Thursday, May 13, 2010
All to keep the banks from collapsing
The Telegraph: Spain has followed Ireland and Greece in imposing 1930s-era wage cuts to slash the budget deficit
Pension rises will be shelved. The country’s €2,500 baby bonus will be cancelled. Aid to the regions will be slashed and infrastructure projects will be put on ice.
"It is not a viable policy. Weakening demand will cause the tax base to shrink. If the population could see light at the end of the tunnel, they might put up with it, but there is no light: it is a long dark passage leading nowhere."
Posted by devo @ 06:54 AM (2070 views) Add Comment
42 Comments
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1. Devo said...
our turn next
first the protests
then the riots
oh look, right on cue....
Coalition Government: emergency Budget within 50 days
http://www.telegraph.co.uk/finance/economics/7716645/Coalition-Government-emergency-Budget-within-50-days.html
2. devo said...
our turn next
first the protests
then the riots
oh look, right on cue...
Coalition Government: emergency Budget within 50 days
http://www.telegraph.co.uk/finance/economics/7716645/Coalition-Government-emergency-Budget-within-50-days.html
3. happy mondays said...
The spanish are struggling already with high unemployment, i cannot see this going down too well...
"If you make peaceful revolution impossible, you make violent revolution inevitable". Comment 1
4. Crunchy said...
2. happy mondays said...'The spanish are struggling already with high unemployment,'
Do you smell mass DEFAULT contagion. The whiff is in the air already.
Currency wars ahead? Terrorism, terrorism.
5. cat and canary said...
Zapatero is not raising/creating a top rate of income tax, despite continued vague promises to do so
Nor does spain have much of a child benefit system, so scrapping the 2,500EUR baby 'fund' is only going to make Spain's low birth rates even worse.
A wise group of men once said "I predict a riot, I predict a riot"
6. uncle tom said...
The more people say Santander is in 'excellent shape' the less I believe it..
Look at the photo in this piece - is 'Bambi' Zapetero turning into Mr Bean?
7. tom101 said...
Are any banks safe at the moment!!
8. vacuouspolitician said...
Devo.
We don't do strikes ...or protest ...or riots in this country. We just accept this is the way it is ...with a stiff upper lip. Don't you know! After all if you say anything different from the 'in-crowd' ...including the self-appointed HPC 'elite' you are just branded a loon/socialist/commi etc etc.
These are the same self-appointed 'elite' who continue to cause all the problems for ordinary folk. Anyone for tennis? Jar Spoon Spoon Jar.
9. taffee said...
santander are probably okay 'cos they lent considerably less than they had in deposit....quite a revolutionary concept!
If banks had taken this course then none of this would have happened
Only a run on the bank could change santander,but that's unlikely 'cos they don't need to borrow from money markets if they don'y want to
10. uncle tom said...
taffee,
Santander's problem is that a lot of property backed loans in Spain will never be repaid. Look at the asking prices in Spain - they are still way above build cost, even though that country has close to a milllion more homes than they have households to fill them..
..when reality sets in - as it has in Ireland - there will be an immense amount of bad debt to deal with..
11. rumble said...
"We don't do strikes ...or protest ...or riots in this country. We just accept this is the way it is ...with a stiff upper lip. Don't you know! After all if you say anything different from the 'in-crowd' ...including the self-appointed HPC 'elite' you are just branded a loon/socialist/commi "
--Are you saying you're too soft to deal with the downside of standing up for your thoughts? How are the English not Scottish? Practice on customer service departments.
12. cat and canary said...
the Spanish folk I know also criticise themselves also for 'taking the punches' too often
I actually think we are going to see a lot stronger reaction that we are anticipating in the UK and Spain.
and the losses will continue to mount, and the politicians will continue to take the easy option of dumping the losses on the taxpayer, until eventually, the politicians will learn that the taxpayer is actually too big to fail
first bail out the banks, followed by small countries, what next.
13. Stillthinking said...
The governments themselves are starting to deleverage, let alone individuals and businesses. If this isn't debt deflation then what on earth is?
14. stillthinking said...
