Libertarians Thoughts On The New Government

[Traktion]

We currently have an absolute guarantee of public sector cuts and a blind faith in the ability of the private sector to grow at a rate that has never been seen before.

But no one can actually tell me where this growth is going to come from.

What industries are going to expand to create 2.5 million new jobs?

What new industries are about to be created that will create that many jobs?

What choice do we have? We can't just keep borrowing.

We either have to go with higher taxes or public sector cuts. IMO, we're taxed too much as it is, which leaves only one option.

[libspero]

independant of what or who and why? to what end?

what opportunities are you talking about?

the above sounds like a classic political soundbite built from stock phrases and concepts.

what do you think about the quest for growth? Good or bad?

Independent of state support/ handouts.

Opportunities to pay less tax and instead invest their money in a business idea (either their own or someone else's).

I have no particular issue with the quest for monetary growth.. we sort of do that already by targetng price inflation. I do take issue wth global population growth and sustainability, but that is probably a larger issue than single government policy.

[Authoritarian]

Is it one of these?

[libspero]

We currently have an absolute guarantee of public sector cuts and a blind faith in the ability of the private sector to grow at a rate that has never been seen before.

But no one can actually tell me where this growth is going to come from.

What industries are going to expand to create 2.5 million new jobs?

What new industries are about to be created that will create that many jobs?

If you recognise that we are in a period of economic restructuring/realignment then you appreciate that there is a lack of monetary growth generally, independent of whether it is public or private.

The issue originated from a rapid expansion of monetary growth caused by irresponsible lending resulting in extensive private speculation and malinvestment. The investments went bad, losses were made and the monetary supply started contracting sharply. As a result of this we printed money and moved a substancial amount of the liabilities onto sovereign entities.

The problem is that as a result of this illusionary/bad growth we taxed more in order to borrow / spend more to redistribute the wealth. Some might argue that this, under the stewardship of our previous government was allowed runaway almost uncontrollably to very high levels with almost no contingency for any period of monetary contraction/realignment.

The fact that public sector spending and state handouts are being cut back is the result of the mal investment and the requirement for government to balance it's books. As any sensible government needs to do.

It will be the unenviable job (IMHO) of the bank of England to try to apply a monetary policy to promote growth and investment in the country whist balancing this against currency strength and inflation.

The scale of what is being asked of the private sector is mind boggling, over the last decade we have graduated a whole load of people to work in the games industry. It has often been lauded as the new darling of clean, green, high tech exporting of the future.

At it's peak the whole games industry in this country only employed 15,000 people. It has been shrinking at 15% a year for the last couple of years as companies are lured away by tax breaks offered by France, Canada, Singapore, South Korea etc.

I'm not an expert on the games industry.. great if it takes off, if not, lets not waste money on it. Industry will decide whether we need (if there is demand for) more games manufacturers. All we can do is try to make the UK an attractive investment location by offering skilled/educated people and an attractive tax regime. IMHO

[Authoritarian]

Personally I'm not sure that is enough for us - or Western Europe in general.

There are 2 billion people prepared to work for a pittance in China and India alone. Many are becoming well educated so they have skills too.

No - I think the time has come to insist on equal environmental policies, equal social policies like healthcare and unemployment benefits and, dare I say it, equal pay.

Otherwise the only reason the businesses move round is in a race to the bottom and higher returns on capital - not because of better technology and products, which in my view today, should be the ONLY REASON why a product or service should be bought from abroad.

Surely this undermines the concept of national sovereignty?

I don't think that we're in any position to lecture the Chinese on the virtues of Western economics.

[libspero]

Personally I'm not sure that is enough for us - or Western Europe in general.

There are 2 billion people prepared to work for a pittance in China and India alone. Many are becoming well educated so they have skills too.

No - I think the time has come to insist on equal environmental policies, equal social policies like healthcare and unemployment benefits and, dare I say it, equal pay.

Otherwise the only reason the businesses move round is in a race to the bottom and higher returns on capital - not because of better technology and products, which in my view today, should be the ONLY REASON why a product or service should be bought from abroad.

I'm not sure that I completely understand your argument. Are you saying that because foreign workers are prepared to work for less, we should impose trade barriers to foreign imports?

I think I probably see the opposite problem. These low paid workers that have afforded us such a luxurious life style in the West for the past couple of decades are starting to become wealthier and are now competing with us for global resources.

This will drive up prices and lower the standard of living in the West, but at the benefit(?) of bringing some of these more manual jobs jobs back to our own shores.

Edited July 3, 2010 by libspero

[Authoritarian]

I'm not sure that I completely understand your argument. Are you saying that because foreign workers are prepared to work for less, we should impose trade barriers to foreign imports?

