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| The Debt Time Bomb | |
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| Topic Started: Oct 29 2014, 11:13 AM (750 Views) | |
| RJD | Oct 29 2014, 11:13 AM Post #1 |
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Prudence and Thrift
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Summary ● The government’s finances are currently on an unsustainable trajectory. ● Whilst current levels of government debt are below the levels seen in previous periods in history, accumulating such large levels of debt during a long period of peacetime is more or less unknown. ● Government debt figures do not include commitments to future spending either: governments do not account in the same prudent way that companies are required to account. An ageing population means that on unchanged policies the cost of providing age-related spending such as healthcare, pensions and social care will rise substantially over the next five decades, seeing overall debt on an upward trajectory. ● According to the government’s own Office for Budget Responsibility (OBR) a permanent fiscal adjustment (tax increases and/or spending cuts) of 1.3 per cent of national income will be necessary from 2018/19 in order to ensure that the debt-to-GDP ratio falls to 20 per cent by 2063/64. ● However, the OBR figures make heroic assumptions about healthcare productivity and also assume that there will be a fiscal adjustment of 5.2 per cent of national income before 2018/19. In other words, spending needs to be cut by around 6.5 per cent of national income from now and for the foreseeable future to hit a government debt target of 20 per cent of national income by 2063/64. Such a measure will not create room to reverse recent tax increases. ● If more realistic assumptions about healthcare productivity, immigration and spending priorities are made, spending would need to be cut by 9.6 per cent of national income now and for the foreseeable future to hit a debt target of 20 per cent of national income in 50 years’ time. This is equivalent to about one quarter of all government spending or one half of all social protection spending. Other approaches to the analysis of the public finances reach similar conclusions. The Debt Time Bomb The Debt deniers can continue to bury their heads, but the truth is that their/our selfishness is piling up a massive headache a Time Bomb for our children and grandchildren. This Gov. should have cut deeper and faster removing the overhang within a single Parliament and then setting course to prune down the National Debt. Failure to do so was a crass act of selfishness. As an aside the Gov. should not tolerate any increase in the EU Budget and this needs to be reeled in to that agreed between the Heads of Governments. Those that claimed that the proceeds of growth would claw our way out of our financial difficulties have, as warned, been proven to be wrong. Cutting Big Nanny down to an affordable size is what we can do, creating and relying on future growing income streams is the stuff of smoke filled pipes. Banking public sector and NHS future productivity gains is Fool's Gold. If you really believe that we should not consume today at the cost of future generations then you must support massive Public Sector spending cuts now and sustained well into the future. There is also one thing for sure and that voting Labour would be counter production to that aim. |
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| ACH1967 | Oct 31 2014, 11:37 AM Post #81 |
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Senior Member
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There was a very good report in the economist about technology and about how it is exascerbating wealth differentials. giving the really talented the means to make real money but leaving those less and increasingly moderately talented behind as processing power and algorithms improve. Further more there is growing evidence that there is "premature deindustrialisation" occuring in even developing economies. If this is borne out then those who are suggesting we should invest more in "making stuff" may well be missing the boat by a couple of decades. Thta is not to say that this is not creating a problem that needs addressign but it does mean old ways of thinking should be tempered with an appreciation of the exisiting reality not the reality as it existed in days gone by. If this does mena that some people are able to make real gains whilst others see real losses then some incrase in redistribution will be necessary not for "fairness" (as this is far too emotive a word for some) but for social cohesion and stability. |
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| RJD | Oct 31 2014, 02:44 PM Post #82 |
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Prudence and Thrift
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It has been long understood that our GDP growth is more to do with capital than labour which becomes less relevant each decade. I think the tipping point was around 30 years ago and manufacturing employment went into rapid decline in around 1965. The truth is that it is those with financial resources and/or expertise and skills that are gaining and those without either, because there is now even more of them knocking on factory doors who are relatively speaking losing ground. If you want UK workers to have more net disposable then stop taxing them and get rid of the tax on jobs which comes directly from paypackets, coupled with that give them more skills and stop importing people to undermine job chances. Trouble is that the left put keeping Big Nanny in oversized dresses as more important than jobs or wages. |
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| Affa | Oct 31 2014, 08:37 PM Post #83 |
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Senior Member
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As a nation, what is it we as citizens desire to be our role in it, and the rewards we expect from doing so? Are people relevant any more other than as units of consumerism? Is business success the only thing our government should be pursuing? The model of society as serving business is of course a complete reversal of the real meaning of Patriotism. |
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| Rich | Oct 31 2014, 09:39 PM Post #84 |
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Senior Member
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A very pragmatic and sensible posting.
