Thursday, 22 March 2012

Second Thoughts on the Budget and Showing a Bit of Egalitarian Ankle

"The failure of a disastrous model of economic growth" is the Chancellor's succinct account in his budget speech of what happened to the UK under Labour.  It was matched in Ed Miliband's equally revelatory response that the United States economy was growing under that model, growing under stimulation and 'investment' policies that should have been persisted in by the UK,  even as it was brought down by unsustainable state debt.

The United States is the World power.  It cannot go bankrupt.  It is an enormous economy beside which it is pointless to place the economy of the United Kingdom.  As the government copes with the devastating results of  hubris,  Atlanticist intellectual fawning, and failed policies aimed at the disruption of European integration rather than at the withdrawal of the UK from the Union, Labour displays poverty of understanding, poverty of personnel, poverty of proposals for the sensible pursuit of debt-reduction and economic growth.

All they offer is those worn-out faces with their worn-out policies.  "Be like America.  The economists we cite have won Nobel prizes."  While all around them the people of the UK are hanging on like grim death to their housing and their jobs  and their shrinking public services because of vile experiments practised on their economy by those incompetent, bamboozled, economic idiots with a nasty line in state and Party control.

And as for the poor pensioners: pensioners are not a homogenous group.  Of course  the final salary, comfy house bought for small multiples of annual income on endowment mortgages that actually returned a profit,  university free-at-the-point-of-use, free travel pass toting generation should cough up.  They  are the 'rich' and many are 'rich' on state employee unfunded pension payments.  We are all in this together, particularly those who retired at 60 or even earlier and have quarter of a century of largesse yet to finish consuming.  If a pensioner hasn't a large enough income they won't be paying more tax.  There is a certain schadenfreude in reading of their shock at discovering that this time the gate came down in front of them, and not behind their cohort.   

What pension 'raid'?  Income is income and tax is tax.  Everyone should be handing over for agreed outgoings - the wider the tax base the more government expenditure can be controlled by interested tax-payers.  Something on the lines of that old, progressive chestnut 'everyone should use state educational and health services so that they benefit from the sharp elbows of the middle classes'.

Pity there wasn't a wealth tax introduced; inter-generational inequalities are far too embedded.


lilith said...

My Dad (77) asked last year "I don't understand why they are being so generous to pensioners". This from someone who lost his to Equitable Life.

Weekend Yachtsman said...

I agree on tax in general: we should all pay a fair share. That is why I support a flat tax system; if I were dictator, there'd be a personal tax-free allowance of roughly the current full-time minimum wage (there would not, of course, be a minimum wage) and every penny above that would be taxed at some low but unavoidable rate. No deductions, no allowances, no quibbling, nothing at all. 15% of everything (or some such figure), period, end of.

Thus: transparency, simplicity, fewer accountants, fewer tax lawyers, the same revenues (or more likely, higher revenues).

But I don't agree on wealth tax; it would simply be a capital confiscation programme, and the capital thus confiscated would be wasted on government consumption, the payroll vote, vanity projects, stupid wars, and so on.

Capital is for investment, not for the state to throw away: it's the way we get richer. It's the seed corn. It needs, as far as possible, to be kept out of the maw of the State.

Bill Quango MP said...

Although I privately agree with what you write, there are no votes in being beastly to pensioners. And seniors vote in record numbers. And in my constituency, they form a sizeable percentage.

So on the record, Boo!...BOO! HG!

This government needs to funnel more funding into stairlifts, teapots, gardening mats, gloves, fleece cardigans, wheeled shopping bags and bird feeders!

grumpy old git said...

Oh yes I remember it well.
Got married in 76 and bought a house hooray. I worked some 60-65 hours a week and my wife had one full time job and a part time one evening and Saturday. We couldn't afford a car and holidays were 2 long (3night) weekends in England. Oh how lucky we were, the mortgage rate was only about 12% and accounted for over half our income. 8 years later we were a bit better off and had kids. Our first foreign holiday was still 5 years away. Yes our kid's only had small Uni fees, Yes I now own my home Yes I have gone without to save for my future, and now someone has changed all the rules and shown what a fool I have been.
I should have lived on the state, not saved a bean and relied on you young taxpayers to look after me, like I looked after my Granny and Mum and Dad.

Chief of men said...

Got to disagree.america was a world power and it will go bankrupt.enough said.

hatfield girl said...

L, my Godmother used to remark on the same lines - "they give me all this money, dear. It seems an awful lot. Where is it coming from?"

I'm not sure on flat taxes Yacht but it was explained to me by a European former finance minister that anything over 30% led to tax revenue falls and was unjustifiable anyway. He felt that a three-level tax 20%, 28%, 30% ish was effective. After that all sort of bad side effects set in. Only I can't recall the full arguments - pity.

The wealth taxwould break up accumulations of wealth by entities that don't die. The Crown, for instance. Big advantage, not dying.

Espousing vote-seeking popularism Mr Q. I am shocked, shocked. Where is your vision, your implementation of political, nay, moral principle? It is part of your duty to lead us not just pander to our self interest, raise our consciousness to seeking the greater good not buy our votes with subsidised life-enhancing courses in '60 is the new 30' held in Bloomsbury basements. Or 'introductory bridge and French for your first cruising experience.' (They're well past the step-in bath, free well-person annual check-up with full body MRI scan, specially adapted cars - they're after specially adapted roads - stage. As you know. We can't afford them and it's up to you to redirect their energies to cheaper ends like caring for grandchildren and cooking ginger cake..

hatfield girl said...

Grumps, you were able to buy a house, raise a family (educated to university level) go on the kinds of holiday you regarded as decent eventually, ie live life to the full albeit without some of the frills but we are all poor with families to raise, mortgages to meet through thick and thin and we all have rellies to stay with and put up with in their turn, nothing the matter with long weekends in England - those are what most people got, a change being as good as a rest, until the outbreak of mass package tourism.

People born 20 years ago have far lower chances of doing what you did in your twenties - it must be really depressing looking forward to establishing independent family life without employment opportunities in abundance (as there were in the seventies unless you were a coal miner). People who have retired must stop expecting so much.

'There's no money left' Remember? And not a lot of hope for many young people either, despite them being, on the whole, a hopeful lot.

hatfield girl said...

Chief, It's all very well writing' enough said' but America really can't go bankrupt. That's part of what makes the UK's economic policies throughout the brownian debacle years so particularly silly.

Chief of men said...

forgive the delay

proect armageddon usa

the uk report is also interesting.