Thursday, Oct 30, 2008
here we go, now we are paying for the money we lent to banks!!
yahoo: arling warns taxes may rise
Britons have been told to prepare for higher taxes and lower spending after the next election as Chancellor Alistair Darling effectively did away with Gordon B
Posted by mark @ 10:12 AM (848 views) Add Comment
18 Comments
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1. whiteknight said...
You can lead a horse to water ...
2. Fjcruiser said...
"With hindsight, monetary policy has not been sufficiently forward-looking."
what are these guys in blue stripes suits been doing then if not looking at monetary policy ? looking at their fat bank accounts perhaps ?
3. malct said...
The UK national debt is the total amount of money the British government owes the private sector.
At the end of August 2008, UK National debt was £637.4 billion. (or 43% of National GDP) -
Source: Office National Statistics
4. maddison said...
So where are the taxes going to rise.... My bet is gas guzzling cars will be walloped, Lots of green taxes and maybe just maybe a higher rate of income tax on earners over £100k........ Another possiblilty is VAT which will be crucial if inflation comes down considerably....
5. wiltshire said...
I've just been looking at the BBC website's 'Have Your Say' section.
Question - "What should the BBC Trust do about the prank calls row?". Currently there are 13198 published comments with 19962 in the moderation queue.
Question - "Have you been affected by the downturn?" Currently there are 1868 published comments with 48 in the moderation queue.
WE ARE ABSOLUTELY DOOMED IN THIS COUNTRY. WE WILL BE FED TO THE LIONS.
6. malct said...
5. As National Debt increases as a % of GDP, it means that the interest payments as a % of GDP increase. Therefore, higher levels of taxes have to be spent on just financing the national debt.
The Bank of England has a responsibility to sell the government debt to the private sector. The Bank of England doesn’t buy the debt, but acts as the agent of the Government in selling it to the private sector.
The Government have to pay interest to those who buy the bonds and bills. The cost of interest payments on the National debt is about £30 billion a year.
http://www.economicshelp.org/blog/economics/how-is-national-debt-financed/
7. malct said...
4. wiltshire said...
"WE ARE ABSOLUTELY DOOMED IN THIS COUNTRY. WE WILL BE FED TO THE LIONS."
Thursday, October 30, 2008 10:58AM
yup, and this is just the latest round - have we forgatten the 30 year hospital projects? (etc)
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The Private Finance Initiative (PFI) was a controversial, but little-used mechanism established by Norman Lamont to privatise specific construction projects. But it meant something much more to New Labour. Officially, the scheme could be a beacon for the Third Way: a means of injecting the ethos of the private sector into the sluggish public sector, and an opportunity to get projects completed quickly and efficiently. Unofficially — and this is what Mr Brown grasped from the off, and what Mr Robinson was hinting at — PFI was an incredibly convenient way of concealing the true extent of public debt. Rather than pay upfront, the government promised to make fixed payments in each project over a period of about 30 years — keeping the whole thing off the books. PFI was a wizard’s cloak of invisibility which could be thrown around expensive new projects.
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3Cs, conned, complacent and cooked.
8. malct said...
sorry here's the Spectator article url for the pfi quote above
http://www.spectator.co.uk/the-magazine/features/2088001/the-great-debt-deceit-how-gordon-brown-cooked-the-nations-books.thtml
headlined :-
The great debt deceit: how Gordon Brown cooked the nation’s books
9. cornishman said...
wiltshire -
I wanted to see some comment on Darling's speech last night and all we got was the 'news' programmes going on and on, for over half their airtime, about Brand and Ross. Quite whether this reflects the public mood, as you say, or whether it's designed to divert attention from 'depressing' matters, as Harold suggested elsewhere I wouldn't know. But it's a little sad to say the least.
malct -
yes PFI liabilities seem to have been forgotten by the commenting voices, and also the Opposition. Perhaps because Lamont brought it in they feel stuffed in that direction.
10. mark said...
2 chat shows last night 1 was paul o grady both complained about the media hype of brandrossgate who cares about them, we want real news...
11. plato said...