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| Tigger | Oct 31 2014, 10:23 PM Post #85 |
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Senior Member
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These things have a nasty habit of self correcting if small and apparently powerful minorities start to think they can take and do what they want, I'm thinking France 1789 and Russia 1917 here. |
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| Steve K | Oct 31 2014, 10:51 PM Post #86 |
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Once and future cynic
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Yes Once upon a time there were jobs for all of all intellects but not now. And like it or not 50% of people have below the median IQ. Who is going to employ them in tens of millions when they are grievously taxed for doing so and forced to pay largely unaffordable wages when there are cheaper ways of getting equivalent effort form overseas factories? Unless we think again the underlying economic fundamentals will push us along the road to 5 million unemployed and revolution from the resulting wealth inequality. |
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| Affa | Nov 1 2014, 10:54 AM Post #87 |
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Senior Member
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A sign of the times and a probable future. But it needn't be this way, end that way.
Affordability is a relative concept ....... everything is affordable 'at the right price'. That business only exists where there is a profit to made is the nature of capitalism. Society is the body on which it feeds, and without which there can be no profit, no business. So business, being the most ingenious application known to man, can see that if society is badly damaged, so to are its own prospects for future gains ....... it must therefore escape from this 'short term returns' focus where 'shareholders' and 'investors' are guaranteed a healthy (above bank interest rate) return on their investments. Governments are investors too, and they too must make better 'long term' preparations ..... all of which requires only one thing to make it work - Capitalism with a Social conscience. A third way. An escape from the Them & Us mentality that divides nations and instead become inclusive ....... and the result, if all this takes place? There are millions of jobs that can be done, and are not being done, today! Full, or rather near full employment is a real possibility, and even those below the IQ level you pointed can be found gainful, AFFORDABLE, employment. A prosperous society generates business opportunities like no other initiative can - there can be jobs for all. The wealth to make it happen already exists. It requires as you also point out a different sort of distribution. The rich will remain rich, their wealth secure, without which none of this is workable - it does require investment, the wealthy are needed to provide it. The world becomes a better place, and strangely as these new jobs appear some old jobs like private security guards, disappear as society settles to become at ease with itself. |
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| Steve K | Nov 1 2014, 12:23 PM Post #88 |
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Once and future cynic
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No arguments with that Affa ^, well said Sadly though, most of our electorate just wants short termism blended with snake oil and who can blame our political parties for at least in part responding to same. |
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| Cymru | Nov 1 2014, 01:06 PM Post #89 |
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Alt-Right
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I'll take that as a no then. |
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| RJD | Nov 1 2014, 04:01 PM Post #90 |
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Prudence and Thrift
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Do you really believe that machinery can be replaced by human labour and we would remain competitive in the global market place? Only a Luddite would recommend such folly. The truth is that as capital has grown to dominate our GDP at the expense of labour this has allowed the latter, in western economies, to generally work less hours per week on average and take more holidays on average. This is an indisputable fact. The problem we have today is that we have a massive oversupply of unskilled labour which as a consequence depresses wage rates, that said, those with skills are generally finding little difficulty in keeping their wage rates beyond inflation and in some sectors demand continues to exceed supply. If you wish for wage rates for those without skills to improve then stop taxing them or their employers for having the audacity to hire them. After that the only real recourse you have is via a system of negative income taxes and/or family orientated credits. Forcing up wage rates whilst maintaining taxes on jobs will only destroy many of those jobs. Sort of counterproductive. I do not think there is a solution within the current tax regime. The 50P rate and Mansion Taxes would bring in less that £2b PA at best and the way things are going this would be swallowed up by the NHS or the EU without a Penny left over for poor Joe Soap. |
