Is Austerity coming to an end?

[wheelie_bin]

You really think the primary pressure to reduce corporation tax is so that profit can be made from lending the government money that would otherwise be raised by that tax? I think a simpler explanation would be that it's so corporations have to pay less of that tax and so can make more profit directly. These corporations that benefit by increased profits won't primarily be the ones that lend the government money.

The largest corporations don't pay the full rate of tax regardless (let's leave aside the wrongs and wrongs of this, it's just facts). Reducing corporation tax can and should help stimulate investment made by the small and medium size businesses, as well as encouraging some corporations to file their income here instead of abroad. It's one of the only sensible decisions Osborne has made IMO. Presuming that he actually made the decision. I'd prefer to see more government spending, but we need a new chancellor for that who isn't wedded to austerity and this at least has a chance of stimulating investment.

If tax is being changed then I'd prefer to see VAT removed entirely and balanced by income tax rise because the impact of VAT is effectively regressive taxation as people on lower incomes spend a greater proportion of their income on goods, but I doubt tories would go for an income tax increase, even if the net effect is lower taxation (and they can't until we exit EU). Similarly but wouldn't happen unless it was targeting a reduction in NHS spend rather than honourable outcomes; swapping individual NI payments that are no longer demarcated for NHS & pensions anyway for income tax increase would reduce regressive taxation impacts and increasing corporation tax instead of employer NI would reward businesses that employ people over those that simply make more money.

 

[brogdale]

Good RF graphic today highlighting the extent to which Osborne's class-war attack on the living standards of UK workers has depressed GDP/capita recovery post the 2008 crash. Far slower than the previous 2 recessions.

 

[Pickman's model]

Good RF graphic today highlighting the extent to which Osborne's class-war attack on the living standards of UK workers has depressed GDP/capita recovery post the 2008 crash. Far slower than the previous 2 recessions.

tbh public sector pay still far lower in real terms than it was in 2008

 

[Xenonxenon]

Good RF graphic today highlighting the extent to which Osborne's class-war attack on the living standards of UK workers has depressed GDP/capita recovery post the 2008 crash. Far slower than the previous 2 recessions.

Also it's indicative of the depth of the financial crisis, of which Brexit is just a particularly stupid little sideshow. `Economic recovery` etc. Let's all pretend the FC is in the past shall we...

 

[brogdale]

Austerity; the next chapter. Mammond using Altmann as an outrider to 'soften' public opinion for the next attack on living standards:-

 

[bi0boy]

The idea that large sums would be saved in anything other than the long term is not true



http://www.nuffieldfoundation.org/sites/default/files/files/PPI Single Tier Series Paper 3_FINAL.pdf

It'll be bus passes first imo

 

[brogdale]

The idea that large sums would be saved in anything other than the long term is not true

View attachment 90159

http://www.nuffieldfoundation.org/sites/default/files/files/PPI Single Tier Series Paper 3_FINAL.pdf

It'll be bus passes first imo

Exactly, but these wedge ends are all about manufacturing consent and opening the Overton window. The fact that the muted change might not 'save' very much is, in essence, immaterial.

 

[bi0boy]

Exactly, but these wedge ends are all about manufacturing consent and opening the Overton window. The fact that the muted change might not 'save' very much is, in essence, immaterial.

The 2.5% escalator was about shoring up the Tory vote. It makes no sense in any other terms.

 

[brogdale]

The 2.5% escalator was about shoring up the Tory vote. It makes no sense in any other terms.

Of course, but Altmann's parting, party shot here is clearly an indication of Mammond aspiration. It will be a tough sell though; as well as the extant political motivation that you correctly identify there's the whole macro-economic context of deliberately depressing an element of aggregate demand that could/would act a positive (pro-cyclical) feedback to recessionary and deflationary pressures.

 

[two sheds]

as well as the extant political motivation that you correctly identify there's the whole macro-economic context of deliberately depressing an element of aggregate demand that could/would act a positive (pro-cyclical) feedback to recessionary and deflationary pressures.

Not only that but old people would have less money to spend which would make the rest of the country poorer.