Funnily enough I can see 0% (or very close) interest rate being adopted throughout the world's big economies. This lowers National Debt and increases costs to anyone sitting on cash...... we are all better off borrowing (nice carrot). Business' profit margins increase so more tax income from this end.The gains support the public sector monster.
Stocks flourish and just about anything with intrinsic value (ironically even property providing it is not abundant)
This seems to me to be the long term idea....... and the Conclusion : Cash will die. Saving cash will be pointless. Borrow you must.
12. waitingfor hpc said...
plato - it never worked out like that in Japan, and I am not sure it will here either!
13. plato said...
Hope not too waitingfor....... I believe the Japanese are a tad more culturally disciplined than us though...... this is my worry.
14. andrew said...
Nobody gets to borrow at 0% or even 1%, so why all the fuss ? If they do, then please show me the way.
Banks use interest to make money, it just will not happen. At best this will only encourage people to borrow another load of funny money, on top of all the problems that exist, that would be suicidal.
Anyway what would happen to an interest only mortgage?
15. sold 2 rent 1 said...
"WE ARE ABSOLUTELY DOOMED IN THIS COUNTRY. WE WILL BE FED TO THE LIONS."
Not quite. Roll on "global enlightenment" after the age of materialism
16. malct said...
The “dirty little secret” of the US bank bailout
27 October 2008
In an unusually frank article published in Saturday's New York Times, the newspaper's economic columnist, Joe Nocera, reveals what he calls "the dirty little secret of the banking industry"--namely, that "it has no intention of using the [government bailout] money to make new loans."
As Nocera explains, the plan announced October 13 by Treasury Secretary Henry Paulson to hand over $250 billion in taxpayer money to the biggest banks, in exchange for non-voting stock, was never really intended to get them to resume lending to businesses and consumers--the ostensible purpose of the bailout.
Its essential aim was to engineer a rapid consolidation of the American banking system by subsidizing a wave of takeovers of smaller financial firms by the most powerful banks.
http://www.wsws.org/articles/2008/oct2008/pers-o27.shtml
17. malct said...
bank bail outs - the established way - from 2002 :-
IMF-orchestrated bailouts of countries in financial crisis -- assistance to countries whose exchange rates are plummeting -- provide money primarily so that developing countries can pay off their foreign creditors, including private banks.
In 1995, the IMF contributed almost $18 billion to a Clinton administration bailout of the Wall Street interests which stood to lose billions with the peso devaluation in Mexico.
The same thing happened with the Asian financial crisis. U.S. banks had approximately $20 billion in outstanding debt in South Korea alone, with BankAmerica, Citibank, J.P. Morgan, Bankers Trust, the Bank of New York and Chase Manhattan the major banks with heavy exposure in South Korea. With the loans threatening to go bad, the IMF swooped in, pushed the government to take on the debts of failing private sector companies, and provided tens of billions of dollars to the government to pay off the debts owed to the private lenders.
The Korean bailout was particularly noteworthy for the conditions which accompanied it: South Korea was required to open its financial sector to foreign investors -- meaning the banks and international financiers who directly contributed to the financial crisis received a double benefit. Not only were they bailed out, they were given the right to penetrate the Korean financial sector.
The IMF went on to repeat the fiasco in Russia, where its August 1998 multi-billion dollar loans immediately left the country -- some directed to foreign creditors, much of it stolen and deposited in foreign bank accounts, and then later in Brazil and elsewhere around the world.
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cont.
There are substantial costs to these bailouts. Not only do they waste taxpayer money, they encourage future imprudent loans by private lenders. Knowing that they can earn high returns on risky loans without fear of losing their money if the investments go bad, lenders and investors are encouraged to direct money to unworthy sources -- making future bailouts that much more likely.
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http://www.essentialaction.org/imf/big_bank_bails.htm
18. Jennifer said...
Today was rice day, fifty-pound sacks of white rice in trucks bearing an elephant logo. The same happy elephant appeared on the bags, its head raised to the sky, the trunk curved like an S.
"Elephant," Todd said.
He said it because a laborer was staring at it intently. Which meant he wasn't working.
"That's right," the man said. "I couldn't remember the word."
He was the only other human at the loading dock this morning. The man didn't have a name, just a number, like the rest of the robots. Paris, at Night.