Britain's Truly Shocking Deficit: Telegraph

[crashmonitor]

It isn't sustainable though is it?

It hasn't made a blind bit of difference having the sham tories in power. Ed Balls and Osborne both belong to the Bilderberg Party. All roads lead to the same place irrespective of which useful idiots are running the UK economy.........a slow grinding descent into economic armageddon.

Got to give the voters what they want, triple locks and all.

[Guest UK Debt Slave]

<b>Calling them stupid is a waste of breathe.</b>

Of course they are...they dont understand anything about Economics (although they should since they all seem to have a PPE degree from Oxbridge).

Since Blair we have had these useless career "pygmy" politicos who look good on TV and that is that.

Any how it has gone past the point where they could do anything even if the knew what to do and had the intention to do it.

The SYSTEMIC problems we now face will take longer than the election cycle to fix.

The action of eroding out national DEBT will require not only the end of the yearly deficit but also actually spending less than we take in tax receipts for a prolonged period (decades).

The entitlement class will not like that and will remove any leader who even looks likely to embark on such a course of action.

Bread and Circuses it is then.

.

It isn't "stupidity"

It is the **deliberate** and well planned destruction of western economies.

I can't overstress the word DELIBERATE

Edited October 23, 2014 by UK Debt Slave

[campervanman]

@Crashmonitor. Why does the UK need a Ponzi? Why did the UK have decent public services and pensions before the 1980's without the need for a Ponzi? What has happened to the money since the 1980's?

[Guest UK Debt Slave]

Got to give the voters what they want, triple locks and all.

Exactly

By voting for these scumbags, you legitimise your own financial and economic death sentence and the eventual death of all freedom.

[crashmonitor]

@Crashmonitor. Why does the UK need a Ponzi? Why did the UK have decent public services and pensions before the 1980's without the need for a Ponzi? What has happened to the money since the 1980's?

Because the demographic has changed, the NHS cost one seventh of its current level in real terms in 1970. The liabilities have suddenly become payable, and we expect a lot more than we used to.

[Guest UK Debt Slave]

@Crashmonitor. Why does the UK need a Ponzi? Why did the UK have decent public services and pensions before the 1980's without the need for a Ponzi? What has happened to the money since the 1980's?

Because those things could be funded by real future economic growth before the 1980s.

Now we are in a situation where economic growth can only be stimulated by artificially cheap credit and rampant quantative easing. There is no sustainable growth in the western economies and only big corporations and banks are benefitting from the current socio-economic system. It's no wonder that pensions and public services are collapsing. There's simply no wealth creation to pay for these future liabilites.

[Bear Goggles]

He wants to entirely separate the issues of low pay and welfare spending- as if the low paid and those receiving state support were different species- in reality of course things are different, and a substantial amount of state support is being directed at people whose pay is so low they cannot afford to pay their rents or bills.

The joke is that guys like Heath have been arguing for decades that a 'flexible' labor force is the key to prosperity- but now they have exactly that- a poorly paid and insecure working population- they find that as well as benefits (cheap labor) there are costs in terms of having to support these people financially.

Maybe if people were paid a living wage instead of having their wages topped up by tax credits or housing benefit the welfare bill might be reduced- and maybe if the corporations paid their taxes instead evading them the tax take might go up.

But of course both these solutions would hit the 'wrong' people- so instead we will have more the same- more and more people forced into low paid jobs or 'self employment' and more and more calls for cuts to the welfare bill.

A living wage will just result in higher rents. The problem is systemic. Neoliberal economics is walking the tightrope between economic and political failure. At some point it is going to fall off.

If they continue with this level of "social benefits" - which is as much about subsidising banks via QE, landlords via housing benefit, and companies via working tax credits, as it is about giving money to the low-paid and unemployed - then the defect will continue to grow and eventually the system will collapse under its own weight of debt.

However, if - as Alistair Heath is suggesting - they cut back sharply on social benefits to balance the budget, then at best it will be political suicide for the party that does it, and at worst there will be social unrest and some kind of uprising.

So it's really just about the narrative behind continuing to do what we are doing. Labour will talk about closing tax loopholes and providing a living wage, and the Tories will talk about cutting benefits, but both are stuck doing exactly the same thing - continuing to maintain the status quo because the alternatives are too unpalatable.

[crashmonitor]

A living wage will just result in higher rents. The problem is systemic. Neoliberal economics is walking the tightrope between economic and political failure. At some point it is going to fall off.

