How many ways to fix a broken economy?

[Puggit]

First stop - remove final salary pension schemes in the Public Sector.

[AJS-]

markcoznottz said:

AJS- said:

One way: Huge huge cuts in public spending. Slash the lot.

Giving the benefits army minimum wage is a crazy idea. Not only would it cost an absolute fortune, but it would completely fk over all the small businesses who are also competing for these wages, by pushing the wage at which people would take a job higher still.

Scrap benefits altogether.

Painful in the short term but much better in the long run.

Scrap the minimum wage, its a populist posturing piece of nonsense. All it means is companies in the service sector employ under 22's, preferably even under 18. Has also fed the growth of angency staff, who cant string together a full working week, and adds an unnecesary intermediate cost in the chain. Labour at its best.

This too, definitely.

Got a bit of a bee in my bonnet over this at the moment in fact. I live in Thailand and although I've noticed it before, it's only just struck my how disproportionately expensive unskilled labour in the UK is.

Using an hourly rate as a base unit, cigarettes, petrol and beer are all relatively cheap in the UK, despite being 2-5 times more expensive in money terms. I would quite conservatively say that unskilled labour is 18 times more expensive in the UK. I say conservatively because this just looks at the wage rates and doesn't take into account the extra pay roll costs like employer NI - I have no idea what these are in Thailand and little in the UK, plus most work in Thailand is cash in hand anyway so it's not really applicable.

By comparisson, professional salaries are a little over double, and I believe executive salaries are about the same.

The upshot of this is that anything locally produced is extraordinarily cheap here, while global brands are enourmously expensive to the average unskilled worker. A Toyota is as out of reach as a Ferrari to many people here, however eating out every night is almost as cheap as cooking for yourself.

Despite the fact that we supposedly live in a global economy, really most of our income stays fairly local. Hence you're way better off as a professional earning half as much here as you would in the UK, because your money will go beween 5-18 times as far depending on what you buy. True a car or a TV will seem expensive, but offset that against nearly everything else being massively cheap and it's a no brainer.

Scrap the minimum wage and benefits (which is a defacto min wage anyway) and let labour settle at it's realistic level, then we will be getting somewhere.

[jimothy]

Spending is the best way - spend on massive infrastructure projects using private business to create jobs and get money moving round the economy. Build power stations. roads, rail, give jobs to loads of people including training in how to build these things to provide better trained people who can contribute to the country.

However:

You save during times of boom to spend during times of bust, not spend and borrow in times of boom claiming you've abolished boom and bust, and end up spending and borrowing more during times of bust you slack jawed one eyed scottish cunt.

IIRC Singa saved a nice war chest of SG$200B during the boom so they could throw billions at the country during the bust. That is how its done.

We have no money to spend, so we have to cut spending. Drastically.

[dilbert]

jimothy said:

Spending is the best way - spend on massive infrastructure projects using private business to create jobs and get money moving round the economy. Build power stations. roads, rail, give jobs to loads of people including training in how to build these things to provide better trained people who can contribute to the country.

However:

You save during times of boom to spend during times of bust, not spend and borrow in times of boom claiming you've abolished boom and bust, and end up spending and borrowing more during times of bust you slack jawed one eyed scottish cunt.

IIRC Singa saved a nice war chest of SG$200B during the boom so they could throw billions at the country during the bust. That is how its done.

We have no money to spend, so we have to cut spending. Drastically.

I personally think you've missed the point. Perhaps drastic cuts are necessary, but to me that's not the point.

You have to encourage, not penalise.

Encouragement does not have to involve taxpayer money, but penalty does. Therein lies the problem AND the solution.

[sidewayz]

jimothy said:

Spending is the best way - spend on massive infrastructure projects using private business to create jobs and get money moving round the economy. Build power stations. roads, rail, give jobs to loads of people including training in how to build these things to provide better trained people who can contribute to the country.

However:

You save during times of boom to spend during times of bust, not spend and borrow in times of boom claiming you've abolished boom and bust, and end up spending and borrowing more during times of bust you slack jawed one eyed scottish cunt.

IIRC Singa saved a nice war chest of SG$200B during the boom so they could throw billions at the country during the bust. That is how its done.

We have no money to spend, so we have to cut spending. Drastically.

+1 plus I see no problem with expecting the banks who have been bailed out to repay with interest.

