He likes riding in a ministerial limo more than having a conscience, it would seem.

Red John wrote:We indeed do have an economy dependent on consumer spending. So what's the point of this policy they've been signalling this week where they're offering to guarantee loans to small enterprises? This is supply side economics, yet the problems seems to be demand side. Unless I'm missing something, this is yet more economic illiteracy. It's pretty difficult to properly stimulate demand when personal debt levels are as high as this: http://www.creditaction.org.uk/helpful- ... stics.html ...and when our major markets are now in recession, not helped by the fact that every government back to Heath locked us so firmly into the protectionist European cartel. We've just spent the last decade on a credit binge and we're spent up. We need some serious structural reforms to unlock that demand and split it out, and the main one is to entirely reform the tax system. 1. Remove non-domiciled status. 2. Stop pretending that NI and income tax are somehow different and go to a different pot. Merge NI into income tax and create three new bands: 15% (up to 20k), 25% (up to 38k), 40% (up to 150k), 50% (150k onwards). Put anyone aged over 65 onto a separate tax code to reflect the fact that we don't charge them NI currently. Raise the personal threshold to 10k, abolish tax credits. Abolish all other loopholes, as per non-doms. Hundreds of thousands will suddenly have a significant amount of money available to them. 3. Increase the number of bands for council tax from A-E to A-J, reducing most people's contributions. 4. Make second-home owners pay full council tax. Those would probably annoy the rich AND the unions, so must be a good thing! On top of that: 1. Renationalise the railways by allowing the franchises to lapse- no more subsidising the operators' profits. 2. Repeal the ludicrous decision by Brown to allow property to count as part of a personal pension pot, which has driven up the buy-to-let market which caused the whole crash to start with. 3. Ban any mortgages over 100%. 4. Hurry up the ban self-certified markets. 5. Restrict the pay of local authority chiefs to £150k. 6. Merge NHS IT systems by county. 7. Merge the DTI into the Treasury. 8. Move the Ministry of Agriculture out of London. But none of this will ever happen, because it'd annoy too many powerful people in business and the unions.

Red John wrote:We indeed do have an economy dependent on consumer spending. So what's the point of this policy they've been signalling this week where they're offering to guarantee loans to small enterprises? This is supply side economics, yet the problems seems to be demand side. Unless I'm missing something, this is yet more economic illiteracy. It's pretty difficult to properly stimulate demand when personal debt levels are as high as this: http://www.creditaction.org.uk/helpful- ... stics.html ...and when our major markets are now in recession, not helped by the fact that every government back to Heath locked us so firmly into the protectionist European cartel. We've just spent the last decade on a credit binge and we're spent up. We need some serious structural reforms to unlock that demand and split it out, and the main one is to entirely reform the tax system. 1. Remove non-domiciled status. 2. Stop pretending that NI and income tax are somehow different and go to a different pot. Merge NI into income tax and create three new bands: 15% (up to 20k), 25% (up to 38k), 40% (up to 150k), 50% (150k onwards). Put anyone aged over 65 onto a separate tax code to reflect the fact that we don't charge them NI currently. Raise the personal threshold to 10k, abolish tax credits. Abolish all other loopholes, as per non-doms. Hundreds of thousands will suddenly have a significant amount of money available to them. 3. Increase the number of bands for council tax from A-E to A-J, reducing most people's contributions. 4. Make second-home owners pay full council tax. Those would probably annoy the rich AND the unions, so must be a good thing! On top of that: 1. Renationalise the railways by allowing the franchises to lapse- no more subsidising the operators' profits. 2. Repeal the ludicrous decision by Brown to allow property to count as part of a personal pension pot, which has driven up the buy-to-let market which caused the whole crash to start with. 3. Ban any mortgages over 100%. 4. Hurry up the ban self-certified markets. 5. Restrict the pay of local authority chiefs to £150k. 6. Merge NHS IT systems by county. 7. Merge the DTI into the Treasury. 8. Move the Ministry of Agriculture out of London. But none of this will ever happen, because it'd annoy too many powerful people in business and the unions.

Okay. You make some interesting and some good (IMO) points. But let's tackle this comment.

Why do you think the unions per se are opposed to what you suggest? And second, hy would annoying the unions be a good thing?

So George in a roundabout way is moving from plan A to plan A and a half, yet still won't go after the people in the financial sector who are the main cause of this debt. Instead further attacks the lower and middle classes, public sector and those who depend on the public sector. Grow some George and get our money back from those who sent this country to the dogs.

No why should he do that when all he has to do is freeze or reduce tax credits?

Glad there's some points that appeal!

On the first point- the replacement of tax credits with a higher threshold, and the amalgamation of NI into income tax, would necessarily remove some of their members' jobs.

On the second point- more jokey to be honest. In my own personal experience, I've found unions to be as much of a problem as the business- not because of the idea of unionised workers, but because (as in management) an awful lot of intransigent, bolshie tossers seem to rise to the positions of power. Although I would admit that I have a grievance with one particular union that will be on strike tomorrow over its disgusting treatment of one of my close relatives when she needed them most.