If they continue with this level of "social benefits" - which is as much about subsidising banks via QE, landlords via housing benefit, and companies via working tax credits, as it is about giving money to the low-paid and unemployed - then the defect will continue to grow and eventually the system will collapse under its own weight of debt.

However, if - as Alistair Heath is suggesting - they cut back sharply on social benefits to balance the budget, then at best it will be political suicide for the party that does it, and at worst there will be social unrest and some kind of uprising.

So it's really just about the narrative behind continuing to do what we are doing. Labour will talk about closing tax loopholes and providing a living wage, and the Tories will talk about cutting benefits, but both are stuck doing exactly the same thing - continuing to maintain the status quo because the alternatives are too unpalatable.

A living wage assumes that we all have the power to just magically increase our wages from the magic money tree. As a self employed person, I don't.

[campervanman]

@UK debt slave. There has been plenty of wealth creation since the 1980's in Western economies. The difference between the post and pre 1980's is the proportion of wealth going into the real economy via the wages of those who produce the wealth. Look at increases in real take home pay vs increases in productivity together with the proportion of national income going to the 1% since 1980.

Edited October 23, 2014 by campervanman

[Venger]

A living wage assumes that we all have the power to just magically increase our wages from the magic money tree. As a self employed person, I don't.

You are posting a lot more sense in recent months.

He wants to entirely separate the issues of low pay and welfare spending- as if the low paid and those receiving state support were different species- in reality of course things are different, and a substantial amount of state support is being directed at people whose pay is so low they cannot afford to pay their rents or bills.

The joke is that guys like Heath have been arguing for decades that a 'flexible' labor force is the key to prosperity- but now they have exactly that- a poorly paid and insecure working population- they find that as well as benefits (cheap labor) there are costs in terms of having to support these people financially.

Maybe if people were paid a living wage instead of having their wages topped up by tax credits or housing benefit the welfare bill might be reduced- and maybe if the corporations paid their taxes instead evading them the tax take might go up.

But of course both these solutions would hit the 'wrong' people- so instead we will have more the same- more and more people forced into low paid jobs or 'self employment' and more and more calls for cuts to the welfare bill.

How about lower costs, instead of forcing employers to pay people a lot more than they're worth the their business? So we remain competitive on world stage. How about lower rental costs? HPC too.

I noticed in the London thread with a lot of entries going to auction, and quite a few of the houses entered to auction were on behalf of The Salvation Army (they're cashing in?). One source I read a few years ago suggested The Salvation Army being quite a large landord - but not sure if it was a US or UK source. Checking why The Salvation Army might be selling led to this 1 October 2014 blog about the zany sums involved in Housing Benefit and how the bulk of it going to people who are not unemployed, to mosly to top up incomes and pension incomes, to pay private sector landlords.

£24.8 billion was handed out to landlords in the form of Housing Benefit cheques in 2012/13 – the latest year for which exact figures are available. This is a rise of £2.7 billion, in real terms annual spending on Housing Benefit since the Tories came to power.

https://johnnyvoid.wordpress.com/category/welfare-reform-2/housing-and-homelessness/

[porca misèria]

The truth is in the short term world of politics, the EU immigration has flattered our deficit. basically we have promised ourselves the moon and the only way to maintain the welfare Ponzi was to import labour.

These immigrants are (meanwhile) accruing trillion of pounds worth of health and retirement rights, all off balance sheet; so trying to maintain the Ponzi and keeping the deficit at manageable proportions (7% doesn't look very manageable to me) means even more grief in forty years time when we have to import more immigrants to support the immigrants.

Forget about 40 years time: it's a continuous process.

When Attlee kicked the modern statist system off it wasn't so bad: there was real growth to be had back to normality from the devastation of war. But that was a one-off and attempting to prolong it sent us bust in the '70s.

[Guest UK Debt Slave]

@UK debt slave. There has been plenty of wealth creation since the 1980's in Western economies. The difference between the post and pre 1980's is the proportion of wealth going into the real economy via the wages of those who produce the wealth. Look at increases in real take home pay vs increases in productivity together with the proportion of national income going to the 1% since 1980.

Where?

In the housing market?

In expansion of the state?

Where is the wealth creation that is going to pay for everyone to have a 1st class health system and a comfortable retirement?

I don't see it anywhere.

