How much of a mess are we really in?
Discussion
Don't worry, it's only 5 months until Dan Hannan Day.
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A couple of things that concern me greatly right now:
the £ - everything we seem to need is imported. The value of it has gone down massively - late 1960s IIRC you could get over $3 for a £
Everything we need comes from abroad including a lot of food, energy and basic raw materials to manufacture what little manufacturing capacity we have. What happens when the suppliers overseas say you know what we dont want you money anymore or it takes so many £££s to buy their money that we simply cannot afford to buy those things.
Cheap imported labour - I can just remember high unemployment at the end of the 1980s & early 1990s and the property crash. I feel we are heading in that direction again quite rapidly. House prices are unsustainable and have to fall if there is no demand because people cannot afford to move and cant sell their houses to move. As borrowing costs escalate along with inflated living costs there will come a point where all that cheap labour is not required because demand (for everything) has fallen so much. Who is going to pay for all that unemployment and idleness ?
the £ - everything we seem to need is imported. The value of it has gone down massively - late 1960s IIRC you could get over $3 for a £
Everything we need comes from abroad including a lot of food, energy and basic raw materials to manufacture what little manufacturing capacity we have. What happens when the suppliers overseas say you know what we dont want you money anymore or it takes so many £££s to buy their money that we simply cannot afford to buy those things.
Cheap imported labour - I can just remember high unemployment at the end of the 1980s & early 1990s and the property crash. I feel we are heading in that direction again quite rapidly. House prices are unsustainable and have to fall if there is no demand because people cannot afford to move and cant sell their houses to move. As borrowing costs escalate along with inflated living costs there will come a point where all that cheap labour is not required because demand (for everything) has fallen so much. Who is going to pay for all that unemployment and idleness ?
Randy Winkman said:
My question was to ask the OP if it has actually gone pear shaped in the last 6 months or if it was already like that? I'd argue it was the latter.
I still think that for all its many faults it's still a great place to live and the standard of living for most is higher than it's ever been When I left school unemployment in my home town was 24% everything was boarded up, derelict, slum clearance ( I'm not that old )
The only queues you saw were outside the dole office
My dad was made redundant/got voluntary retirement package as his factory closed down at 56 and never worked again, as happened to many
There was serious social unrest. The whole country seemed to be rioting. No one had anything, BMW's and Mercs were dreamland cars, in fact most people didn't have cars, they relied on the corporation buses
We'd not long since moved into a new build detached in town that unlike our previous terrace had an inside bathroom and loo, double glazing and central heating
No more going to the bottom of the yard for a piss
It might not be great at the moment but still a damn weight better than it was apart form the music, that was ace, and the pubs, they were ace, and the general lack of crime, that was ace, and you could buy an Alfa for a couple of hundred quid, that was ace
Oh I don't know .. at least I don't have to piss at the bottom of the yard anymore
Edited by Earthdweller on Tuesday 14th January 13:59
Quite simply we are in a debt spiral. There is too much debt at Public, Private and Individual levels and all areas are getting squeezed as debt costs rise back to more normal levels.
Individuals are paying more to service their debts, thus taking money out of the economy, at the same time as being tax more than ever.
Corporates are paying more to service their debts, thus threatening their profits, therefore they are taking actions on costs to maintain profit levels which means less spending in the economy, fewer or lower paid jobs, etc.
The Public sector are paying more for their debts, and cannot raise enough money to cover the cost of servicing said debts, so they just borrow more to cover the shortfall of £100bn. There are no taxes that can be raised to cover this shortfall without having a hugely negative impact on other areas of the economy.
The only political solution is just to keep the plates spinning so they will continue to borrow more, and if needed to stave off the crisis will roll out the printing press, and kick the can down the road passing the obligation onto future generations.
Individuals are paying more to service their debts, thus taking money out of the economy, at the same time as being tax more than ever.
Corporates are paying more to service their debts, thus threatening their profits, therefore they are taking actions on costs to maintain profit levels which means less spending in the economy, fewer or lower paid jobs, etc.
The Public sector are paying more for their debts, and cannot raise enough money to cover the cost of servicing said debts, so they just borrow more to cover the shortfall of £100bn. There are no taxes that can be raised to cover this shortfall without having a hugely negative impact on other areas of the economy.
