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October 07, 2015

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e

Indeed, only who hasn’t noticed; only those who don’t vote? Granted the vast majority when hearing The Nation will assume that’s all of ‘us’ “in it together” government and the people; who would suspect otherwise? Certainly not our wise and well read journalist, too busy, toiling away, just as Starbucks workers do.

BCFG

..and yet we can afford a missile system we will never use of we can afford to send planes to drop bombs anywhere on the planet at a moments notice!

We have a priority problem rather than a lack of money problem.


He is also looking at the budget as something fixed in stone, so for example the whole history of the rich reducing their tax burden does not come into the argument.

Phil

The IFS graph showing the effect of the budget - including the higher minimum wage - on different household income deciles genuinely shocked me: deciles 1-4 and 10 lose, but 5-9 all gain. When Osborne says "We couldn't afford tax credits" he's talking to (and on behalf of) people who are better off for the budget. And look, the government stopped throwing all that money that they couldn't afford at poor people, and now they've got a bit more money! Just like when you decide you can't afford that standing order to Save the Children any more.

Bob

The cost of anything is the real resources it uses. The private sector then cannot use those resources.
Spending also influences distribution of resources, as the money is "respent."
"For a large part of the country, tax credits improve their finances."
In fact it is the opposite. The more "irresponsible" the government is running deficits, the net financial assets of the private sector increase by that much.
The government's deficit is the private sector's surplus. In the UK foreigners save a lot and much of the deficits flow goes to them.

Bob

http://www.3spoken.co.uk/2015/10/uk-sectoral-balances-q2-2015.html?m=0

An Alien Visitor

Just for Bob's benefit,

We should be acutely aware that those countries with more progressive tax policies are the best at reducing poverty and ensuring higher per capita standards of living.

If tax credits are not the answer some form of re-distributive tax system most certainly is, short of a full revolution!

We should also be aware that saving levels can be reactive to economic reality, so Ireland top the savings list because the economic crisis resulted in people saving more of their disposable income. Incidentally third on the list is the shattered economy of Spain!

An Alien Visitor

"The cost of anything is the real resources it uses. The private sector then cannot use those resources."

And of course the more of the useless shit that the private sector get to waste resources on the less we have for really useful things like decent health care, quality education and world class public services!

Bob

I meant opposite to what the Tories were saying! That we have to cut them and its for the good of workers.
My own personal view favours a Job Guarantee rather than basic income or tax credits.

Chris Pepin

It is great to see you quoting a (fellow) Canadian (CB Macpherson). Critics of spending public money on the poor ignore that free lunch arguments also apply to their position. There may be a deadweight loss to welfare; but there is also one without welfare (the US prison system anyone?)

aragon

The Tories are Intellectually, Economically and Morally bankrupt.

How does he propose to rid the country of the poor?

We can't afford the poor, but we can afford the rich, what kind of looking glass world is this?

George Osbournes economic policies will cause an economic crisis without external help. The country is not a household, and
what kind of household seeks to demonize it's members.

His analysis is superficial, his solutions, cosmetic, and his comprehension is missing.

Financial competence is treating the rich rent seekers as productive, and the poor as an externality. The poor are not an externality and the precariat is growing.

Reality will catch up with the rhetoric. But we expect more than economic Tory sycophants from the Labour Party.

aragon

For the record, reducing progressive taxation, income tax, while increasing regressive taxation, VAT, is regressive.

Giving people more of their money back while cutting services based on need, is also regressive.

Despite all the rhetoric from all political parties about the economic benefits of migration, it is now the top of public concerns.

Is it any surprise politicians are held in contempt?

Luis Enrique

i think (?) it's generally true that "can't afford" always has in the background decisions to spend what money you have on other priorities, so for instance if you want to buy a Trident you cannot afford a social safety net.

to the extent that it ever makes sense to say 'the country' cannot afford X, as a collective endeavour via government (and I don't think 'the country' is such a bad short hand for that) then we are always talking about those upon whom tax incidence falls, and in case of transfers that means 'country cannot afford' translates to 'net tax payers' cannot afford (read: don't wish to afford).

Bob

It's never about money. It's always about stuff.
All government spending pays for itself - if there is no saving in the spending chain all the spending comes back as tax.
If not the government issues Gilts or just leaves reserves where they are ("printing money.")
Trident and the City take up some of our cleverest people who should be curing cancer or making energy more efficient.

nick ford

Chris is wrong when he says ' any fool can see this is wrong'.
In fact the difference between transfers and 'expenditure', which uses real resources, is difficult for even clever people to grasp, particularly as the second order effects of transfers that Chris identifies blur the distinction between the two. Similarly, the difference between the government's finances and the nation's finances is not easy to understand. I suggest Chris uses a couple of blogs to spell these out more clearly.

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