensions in which changes in legislation mean you need to put more in to get the same standard of living out, the increased cost of motoring, stunted wage growth, tax rises / reductions in the availability of benefits (child benefit for example) and rising inflation - all things that have consistently bitten away at the leftovers these drivers of an economy have. 

 

This is why a simplistic "tax and not spend" policy is not something that will work. An austerity that's looks solely at the numbers can result in cost savings - but at the expense of eroding an underlying value.

 

The situation we find ourselves in needs grown up politics and a range of evolving solutions, not soundbites and this way or that way ideas that we're being offered at the moment.

 

 

[Rincewind]

 

[katieakita]

The coalition seemed to find plenty of money for project merlin that missed every one of its lending targets and pretty sure the average member of the public would rather see another attempt at stimulating the economy result in profits coming back to the taxpayer and not the banks. Something IDS was promoting a few weeks back talking about a Post Bank.

[DJ Barry Hammond]

13 minutes ago, Rincewind said:

I saw a video/rdoc a while back from someone saying that our debt will never be paid off. It may have been some economist but it seems there are thousands of them all with different views. I think it would solve the problem if we took what we paid the experts and put that into the treasury.

 

Its because of the cycle... the governments tax and spend policy is based on forecasting ahead, rather than getting tax receipts in at the start of a year and saying "right, this is what we have, so this is what we're spending over the next year" so there will always be borrowing of some sort. 

 

There are valid reasons for doing it on a forecast basis though and governments borrowing the money when you need it (mainly because governments have to deal with so many under predictable scenarios). 

[DJ Barry Hammond]

7 minutes ago, Rincewind said:

 

 

I find that video misleading in the sense it doesn't put the borrowing into much context.

 

For example, I believe that since 1976, there have been only 7 occasions of a budget surpluse. It also suggests that the debt needs to be paid back, but that's misleading because what really happens is the debt cycles - batches mature and are replaced by a fresh batch of debt. 

 

I'm all for simplifying information on important subjects, but it shouldn't be at the cost of diluting what's being explained. 

[Rincewind]

I never understand it. Who do they owe it to? Every country owes to another country. It seems it is just a piece of paper with IOU on. So everyone is about equal.

[Guest]

1 hour ago, DJ Barry Hammond said:

 

I find that video misleading in the sense it doesn't put the borrowing into much context.

 

For example, I believe that since 1976, there have been only 7 occasions of a budget surpluse. It also suggests that the debt needs to be paid back, but that's misleading because what really happens is the debt cycles - batches mature and are replaced by a fresh batch of debt. 

 

I'm all for simplifying information on important subjects, but it shouldn't be at the cost of diluting what's being explained. 

Saves me writing it!

[Guest]

54 minutes ago, Rincewind said:

I never understand it. Who do they owe it to? Every country owes to another country. It seems it is just a piece of paper with IOU on. So everyone is about equal.

Investors, rich people, companies, countries. 25% is owed to the bank of England. It's a difficult subject because people link it to the sort of debts ordinary people have. The debt will never be paid off. But over time its value decreases. In 100 years a £1.8t debt will be worth next to nothing in gdp terms. I realise that this seems mad when you think about your debts but this is how the financial system was worked for hundreds of years. The country has always had a national debt and current interest payments are actually relatively modest in historic gdp terms.

 

People then say that if we didn't pay the interest we could spend that money but that is also misleading. If the nation borrows say £100m and puts it into schools....it would get back a chunk through taxes on new teachers earning and increases to the earnings of existing staff. In fact 100% of earnings related borrowing comes back as that money is spent and spent again. This only doesn't happen if people save the money. Perversely, people saving is a negative for our economy as it effectively takes money out of circulation. Anyway, i digress. When the schools have building work done contractors are employed and paid and taxed. When schools buy goods the companies that profit employ staff and both the company and staff are taxed. A majority of what was borrowed and spent might actually come back through taxation. So the country has spent £100m, got say £60m back in taxes and pays say £7m in interest on debt it probably wont repay, just reissue. Don't forget that £60m can be reinvested too. And over time the original £100m debt will become next to worthless. 

 

This isn't to say that you'd want out of control deficits for extended periods just that national debt being characterised as fundamentally bad is wrongheaded.

[Guest Kopfkino]

 

19 minutes ago, toddybad said:

Investors, rich people, companies, countries. 25% is owed to the bank of England. It's a difficult subject because people link it to the sort of debts ordinary people have. The debt will never be paid off. But over time its value decreases. In 100 years a £1.8t debt will be worth next to nothing in gdp terms. I realise that this seems mad when you think about your debts but this is how the financial system was worked for hundreds of years. The country has always had a national debt and current interest payments are actually relatively modest in historic gdp terms.

 

People then say that if we didn't pay the interest we could spend that money but that is also misleading. If the nation borrows say £100m and puts it into schools....it would get back a chunk through taxes on new teachers earning and increases to the earnings of existing staff. In fact 100% of earnings related borrowing comes back as that money is spent and spent again. This only doesn't happen if people save the money. Perversely, people saving is a negative for our economy as it effectively takes money out of circulation. Anyway, i digress. When the schools have building work done contractors are employed and paid and taxed. When schools buy goods the companies that profit employ staff and both the company and staff are taxed. A majority of what was borrowed and spent might actually come back through taxation. So the country has spent £100m, got say £60m back in taxes and pays say £7m in interest on debt it probably wont repay, just reissue. Don't forget that £60m can be reinvested too. And over time the original £100m debt will become next to worthless. 

 

This isn't to say that you'd want out of control deficits for extended periods just that national debt being characterised as fundamentally bad is wrongheaded.

On 30/06/2017 at 12:14, toddybad said:

Yet more evidence of epic government economic failure. 

 

Britons' savings at record low as household incomes drop, says ONS

 

https://www.theguardian.com/business/2017/jun/30/britons-savings-at-record-low-as-household-incomes-drop-says-ons

 

One might suggest making your mind up 

Edited 2 July 2017 by KingGTF

[Guest]

15 minutes ago, KingGTF said:

 

 

One might suggest making your mind up 

They're too seperate discussions king.

 

In terms of having money out of circulation - and the fact that savers aren't borrowers - it technically weakens the gdp figures as there is less money circulating. That sentence intended to say no more or less than that. 

 

However, there is more to life than just gdp figures. In normal times if the economy was strong you would expect to see savers saving (about 10% of their income from figures given easier today) and so it is extremely useful as an indicator of the state of personal finance.

 

The fact that savings have reduced and personal debt is at near record levels tells us a lot about the difficulties being faced by ordinary people. 

 

Clearly more money is needed in the real economy. 

Edited 2 July 2017 by Guest

[Guest]

https://www.thesun.co.uk/news/3928898/britain-on-edge-of-worst-house-price-collapse-since-1990s-as-experts-warn-property-value-could-plunge-by-40/

 

 

[Buce]

 

Is the far-right poised to take over UKIP?

 

https://www.theguardian.com/politics/2017/jul/02/ukip-members-anne-marie-waters-anti-islam-far-right-fears

[Guest]

Reality hits

 

British officials drop 'cake and eat it' approach to Brexit negotiations

https://www.theguardian.com/politics/2017/jul/02/british-officials-drop-cake-and-eat-it-approach-to-brexit-negotiations?CMP=Share_AndroidApp_Copy_to_clipboard