Austerity revisited

[Micilin]

Some cuts-

Someone I know had spent over 6 months in the process of joining the police, and was about to hand in notice at work, being given a start date.

Then got a phone call saying sorry, funding has been cut please don't hand in any notice and ignore any info to the contrary . Pack with warrant number etc came in the post , as did a letter apologising and asking for the pack to be sent back.

Also the previous intake are not being taken on after basic training.


Schools I do some work in also have had budgets cut and have had to let staff go as well as cancel firms they had in for PPA cover and lunchtime clubs.

These cuts are real, but the govt has kept spending on the wrong things-
The govt can cut a lot of funding while still increasing spending.


The QE that has gone to pension funds and banks has not helped with growth as it could have done if spent elsewhere. The lack of growth as a result means more spent on benefits, so the govts proudest boast seems to be , 'yes we are borrowing loads but we are not paying as much for it as the other lot would have to'.

Talking austerity to convince the markets on one hand just shattered busnines confidence on the other

I know posters have said govt can't create jobs but of course they can affect the econlmy, even if it's only to stop a negative inflence on it.

For example, taxation .

You have three choices if in Govt.

100% tax rate for everyone or 0% tax rate for everyone. Neither will work.

The third choice is find the optimum for growth .So how can we say that govt cannot help create jobs?

Even if you merely identify al the things that govt does that hinder growth, then say that by stopping these you have a better ecnomic climate, then we have to agree that one way is better than another ?

 

[Bodgeitandleggit]

Cuts,cuts..........there has been hardly any cuts yet just a freeze on spending and the cuts are to follow

as Bachman Turner Overdrive said.......you aint seen nothing yet

Prepare for the worst and hope for the best

 

[AronSearle]

CUTS CUTS CUTS, but what are these cuts?

2008 Total Spending = £582 billion

Public Pensions £99 billion
National Health Care + £102 billion
State Education + £79 billion
Defence + £38 billion
Social Security + £90 billion
State Protection + £31 billion
Transport + £20 billion
General Government + £17 billion
Other Public Services + £49 billion
Public Sector Interest + £31 billion



2012 Total Spending= £695 billion


Public Pensions £127 billion
National Health Care + £121 billion
State Education + £92 billion
Defence + £46 billion
Social Security + £116 billion
State Protection + £32 billion
Transport + £20 billion
General Government + £17 billion
Other Public Services + £46 billion
Public Sector Interest + £47 billion

Councils hoarding more cash despite spending cuts
Councils are hoarding billions of pounds of taxpayers money, equivalent to £430 for every British family, despite making cuts to public services.

http://www.telegraph.co.uk/news/pol...hoarding-more-cash-despite-spending-cuts.html

Some suspect councils are playing brinkmanship with central government, cutting services whilst hoarding money, in an effort to get more government funding.







If they cut police spending, it will still be higher than before the recession

You have three choices if in Govt.

100% tax rate for everyone or 0% tax rate for everyone. Neither will work.

http://timworstall.com/2012/09/17/yes-of-course-wed-all-like-a-pony/

But is a pony for all actually possible?

For it’s entirely possible for taxes to be at such rates that increasing said rate produces less tax revenue than before. That old Laffer Curve thing.

Looking around at the major taxes I’m not entirely convinced that there is much room to raise them. 45% (including NI etc rather higher than that) seems to be around and about that Laffer peak. Certainly, there are enough people who seem to think it is. The Saetz paper for example, tells us that 54% including employer paid taxes on employment is the peak in a system with allowances. Allowances including things like the basic EU right to bugger off. Ad we are around and about at that 54% with employers’ NI.

Certainly I think taxes at the benefits/wages interface are above the Laffer Curve. The millions of people facing higher than 60% marginal tax and benefit withdrawal rates, the hundreds of thousands on 80% and more.

We’re told that 28% CGT is that peak collection rate.

VAT at 20%….not sure I see all that much upside possible in that rate. Fag taxes with the smuggling in from Europe don’t seem to have much upside. There’s good economic support (and a lot who shout about the idea to be sure) that any corporation tax rate above 0% is over the long term peak.

I’m not drawing a line in the sand you understand, insisting that no more revenue can be squeezed from the populace. Rather, pointing out that higher tax rates do not necessarily mean higher revenue. And that it wouldn’t surprise me at all if the UK economy was around and about at the peak of what can be squeezed out given the current underlying structure.

Change the structure and you probably could gain more of GDP in taxation. But doing so would probably mean going the Nordic route: having a much more classically liberal economy underneath than we do.

 

[Micilin]

I've given two first hand examples of cuts. Perhaps the funding has been redirected to private companies at higher cost such as G4S in the police example or Free schools and academies in the education example?

Whatever, local cuts are a reality despite overall spending rising as per your figures above.

I think we are agreed that there is an optimum tax policy?

 

[AronSearle]

I've given two first hand examples of cuts.

Individual budgets are cut even in good times, anecdotal accounts are worthless as evidence.

Perhaps the funding has been redirected to private companies at higher cost such as G4S in the police example or Free schools and academies in the education example?

Whatever, local cuts are a reality despite overall spending rising as per your figures above.

Perhaps, why make assumptions and guesses, why not do some reading rather than "my mate said"?

And even if true, that is not austerity, if the money is still going into the economy.

Austerity is when the government cut's spending (which it hasn't), not that it is spending more money poorly, or spending here rather than there.


If spending money poorly was Austerity, then the UK has been in Austerity for hundreds of years over successive incompetent governments.

 

[Micilin]

The local cuts are anecdotal to readers here, obviously, but real actual examples to me so I'm not sure how they relate to my reading habits!

Are we so far removed from a discussion that 'perhaps' can't be used in a debate? Or questions asked to look for points of view?


Is it not better for growth to have the same amount of money distributed tthrough more jobs than tied up in pension funds or paid to a larger entity for fewer jobs?

If a govt cuts funding for the services the bottom earners use, but uses money to benefit the
Top bracket, then a term such as 'austerity' may be in the pocket of the beholder.

 

[AronSearle]

The local cuts are anecdotal to readers here, obviously, but real actual examples to me so I'm not sure how they relate to my reading habits!

The problem is that cut's to budgets happen all the time.

For instance a local council might decide to close a school, and amalgamate the students in a larger/other school down the road.

At the moment any "cut" is being branded about by the media, whilst completely ignoring that the money saved from the "cut" is just being spent elsewhere.

Is it not better for growth to have the same amount of money distributed through more jobs than tied up in pension funds or paid to a larger entity for fewer jobs?

I would rather we just moved away from this business that the government should be run like it's their to drive the economy.

Rather government provides services, by taxing the productive economy.

Treating it the other way round, is where we have got to this position of high taxes and low services, and fights for any cut's or streamlining to these services as it will affect the economy (which technically it will, but you end up chasing your own tail trying to provide services whilst paying for all the government fat).

arse about face.