[andy43]

Asterix said:

My solution is to have the work shy made to contribute to their local society - picking up litter, painting over graffiti etc.. they'll get the minimum wage and councils will suddenly have thousands of workers which are then taken off the benefits gravy train. Those incapable of moving, the obese and physically unable are given lap tops to provide basic back up stuff as well. They get trained, we get a service.

Great idea.
Except anyone claiming who happens to have kids has just been bloody given a free 500 quid laptop anyway

[andy43]

eldar said:

As we owe £950,400,000,000 - or £15,800 each in government debt, £6bn doesn't even cover the interest (£31 bn, or a tenner a week per head)

None of the parties is approaching reality here.

Arguing over 6 billion at the moment is like two grown men fighting in the street over a penny they found on the pavement. What really gets me is NOBODY mentions what st we're in.
We be fked.

[jimothy]

dilbert said:

I personally think you've missed the point. Perhaps drastic cuts are necessary, but to me that's not the point.

You have to encourage, not penalise.

Encouragement does not have to involve taxpayer money, but penalty does. Therein lies the problem AND the solution.

What point have I missed? The question was should we spend or cut. If we had a competent government who saved during the boom then we should spend now, but we don't, so we have to cut. Winky went on about Kenseyan (sp?) economics when he spent, only he missed the part of that where you save.
Cuts are necessary - we owe on paper 62% of the GDP of the country (and probably the same again off balance sheet). If you owed 62% of your salary would you keep borrowing until no-one wants to lend you anything and they reposes your house, or would you cut back your spending and pay it off?
Encourage, not penalise? Not sure what you mean by this though.

sidewayz said:

+1 plus I see no problem with expecting the banks who have been bailed out to repay with interest.

By bailed out, you mean taken over by injections of cash in return for shares. Unless Winky does the same as he did with gold, they'll be sold for more than was paid for them leading to a profit. RBS is close, Lloyds should be in profit this year based on current projections. So yes, they will 'repay with interest'. Same as GS - they took TARP funding and paid it back with much more interest than the US Government would have paid to increase their massive national debt to fund it. Once again, the banks are a net contributor to the economy. Same as always. Think of the banks in this situation as a worker - pays plenty of tax, loses his job, takes a couple of months JSA, then gets another job and pays tax. Net contributor to the tax man.

[JagLover]

mft said:

Interesting - I really didn't think this was the case. Could you point me towards some figures on this?

There are far more benefits available than just the basic JSA or IB

Take Housing benefit for example-figures below from DWP



Statistics are based on Housing Benefit (HB) and Council Tax Benefit (CTB) recipients in Great Britain at November 2008 to January 2010.

The key points from the latest release are:

At January 2010, the total number of people receiving Housing Benefit was 4.65 million, with 5.68 million claiming Council Tax Benefit.
3.10 million Housing Benefit recipients were of working-age, representing almost two thirds of all Housing Benefit recipients.
70 per cent of Housing Benefit recipients were tenants of Social Sector landlords and 30 per cent were tenants of Private Sector landlords.
Over two thirds of both Housing Benefit and Council Tax Benefit recipients are in receipt of a Passported Benefit.
The overall average Housing Benefit award is £83.38 per week, and for Council Tax Benefit recipients, the overall average award was £15.74 per week.

[dilbert]

jimothy said:

dilbert said:

I personally think you've missed the point. Perhaps drastic cuts are necessary, but to me that's not the point.

You have to encourage, not penalise.

Encouragement does not have to involve taxpayer money, but penalty does. Therein lies the problem AND the solution.

What point have I missed? The question was should we spend or cut. If we had a competent government who saved during the boom then we should spend now, but we don't, so we have to cut. Winky went on about Kenseyan (sp?) economics when he spent, only he missed the part of that where you save.
Cuts are necessary - we owe on paper 62% of the GDP of the country (and probably the same again off balance sheet). If you owed 62% of your salary would you keep borrowing until no-one wants to lend you anything and they reposes your house, or would you cut back your spending and pay it off?
Encourage, not penalise? Not sure what you mean by this though.

All I'm trying to say is that under labour the effort has been to encourage with money. In the end it has become a condition where they can only encourage one thing if they penalise another. The penalty pays for the encouragement. This could be described as social engineering. Sometimes it is.

The government can never get this right from the centre, and that's if they can at all.

If one stops the penalty, then one must stop the encouragement, because there is no money to pay for it.