The only political solution is just to keep the plates spinning so they will continue to borrow more, and if needed to stave off the crisis will roll out the printing press, and kick the can down the road passing the obligation onto future generations.
Edited by Ashfordian on Tuesday 14th January 14:03
s1962a said:
The UK is becoming a 2 tier society, much like parts of the 3rd world are. There are those that have great purchasing power, either from family wealth or self made money, and those that just about survive, either with a job that pays enough for rent and a little bit of luxury, or on benefits of sorts. I think this divide will continue and get bigger over time.
Indeedy. The UK has blindly followed America into growing wealth inequality and a broken democracy. What amazes me is how many people genuinely believe populist politicians and billionaires have their best interests at heart. I can understand why this happens in America, so many people there believe they’re just one hard grind away from being rich themselves, but what’s the UK’s excuse?Life expectancy here stopped improving in 2018 and is now falling. NHS waiting times and cancer survival rates are among the worst in wealthy nations. The cost of living is higher than much of Europe, yet Brits work longer hours for lower productivity. Our rivers and beaches are some of Europe’s most polluted, but water bills remain some of the highest in the world.
Big tech and billionaires are breaking democracy. Newspapers serve private interests, and media outlets push spin over truth.
People get the government they deserve. If large sections of the population are willing to swallow snake oil from various fraudsters they will have to reap what they sow.
Shame, but I'm rapidly approaching a point, where I don't give a toss. No kids, no family (in the UK), and able to move country anytime really. I guess I'm still hanging around to see if anything actually can improve.
ATG said:
Might come true. Current government needs to hold its nerve in the face of the stirring. The government had said very, very little, which isn't particularly surprising as neither the PM or Chancellor are exactly great orators. This has ceded the ground to a handful of opposition politicians who themselves have precisely nothing to offer ... except criticism. The challenge for Labour is to decide if it's better to just let them prattle on in the hope the public get bored, or do you risk giving the criticism credibility by trying to counter it? Personally I'd suggest they just try to set the agenda themselves. Get another story out there. But they're a charisma vacuum.
You need to give a government about 2 years before you can begin to judge their impact on the economy because that's the sort of time it takes the economy to react to policy. That's reality. The news agenda has a half-life of about a week.
Agree with pretty much all of that. You need to give a government about 2 years before you can begin to judge their impact on the economy because that's the sort of time it takes the economy to react to policy. That's reality. The news agenda has a half-life of about a week.
I'm just ignoring the noise at the moment. In 2 or 3 years time let's see where we're at. If they really have overcooked the goose then they'll be gone soon after anyway.
We're in a mess, but it's not insurmountable.
We have to accept that there are no easy answers and certainly no quick ones because of the situation we're in. We can't tax and spend, because the economy is weak. We can't borrow and spend because national debit it already eye wateringly high, we can't use austerity because public services are already on their knees, and we can't inflate to devalue the national debt because inflation is already too high.
All the Government can really do is steer us with what measures they can make as we slowly claw out way out of it.
There are some things I'd do, but they're going to be very unpopular with some, namely decriminalise cannabis use and whack a duty on it, reducing the cost of policing and increasing revenue and trade, even if it's pretty modest on a national economic level. Reduce trading restrictions with the EU, and accepting free movement of workers if that's what it takes. Trump is about the impose trade tariffs on us and the rest of the world, which is only going to make things worse for us.
We have to accept that there are no easy answers and certainly no quick ones because of the situation we're in. We can't tax and spend, because the economy is weak. We can't borrow and spend because national debit it already eye wateringly high, we can't use austerity because public services are already on their knees, and we can't inflate to devalue the national debt because inflation is already too high.
All the Government can really do is steer us with what measures they can make as we slowly claw out way out of it.
There are some things I'd do, but they're going to be very unpopular with some, namely decriminalise cannabis use and whack a duty on it, reducing the cost of policing and increasing revenue and trade, even if it's pretty modest on a national economic level. Reduce trading restrictions with the EU, and accepting free movement of workers if that's what it takes. Trump is about the impose trade tariffs on us and the rest of the world, which is only going to make things worse for us.
fido said:
pghstochaj said:
The minimum wage is about to be £25.4k/annum and the median salary is just £37k. That gap is relatively small. I don't think you become a net contributor to the country until you earn >£45k, so less than 40% of workers contribute more than they take. That's scary.
