How many ways to fix a broken economy?
Discussion
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.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.
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.
As far as I understand it the government
a) agreed to buy shares/preference shares in RBS and Lloyds for significantly less than the sums you are mentioning. Shares which will be sold on the open market or in a placement at some point in the (not to distant) future for a profit.
b) agreed to underwrite some of the dodgy the liabilities of said banks, for a decent fee, in order to stabilize the financial markets.
The tax payer will turn a profit on this ultimately.
jules_s said:
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?
National DebtAnd we have a national debt of 1.2 trillion?
1997 348.0
2007 500.0 <- before the crisis !!!
2010 776.6
As for the bank bailouts, who really got bailed out? thankfully the tens of millions of people with accounts at rbs, hbos, northern rock etc... who would likely lost all their savings. more than likely YOU, your family and friends were 'bailed out'.
ps the treasury is actually in profit on its RBS 'investment' for the time being... http://www.ft.com/cms/s/0/bca904c6-498b-11df-9060-...
jules_s said:
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...
come on give it a rest. you were part of this exact same conversation previously... try clicking on the source of your link... notice the oh so slightly different headlines? to keep with the spoon feeding... "Bank Bailout To Add up to £1.5 trillion to Public Debt" from "Government stakes in RBS and Lloyds could add £1.5 trillion to UK national debt ", world of differnce between potential liability and cost.fbrs said:
Elroy Blue said:
"New estimates suggest the government's recent bailout of RBS and Lloyds TSB will cost the tax payer up to £1.5 trillion. The data, released today by the Office of National Statistics.."
i guess you didn't understand the difference after all. you quote a money.co.uk headline from feb'09 that cites the torygraph as a source, which its self makes the glaring error of (deliberately) confusing an ons estimate for future national debt with the cost of the bank bailouts. debt was rapidly increasing well before 2008. never mind. are you telling us the treasury numbers are out by 1.490 trillion pounds? you should report mr darling to the SFO jules_s said:
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
complete BS, totally contrary to the basic facts.http://www.ukpublicspending.co.uk/downchart_ukgs.p...
Edited by fbrs on Monday 26th April 23:32
M3333 said:
Does anybody actually know how much our debt in total is?
apologies for the obviously tory research but suprisingly i think its pretty accurate (at least for debt and public sector pensions)http://www.cps.org.uk/cps_catalog/the%20hidden%20d...
Edited by fbrs on Monday 26th April 20:09
jules_s said:
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.
The bank buy out isn't anywhere near 1.5 trillion. That is the theoretical liability, not the same thing as the actual cost. Yes, since my last post I've looked it up.The bank bailout turns out to be a small part of the problem, though still large in its own right.
We have:
- 900 billion public spending debt increasing by 168 billion over this year
- 130 billion bank bail out (which we might get back)
- 130+ billion in PFI deals (off balance sheet but still arguably debts)
- 1000+ billion in unfunded public sector pensions
Of interest is that the things we are told are funded out of tax, education, defence, law and health, that are so important that any tax decrease would threaten their very existence are actually small parts of spending.
education 13%
defence 6%
health 18%
public order and safety 5%
social protection and services 32% (benefits of which about half go to OAPs)
interest on the debt 4%
The benefit bill is greater than any of the expenses that are used to defend the need for tax by a significant margin. Also income tax doesn't even cover the benefit bill...
cymtriks said:
jules_s said:
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.
The bank buy out isn't anywhere near 1.5 trillion. That is the theoretical liability, not the same thing as the actual cost. Yes, since my last post I've looked it up.The bank bailout turns out to be a small part of the problem, though still large in its own right.
We have:
- 900 billion public spending debt increasing by 168 billion over this year
- 130 billion bank bail out (which we might get back)
- 130+ billion in PFI deals (off balance sheet but still arguably debts)
- 1000+ billion in unfunded public sector pensions
Of interest is that the things we are told are funded out of tax, education, defence, law and health, that are so important that any tax decrease would threaten their very existence are actually small parts of spending.
education 13%
defence 6%
health 18%
public order and safety 5%
social protection and services 32% (benefits of which about half go to OAPs)
interest on the debt 4%
The benefit bill is greater than any of the expenses that are used to defend the need for tax by a significant margin. Also income tax doesn't even cover the benefit bill...