But you can encourage people without paying anything. All you have to do is say that people can keep more of whatever they make.

I quite agree, however, that we can no longer afford to encourage the wrong people. That is cuts in all but name. Equally important, is not to penalise the wrong people.

Edited by dilbert on Sunday 25th April 18:56

[cymtriks]

raf_gti said:

To my little brain pulling £6 Billion out really can't be all that good for the country..

Look at it like this.

We are a 1000 billion in debt. That does not include a lot of other liabilities. The total debt could be, depending on how you add it up, nearly twice that.

So...

Suppose a thousand people are going to take a pound off you.

Labour promise to charge someone to pay off six of them. Now you only have 994 people comming to take money off you. Then you discover that that "someone" is you.

Tories promise to cut the number of people comming to charge you to 994. They don't charge you but you still have to pay 994 pounds instead of 1000. Big difference.

They dare not tell you the truth. Until they do the situation will just get worse.

The only real solution is to cut spending or raise taxes by circa 200 billion. Every year. For ever.

[jules_s]

cymtriks said:

raf_gti said:

To my little brain pulling £6 Billion out really can't be all that good for the country..

Look at it like this.

We are a 1000 billion in debt. That does not include a lot of other liabilities. The total debt could be, depending on how you add it up, nearly twice that.

So...

Suppose a thousand people are going to take a pound off you.

Labour promise to charge someone to pay off six of them. Now you only have 994 people comming to take money off you. Then you discover that that "someone" is you.

Tories promise to cut the number of people comming to charge you to 994. They don't charge you but you still have to pay 994 pounds instead of 1000. Big difference.

They dare not tell you the truth. Until they do the situation will just get worse.

The only real solution is to cut spending or raise taxes by circa 200 billion. Every year. For ever.

Please excuse my ignorance, but if we are a so called 'trillion' in debt and the ONS includes the bank bail out in that figure http://www.money.co.uk/article/1002877-bank-bailou...

How does that work given the govt bought low(ish) and the share rates have levelled and are growing?

[sidewayz]

@ jimothy

Not the complete picture.Should have let them fail as in normal business practice then pick up the expertise and assets at a true market value.The expertise had nowhere to run to despite the threats.Would have cost a lot less and made a lot more helping to reduce the debt further and faster.

[odyssey2200]

Fixing the ecomony would be quite simple.

You need to give busines the freedom to grow and make profit.

Profitable business pays tax, employs people who pay tax and those people earning money spend that money and pay tax.

Business owner = Happy
Employee = Happy
Tax and revinue man = Happy

I suspect it can be shown that people with jobs and an income commit less crime and vandalism so Plod and local residents = Happy

strangling business is not good for the country or the people.

[cymtriks]

jules_s said:

cymtriks said:

raf_gti said:

To my little brain pulling £6 Billion out really can't be all that good for the country..

Look at it like this.

We are a 1000 billion in debt. That does not include a lot of other liabilities. The total debt could be, depending on how you add it up, nearly twice that.

So...

Suppose a thousand people are going to take a pound off you.

Labour promise to charge someone to pay off six of them. Now you only have 994 people comming to take money off you. Then you discover that that "someone" is you.

Tories promise to cut the number of people comming to charge you to 994. They don't charge you but you still have to pay 994 pounds instead of 1000. Big difference.

They dare not tell you the truth. Until they do the situation will just get worse.

The only real solution is to cut spending or raise taxes by circa 200 billion. Every year. For ever.

Please excuse my ignorance, but if we are a so called 'trillion' in debt and the ONS includes the bank bail out in that figure http://www.money.co.uk/article/1002877-bank-bailou...

How does that work given the govt bought low(ish) and the share rates have levelled and are growing?

I don't know what that 1.5 trillion mentioned in the link covers. It may be based on a very pessimistic set of assumptions regarding the banks liabilities. The shares may not be the same as the sum mentioned.

In any case my analogy holds. Even if you assume that bank shares turn good and wipe away the debt what about next year? Or the year after that?

Ultimately the only solution is to live within our means. That means either paying a lot more tax or drastically cutting services. The summs of money involved are vast, way more than a piffling six billion.

[jules_s]

cymtriks said:

I don't know what that 1.5 trillion mentioned in the link covers. It may be based on a very pessimistic set of assumptions regarding the banks liabilities. The shares may not be the same as the sum mentioned.