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| RJD | Nov 1 2014, 04:10 PM Post #91 |
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Prudence and Thrift
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I believe that more jobs can be generated, but jobs for all in the UK, in the EU, in this globalised market place is just a pipe dream. Some vacancies for skilled people will remain unfulfilled and opportunities for work of the purely manual variety will see dozens chasing it, not to forget those that have given up the chase. What we have seen over the last 30 years is the growth in importance of capital and skill and decline of that for unskilled labour. This trend is unlikely to reverse. That said we should do our best to optimise jobs within our economy, however, necessary improvements in productivity work in the opposite direction. If at the same time you also wish to see the net disposable income increase for low skilled workers then the only course you have is to lift the burden of taxation. |
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| C-too | Nov 1 2014, 05:44 PM Post #92 |
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Honourable Member
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Your lack of understanding of fairness comes as no surprise, you would have made a good corporal under Maggie. I have no problem with success and reward for effort, I believe in the capitalist system. I also understand that unbridled capitalism is a stench that eminates from emotionally sick individuals who rely on wealth in order to establish their manhood. (That's why we need a social input). I do have a problem with greed and the emotional drivers that pushes for more and more wealth regardless of the mess it leaves behind. A situation that is often accompanied by an arrogance that either fails to understand or chooses to ignores the human condition. |
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| C-too | Nov 1 2014, 05:59 PM Post #93 |
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Honourable Member
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With a single scenario much of which can be taken into consideration. As I posted to SK, I'm not after the rich per se, I'm looking at the idea that we are all in it together. Those on housing benefit caught by the bedroom/boxroom tax are in it, those sitting on a £2m house, many of whom will be financially rich as well, are not. If we punish the poor for being poor, why not puish the rich for being rich? |
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| Rich | Nov 1 2014, 07:14 PM Post #94 |
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Senior Member
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The day will come when technology as it promises to do will fulfill most of the manufacturing jobs, my biggest concern is when those not in work outnumber those in work and paying taxes. how will the treasury and the government of the day deal with that scenario? we may still have an NHS to fund, education, defence, policing, local council services and so on and so forth, it may be pie in the sky but then again it may come about, I doubt if I will be here to see it or even if the government of the day will allow that situation to happen ANYWHERE in the world as it is self defeating and I just cannot see elected politicians working for nothing. Mind you, the traditional trades that necessitate hand skills will still be in demand as I cannot see automatons clambering on a roof to rethatch it or glazing, carrying out carpentry and cabinet making, plumbing underneath a kitchen sink, servicing an oil/gas fired boiler and so on. |
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| Affa | Nov 1 2014, 07:25 PM Post #95 |
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Senior Member
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We are becoming, already are, that Services Dominated economy it was told we would become in the eighties. Today there are more people in work than ever before, and most are in the Services sector - and as the economy grows and folk have more money and time to spend away from work, so then do opportunities arise for more service sector businesses to flourish. Alas there does need to be the settlement on some sort of 'living wage' for any of this to happen. |
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| Boxter | Nov 2 2014, 12:13 AM Post #96 |
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Regular Member
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https://www.youtube.com/watch?v=sNDoVPHftAE US National Debt Clock REALTIME |
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| Deleted User | Nov 4 2014, 05:41 PM Post #97 |
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Deleted User
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Four days later and no response and certainly no evidence. Oh hang on a moment its Papasmurf! He asks for evidence but never supplies it! Once again discredited! |
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7:32 PM Jul 11