Matt01 wrote:So George in a roundabout way is moving from plan A to plan A and a half, yet still won't go after the people in the financial sector who are the main cause of this debt. Instead further attacks the lower and middle classes, public sector and those who depend on the public sector. Grow some George and get our money back from those who sent this country to the dogs. Not quite. Have a glance at the below link (note- this is from Tulett Prebon, a City broker- if I can ferret out the official stats I will paste them here): http://www.tullettprebon.com/Documents/ ... rt_007.pdf In 2007, debt as a percentage of GDP is 103%. Which is manageable. It's high before the bailout- remember that Northern Rock goes in autumn of 2007. The lesson was missed then- you have to go through fiscal consolidation during the good times in order to be in a good place for the bad times (as the German SPD did), and we didn't leave ourselves in that position, either personally or as a government. The banks are a factor but not the only one. And not even every bank. We should have run a surplus rather than a deficit through most of the 2000s, but instead we assumed it was here to stay and spent accordingly- and then bailed the banks out. We also had political pressure to keep interest rates down, which made mortgages affordable to a lot of people who really couldn't afford them if the rates were even slightly higher (leading to the subprime crisis). And Osborne has renewed the bank levy- which considering most of them are running at a loss, you couldn't really expand.

Matt01 wrote:So George in a roundabout way is moving from plan A to plan A and a half, yet still won't go after the people in the financial sector who are the main cause of this debt. Instead further attacks the lower and middle classes, public sector and those who depend on the public sector. Grow some George and get our money back from those who sent this country to the dogs. Not quite. Have a glance at the below link (note- this is from Tulett Prebon, a City broker- if I can ferret out the official stats I will paste them here): http://www.tullettprebon.com/Documents/ ... rt_007.pdf In 2007, debt as a percentage of GDP is 103%. Which is manageable. It's high before the bailout- remember that Northern Rock goes in autumn of 2007. The lesson was missed then- you have to go through fiscal consolidation during the good times in order to be in a good place for the bad times (as the German SPD did), and we didn't leave ourselves in that position, either personally or as a government. The banks are a factor but not the only one. And not even every bank. We should have run a surplus rather than a deficit through most of the 2000s, but instead we assumed it was here to stay and spent accordingly- and then bailed the banks out. We also had political pressure to keep interest rates down, which made mortgages affordable to a lot of people who really couldn't afford them if the rates were even slightly higher (leading to the subprime crisis). And Osborne has renewed the bank levy- which considering most of them are running at a loss, you couldn't really expand.

Not sure you disagree with me there. The banking sector are clearly to be a major part of the blame, I think all you are saying is that we should have assumed eventually they would probably fail and the government should have been in a better position to cover their failure.

I do agree, and I don't. I definitely agree that they play a major part in this, but so does government spending. What I think is:
- The mortgage market should have been better regulated to prevent excessive borrowing.
- Investment arms and retail arms should have been kept separate.
- Either spending should not have risen as much as it did, or tax should have been increased to compensate. Brown tried to have it both ways, and Darling tried to stop him.

My job is to test accounting systems for one of the banks- until last year, my old job was to test them for the NHS and factories. You'd be amazed at what the banks did before the crash- you'd be amazed at some of the stuff the NHS were still doing last year. The State and the banks between them have wasted so much money, they'd even struggle at Red Hall.

They are the major one by a country mile.

As a look at the government statistics since 1997 will show you the levels of government borrowing were over that period either lower in some years but never higher than they were in 1997 until the 2008 crash when they just went through the roof.

They went through the roof for two main reasons. A recession brought on by the financial crisis which sent tax revenues tumbling and to find money to bail the banks out. Without the banks screw up neither would have happened.

So pre-banking crisis things were par for the course with, very significantly, a level of spending the current government said it would match and post banking crisis we are up the creek without a paddle. It's blindingly obvious what caused it.

Also the idea any government could have put away enough cash to deal with the a banking crisis and resulting recession which more or less happened overnight is pure fantasy. None of them did because this wasn't a cyclic economic pattern but a wall street crash scenario of huge impact.

The banks should simply be being fleeced to pay for it. We basically own most of them so their profits should be being ploughed into the economy directly instead of cutting working tax credits to stump up £5b for projects.

With VAT rises, pay freezes, job losses and austerity we are basically paying a "deficit tax" when the vast majority of us had nothing to do with getting us into this mess in the first place. Those and the companies who did seem largely immune to the deficit tax.

Also the idea we will save much by limiting top local government salaries to £150K and other fiddling is just scratching the surface. Far better go after major money such as the £15bn (yes 15 billion) in lost tax revenue the government is legally entitled to but is being diddled out of. That is 10 times the amount of benefit fraud and these are also statistics you can find on the governments own web site.