Friday, Apr 02, 2010
Could this be Britain after the election?
New York Times: From Lithuania, a View of Austerity’s Costs
If leaders of the world’s many indebted countries want to see what austerity looks like, they might want to visit this Baltic nation of 3.3 million. Faced with rising deficits that threatened to bankrupt the country, Lithuania cut public spending by 30% — including slashing public sector wages 20 to 30% and reducing pensions by as much as 11%. And the government didn’t stop there. It raised taxes on a wide variety of goods, like pharmaceutical products and alcohol. Corporate taxes rose to 20%, from 15%. VAT rose to 21%. The net effect on this country’s finances was a savings equal to 9% of GDP. But austerity has exacted its own price, in social and personal pain. Pensioners, their benefits cut, swamped soup kitchens. Unemployment jumped to a high of 14%.
24 Comments
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1. devo said...
useful case study
2. braindeed said...
....but I'd like to see any party try cut our 'boomers' pension - there'd be a big grey blamange dropped on their head from on high.
3. a saver said...
This constant and irrational boomer-bashing is putting me off this site.
Braindeed, do you really think it's okay to tax someone at 40% +10% 'National Insurance' stealth tax, plus real NI contributions, then the day after they retire the only thing they get from the state is less than 5K a year, which is taxed? You really think there's room for cuts there? It's utterly outrageous and with the failure of many private pension schemes and endowment mortgages no wonder people have looked for other ways to invest-although rampant HPI should never have been allowed to happen because people need a place to live.
There's greed in every generation and I've seen far more of the get-rich-quick mentality in generation X than in the boomers. There's plenty of people in their thirties with huge property portfolios, planning to retire at 40, leveraged to the hilt and now looking to the government to bail them out.
4. paranoia blue said...
Re: Bashing.
Another point needs airing. In the 1980s my top earnings were taxed @ 60%, the next band 55%, the next 50% etc….
There would be a lot of squealing, if that were the case today.
5. braindeed said...
I stand by my comments. The pensioner block vote is set in concrete......big enough to be manipulated by any opposition party.
This block will not be asked to pay it's fair share of the price of.stabilising the financial system - end of.
If you don't want to read views to the contrary, have a night out at the bingo.
6. estrader said...
It is sad to read this and hard to believe the suicide rate is so high. I was in a LDR with a Lithuanian woman a few years ago and visited Vilnius many times. The people there are exceptionally friendly and the women are utterly beautiful. Well worth a visit.
7. a saver said...
@4 paranoia blue, yes I remember that, most unfair and the reason why many high earners left the country.
Actuallymany people who are now pensioners will have paid taxes at these rates.
@6 braindeed. Many pensioners are also savers or rely on savings income. Are you saying that they are not paying to 'stabilise' the financial system? My business hasn't suffered at all in the recession but I'm paying dearly to subsidise the less prudent - my savings income has been more than halved and would have been cut a lot more than that if I hadn't nabbed a few long-term bonds and foreign currencies. Lucky that I still work (no choice). Maybe bingo is your idea of fun, each to his own, but I prefer reggaeton dancing.
8. mr g said...
@Braindeed
I'm retired but have not yet reached state pension age.
Why on earth should my state pension be cut when I have paid in 44 years NI contributions and we subsidise the families of suspected terrorists and pay out mega amounts in benefits to bogus asylum seekers and so called refugees who have contributed sweet FA in tax and NI?
I bet you'll think my way when you get to pension age.
9. alan_540 said...
I think the UK state pension is at position 27 in the world rankings, which seems hardly generous to me considering we're supposedly the worlds 6th largest economy.
10. letthemfall said...
Funny that there is a desire to attack a group of people on the grounds of age when to do so on race would be anathema.
a saver is right. The problem has little to do with age but an economy that allows some people to make enough money to cease production halfway through their working lives. This sums up the intrinsic inequality in our system. There are numerous retired people who are subsisting on the state pension. Old is not identical with rich.