On that note. We need a more graduated income tax e.g. starting at 20% to 40% at a much higher threshold (think it’s around 6 times the minimum wage in the US).For employees who have one job:
1. National Insurance (NI) is just income tax under a different guise.
- It's not hypothecated (ringfenced) into pensions or a state wealth fund. It is just spent as general taxation funds.
- It doesn't affect your state pension much if at all since that would be topped up anyway via pension credit, whether you paid NI or not in your working life.
- The primary bit of NI is the "employer's NI" which most people don't really see as being their business -- it is a tax on your income as an employee so impacts what you take home in pay (if an employer has £100K to spend on a staff member, the highest they'll advertise the job at is about £87K knowing they'll have to pay employers NI on it, pushing the overall spend to £100K)
- This is also just another income tax, albeit with different bands than income tax that's actually called income tax.
The removal of the personal allowance for employees making £100000 to £125140 means their effective income tax rate jumps from 40% to 60% (for England) between these two salary amounts, before falling back down to 45% for amounts above £125140. This "bump" in the tax system is incredibly unfair -- why should people on £110K have a higher marginal rate than people making £10m a year in employment?
Adding Employers NI, Employees NI, Income tax rate, and withdrawal of allowances is the only REAL way to view income taxation, but it's hardly ever how this is described in the UK.
For someone making a basic £125K salary in England, their effective marginal tax bracket consists of 40% income tax, 2% employees NI and 20% to cover the loss of the personal allowance.
Employers NI at 13.8% on the threshold £9100 up to £125000 means they would be paid £140,994.20 base salary if employers NI didn't exist. ( [13.8% of ((£125000-9000)=115900) = £15994.2])
Their effective marginal tax rate is really 40% + 2% + 20% + 12.79%, in other words, the marginal tax take at this point is already 74.79% of what the employer is paying for that employee.
People in the UK don't really discuss this because £125K is a lot in terms of salary for most people. It's f
king mindbending when you look at it from this angle.ATG said:
Might come true. Current government needs to hold its nerve in the face of the stirring. The government had said very, very little, which isn't particularly surprising as neither the PM or Chancellor are exactly great orators. This has ceded the ground to a handful of opposition politicians who themselves have precisely nothing to offer ... except criticism. The challenge for Labour is to decide if it's better to just let them prattle on in the hope the public get bored, or do you risk giving the criticism credibility by trying to counter it? Personally I'd suggest they just try to set the agenda themselves. Get another story out there. But they're a charisma vacuum.
You need to give a government about 2 years before you can begin to judge their impact on the economy because that's the sort of time it takes the economy to react to policy. That's reality. The news agenda has a half-life of about a week.
Good summaryYou need to give a government about 2 years before you can begin to judge their impact on the economy because that's the sort of time it takes the economy to react to policy. That's reality. The news agenda has a half-life of about a week.
I do wonder what it'd be like if everyone in the UK had an account that showed how much they have input into the system versus how much they've taken out.
It'd never be practical but it'd maybe give some people pause for thought when the majority of folk complaining about immigration turn out to be a negative on the states' finances and immigrants turn out to be a positive.
Nobody up for a system where those who are paying for it get more say in how it works than those who benefit from it? nobody?
It'd never be practical but it'd maybe give some people pause for thought when the majority of folk complaining about immigration turn out to be a negative on the states' finances and immigrants turn out to be a positive.
Nobody up for a system where those who are paying for it get more say in how it works than those who benefit from it? nobody?
Are we really worse off than our nearest neighbours? Most EU countries have similar problems - look at the current political turmoil in Germany and all the protests in Spain about unaffordable housing.
One area we may be worse off is that our housing stock is very old. I was in Bristol recently and although the buildings in Clifton and Redland looked nice from the outside, they are clearly old and cold and energy inefficient and also have insufficient parking (so the streets are blocked by people parking on them). Similarly a lot of our infrastructure is old, because we industrialised first (and didn’t suffer massive destruction in WW2) and is not fit for purpose but we don’t seem to have the money to fix it.
Overall life is still good in the UK for most people. We are economically falling further and further behind the US and Asia though.
