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The Solution To Britains Economic Problem


jplevene
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Also check http://www.civilservice.gov.uk/Assets/2009-10%20Resourcse%20Accounts_tcm6-36925.pdf and you will see the money is in funds managed by companies such as Standard Life.

The section of the above which refers to Standard Life and others is about additional voluntary contribution facilities available to civil service scheme members; Standard Life manages these AVC funds and does not receive, hold or manage any contributions from the main Civil Service scheme.

Edited by White Craw
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We could reform our present rent-a-currency money system and provide ourselves with an adequate, publicly issued, debt-free means of exchange with which to conduct our business and run our economy.

That would eliminate the institutionalised, continuous and unavoidable transfer of wealth from the money users (that's us) to the money issuer-lenders (the banks).

http://www.positivemoney.org.uk/

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Not sure about the accuracy of this, it states that Public Sector managers etc. get less than private sector which we all know is not true.

Also check http://www.civilservice.gov.uk/Assets/2009-10%20Resourcse%20Accounts_tcm6-36925.pdf and you will see the money is in funds managed by companies such as Standard Life.

The section of the above which refers to Standard Life and others is about additional volutary contribution facilities available to civil service scheme members; Standard Life manages these AVC funds and does not receive, hold or manage any contributions from the main Civil Service scheme.

That's right, and check out page 10

"The Principal Civil Service Pension Scheme (PCSPS) is an unfunded public service

scheme made under the Superannuation Act 1972. All payments of benefits and other

liabilities from the Scheme are met from the Civil Superannuation Request for Resources

(RfR). Participating employers make contributions known as Accruing Superannuation

Liability Charges (ASLCs), which are treated as Appropriations in Aid on the RfR. ASLCs are

regularly assessed by the Scheme Actuary and are consistent with those that might have

applied had the Scheme been funded, making allowance for amortised surpluses or deficits

that would have arisen in a funded scheme based on an assumed notional investment return."

The fundamental set up is ponzi, but all underwritten by the tax payer. Cutting numbers is going to cut the ponzi element of the funding, leaving a larger cost to be covered by the taxpayer. The switch from RPI to CPI link will help.

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We have no money, an imaginable debt, a huge pension fundshortfall, risk of a double dip recession, etc.

The following would clear that, make Britain the economic super power and put us into the black within a few years, without burdening our children with our debt. So as not to waffle on, I have put this into 3 brief points:

  • Firstly, to boost growth and investment you need to reduce taxes, mainly on companies, which in turn would increas tax receipts (the proof is in world history).
What proof?
Our tax laws are complex and allow the rich to avoid paying tax, leaving the burden on the middle class and poor. Countries with simple tax systems have larger growth than coutries with more complex systems.
Which countries?
The simple solution; abolish all taxes (except VAT, which should be drastically reduced) and replace with a flat 20% tax rate on people's earnings only (and then lowered to 15% at a later date), which means that companies pay no tax on their profits. All dividend payments and wages payments above £10,000, would be subject to a flat 20% tax. The dividends should be taxed at source (the company paying them deducts them). UK companies receiving dividends can reclaim the tax, once it has been paid (non UK companies can't reclaim the tax).

This stops the non-dom tax dodge for multimillionaires. It is also the greatest incentive for large corporations to move to England as all of their profits can be re-invested which creates more wealth and growth in the UK. It also means that all profits earned in the UK are subject to tax payable to the UK government.

There are 2 major loopholes with this basic system; millionaires could pay dividends to there own personal company that supports their lifestyle and overseas shareholders could invoice their UK company for bogus services by an overseas company instead of paying themselves dividends. However these could be overcome with simple regulation and laws.

All of these "solutions" rest on the veracity of the "problems" you have outlined but have not provided evidence for.
Reduce the Public sector (Civil Servants) size by at least half in the first year then continue to reduce its size more slowly over the next few years. Currently the public sector is larger than the private sector that funds it. It is simple maths and common sense that it needs to be reduced as it is funded by the private sector that can't afford it. You are probably now shouting saying how it will collapse the economy, but read the next point.
Whilst suggstng that the private sector need to produce more welath than the public sector consumes, you fail to address the more fundamental question why all modern capitalist economies seem to be incapable of gernerating enoubh jobs in the private sector.
We need to solve the Civil Servant pension fund shortfall currently at £3.8 trillion. This is easy, abolish the Civil Servant pension scheme. This is a fund, therefore the money is actually there, albeit tied up in investments, but it is not monopoly money like the rest of the money the government spends.
Again, it's obvious that the pensions funds do not stand a chance of meeting their future obligations. Again, though, you do not adress the moire fundamental question of why?
This fund should be proportionally given in cash lump sum windfalls and tax free to all civil servants who have paid into it. This will also have another effect, it will instantly inject huge amounts of cash into the economy. These Civil Servants will suddenly have large windfalls of cash that they will spend, which will in-turn boost the private sector. Unlike before, the boost will be from actual money and not borrowed money. This will counteract the effect of the mass unemployment from the previous point and create many more jobs in the private sector.

Your suggestion here is a mere short term boost. It does not adress any of the points I have mentioned. Is it because you have no answers?

There are many other points like keeping Entrepreneur Tax Relief on capital gains, as this would promote investment and be an incentive to do so. Also there should be no tax on the capital gains on your home, inheritance tax abolished, etc.

All we need is a bold and gutsy PM who isn't afraid of the voting civil servants, unions and tabloid headlines. The unions would actually help as when they call a strike and save us money, as we wont have to pay the union members while they are on strike.

This is a very simplified version with just the major key points.

All you have done here is describe a set of propossals to make the books balance. all well and good on paper. However, out here in the real world you are going to find that there will be a very large number of people who can;t afford to live knocking on the dfoorsof those who can afford to live. In your visioniary future, some people are going ot need to build some very high fences.

You have provided no answers.

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