I think I probably see the opposite problem. These low paid workers that have afforded us such a luxurious life style in the West for the past couple of decades are starting to become wealthier and are now competing with us for global resources.

This will drive up prices and lower the standard of living in the West, but at the benefit(?) of bringing some of these more manual jobs jobs back to our own shores.

Good post. The Chinese have done us a huge favour by producing goods that the UK domestic market is desperate to consume in exchange for a pittance, if that era comes to an end a large portion of the UK public would be significantly worse off (much to the delight of middle class economists and commentators who lament on the evils of Chinese economics)

But this glosses over the main point that we - not the Chinese- have destroyed our economy by inflating tax revenues and house prices. If we hadn't have done this we could have a had a very cheap and high standard of living this past decade with very little debt.

[D.C.]

If you recognise that we are in a period of economic restructuring/realignment then you appreciate that there is a lack of monetary growth generally, independent of whether it is public or private.

The issue originated from a rapid expansion of monetary growth caused by irresponsible lending resulting in extensive private speculation and malinvestment. The investments went bad, losses were made and the monetary supply started contracting sharply. As a result of this we printed money and moved a substancial amount of the liabilities onto sovereign entities.

The problem is that as a result of this illusionary/bad growth we taxed more in order to borrow / spend more to redistribute the wealth. Some might argue that this, under the stewardship of our previous government was allowed runaway almost uncontrollably to very high levels with almost no contingency for any period of monetary contraction/realignment.

The fact that public sector spending and state handouts are being cut back is the result of the mal investment and the requirement for government to balance it's books. As any sensible government needs to do.

It will be the unenviable job (IMHO) of the bank of England to try to apply a monetary policy to promote growth and investment in the country whist balancing this against currency strength and inflation.

Agree completely.

I'm not an expert on the games industry.. great if it takes off, if not, lets not waste money on it. Industry will decide whether we need (if there is demand for) more games manufacturers. All we can do is try to make the UK an attractive investment location by offering skilled/educated people and an attractive tax regime. IMHO

Disagree completely.

Wee Georgie has just cancelled loans to Forgemasters claiming that if it made economic sense they would have been able to raise the money in the markets.

He cancelled the tax incentive for the games industry which will now continue to haemorrhage jobs and taxes. We have spent millions of taxpayer pounds training students for years in universities, we have spent millions creating the 'educational infrastructure' (lecturers, hardware, software etc) and millions laying high bandwidth fibreoptic for the games companies to use.

After a decade of investment by 2008 we had a thriving industry, but then France, Canada, Singapore, South Korea started offering tax breaks and companies started leaving.

The tories seem to have a very simplistic view of the market.

No country is offering tax breaks to Asda so that Asda will stop selling vegetables in Britain. They are offering tax breaks to the games industry to lure companies away.

So supermarkets and games companies have different market forces acting on them.

What is more, you can tax supermarkets as much as you want, nobody is going to drive to China for their weekly shop are they? Asda is only competing against other supermarkets in this country.

By contrast games companies can operate from anywhere with electricity and a building. So if another country offers a generous tax incentive it guarentees that the games industry in this country will rapidly die.

By being overly simplistic and ideological, demonstrated by the blanket reduction in corporation tax, we are made less globally competitive not more if you compare us to a company that taxes supermarket type industries at 30% and games type industries at 10%

Corporation tax should be like VAT.

Kids clothes = 0% tax

Most stuff = 17.5% tax

Booze & fags = shed loads of tax

As a libertarian would you support leving an equal amount of tax on children's clothes and cigarettes and let the market decide how many kids get clothes and how many people smoke?

[libspero]

Wee Georgie has just cancelled loans to Forgemasters claiming that if it made economic sense they would have been able to raise the money in the markets.

Agreed. I don't know a huge amount about Forgemasters, except that the £80m government loan (recently withdrawn) was to be used to fund expansion into large/specialist castings for the nuclear industry. This looks at face value like a viable business proposition.. I can't imagine if everything lines up why this money can't be borrowed from private sources.

He cancelled the tax incentive for the games industry which will now continue to haemorrhage jobs and taxes. We have spent millions of taxpayer pounds training students for years in universities, we have spent millions creating the 'educational infrastructure' (lecturers, hardware, software etc) and millions laying high bandwidth fibreoptic for the games companies to use.

After a decade of investment by 2008 we had a thriving industry, but then France, Canada, Singapore, South Korea started offering tax breaks and companies started leaving.

It is a difficult one (and as I said previously not an area I am particularly familiar with). I thought the games industry was actually growing in the UK.. I believe Sony have quite a presence up in the North West.