One area we may be worse off is that our housing stock is very old. I was in Bristol recently and although the buildings in Clifton and Redland looked nice from the outside, they are clearly old and cold and energy inefficient and also have insufficient parking (so the streets are blocked by people parking on them). Similarly a lot of our infrastructure is old, because we industrialised first (and didn’t suffer massive destruction in WW2) and is not fit for purpose but we don’t seem to have the money to fix it.
Overall life is still good in the UK for most people. We are economically falling further and further behind the US and Asia though.
EmailAddress said:
CraigyMc said:
Nobody up for a system where those who are paying for it get more say in how it works than those who benefit from it? nobody?
And welcome, our next European Ambassador, Wayne Rooney.Skeptisk said:
Are we really worse off than our nearest neighbours? Most EU countries have similar problems - look at the current political turmoil in Germany and all the protests in Spain about unaffordable housing.
One area we may be worse off is that our housing stock is very old. I was in Bristol recently and although the buildings in Clifton and Redland looked nice from the outside, they are clearly old and cold and energy inefficient and also have insufficient parking (so the streets are blocked by people parking on them). Similarly a lot of our infrastructure is old, because we industrialised first (and didn’t suffer massive destruction in WW2) and is not fit for purpose but we don’t seem to have the money to fix it.
Overall life is still good in the UK for most people. We are economically falling further and further behind the US and Asia though.
In the US if you get chronically sick you're completely fOne area we may be worse off is that our housing stock is very old. I was in Bristol recently and although the buildings in Clifton and Redland looked nice from the outside, they are clearly old and cold and energy inefficient and also have insufficient parking (so the streets are blocked by people parking on them). Similarly a lot of our infrastructure is old, because we industrialised first (and didn’t suffer massive destruction in WW2) and is not fit for purpose but we don’t seem to have the money to fix it.
Overall life is still good in the UK for most people. We are economically falling further and further behind the US and Asia though.
ked, economically speaking. That's a choice.ATG said:
Might come true. Current government needs to hold its nerve in the face of the stirring. The government had said very, very little, which isn't particularly surprising as neither the PM or Chancellor are exactly great orators. This has ceded the ground to a handful of opposition politicians who themselves have precisely nothing to offer ... except criticism. The challenge for Labour is to decide if it's better to just let them prattle on in the hope the public get bored, or do you risk giving the criticism credibility by trying to counter it? Personally I'd suggest they just try to set the agenda themselves. Get another story out there. But they're a charisma vacuum.
You need to give a government about 2 years before you can begin to judge their impact on the economy because that's the sort of time it takes the economy to react to policy. That's reality. The news agenda has a half-life of about a week.
No wonder liz truss is still adamant she was always right all along and just needed more time and should have just 'held her nerve'.....You need to give a government about 2 years before you can begin to judge their impact on the economy because that's the sort of time it takes the economy to react to policy. That's reality. The news agenda has a half-life of about a week.
Chrisgr31 said:
Has it really gone pear shaped? Ignoring what politicians, media, social media tell us have our lives gone pear shaped?
Are we all unable to afford what we could afford, are we all unemployed, are we all taking pay cuts etc?
Or is it all been stirred by a bunch of self interested parties who by stirring it are raising such uncertainties their prophecies will become true?
It's been brewing for a few years now but my field of fAre we all unable to afford what we could afford, are we all unemployed, are we all taking pay cuts etc?
Or is it all been stirred by a bunch of self interested parties who by stirring it are raising such uncertainties their prophecies will become true?
ks to give is now barren when it comes to living in this country. CraigyMc said:
In the US if you get chronically sick you're completely fked, economically speaking. That's a choice.
I wonder if that's why their productivity is higher than ours? Harsh as it is, if you're in a position where "if you don't work you and your family starve" you're less likely to pull sickies.ked, economically speaking. That's a choice.isaldiri said:
No wonder liz truss is still adamant she was always right all along and just needed more time and should have just 'held her nerve'.....
I wonder what the difference in tax income for the treasury is between Kwarteng's withdrawn 5% off the top rate and Hunt's granted 4% off basic rate tax payers.Countdown said:
CraigyMc said:
In the US if you get chronically sick you're completely fked, economically speaking. That's a choice.
I wonder if that's why their productivity is higher than ours? Harsh as it is, if you're in a position where "if you don't work you and your family starve" you're less likely to pull sickies.ked, economically speaking. That's a choice.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff