Bolitics The New Condem Government

[Awol]

I worry that QE is like a one off hit, but if you keep doing it, then it doesn't work. I think this is Awol's point, and I agree. Yes, do it once, maybe twice, but after that any argument for doing it again is (IMO) from what I've read and tried to understand, daft, as it's counter productive.

It appears that the Chinese agree with you..

The Chinese trying to take the high ground over currency devaluation? That's really having a laugh.

It matters not if they turn on the dollar though, does it?

[snowychap]

It matters not if they turn on the dollar though, does it?

Firstly, are they going to do that? Secondly, as per some of Peter's earlier comments, it ought not to actually matter. :winkold:

I read this much more as, "Don't you do anything to the value of your currency - that's our policy. But we can't come straight out and tell you as we're all supposed to be friends now so we'll get a ratings agency (why on earth do we continue to take note of ratings agencies?) to make some comment.

[blandy]

...one area that isn't discussed much, though, is that of tax changes. There's a lot on QE, a lot on the merits or otherwise of changes to benefits, but all the parties, and hence much of the discussion, tend to overlook what could be done in terms of raising Gov't income through taxation of various things, higher incomes, bank levies (though some action has been discussed/taken).

It's a strange one, this thing about taxation creating government spending power. The current theory (or one of them), which sounds quite counterintuitive, is that if you were to pay your taxes in cash, the government would destroy the banknotes you had paid with. Sounds unbelievable. The logic is that the purpose of taxation is not to raise revenue (because government spending happens way before revenue is raised, at least in the modern economy) but to prompt individuals and firms to produce either goods or labour to meet tax demands. And also that since a government (at least a sovereign one in charge of its own currency, like us) can issue credit or "print money" at any time, the idea of "saving" in its own currency is a logical non-starter. That's a bit of a brain-teaser.

More than a brain teaser, it goes against all the arguments made for increasing spending to get us out of the hole - the argument being that increase spending, get more people doing work, get more people earning money, get more money moving round the economy, then more taxes are paid, more VAT., more income tax and this, in time, will bring about a defecit reduction.

[peterms]

More than a brain teaser, it goes against all the arguments made for increasing spending to get us out of the hole - the argument being that increase spending, get more people doing work, get more people earning money, get more money moving round the economy, then more taxes are paid, more VAT., more income tax and this, in time, will bring about a defecit reduction.

No it doesn't, though I can see why you say that. It goes back to the question "where does government spending come from?". If you think it comes from taxes received, then the govt would need to keep the money paid as tax in order to be able to spend it again. If you think it comes instead from just creating credit, or money, then the payment of tax destroys some or all of the credit which was created, reducing the deficit to that extent. So if people pay in cash, you would need to destroy that cash.

That doesn't affect, either way, the central point that generating economic activity through spending will have all the consequent effects we so desire, eg reducing unemployment and welfare payments, increasing demand and spending, increasing tax payments, and generally indicating that wealth is being created rather than destroyed. If you did believe that government has to have money before it can spend it, then I suppose you'd have to think that this money comes from past taxes or from borrowing. In either case, in a recessionary phase, it plainly makes sense to increase rather than reduce government spending, if we wish to cut unemployment and get people off the dole and into work.

[peterms]

It matters not if they turn on the dollar though, does it?

Firstly, are they going to do that? Secondly, as per some of Peter's earlier comments, it ought not to actually matter. :winkold:

I think it would matter, as we're not a closed economy. If we get into a situation where there are currency wars and competitive devaluations, the impact on the global economy could be pretty bad.

[peterms]

Seems like a silly thing to get steamed up about when there is so much they really do need taking to task for.

There are several things I can get steamed up about, but a picture of the Gang of Four quaffing champagne against a backdrop of the Great Wall of China just made me feel mild amusement. It's the other things they do that annoy me.

[mjmooney]

Not quite up to French standards, but there's quite a nice little student riot going on at Millbank atm.

BBC

[drat01]

Sky are appalled - Kay Burley (waste of skin and bone) just keeps trying to sound upset about it all but only succeeds in sounding more and more like she has even less of a clue.

One comment on Twitter

Students say theyll pay 4 crim damage caused by protests - based on those who can afford 2 pay, over 30 yrs, on low int repayment scheme.

[Awol]

Sky are appalled - Kay Burley (waste of skin and bone) just keeps trying to sound upset about it all but only succeeds in sounding more and more like she has even less of a clue.

One comment on Twitter

Students say theyll pay 4 crim damage caused by protests - based on those who can afford 2 pay, over 30 yrs, on low int repayment scheme.

Are you condoning this then?

Either way I think the police are likely to smack the hell out of them pretty soon, they've been throwing concrete missiles off the roof.

[GaztonVilla]

This is both terrible and hilarious at the same time.

Just hope nobody gets hit by the concrete being chucked from the top of the tower.

[snowychap]

Not quite up to French standards, but there's quite a nice little student riot going on at Millbank atm.

That's not a riot.

[drat01]

Are you condoning this then?

Either way I think the police are likely to smack the hell out of them pretty soon, they've been throwing concrete missiles off the roof.

Stop trying to cause problems Jon, its neither big nor clever.

I was merely pointing out the response from that worthless news reporter Kay Burley and was also quoting a comment (which was mildly amusing) from Twitter, so pack up with the silliness

[Clarry]

Benefits Claimants

Public Sector

Tube Workers

Firemen

the ever present Immigrants

Students

The list is building of people for the powers that be to point a figure at.

[kidlewis]

Nothing like a few idiot anarchists to mix things up a bit.

quite clear that the student protests were infiltrated by anti (everything) groups.

just seen the fire extinguisher thrown from the roof.

I'd have that building cleared in minutes after that.

The fact is that Labours policy of getting as many people as possible through university, with many obtaining a buy now pay later degree where there was clearly never enough jobs to cater for graduates to earn a salary worth of tens of thousands of uni debt has failed.

the option was to hike up the taxes on every person in the UK or increase the fees to try and balance the ever increasing gap in university funding.

they talk about this £9k in fees, only the likes of Cambridge and Oxford will charge those kind of fees, and they have plenty of scholarships available to lower income families.

[kidlewis]

from the placards they want fee university places, no cuts and lots of jobs.

**** sake perhaps they need to go to uni because they're thick as pig shit if they think all three of those are possible in today

[GaztonVilla]

Anybody hear the interview on Sky News with the "Full Time Campaigner"?

Bascially, her job (and she's PAID for this...) is to organise direct protest action against, basically, everything.

A salaried anarchist. Brilliant.

[mjmooney]

Just saw an excellent placard:

"Down with this sort of thing".

[GaztonVilla]

Just saw an excellent placard:

"Down with this sort of thing".

Careful now.

[kidlewis]

Anybody hear the interview on Sky News with the "Full Time Campaigner"?

Bascially, her job (and she's PAID for this...) is to organise direct protest action against, basically, everything.

A salaried anarchist. Brilliant.

I bet she is a massive word removed as well

[Awol]

Are you condoning this then?

Either way I think the police are likely to smack the hell out of them pretty soon, they've been throwing concrete missiles off the roof.

Stop trying to cause problems Jon, its neither big nor clever.

I asked you a question which you chose not to reply to. Don't tell me what to post Ian, or do you need to be reminded yet again that you are not a moderator?