Public sector job losses equalled by Private sector job loss
Discussion
Dracoro said:
Paying someone, for example, £10k a year on benefits (and remember, it won't be forever) is cheaper than paying them £20/30k plus pension, expenses to employ them etc.
Basically the cost of paying benefits is far outweighed by the savings.
For those that end up unemployed, it's not great for sure and I sympathise. However, we need (to hope) the private sector can grow and flourish then they can get jobs again (helping to create wealth to the economy rather than draining it).
On that note, this is where the govt. have to be careful not to rush too much so that the balance is wrong. Time will tell. Ultimately though, if the money isn't there to pay them, it's not there to pay them! i.e. there is no choice.
Which is exactly what Thatcher did with the miners. Non of those pit villages (or regions) could absorb the job losses, and more than a few weren't willing to find employment elsewhere, so they simply went on the dole for the most part. Cheaper than subsidizing the mines at the end of the day - far cheaper.Basically the cost of paying benefits is far outweighed by the savings.
For those that end up unemployed, it's not great for sure and I sympathise. However, we need (to hope) the private sector can grow and flourish then they can get jobs again (helping to create wealth to the economy rather than draining it).
On that note, this is where the govt. have to be careful not to rush too much so that the balance is wrong. Time will tell. Ultimately though, if the money isn't there to pay them, it's not there to pay them! i.e. there is no choice.
ZondaMark said:
Digga said:
otolith said:
ZondaMark said:
What do the Chinese then do with our pounds?
Buy Africa?Talk to anyone who imports from China (or any other emerging econopmy for that matter) and they'll likely be paying for the goods in greenbacks. The pounds buy the dollars and the Chinese keep piling 'em up and look for a 'way out' of the classic dollar trap (Google "dollar, france, trap" for explanation) and find they can make friends with mineral rich African states, supplying subsidised Chinese tat in return for stuff that they need...
ETA (What exactly they want with Greece is less clear.)
Edited by Digga on Thursday 14th October 16:02
Dracoro][b said:
Paying someone, for example, £10k a year on benefits (and remember, it won't be forever) is cheaper than paying them £20/30k plus pension, expenses to employ them etc.
Basically the cost of paying benefits is far outweighed by the savings.[/b]
For those that end up unemployed, it's not great for sure and I sympathise. However, we need (to hope) the private sector can grow and flourish then they can get jobs again (helping to create wealth to the economy rather than draining it).
On that note, this is where the govt. have to be careful not to rush too much so that the balance is wrong. Time will tell. Ultimately though, if the money isn't there to pay them, it's not there to pay them! i.e. there is no choice.
It looks like you missed the point. Benefits will also have to be paid to privcate sector workers who loose their jobs because of the public sector cuts. This could well negate any savings and give a net cost. It will also reduce the tax income used to pay the benefits.Basically the cost of paying benefits is far outweighed by the savings.[/b]
For those that end up unemployed, it's not great for sure and I sympathise. However, we need (to hope) the private sector can grow and flourish then they can get jobs again (helping to create wealth to the economy rather than draining it).
On that note, this is where the govt. have to be careful not to rush too much so that the balance is wrong. Time will tell. Ultimately though, if the money isn't there to pay them, it's not there to pay them! i.e. there is no choice.
Sure, salaries are a huge cost to the public sector, but if benefits come to Mr Camerons maximum of a bout £26k then that's much more than the £10k you quote above, so benefits will be a huge cost too. You also forgot to add in the costs of redundancy in terms of payments, compromise agreements, lawyers, re-training etc.
This is not simple or clear cut by any means. Ultimately it will probably be presented as look how much we have saved in [name your department] aren't we clever! But no connect will be made with reducing tax revenues, increasing benefit costs, etc
Digga said:
ZondaMark said:
Digga said:
otolith said:
ZondaMark said:
What do the Chinese then do with our pounds?
Buy Africa?Talk to anyone who imports from China (or any other emerging econopmy for that matter) and they'll likely be paying for the goods in greenbacks. The pounds buy the dollars and the Chinese keep piling 'em up and look for a 'way out' of the classic dollar trap (Google "dollar, france, trap" for explanation) and find they can make friends with mineral rich African states, supplying subsidised Chinese tat in return for stuff that they need...
ETA (What exactly they want with Greece is less clear.)
Edited by Digga on Thursday 14th October 16:02
ZondaMark said:
Digga said:
ZondaMark said:
Digga said:
otolith said:
ZondaMark said:
What do the Chinese then do with our pounds?
Buy Africa?Talk to anyone who imports from China (or any other emerging econopmy for that matter) and they'll likely be paying for the goods in greenbacks. The pounds buy the dollars and the Chinese keep piling 'em up and look for a 'way out' of the classic dollar trap (Google "dollar, france, trap" for explanation) and find they can make friends with mineral rich African states, supplying subsidised Chinese tat in return for stuff that they need...
ETA (What exactly they want with Greece is less clear.)
Edited by Digga on Thursday 14th October 16:02
Corsair7 said:
At last someone has relaised that if you take many billions out of the economy by reducing the Public sector, that money which eventually all gets into the private sector in terms of spending from wages, purchasing, contracts, supplies etc etc will cause just as many job losses in the private sector.
http://www.bbc.co.uk/news/business-11530811
Those that have been saying all along that the private sector will absorb these job losses need to wake up and smell the roses, because they are not going to. Money goes round in cricles in our economy, break that circle and everyone gets affected.
I think you'll find that the Public Sector, like in so many other ways, lags behind the Private Sector. We've lost billions in turnover growth so employment levels are down, tax revenues are down and as a result the Public Sector has to take a hit. Yes this might have an effect on the Private Sector but we are much better placed to tighten our belts yet again and deliver the same level of service for less. Not whinge and whine about how cuts in funding must have a direct impact on services if though the Public Sector was run so efficiently that there was no fat that could be removed to improve services and cut costs.http://www.bbc.co.uk/news/business-11530811
Those that have been saying all along that the private sector will absorb these job losses need to wake up and smell the roses, because they are not going to. Money goes round in cricles in our economy, break that circle and everyone gets affected.
Digga said:
The sterling ends up here, but... import goods = exported value.
The first bit is correct, but the second is at odds with it (contradiction in terms).ETA: if you mean there are foregone domestic opportunities, then yes you are correct, but this doesn't mean imports are somehow a drain on the nation's overall prosperity, as the post to which I initially replied seemed to assert.
ETA2: apologies for the thread hijack.
Edited by ZondaMark on Thursday 14th October 16:53
Edited by ZondaMark on Thursday 14th October 16:55
Think the whole spending review is being made up as they go along.........
Not sure if its been mentioned above but the true cost of the actual benefit bill is not as great as the gov't (of whatever hue) say.......... for every pound given to a person/family or rebate granted off rent or council tax benefit a good proportion of that gets back to the treasury through VAT/Income Tax/Corporation Tax. Either from shops selling the claimants goods.......landlords paying corp tax on profits as well as income tax on personal income.....only way they (gov't) loose out is if people save the benefit which is unlikely if they are due it..............
The audit Commision as a quango has been disbanded........central/local govt audit work will be done by the private sector..........now the big firms have the market watch those rates go up...............
Could go on but I'll get my coat........
Not sure if its been mentioned above but the true cost of the actual benefit bill is not as great as the gov't (of whatever hue) say.......... for every pound given to a person/family or rebate granted off rent or council tax benefit a good proportion of that gets back to the treasury through VAT/Income Tax/Corporation Tax. Either from shops selling the claimants goods.......landlords paying corp tax on profits as well as income tax on personal income.....only way they (gov't) loose out is if people save the benefit which is unlikely if they are due it..............
The audit Commision as a quango has been disbanded........central/local govt audit work will be done by the private sector..........now the big firms have the market watch those rates go up...............
Could go on but I'll get my coat........
Prolex-UK said:
Not sure if its been mentioned above but the true cost of the actual benefit bill is not as great as the gov't (of whatever hue) say.......... for every pound given to a person/family or rebate granted off rent or council tax benefit a good proportion of that gets back to the treasury through VAT/Income Tax/Corporation Tax. Either from shops selling the claimants goods.......landlords paying corp tax on profits as well as income tax on personal income.....only way they (gov't) loose out is if people save the benefit which is unlikely if they are due it..............
So, if we all go on benefits, we all get to live for free because the money is circular? Nope.............put your reading spectacles on...........Govt always spout on that the benefit bill is ****million and MUST be cut.....fact is they a big proportion of it back when the claimants spend the dosh...........same with people who administer it..........and companies who supply IT......and companies who sell employees who administer it lunch.......train companies who seats will be empty when those people don't travel in.............tax-duty on petrol same employees spend to get to work......
Prolex-UK said:
Nope.............put your reading spectacles on...........Govt always spout on that the benefit bill is ****million and MUST be cut.....fact is they a big proportion of it back when the claimants spend the dosh...........same with people who administer it..........and companies who supply IT......and companies who sell employees who administer it lunch.......train companies who seats will be empty when those people don't travel in.............tax-duty on petrol same employees spend to get to work......
I remember this worked well in Cuba and the Soviet Union.Why don't we cut out the business bit, and just have lots of Govt departments. It'll be brilliant.
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