Category Archives: economics

Stop Expecting The Government To Solve Problems. It Won’t

Toddler-Tantrums

Tribal politics is a funny thing. It makes people fanatical & like religion blinds logic. Anyone who has come into contact with a rabid UKIP supporter knows exactly what I mean – they simply cannot comprehend that you don’t share their views, even when you present them with facts. Labour supporters tend to be nicer, but I have been called Tory scum because I don’t wholeheartedly support a large welfare state. Even a Tory abused me when I pointed out David Cameron had the convictions of a carrier bag (I believe members of the cabinet privately agree on this).

Well it’s lucky that words on the internet don’t really phase me too much & if I’m comfortable walking in the rain with my daughter’s ladybird umbrella, I’m sure as shit comfortable with some keyboard warrior in Derby telling me I’m thick. I digress though. There is one thing though that unites all of these apparent warring factions: and it’s this. That their team will save the day. Newflash kids: they won’t.

UKIP primarily are the most deluded right now. They believe their “small state” party will protect British workers from global competition. Guys, it won’t. We saw this in the 1980’s with the coal mines. You seem more left wing than a ranty union member when you bleat on about cheap labour from Poland taking all the jobs. As my British builder tells me, you can’t find an English bricklayer in London now. I’ve had the United Nations work on my house but the Polish get a notable mention not because they’re cheap but because they’re good. The Brits have often been sloppy, start at 930 and gone by 4. The “cheap immigrants” have been perfectionists. This is the equivalent of US cars vs Japanese cars played out in the US in the 1980s. People went for a superior product. The solution is to get better not ask for state protectionism.

Now for Labour. Ah, the last preserve of the socialist. Well probably not, the real left seem to have moved to the Green party who actually seem to have some ideals left. Ed Miliband would probably be the worst PM on his leafy street. Every idea he has (breaking up banks, mansion tax, energy company attacks) are riddled with holes. They’ve spent the banker bonus tax so many times they’ve had to come up with new taxes. Throwing money at the NHS does not win my vote (and by the way, it’s not MY NHS anymore than Downing Street is my second home) and now following UKIPs line on immigration is particularly disappointing. The Ed’s on a global scale with a large economy would be a frightening mess for sure.

Which I suppose leaves the Tories (I’m not going to talk about the LibDems as whilst I admire their liberalism, they’re as popular at the ballot box as Jimmy Saville at a kid’s party). Cameron should be talking about the positives of immigration but he isn’t. He’s talking tough on renegotiating the free movement of people. Dave: forget it – either you’re in or you’re out, but if you’re in, this is a key pillar of the EU. On a global scale, he does not have a fraction of the impact that Blair ever had or beliefs that Thatcher did. This cabinet are led by the Daily Mail, not what is right or just. And Right to Buy, what was that about??

So, where does this leave you? Well, putting you cross in the box you think whose shit stinks less or not voting at all. I go for the former but I understand both views, unless you’re Russell Brand. But one unifying factor is that if you’re still thinking any of the above parties will solve unemployment, stop poverty, take down Putin , fix the NHS, get you a bigger house, a better partner or make you more attractive, you’re misguided. My view is that the bigger the government the more they’re likely to fuck things up. That’s not universally shared but voting one donkey because you think it can fix the macro issue the other donkey can’t is going to leave you disappointed. The last governments in power just wanted to keep that power and leave themselves a nice nest egg for themselves afterward. The Tories should be well ahead in the polls but they are they’re so busy in fighting or defecting to UKIP they negate any power for change they may have.

So stop expecting the government to solve your problems. If you want a better job, get more skills; if you want a nicer house, get a pay rise; if you can’t afford a house, move to Eastern Europe! Be the change or whatever, but don’t sit their sulking that all your problems would be solved as long as Nigel “man of the people” Farage gets in power. He won’t. Now get over it and stop voting populous politicians giving you promises they cannot deliver on.

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Expenditure Must Equal Tax Take

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OK, so first off, what is the tax take of a country?

  • My definition is – the exact amount of money that a country receives in tax revenue in any given year
  • NOT what it hopes to receive but what it actually receives
  • Any tax collection authority has an idea of what their tax take will be any given year and they will take account of leakage (tax evasion which is illegal) and an idea of what won’t be paid via avoidance (they set the rules, so they expect people to exploit the holes)

So now we’ve got that straight, the tax take is what you should expect to get and you should plan to get. Whatever your view on tax (hate it or think people should be taxed more) assuming you will get more is silly – it’s like saying people won’t commit crime. Criminals will avoid paying tax and most people (call them immoral if you want, morality is not one size fits all) will ONLY pay the tax they have to.  I have my own personal view of tax and it’s that there should be a flat tax BUT that’s not for discussion now – my only point today is that the tax take must equal the expenditure any government makes.

According to this article the UK will pay £1billion a day in interest supporting our debt. http://www.cityam.com/article/1399490719/closing-deficit-isnt-enough-uk-debt-risk-financial-stability. You can beat me up on the difference between deficit & debt but one thing is clear: you cannot pay off the debt until you are spending less than you taking in in tax receipts. Why is this so important to me and why should it be important to you (as let’s face it, prudent economic ain’t sexy)? Well I pay a lot of a tax and I’m not alone in that. If you’re a single person earning £50,000 you will pay out £15,000 in tax. That’s a lot of money, you have no kids, don’t use much public services & still the government cannot balance the books. I’d be pissed with that. I give you £15,000 every year & you still overspend? And you want MORE?? Exactly.

So, considering most people don’t want to pay more tax and let’s face it, it’s the lowest tax brackets that generate the most tax, the expenditure clearly has to come down. The left wing will say armed forces, trident etc will have to come down & the vulnerable cannot be impacted; the right wing will say the benefit system is too generous, the NHS is a behemoth and the armed forced must be protected.  I see both views but I don’t want to start that debate here, but let’s get one thing straight – we have our tax take, we have our current expenditure & it’s frankly too high. Choose your current UK expenditure you hate and tell your MP you want it gone. But we cannot keep going on like this, we cannot keep servicing a debt that costs so much, having someone earning £12,000 a year paying for a Tory MPs stables to be heated or the Royal Family’s Range Rover.

As Vince Vaughn in Starsky & Hutch said:

“Coke it costs money, planes they cost money. This yacht, this perm, my kid’s braces, it all costs money”

It all costs money kids & when we the taxpayer funds that bill, we MUST force our MP’s to ensure that the current tax take (no more than it is now) equals what is spent.