As far as tax breaks go, we can provide incentives to industry up to the point we break even, but ultimately if you are paying more to attract companies than you are generating in revenue (both directly and indirectly) then you have to be rational about what you are trying to achieve. If the only thing required for producing computer games is access to the internet and a computer, then low wages in other countries will win out regardless. That said, I imagine we should have some advantage given that most games will be sold in European/American states and we are closer culturally to provide games that will appeal to that particular audiance.

The tories seem to have a very simplistic view of the market.

No country is offering tax breaks to Asda so that Asda will stop selling vegetables in Britain. They are offering tax breaks to the games industry to lure companies away.

- SNIP -

By being overly simplistic and ideological, demonstrated by the blanket reduction in corporation tax, we are made less globally competitive not more if you compare us to a company that taxes supermarket type industries at 30% and games type industries at 10%

I'm sure the government are aware of which companies are mobile or not. We do not have a monopoly on supermarkets yet so any tax savings would need to be passed on (to some extent) to the consumer. That said, I'm sure the government have ways to tax supermarkets pretty considerably relative to other favoured industry. I'm sure "soon not to be a chain retailer" could enlighten us further.

Corporation tax should be like VAT.

Kids clothes = 0% tax

Most stuff = 17.5% tax

Booze & fags = shed loads of tax

As a libertarian would you support leving an equal amount of tax on children's clothes and cigarettes and let the market decide how many kids get clothes and how many people smoke?

If I were a pure libertarian I would probably not agree with any sales tax, a simple income based tax would be plenty. Personally though I am reasonably happy with the current VAT system and wouldn't go to great lengths to change it. I wouldn't particularly single out tobacco and alcohol for special treatment. That has more to do with life choices than market forces IMHO.. who am I to tell you you can't drink and smoke?

[D.C.]

It is a difficult one (and as I said previously not an area I am particularly familiar with). I thought the games industry was actually growing in the UK.. I believe Sony have quite a presence up in the North West.

As far as tax breaks go, we can provide incentives to industry up to the point we break even, but ultimately if you are paying more to attract companies than you are generating in revenue (both directly and indirectly) then you have to be rational about what you are trying to achieve. If the only thing required for producing computer games is access to the internet and a computer, then low wages in other countries will win out regardless. That said, I imagine we should have some advantage given that most games will be sold in European/American states and we are closer culturally to provide games that will appeal to that particular audiance.

I'm sure the government are aware of which companies are mobile or not. We do not have a monopoly on supermarkets yet so any tax savings would need to be passed on (to some extent) to the consumer. That said, I'm sure the government have ways to tax supermarkets pretty considerably relative to other favoured industry. I'm sure "soon not to be a chain retailer" could enlighten us further.

It was until other countries started offering tax breaks, now we are not competitive.

Even the Torygaph is calling it as a mistake

http://www.telegraph.co.uk/technology/video-games/7847291/Budget-2010-Scrapping-video-games-tax-credits-is-a-big-mistake.html

Even if you slash corporation tax to zero for the games industry you still provide jobs, economic activity and tax from income tax.

I'm starting to think that there is little more than blind ideology driving a lot of policies put forward taken from a rose tinted view of the Thatcher years. I hope not as there want be an oil to save us...

[D.C.]

That is not quite true.

There is another way of looking at the oil as a poison challice....

http://en.wikipedia....i/Dutch_disease

Or another way of looking at it is that Japan and Germany never discovered large amounts of cheap oil and gas to increase their exchange rates and 'hollow them out'.

It is true that there is no oil wealth about to come to the rescue.

British manufacturing was in decline before the discovery and exploitation of oil so blaming North Sea oil for the decline is absurd.

[Sourman]

After 13 years of the statists bankrupting us, destroying our freedom and re-distributing wealth from the productive to the nonproductive;

What do the Libertarians on here make of the new government?

I'm pretty damn impressed so far.

- Takling wasteful spending.

- Removing pointless laws and regulations.

- Promoting the only sector that creates wealth for the nation.

I know its not Ron Paul and Peter Schiff, but at least its a step in the right direction.

Thoughts? Socialists need not reply.

You're so full of sh*t It's almost frightening. This gov't will bring riots back to the streets of London, glad you're so happy.

[Potwalloper]

You're so full of sh*t It's almost frightening. This gov't will bring riots back to the streets of London, glad you're so happy.

So you are angry about the dependency culture being dismantled. You wanted to pay housing benefit to keep the unemployed in swimming pools?

Or are you just a child whose team isn't 'in'?

[scepticus]

Independent of state support/ handouts.

Opportunities to pay less tax and instead invest their money in a business idea (either their own or someone else's).

those currently on state handouts don't have any money, and don't pay any tax, so actually making them indepependant of state handouts doesn't seem like an adavntage to them. Perhaps you could explain the logic there.

what they need is a job, whatever it may be. Funny you failed to mention that.