The governments themselves are starting to deleverage, let alone individuals and businesses. If this isn't debt deflation then what on earth is?
15. the number cruncher said...
I am sitting in my office less than a mile from Bosenden Wood, site of the last major English Rebellion in 1838. (although there was the Glasgow strike of 1919 which narrowly avoided major bloodshed in Scotland)
The battle was between a small army of labourers and a detachment of soldiers sent to arrest the marchers' leader, John Nichols Thom, Eleven men died. The same soldiers where sent to put down the Newport Chartists a year later in Wales and killed 20 protesters.
Democratic and popular movements have always been violently put down in the UK, especially when they threaten the rights of landowners and their ability to extract rents from the landless.
16. Crunchy said...
10. cat and canary said...'first bail out the banks, followed by small countries, what next.'
Big countries.
This is not about rescue, it's about hoarding as much money from whichever country in order to bring them down and consolidate power
after that process.
When that's achieved the takeover begins.
Why do you think that the countries who are not in massive debt are at war and with whom?
It's a two pronged attack. All because a group of people thought that Hitler was onto something but didn't have the sophistication to
achieve the goal. We are dealing with a much greater powerhouse now.
The policies between Hitler and the illegal President Barry Soetoro aka Obama are plain to see. It's all out in the open 'now.'
BOLD AS BRASS.
17. flashman said...
There is no need to be so dramatic about the past. We once had slavery and women couldn't vote but I doubt that we'll return to those days any time soon. We have moved on from the 1800s. By way of proof:
31 March 1990. The poll tax riots were successful. The army was not called in and the legislation was repealed. The landless won that battle hands down and their victory directly contributed to the fall of Thatcher. Was anyone else there? It felt good to be alive that day. If any of you want to riot and you feel physically up to the job, then why don't you stop fantasising and get down to business? Mind you, in 1990 there were millions of us behind that cause. I doubt you'd manage to muster any more than a handful of bloggers who would be unlikely to leave the comfort of the pub. It's good to talk though
18. refusetobuy said...
Portugal is expected to include a 1 percentage point increase in value added tax to 21 per cent and increases of up to 1.5 percentage points in income tax.
The increases, which are being called a “crisis tax”, are expected to include a 2.5 percentage point increase in corporate tax to 27.5 per cent. Politicians and public sector managers will also see their salaries cut by 5 per cent.
(http://www.ft.com/cms/s/0/0e4e9232-5e6d-11df-9266-00144feab49a.html)
19. Crunchy said...
13. flashman
There speaks an old man flash. What happened to you? You need a Greek holiday and a good ol' service.
20. uncle tom said...
flashman,
The poll tax episode was an extraordinary event, both at the time, and looking back.
It started with a genuine attempt to replace the old rating system, which had people in new houses paying far more than those in old ones; and households with many adults living under one roof paying the same as those that were in single occupancy; with a system that was simpler and fairer.
The introduction of what should have been an uncontroversial measure; one that could just as easily have been introduced by a Labour govt. as a Tory one; was bungled however, and the subject became a focal point for a wide body of people who were disillusioned with Mrs T.
It is now gaining some mythological status among the political left, when it was really only a catalyst. If it had never been introduced, something else would probably have emerged as a focus for disquiet..
21. flashman said...
uncle tom: "something else would probably have emerged as a focus for disquiet"
Maybe so. I also have to put my hands up to being anti-Thatcher at the time.
You described Poll tax as "a system that was simpler and fairer"
I'll have to take issue with that. One some levels it appeared fairer because pre-poll tax, there were many wage earners who didn't contribute to the services they received. However, I objected to it strongly at the time because it made things cheaper for landlords and made things more expensive for many people who were saving for a home. Thatcher droned on about home ownership and yet here she was forcing through legislation that effectively put up a barrier to aspirant homeowners. The poll tax put more money in the pockets of landlords and helped them grow their portfolios at the obvious expense of first time buyers. Any legislation that enriches homeowners/landlords at the expense of others has to be questioned. That was the net effect of the poll tax. The lower income tax rates are carefully worked out for a reason. If you apply other taxes that only effect lower income workers, then you are slyly perverting the tax system. It was brutally foolish of her (on a political level at least) to attempt that.
