Damp squib budget

[scose-no-doubt]

buy more food and less white goods

you should be telling that to Dave!

*ba dum psh*

 

[montmorencyt2w]

Edit: removed comment to Gecko following his followup post.


VAT should be no more than 5-10% at most, in my opinion. Darling should have put it down to 10% in order to boost the "recovery". The 2.5% reduction was not enough. And this budget should have left it there or lower. The rise to 20% will be self-defeating.

I was talking to a local builder today. He says what will happen in his business is that people will rush to get jobs done before January, and then business will die off.

 

[robster970]

I was talking to a local builder today. He says what will happen in his business is that people will rush to get jobs done before January, and then business will die off.

Or more jobs will be done for cash.

 

[arabianights]

Well there should be no VAT at all frankly, and there should be a flat tax of 3%.

But we have to get these pesky debts paid off first. We can't even inflate our way out of them as the majority are index linked.

What would make most sense is if we had pro-smoking and drinking campaigns. Try to kill the public sector workers off so as to not have to pay for their pensions.

 

[montmorencyt2w]

Well there should be no VAT at all frankly, and there should be a flat tax of 3%.

But we have to get these pesky debts paid off first. We can't even inflate our way out of them as the majority are index linked.

What would make most sense is if we had pro-smoking and drinking campaigns. Try to kill the public sector workers off so as to not have to pay for their pensions.

Public sector workers are far too sensible to drink and smoke.
It would probably kill off a few traders and students though

 

[donaldduke]

im a bit annoyed that the cgt increase starts from midnight today and not april next year..

 

[Hilarymannah]

It's a mathematical impossibility to pay off borrowed money at interest ! (Usury),...and that's before we get into the derivative markets,......
In conclusion, I wouldn't fall for all the tripe(If I were you), that is spun to keep you in this web of deceit,....just saying! : )
Things are going to get a whole lot worse,...WAAAHAHAHAAAAA

 

[meanreversion]

90 pct of "money" is created from debt issued by banks. The debt requires repaying, along with interest. Where does the interest come from? More debt. Giant ponzi scheme. However, as long as the law of the land is respected (and it is), then this fiat currency will be enforced.

I don't see inherent evil in fractional reserve banking, but maybe I'm naive.

 

[meanreversion]

Vis a vis Labour, my policy is to not listen to anything they have to say, as it raises my blood pressure unnecessarily.

A bit like watching England labour to a 1-0 victory over Slovenia tomorrow will. But I'll watch anyway.

 

[Masquerade]

im a bit annoyed that the cgt increase starts from midnight today and not april next year..

I think they heard my shares were finally going up, *******s!

 

[Hilarymannah]

"Vis a vis Labour, my policy is to not listen to anything they have to say, as it raises my blood pressure unnecessarily."

Yeah,..I've a similar policy,...I've even stopped espousing "my opinion", on others,...
But, I do throw out seeds now and again, merely to discern what percentage of folk fall into the culture trap! :whistling

 

[Trader333]

Things are going to get a whole lot worse,...WAAAHAHAHAAAAA

In what context and why ?


Paul

 

[montmorencyt2w]

It's a mathematical impossibility to pay off borrowed money at interest ! (Usury),...and that's before we get into the derivative markets,......

How do you work that one out then Chief? I've paid off every loan I've ever taken out, and a bunch of credit card debt. Can you please quote which mathematical laws you are referring to?

In conclusion, I wouldn't fall for all the tripe(If I were you), that is spun to keep you in this web of deceit,....just saying! : )

Why do people say that, I wonder.

Things are going to get a whole lot worse,...WAAAHAHAHAAAAA

Probably.

 

[meanreversion]

Let's say in the beginning the central bank creates £100 and lends it to a retail bank. If the reserve requirement is such that £20 must be kept to one side, the bank will then lend out £80. They will issue a IOU to the central bank for the £100, which the CB can transfer to another bank if they wish.. thus the total amount of money is now £180 (80 loan + 100 IOU). That £80 will then find its way to another bank, who will create an additional £64 of money (need to leave 20 pct of £80 as deposit), and so on.

In the end, the original £100 translates to £500 of money, if the reserve requirement is 20 pct. (I've lifted this from Wikipedia, fractional reserve banking).

Each loan is interest bearing. Where does the interest come from? It can only come from even more new money.

Fractional reserve banking compels the continuous creation of new money.

http://en.wikipedia.org/wiki/File:Components_of_the_United_States_money_supply2.svg

This graph shows the inexorable rise in M3 (until such time as the Fed stopped publishing it).