11. braindeed said...
Grumpy @ 8 said....
Why on earth should my state pension be cut when I have paid in 44 years NI contributions and we subsidise the families of suspected terrorists and pay out mega amounts in benefits to bogus asylum seekers and so called refugees who have contributed sweet FA in tax and NI?
Leaving aside the issue of the bogus asylum seekers.....your NI contributions of 44 years was used in a big pot to pay for your dad's pension, like his was for his dad's ....right back to the point where the first Pensioners were awarded it for 'nothing' - so we all pay in taxes for our parent's pensions ...ask any actuary, it's true.'
It's been known that this is an absurdity for generations, and now the 'big bulge' arrives hands out with newly declining birthrates and whines for their share too - the trouble is it's just not mathematically (or morally) possible. My grown up kids had university tuition debts, ludicrously over priced houses, thanks to speculation sanctioned by Boomer politicians....and just to put the cherry on the cake are told to sod off and save for their own pensions , because it's to be allowed to wither and die..
Now grizzle if you must, just don't expect youngsters to be happy paying for YOUR pension and being told to fund their own.
12. braindeed said...
ltf @ 10 said....
Funny that there is a desire to attack a group of people on the grounds of age when to do so on race would be anathema.
Pathetic, self serving tosh.
How else could I castigate people who's only common denominater is their age...what your saying, is being a certain age let's people escape their civil contribution.
13. devo said...
i am fully in favour of cuts that don't affect me directly
14. braindeed said...
13. devo said...
i am fully in favour of cuts that don't affect me directly.....or MY pension, you could have added, for just an added twist of irony
15. mr g said...
What are you on tonight Braindeed? Your arguments defy all logic and I won't give them respectability by answering them.
No one doubts that there are greedy, avaricious boomers but as I have argued before, there are plenty who are not and equally there are as many greedy members of generation X.
However, LTF's statement "Funny that there is a desire to attack a group of people on the grounds of age when to do so on race would be anathema." is absolutely correct.
The current attacks on the boomer generation are downright ageism, which adds weight to my argument that the younger generations are nothing short of hypocritical and readily adopt double standards when it suits them. Add to that, the victim culture mentality of many younger people so that when things go wrong they can't hack it and look for a scapegoat namely the boomers.
To repeat my comment in an earlier post, I bet you and all your generation will think my way when you get to pension age.
QED: Hypocrisy.
I'm off for a few pints of Taylor's finest now, no doubt there will be more tosh to respond to tomorrow!
Yours
Grumpy
16. alan_540 said...
braindeed, you're making some sense tonight, broken your bong?
17. mr g said...
Just before I go out, I've got to say that I'm beginning to think we get more sanity from Smugdog's posts than from the boomer bashers.
18. Smiling said...
For anyone on this site, still clinging on to hopes of owing a house anytime soon, please don't look at american job numbers today.
Mind you the way doomsters normally work, +224,000 on the job numbers is good because interest rates will go up, which in turn will kill the recovery and all the good folk at HPC will get a house with cash from the tinpot under the bed...
19. letthemfall said...
braindeed: "self serving tosh"
How can it be self serving!!
I see you most definitely belong to the collective of snipers on this site. Well, you're welcome to your vituperation. I shan't bother arguing further with you.
20. novice pete said...
For what it's worth, my contribution to the madness.
21. novice pete said...
I wonder if smugdogs heart 'dances with the daffodils' after reading the title story.
22. Mr G said...
@NP Possibly but Smugdog's comments are no more eccentric than some of those from the boomer bashers.
23. braindeed said...
LTF@18 whined....
I see you most definitely belong to the collective of snipers on this site. Well, you're welcome to your vituperation. I shan't bother arguing further with you.
So it's your ball and you're taking it home......oh no - dont make me cry.
24. Enough Already said...
The boomers are laughing all the way to their next cruise.
Their mantra regarding younger generations is 'let them eat cake'. And you know what happened next...