 

[bi0boy]

Not only that but old people would have less money to spend which would make the rest of the country poorer.

Old people are much better savers than younger people. If the aim is to increase consumption then the difference would be better allocated to e.g. family benefits but the sums involved are piddling in terms of the overall economy.

 

[two sheds]

Yes agreed.

Although pensions costs are larger than social security costs.

 

[two sheds]

as well as the extant political motivation that you correctly identify there's the whole macro-economic context of deliberately depressing an element of aggregate demand that could/would act a positive (pro-cyclical) feedback to recessionary and deflationary pressures.

Old people are much better savers than younger people. If they aim is to increase consumption then the difference would be better allocated to e.g. family benefits but the sums involved are piddling in terms of the overall economy.

 

[brogdale]

Old people are much better savers than younger people. If they aim is to increase consumption then the difference would be better allocated to e.g. family benefits but the sums involved are piddling in terms of the overall economy.

A even better allocation would be for that increase in working age benefits not to be at the expense of the retired.
I also think the Government under-estimates the amount of cross-generational transfer that exists on the basis of the accumulated savings of some elements of the retired.

 

[brogdale]

Not only that but old people would have less money to spend which would make the rest of the country poorer.

Yes, that's what I said

 

[bi0boy]

Not only that but old people would have less money to spend which would make the rest of the country poorer.

We are talking £9 a week by 2038.

The arbitrary 2.5% escalator should be replaced by a review system that can increase the pension above earnings/inflation based on the actual needs of pensioners (which will change in as yet unknown ways with e.g. advances in medicine/robotics etc).

 

[two sheds]

Yes, that's what I said

I know

 

[brogdale]

I know

 

[brogdale]

We are talking £9 a week by 2038.

The arbitrary 2.5% escalator should be replaced by a review system that can increase the pension above earnings/inflation based on the actual needs of pensioners (which will change in as yet unknown ways with e.g. advances in medicine/robotics etc).

Why should an increase in the income of ordinary retired people be conditional on any societal/technological change? Where's your aspiration for the working class?

 

[bi0boy]

Why should an increase in the income of ordinary retired people be conditional on any societal/technological change? Where's your aspiration for the working class?

Why should it be based on a low, fixed percentage and not take account of need?

 

[brogdale]

Why should it be based on a low, fixed percentage and not take account of need?

We've all seen how the consolidator state (governed by whichever party of capital) uses 'review' or means testing to shit on the poor & vulnerable from a very great height.

 

[teqniq]

*bump*

Not that anyone with half a brain cell didn't already know it wasn't working...

Seven years of austerity, but the Tories are still spending as much as the last Labour government, damning report finds

 

[mauvais]

Ironically the response to today's '£20bn black hole' stories seems to be that we now can't afford to increase public spending.

 

[ViolentPanda]

*bump*

Not that anyone with half a brain cell didn't already know it wasn't working...

Seven years of austerity, but the Tories are still spending as much as the last Labour government, damning report finds

I read that, and all it says to me is "if you're going to stick to traditional economic verities, then the only route the government can take is Keynesian".

 

[Sasaferrato]

The idea that large sums would be saved in anything other than the long term is not true

View attachment 90159

http://www.nuffieldfoundation.org/sites/default/files/files/PPI Single Tier Series Paper 3_FINAL.pdf

It'll be bus passes first imo

Political suicide.

 

[Sasaferrato]

I read that, and all it says to me is "if you're going to stick to traditional economic verities, then the only route the government can take is Keynesian".

I have stopped believing anyone with regard to the economy. It is impossible to get honest figures.

 

[toblerone3]

So the answer to the question posed in thread appears to be yes.

For the UK economy, this budget is its Suez moment

"....The good news is that Hammond has effectively called time on the age of austerity. The bad news is that his drip-feed of new money is not nearly enough to compensate for previously announced Whitehall spending cuts, the benefits freeze and the fall in real incomes caused by the cost of living running ahead of inflation."

 

[FridgeMagnet]

On the other hand, no.

 

[bemused]

I think it's just become code for moaning about government spending.

 

[petee]

UK austerity has reached the NYT

In Britain, Austerity Is Changing Everything