Is this a Ponzi scheme? I'm not sure. The continual production of money must go on; were it to stop, massive deflation would ensue. When times are good, this new money finds its way into liquid assets.. commodities, real estate and so on. When times are bad and people are paying down loans (destroying money), the production of new money by banks ceases and needs to be substituted by more central bank money (QE).

Is this necessarily going to result in rampant inflation? Depends what you mean by inflation. Most measures ignore the cost of buying a house, which seems to be where most of the new money has gone.

 

[Hilarymannah]

meanreversion,..Thanks for saving me the time to explain,...
Monty's question reiterates in my mind, how ignorant most folk are ! (No offence Mont')
Naivety doesn't equate to stupidity ! : )

 

[meanreversion]

I did that partly for my own benefit as well. It took me months to work it out, maybe I'm a bit slow!

 

[montmorencyt2w]

meanreversion,..Thanks for saving me the time to explain,...
Monty's question reiterates in my mind, how ignorant most folk are ! (No offence Mont')
Naivety doesn't equate to stupidity ! : )

No offence taken Squire, but you are off my Christmas card list
You didn't qualify your statement that you were only talking about government debt.

I may be ignorant and naive, but I have heard of fractional-reserve banking, and that money is supposed to be largely mythical; I have probably seen exactly the same anti-central-bank propaganda videos as you have.

 

[Hilarymannah]

As with all comment boards,...they're good tools, for the collection of public "opinion",...
So when I stir the waters,.I hope no one takes offense !
BTW: montmorencyt2w,..I wouldn't say "money" is mythical,..just "our" particular use of it !
As you're aware there are many ways to store "value",..not just the decreed paper we are ordained to exchange.

 

[montmorencyt2w]

Mister Ten Percent

Further to what I was saying about VAT somewhere or other, this would be my killer budget.

Although I am somewhat left of centre politically, even I think that too much tax and too much public-spending is counter-productive. (I think a great deal of the NHS is not money well-spent, for example, and yet it is a sacred cow, apparently even for the Tories now).

Brown had his "prudence", Osborne has whatever he has. I would be "Mister ten percent".

No tax more than 10%.
For income-tax, low-incomes on sliding scale from 0-5. Majority would pay 5-10%.
VAT: 10% max, with zero-rated, exempt, and less than 10 for selected categories.

All departments (with none protected) cut by 10%, every year for 5 years.

We don't want any more house-price bubbles, so 10% minimum deposit (and no special deals for buy to let). 10% CGT on profits from all house sales, including main residence.

Random taxes like airport and insurance would go, as would NIC.

Don't know about bank levy. Have to keep an eye on banks though.
I think I would outright nationalise one of them "pour encourager les autres".

I'd abolish the TV licence & fee, but still protect the BBC's income, as that is one bit of "public" money that is mostly well-spent. I'd give someone like George Soros the equivalent of 5 years' licence fee (or maybe a bit more, by negotiation) to trade with, and see if he can bring in the equivalent of the current annual BBC budget or more. He could keep 10%. It would have to be underwritten by the government I guess, but hopefully as a low-risk.

I suspect interest rates would have to go up, but that would be no bad thing in my opinion.

 

[Martinghoul]

Let's say in the beginning the central bank creates £100 and lends it to a retail bank. If the reserve requirement is such that £20 must be kept to one side, the bank will then lend out £80. They will issue a IOU to the central bank for the £100, which the CB can transfer to another bank if they wish.. thus the total amount of money is now £180 (80 loan + 100 IOU). That £80 will then find its way to another bank, who will create an additional £64 of money (need to leave 20 pct of £80 as deposit), and so on.

In the end, the original £100 translates to £500 of money, if the reserve requirement is 20 pct. (I've lifted this from Wikipedia, fractional reserve banking).

Each loan is interest bearing. Where does the interest come from? It can only come from even more new money.

Fractional reserve banking compels the continuous creation of new money.

http://en.wikipedia.org/wiki/File:Components_of_the_United_States_money_supply2.svg

This graph shows the inexorable rise in M3 (until such time as the Fed stopped publishing it).

Is this a Ponzi scheme? I'm not sure. The continual production of money must go on; were it to stop, massive deflation would ensue. When times are good, this new money finds its way into liquid assets.. commodities, real estate and so on. When times are bad and people are paying down loans (destroying money), the production of new money by banks ceases and needs to be substituted by more central bank money (QE).

Is this necessarily going to result in rampant inflation? Depends what you mean by inflation. Most measures ignore the cost of buying a house, which seems to be where most of the new money has gone.

With all due respect, meanie, what you say above is incorrect in a whole variety of ways. What hilarymannah says is just plain silly.