In hindsight I appreciate that my argument was not exactly bullet proof but that was then and this is now. It's hard to recreate the mood of the time, 20 years later. I really do think that it made a significant contribution to the downfall of Thatcher. Apparently the cabinet could hear the riots and many of them started being openly contemptuous of Thatcher for being stubborn in the face of a disaster.
My poll tax anecdote was not intended to drag up the old poll tax arguments. I was offering it as proof that we do not live in the same world inhabited by our distant relatives. The landless won the 1990 battle without the army being called in. In today’s world the majority will always get want they want (eventually). Dredging up ancient tales of heavy-handed army action is a little self-indulgent.
22. the number cruncher said...
The Poll Tax riots never threatened the rights of landowners or espoused any major redistribution of wealth. Therefore there was no need to suppress it. A lot of our landed classes were very happy to see the back of Mrs T.
For quick to judge flashman: I have been been thrown down a flight of stairs by 5 policemen and kicked in the head as I chased after a car with the South African Foreign Minister in it on an overhead motorway outside the tory club in Birmingham. After scaling 50 feet to get to it with my banner between my teeth, I felt the rush as the crowd roared as they saw me scale up the outside of the stairwell circumventing the policemen and I waved my 'free Mandela' banner staring into the eyes of the South African officials.
I was once also charged by a row of at least 50 police horses outside the houses of parliament at a grants demo, I picked up then shielded a young lady who was knocked to the ground by a horse from the charge, then took her to safety and an ambulance through the police lines.
I once beat the living s**t out of three skin heads at an anti apartheid demo who where acting as agent provocateurs, and trying to incite a riot. They got carried away and started to lay into some of the peaceful protesters. I then tracked down their be-suited and Barbour jacketed NF handler and gave him a kicking he will still remember to this day. (I hold a second degree black belt in Taekwondo and was an accomplished amateur boxer in my day).
23. letthemfall said...
First time I've seen the poll tax described as (what should have been) uncontroversial. It was the regressive tax to end them all. The only people I met who were in favour were the very well off.
(It's an interesting historical point that the Duke of Westminster spoke against the PT in the Lords.)
Whether the cuts to come will provoke riots is impossible to say. These things tend to spring up quite suddenly and unpredictably.
24. Crunchy said...
16. flashman said....
'Thatcher droned on about home ownership and yet here she was forcing through legislation that effectively put up a barrier to aspirant homeowners. The poll tax put more money in the pockets of landlords and helped them grow their portfolios at the obvious expense of first time buyers.'
Ring any bells?
25. uncle tom said...
The failings of the poll tax were essentially threefold:
Firstly, as Flashman notes, it lacked the checks and balances needed to prevent a small number of people benefiting unfairly.
Secondly, it was introduced overnight, when a phased introduction over perhaps three or four years would have been wiser, and cause less shock to those who had to pay more.
But thirdly, and perhaps most significant, was the decision to use the changeover as a cover to reduce the rate support grant, with the result that most households ended up paying more..
Bungled it most certainly was!
26. rumble said...
"free mandela banner"? He was a puppet, interchangeable part.
27. the number cruncher said...
Rumble explain your cryptic post??? I am interested to hear if their was a darker side to Mandela, I know he was Thembu nobility.
28. flashman said...
uncle tom: I'm all for the simplification of taxes but the poll tax was a very poor example of simplification. Its implementation was indeed bungled but even if it had been executed with precision, there is no getting away from the fact that is was, "the regressive tax to end them all".
I cut and pasted a definition:
"A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. In simpler terms, a regressive tax imposes a greater burden (relative to resources) on the poor than on the rich"
It works just as well with a few substituted words.
"The poll tax was a regressive tax that was imposed in such a manner that the tax rate decreased as the amount subjected to taxation increased. In simpler terms, this regressive tax imposed a greater burden (relative to resources) on the poor than on the rich"
29. vacuouspolitician said...
What a load of cobblers.
@ Rumble - No. Some people walk the walk...and some people just talk the talk. The HPC 'elite' are the latter.