Then after they have had a job for a while, they could possibly think about actually having some spare cash of their own, and perhaps take advantage of these new opportunities.

Now, about those jobs...

Edited July 4, 2010 by scepticus

[Zngland]

Agree completely.

Disagree completely.

Wee Georgie has just cancelled loans to Forgemasters claiming that if it made economic sense they would have been able to raise the money in the markets.

He cancelled the tax incentive for the games industry which will now continue to haemorrhage jobs and taxes. We have spent millions of taxpayer pounds training students for years in universities, we have spent millions creating the 'educational infrastructure' (lecturers, hardware, software etc) and millions laying high bandwidth fibreoptic for the games companies to use.

After a decade of investment by 2008 we had a thriving industry, but then France, Canada, Singapore, South Korea started offering tax breaks and companies started leaving.

The tories seem to have a very simplistic view of the market.

No country is offering tax breaks to Asda so that Asda will stop selling vegetables in Britain. They are offering tax breaks to the games industry to lure companies away.

So supermarkets and games companies have different market forces acting on them.

What is more, you can tax supermarkets as much as you want, nobody is going to drive to China for their weekly shop are they? Asda is only competing against other supermarkets in this country.

By contrast games companies can operate from anywhere with electricity and a building. So if another country offers a generous tax incentive it guarentees that the games industry in this country will rapidly die.

By being overly simplistic and ideological, demonstrated by the blanket reduction in corporation tax, we are made less globally competitive not more if you compare us to a company that taxes supermarket type industries at 30% and games type industries at 10%

Corporation tax should be like VAT.

Kids clothes = 0% tax

Most stuff = 17.5% tax

Booze & fags = shed loads of tax

As a libertarian would you support leving an equal amount of tax on children's clothes and cigarettes and let the market decide how many kids get clothes and how many people smoke?

So to subsidise the games industry our food bill should rise

[easy2012]

he cancelled the tax incentive for the games industry which will now continue to haemorrhage jobs and taxes. We have spent millions of taxpayer pounds training students for years in universities, we have spent millions creating the 'educational infrastructure' (lecturers, hardware, software etc) and millions laying high bandwidth fibreoptic for the games companies to use.

After a decade of investment by 2008 we had a thriving industry, but then France, Canada, Singapore, South Korea started offering tax breaks and companies started leaving.

I think I have to agree with you on this one. We would be better off with a game industry than not.

The tories seem to have a very simplistic view of the market.

No country is offering tax breaks to Asda so that Asda will stop selling vegetables in Britain. They are offering tax breaks to the games industry to lure companies away.

So supermarkets and games companies have different market forces acting on them.

What is more, you can tax supermarkets as much as you want, nobody is going to drive to China for their weekly shop are they? Asda is only competing against other supermarkets in this country.

Quite correct but again this is simplistic. Company have a ROI for each investment plan. If they can pass the cost on to maintian profit, they will. If they can't, then Tesco will invest overseas and the competition will be reduced and the supermarket sector will become even more concentrated. There is a curvy effect here but if you say you want to tax supermarket at few % more than other corporations, I think it is a good idea. Actually, this has already been done via Business Rate - the supermarket consent always attracts a pretty high business rate. And actually the government knows this, that is why they do PAYE tax as they know people are even less immobile than Tesco investment plans.

Then of course we have difficulties defining what a 'supermarket' is. Is it one that sell food? Is it one that sellf food and toys and nappies? Is Ocado a supermarket or is it a website?

By being overly simplistic and ideological, demonstrated by the blanket reduction in corporation tax, we are made less globally competitive not more if you compare us to a company that taxes supermarket type industries at 30% and games type industries at 10%

I suppose the reduction of the corporation tax makes UK more competitive globally OVERALL - higher value added capital that will be attracted to 24% CT on a speciific industry will come here while activities that requires 0% won't (such as some banking activities, which will continue to use Jersey and the usual UK 'partners')

Corporation tax should be like VAT.

Kids clothes = 0% tax

Most stuff = 17.5% tax

Booze & fags = shed loads of tax

As a libertarian would you support leving an equal amount of tax on children's clothes and cigarettes and let the market decide how many kids get clothes and how many people smoke?

Tax are distortions and setting different rates should be the last resort. Current VAT structure already caused silly things such as M&S arguing in a the court whether a cake is a cake or a cake is actually a biscuit. I would much prefer a flat low rate of VAT, maybe 5% (other country call this sales tax). I do have to agree with you that at 17.5%, different rates will have to be applied as 17.5% on essential is a bit too much to bear. However, the root cost of the need of a high VAT is non other than the bloated state that needs lots of income and the EU.

Edited July 4, 2010 by easybetman