O/T. The Government's handling of Covid

[Geoff Parkstone]

"I’m not sure why you keep suggesting I blame Truss for everything, GP"

Maybe because you do, she's the new bogeyman Johnson substitute

[ramAnag]

"I’m not sure why you keep suggesting I blame Truss for everything, GP"

Maybe because you do, she's the new bogeyman Johnson substitute

Do I? Well I suppose she is in a way...not as dishonest perhaps, but seems a tad dimmer.
Not got off to the best of starts has she? Certainly not according to one Geoffrey Parkstone who referred to her Chancellor’s budget, you know...the one she applauded, as ‘ludicrous’, ‘ridiculous’ and including tax cuts that are ‘madness’. Far more outspoken than anything I’ve written.

[Geoff Parkstone]

True, more outspoken for good reason as it transpired. But there is a difference between making a valid point that even your hero Martin (why should I give my OBE back now I've been upgraded to CBE) Lewis agreed with and constant bitching and sniping

[ramAnag]

True, more outspoken for good reason as it transpired. But there is a difference between making a valid point that even your hero Martin (why should I give my OBE back now I've been upgraded to CBE) Lewis agreed with and constant bitching and sniping

You seem to have lost the plot, GP. My hero, Martin Lewis? Where on earth have you got that from?
Like you he knows about money...when he, or you, talk about financial matters (and nothing else at all) I listen...I accept that both you and ML know more about financial matters than me.
Beyond that I’ve seldom mentioned Truss...yes, I castigated Johnson because he was, imo, a liar, totally lacking in integrity and someone who wasn’t fit to be PM, a view, in the light of what happened, shared by many Tories.
As it happens I agree with your appraisal of the ‘mini budget’...and I do have enormous doubts about Truss, but it was you who hammered them from the off, even comically suggesting that I’d probably agree with it.
No one has ‘sniped’ more than you...you need to keep up with what you write and remember who started the highly critical tax cutting thread in the first place.

[MadAmster]

Cutting taxes is a great idea, if you do it for the 70% worse off of the populace. They will spend the extra thereby generating demand for goods and services. That will create jobs, increase profits, increase shareholder dividends and increase tax revenue. Bubble up works, trickle down doesn't.

There is a slight hole in the above, namely, there is a % of the population who don't earn enough to pay tax or NIC. There has to be a way to channel more into their pockets. That's a job for the money men like GP to come up with. Maybe channel some of the obscene (and very accidental) profits from the oil and energy giants their way?

[Geoff Parkstone]

You're right MA there is no advantage in giving tax breaks to create growth if you give the breaks to people who just stuff the extra money into savings, or indeed foreign holidays (which is why I reacted as I did on the tax thread) The only way for it to work so as to stimulate the domestic economy is to encourage domestic spending - spending money on imports does a little since the importers and distributors get a cut of the action. The weakness of the logic is that UK Limited doesnt make much i the way of capital goods any longer - those industries having been outsourced to the far eat in general, and now lost.

How do you stimulate spending by those who don't earn enough to pay tax/NI, and so don't get any savings from the cuts? That's a 64 million dollar question. The likes of rA, thee and me don't pay NI now, so there's no upside there but at least 2 out of the 3 of us are still taxpayers and will get a mini boost.

But those who pay no tax or NI - you cant stimulate their spending because they arent spending enough already without not getting any more to spend. I dont know: the two ends of the political spectrum may have suggestions ranging from (a) kill the poor to (b) quadruple benefits to bring them into the tax club. Neither make real sense, but at least we've defined the goalposts.

I guess you just have to do your planning whilst ignoring that %age of the people who would not be stimulated by tax/NI cuts - ie those earning under £ 8 an hour on an annualised basis if working full time

[ramAnag]

Cutting taxes is a great idea, if you do it for the 70% worse off of the populace. They will spend the extra thereby generating demand for goods and services. That will create jobs, increase profits, increase shareholder dividends and increase tax revenue. Bubble up works, trickle down doesn't.

There is a slight hole in the above, namely, there is a % of the population who don't earn enough to pay tax or NIC. There has to be a way to channel more into their pockets. That's a job for the money men like GP to come up with. Maybe channel some of the obscene (and very accidental) profits from the oil and energy giants their way?

Agreeing with that. The other ‘slight holes’, MA seem to me to be...if your tax cutting strategy effectively puts the fear of God into the markets and makes mortgages start to resemble what they were like in the 1980’s then ultimately people are going to be a great deal worse off...plus...we need investment in the infrastructure of the country...the NHS, Education, Care, Transport (not HS2!)...and cutting taxes will not allow that, especially at a time when so much revenue is being spent on, defence, vaccinations and ensuring that people can stay warm this winter.

[Geoff Parkstone]

Making mortgage rates go up does not make people poorer as such (their income is still the same) what it does do is to change their spending patterns - and most mortgage lenders are domestic so it still ticks the boxes of stimulating spending in the UK. Indeed it might potentially put more money into the economy via a negative savings multiplier - by reversing savings flows as people draw down on savings to meet rising costs.

I agree we need targetted investment in infrastructure but at the moment we cannot borrow to fund it - and even if we could it would be prohibitively expensive with our ratings downgrades. The magic money tree again Im afraid. When we are almost a third world country we cannot afford first world luxuries

[ramAnag]

Okay...your area of expertise...not mine. But aren’t we far from being ‘almost a third world country’ and still actually one of the wealthiest 5-10 nations in the world?

Also...I understand what you’re saying about income remaining the same but, remembering back to my days of having a mortgage, I sure as hell felt - and actually was - a lot poorer, in terms of disposable income, each and every time the mortgage rate increased, as it regularly did, between about 1981 and the mid nineties.

In the real world...putting someone’s mortgage payments up by £150-£500 per month makes them poorer...as does putting up other aspects of the cost of living eg fuel and food. I’m not sure how you can argue against that.

[Geoff Parkstone]

Inflation of any form makes people feel poorer but still have the same, or maybe more, disposable income if they have a tax cut. Thus they will spend more. They will change what they spend it on - the second car may go, the private education go, or they just wont eat but from a macro economic perspective, the consistent spending (coupled with withdrawals from savings) should stimulate the economy as the circulation of money does that (and also creates more inflation)

I hear what you say about "feeling poorer" but people dont cut spending in these circumstances, they actually increase it if they can, or they redirect it