If there is any impetus at all to grow the private sector, it's rapidly going to effect the deficit.
I cannot fail to agree, that encouragement for the private sector would always have been a better plan. It's the failure of encouragement, and penalty, for so long which has left the public sector so top heavy.
The public sector has become one of "those" problems. The worse it gets, the worse it becomes. No?
Edited by dilbert on Tuesday 27th April 01:02
dilbert said:
cymtriks said:
We have:
Of interest is that the things we are told are funded out of tax, education, defence, law and health, that are so important that any tax decrease would threaten their very existence are actually small parts of spending.
education 13%
defence 6%
health 18%
public order and safety 5%
social protection and services 32% (benefits of which about half go to OAPs)
interest on the debt 4%
The benefit bill is greater than any of the expenses that are used to defend the need for tax by a significant margin. Also income tax doesn't even cover the benefit bill...
But the benefit bill is more or less £150 billion. The public sector pensions deficit is £1 trillion. One is long term and the other short term. Surely public sector waste is cheaper on the dole than in government?- 900 billion public spending debt increasing by 168 billion over this year
- 130 billion bank bail out (which we might get back)
- 130+ billion in PFI deals (off balance sheet but still arguably debts)
- 1000+ billion in unfunded public sector pensions
Of interest is that the things we are told are funded out of tax, education, defence, law and health, that are so important that any tax decrease would threaten their very existence are actually small parts of spending.
education 13%
defence 6%
health 18%
public order and safety 5%
social protection and services 32% (benefits of which about half go to OAPs)
interest on the debt 4%
The benefit bill is greater than any of the expenses that are used to defend the need for tax by a significant margin. Also income tax doesn't even cover the benefit bill...
The public sector has become one of "those" problems. The worse it gets, the worse it becomes. No?
Neither of these debts occured recently, they have both been building up for a long time.
As I said above there really are only two ways out, we pay a lot more tax or we cut back drastically.
The common argument against cuts is that health, law, education and defence will be threatened. It just isn't true. Added together these are less than half of the government budget. Also income tax, which many assume pays for all the "important stuff that cannot be cut" does not even cover the benefit bill.
Yes, you are right, the longer it goes on the bigger the problem gets.
AJS- said:
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 f
k 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.Giving the benefits army minimum wage is a crazy idea. Not only would it cost an absolute fortune, but it would completely f
k 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.
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.
You choose not to live in the UK. But want to lecture us on how we run our country?
Good grief.
How come none of the big 3 have even mentioned tackling the cost of benefits? In 2009/10, the Treasury is expecting to take in £140.5 billion in gross income tax receipts. Social security benefits are projected to be £164.7 billion.
£6bn seems pretty insignifiant when stacked against that bill. If benefits go up by a couple of percent next year that's another £3.3bn straight away.
£6bn seems pretty insignifiant when stacked against that bill. If benefits go up by a couple of percent next year that's another £3.3bn straight away.
Just to really cheer everyone up the bit that gets overlooked is that the demographics are going the wrong way to help.As baby boomers retire the call on benefits will increase at the same time the tax paying population is decreasing. Mind you it was all so totally unexpected,we have only had fifty years to plan for it so what do you expect.
P.S. I don't subscribe to the banks were blameless argument at all. Major winking about happened.
P.S. I don't subscribe to the banks were blameless argument at all. Major winking about happened.
VXRuss said:
Something that I wonder that surely doesn't help with the economy is that the UK has seen a population increase of over 3.5m people between 1997 and 2010, this must be a drain on resources?
It depends, many of the immigrants filled the job vacancies created by (and to an extent fuelling) the boom. They came over from the EU with relatively good qualifications, worked & paid taxes, helped fuel the boom and have left now that things are going south. I believe that these people are the reason for the falling immigration figures rather than any tightening of immigration policy.Wealthy individuals came over (think Abramovich) because of our fairly attractive tax regime and the benefits of London. Some are still here but some have left due to changes in the tax system.
Finally some immigrants haven't really contributed and have indeed been a drain on resources.
Edited by theaxe on Tuesday 27th April 17:08
theaxe said:
How come none of the big 3 have even mentioned tackling the cost of benefits? In 2009/10, the Treasury is expecting to take in £140.5 billion in gross income tax receipts. Social security benefits are projected to be £164.7 billion.