In any case my analogy holds. Even if you assume that bank shares turn good and wipe away the debt what about next year? Or the year after that?

Ultimately the only solution is to live within our means. That means either paying a lot more tax or drastically cutting services. The summs of money involved are vast, way more than a piffling six billion.

I posted that because I'm getting fed up with people on here posting scatter gun style that the UK debt is due to the government public spending whilst glibly ignoring the bank buy out.

So the uk was supposed to save in the good times and use that money to help out in recession? yep, looks like that happened to me, but the vast majority of 'our' savings went on the banks who seem to have 0% accountablity, how much money have they given US back yet then? and when are WE going to get OUR money back?

To me it's like we've taken a mortgage out on something we didn't want (bank debt) and the banks are just thumbing their noses at the uk tax payer.

[AJS-]

jules_s said:

cymtriks said:

I don't know what that 1.5 trillion mentioned in the link covers. It may be based on a very pessimistic set of assumptions regarding the banks liabilities. The shares may not be the same as the sum mentioned.

In any case my analogy holds. Even if you assume that bank shares turn good and wipe away the debt what about next year? Or the year after that?

Ultimately the only solution is to live within our means. That means either paying a lot more tax or drastically cutting services. The summs of money involved are vast, way more than a piffling six billion.

I posted that because I'm getting fed up with people on here posting scatter gun style that the UK debt is due to the government public spending whilst glibly ignoring the bank buy out.

So the uk was supposed to save in the good times and use that money to help out in recession? yep, looks like that happened to me, but the vast majority of 'our' savings went on the banks who seem to have 0% accountablity, how much money have they given US back yet then? and when are WE going to get OUR money back?

To me it's like we've taken a mortgage out on something we didn't want (bank debt) and the banks are just thumbing their noses at the uk tax payer.

y ro

The bank bailout is public spending.

And no we did not save in the good times. The UK has been running a deficit for years.

[M3333]

jules_s said:

Maxf said:

Cut spending, increase income. Same as if I owed the bank more than I could afford.

We are an island nation perfectly placed between the east and west. Stop hammering the financial industries and, instead, encourage more business here - perhaps reduce company taxes as a 'loss leader' but make it a little tougher for the earned money to leave the country/system.

Decrease the amount of red tape for businesses and bring back some of the great British 'ingenuity', creating more jobs which can mean the public sector non-jobs can start moving over to the private sector. I dont think we can cut the public sector overnight, as it is so intertwined with the economy.

Didn't the UK tax payer bail out uk/various banks out to the tune of £1.3 trillion?

And we have a national debt of 1.2 trillion?

And we have to pay interest on that when the banks still refuse loans and give their employees staggering bonuses?

Not forgetting the massive (1 trillion) black hole in Pensions?

What about all the PFI stuff kept of the balance sheets?

Does anybody actually know how much our debt in total is?

Amazed the Media do not make a big thing from it and wonder why they do not. Is it left bias or they just do not grasp the extent of the situation?

[johnnywb]

Interesting article on the FT website today
http://www.ft.com/cms/s/0/c95e4d10-50ad-11df-bc86-...

Extract;
FT costings of a range of the choices that the next chancellor will face show that almost the whole population would be hit as the new government makes £30bn-£40bn of cuts in real terms to halve the deficit.

An online simulator, developed by the FT using government figures, suggests a saving of that scale would require all of the following: a 5 per cent cut in public sector pay; freezing benefits for a year; means-testing child benefit; abolishing winter fuel payments and free television licences; reducing prison numbers by a quarter; axing the two planned aircraft carriers; withdrawing free bus passes for pensioners; delaying Crossrail for three years; halving roads maintenance; stopping school building; halving the spend on teaching assistants and NHS dentistry; and cutting funding to Scotland and Wales by 10 per cent.

Worrying times ahead...

[rypt]

That article is such bullst ...

abolishing free television licences - or you just cut the funding BBC gets, do they REALLY need 5 channels, god knows how many radio stations and so on?
reducing prison numbers by a quarter - or you just introduce labour in prisons, to get some money/useful product back
freezing benefits for a year - or you remove benefits from the idle scum
means-testing child benefit - do we need child benefits?
a 5 per cent cut in public sector pay - or you fire the managers and non-jobs that do nothing but earn lots
cutting funding to Scotland by 10 per cent - Scotland already gets more per head than England