30. Crunchy said...
Some here pack thier sandwiches in plastic containers and others in leather strapped wicker baskets.
I know the names by now. :)
31. uncle tom said...
Flashman,
A lot of taxation is relative to the ability of the individual to pay, but it does not follow that any tax that does not fit that mould should be condemned out of hand - the rich man pays the same duty on a pint of beer as does the poor man..
One of the problems with local government finance prior to the poll tax fiasco, was the ability of local government candidates to stand on a platform of reckless spending, and be elected by people who would suffer no financial consequence as a result. There were some extreme examples of wanton spending prior to the reform.
Introducing a connection between what a local council spends, and what their electors pay, had become a pressing issue at the time.
32. flashman said...
uncle tom: Our income tax is designed so that the richer man pays a higher % of his income. Presumably society thinks that this is fair, so we could argue that all taxes should follow this template. The duties on beer and fuel do not follow this template. On the other hand the VAT exemption on food is more faithful to the template because the poorer man spends a much higher % of his income on food. Obviously the poll tax belonged in the same 'regressive' bracket as beer and fuel.
I sometimes waiver on this line of thought because the richer man now pays approaching 70% of his income in tax (including NI but not including VAT, rates, duties and a million sneaky taxes on anything and everything that moves). I think there comes a time when it is not healthy to further burden the richer man.
“Introducing a connection between what a local council spends, and what their electors pay, had become a pressing issue at the time”.
Then and now. If our national and local governments weren't so reckless, we'd all pay less tax and there would be no reason to test the breaking point of both the richer man and the poorer man. My old man paid 78% income tax and 98% on investment income. Another term of Labour and we'd have reached those levels again. Madness
33. mr g said...
Number Cruncher and Flashman
Presumably your protests were in your uni days and were very noble and idealistic but a lot of us haven't had the luxury of being able to study full time AND protest, as we live in the real world and had to work for a fu**ing living.
34. rumble said...
keyboard's taken 2 locking,using onscreen point&click so no mood 4 politicians esp nobel prize winning messiahs.trendy pr bs
are there 2 distinct groups of hpc elites, bit like the reactionaries?
captcha fk
35. mr g said...
@Rumble "are there 2 distinct groups of hpc elites, bit like the reactionaries?"
4 actually:
Guardian reading public sector types, former socialist idealists who have made money, foaming at the mouth extreme right and left wingers and the plain mad.
36. rumble said...
i want 2 b elite - will take plain mad.
37. uncle tom said...
All I know is that after 13 years of Nu Labour, I've had enough of Champagne socialism to last me until the end of my days..
..and admin - get rid of this stupid reCAPTCHA thing - I can't read what it says half the time, and if you click the button to get it in voice form it comes out with something totally different in an indian accent..
38. mr g said...
Goodness, gracious, me
39. the number cruncher said...
mr g @ 26- my first degree was in Medical Biochemistry, a bloody hard subject and I worked harder for it than most people in full time jobs, and a 70 hour week was common for me. I have repaid society many times over for its investment in my education. I also worked as a bouncer in a nightclub during that time to help pay my way. Don't be too jealous, as I doubt you would have wanted to trade places. But I loved it and the joy of knowledge and discovery should be open to all. Have you ever thought of getting a degree through night classes? I did an MA in marketing and an MBA at Night School and got some grants and some cash from my then employers to cover a lot of the fees, while working full time of course.
Nowt wrong in learning
40. mr g said...
@NC
There's certainly nowt wrong in learning, I've encouraged my kids to do so and seen them obtain good degrees, one in Electronic Engineering and the other in Languages.
I'm never been jealous of anyone as I believe that you make your own luck in this life.
I studied at night school whilst doing a full time job, achieved Chartered status in my area of technical expertise and cannot complain at how life has treated me.
@UT Don't worry about the reCAPTCHA thing, just type in some word that looks similar and it works anyway!
41. mr g said...
Typo: That should read I've never been jealous.
42. letthemfall said...
mr g "..as I believe that you make your own luck in this life."
Wish I'd known that. I'd have made myself born into a wealthy family.