£6bn seems pretty insignifiant when stacked against that bill. If benefits go up by a couple of percent next year that's another £3.3bn straight away.
The danger is in lumping people on Benefits all in together.£6bn seems pretty insignifiant when stacked against that bill. If benefits go up by a couple of percent next year that's another £3.3bn straight away.
There are those, that due to the current recession, have been made redundant and are genuinely in need of support while they look for work.
Then there are those who have chosen benefits as a lifestyle.
Discussing "benefits" as one issue and making blanket decisions is wrong IMHO.
i would guess anyone who just wants to cut benefits across the board has never been called into the bosses office and suddenly sent home with out a job, and income anymore!
It tends to change your opinion of "Benefits" but reinforces your opinion of civil servants and local government incompetence.
odyssey2200 said:
theaxe said:
How come none of the big 3 have even mentioned tackling the cost of benefits? In 2009/10, the Treasury is expecting to take in £140.5 billion in gross income tax receipts. Social security benefits are projected to be £164.7 billion.
£6bn seems pretty insignifiant when stacked against that bill. If benefits go up by a couple of percent next year that's another £3.3bn straight away.
The danger is in lumping people on Benefits all in together.£6bn seems pretty insignifiant when stacked against that bill. If benefits go up by a couple of percent next year that's another £3.3bn straight away.
There are those, that due to the current recession, have been made redundant and are genuinely in need of support while they look for work.
Then there are those who have chosen benefits as a lifestyle.
Discussing "benefits" as one issue and making blanket decisions is wrong IMHO.
i would guess anyone who just wants to cut benefits across the board has never been called into the bosses office and suddenly sent home with out a job, and income anymore!
It tends to change your opinion of "Benefits" but reinforces your opinion of civil servants and local government incompetence.
For example a policy that says that anyone on unemployment benefits who pays money to Sky for a TV package should have their benefits reduced by that amount and the cash put directly into care for the elderly.
You can't scrap "benefits".
The system is supposed to be there to help people when they lose their job to "manage" and to get another job. I actually WANT to pay tax so that this system is in place - maybe one day I will need it.
The long term unemployed are a different problem. We pay them benefits so they don't become desperate and sink into criminality...which is a problem none of us want.
Yes there are those who abuse the system and enjoy a "benefits lifestyle". Lets deal with that problem - not a valuable system that is in place for good reasons.
The system is supposed to be there to help people when they lose their job to "manage" and to get another job. I actually WANT to pay tax so that this system is in place - maybe one day I will need it.
The long term unemployed are a different problem. We pay them benefits so they don't become desperate and sink into criminality...which is a problem none of us want.
Yes there are those who abuse the system and enjoy a "benefits lifestyle". Lets deal with that problem - not a valuable system that is in place for good reasons.
theaxe said:
odyssey2200 said:
theaxe said:
How come none of the big 3 have even mentioned tackling the cost of benefits? In 2009/10, the Treasury is expecting to take in £140.5 billion in gross income tax receipts. Social security benefits are projected to be £164.7 billion.
£6bn seems pretty insignifiant when stacked against that bill. If benefits go up by a couple of percent next year that's another £3.3bn straight away.
The danger is in lumping people on Benefits all in together.£6bn seems pretty insignifiant when stacked against that bill. If benefits go up by a couple of percent next year that's another £3.3bn straight away.
There are those, that due to the current recession, have been made redundant and are genuinely in need of support while they look for work.
Then there are those who have chosen benefits as a lifestyle.
Discussing "benefits" as one issue and making blanket decisions is wrong IMHO.
i would guess anyone who just wants to cut benefits across the board has never been called into the bosses office and suddenly sent home with out a job, and income anymore!
It tends to change your opinion of "Benefits" but reinforces your opinion of civil servants and local government incompetence.
For example a policy that says that anyone on unemployment benefits who pays money to Sky for a TV package should have their benefits reduced by that amount and the cash put directly into care for the elderly.
ie food from Farmfoods, clothing from Primark and an allocation of 20 cigs a month and a 6 pack of Super.
It would give them everything they need for living and at the same time encourage them to better themselves without actually punishing them.
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