There has been very little real wealth creation since the 1980s but a huge redistribution of the existing wealth to the very wealthiest.

Edited October 23, 2014 by UK Debt Slave

[BalancedBear]

Where?

In the housing market?

In expansion of the state?

Where is the wealth creation that is going to pay for everyone to have a 1st class health system and a comfortable retirement?

I don't see it anywhere.

There has been very little real wealth creation since the 1980s but a huge redistribution of the existing wealth to the very wealthiest.

Not everyone can have a comfortable retirement or access to 1st class health systems as there are too many people not contributing and taking too much out. However, even those people too lazy to work or create any wealth themselves are more wealthy than many years ago. If you cannot see that living standards have improved, you are choosing to ignore it.

There has been redistribution of wealth to the wealthiest, but quite a bit of this is down to government action such as paying tax credits and large housing benefit bills. These payments set a floor of what can be afforded by those on low incomes.

[THE BALD MAN]

Because those things could be funded by real future economic growth before the 1980s.

Now we are in a situation where economic growth can only be stimulated by artificially cheap credit and rampant quantative easing. There is no sustainable growth in the western economies and only big corporations and banks are benefitting from the current socio-economic system. It's no wonder that pensions and public services are collapsing. There's simply no wealth creation to pay for these future liabilites.

Where?

In the housing market?

In expansion of the state?

Where is the wealth creation that is going to pay for everyone to have a 1st class health system and a comfortable retirement?

I don't see it anywhere.

There has been very little real wealth creation since the 1980s but a huge redistribution of the existing wealth to the very wealthiest.

+1

[Guest UK Debt Slave]

Not everyone can have a comfortable retirement or access to 1st class health systems as there are too many people not contributing and taking too much out. However, even those people too lazy to work or create any wealth themselves are more wealthy than many years ago. If you cannot see that living standards have improved, you are choosing to ignore it.

There has been redistribution of wealth to the wealthiest, but quite a bit of this is down to government action such as paying tax credits and large housing benefit bills. These payments set a floor of what can be afforded by those on low incomes.

Not everyone can have a comfortable retirement or access to 1st class health systems as there are too many people not contributing and taking too much out

Yup!

The welfare class and the poorest are being subsidized by clobbering the working and middle class

The uberrich are being subsidized by clobbering the working and middle class.

Same as it ever twas!

They need to keep the poorest above some threshold of poverty where they might get tetchy and start rioting. So they are deliberately being kept above that threshold.

It's always the middle class and the productive working class people in society who get squeezed........what's left of them...

You know how I define the economic and social classes in this country? The upper class keeps all of the money, pays none of the taxes. The middle class pays all of the taxes, does all of the work. The poor are there just to scare the shit out of the middle class. Keep 'em showing up at those jobs. - George Carlin

[Guest UK Debt Slave]

(deleted duplicate post)

Edited October 23, 2014 by UK Debt Slave

[Executive Sadman]

@Crashmonitor. Why does the UK need a Ponzi? Why did the UK have decent public services and pensions before the 1980's without the need for a Ponzi? What has happened to the money since the 1980's?

What is your infatuation with 'the 1980s'?!

If you need reminding, we had quite serious public debt problems in the 70s...even went to the IMF. The 80s just transferred this problem from the public to the private sector...as has happened in all western nations.

Nope...IMO it all goes back to the 50s, when America decided rather than scale down the vast military industrial complex from WW2, they'd keep it going via constant war and invasions (ie eisenhowers famous speech)...this, IMO... explains the deficits caused by the idiocy of things like Vietnam which in turn led to the US abandoning the gold standard (and the rest of the west, pegged to the dollar, either explicitly or implicitly, doing the same in a de facto manner) and the ballooning deficits of the public sector in the 70s and private debt bubble from the 80s.

Its just the decline became more visible by the 80s as a snowball effect of unproductivity and financialization took hold.

[Guest UK Debt Slave]

What is your infatuation with 'the 1980s'?!

If you need reminding, we had quite serious public debt problems in the 70s...even went to the IMF. The 80s just transferred this problem from the public to the private sector...as has happened in all western nations.

Nope...IMO it all goes back to the 50s, when America decided rather than scale down the vast military industrial complex from WW2, they'd keep it going via constant war and invasions (ie eisenhowers famous speech)...this, IMO... explains the deficits caused by the idiocy of things like Vietnam which in turn led to the US abandoning the gold standard (and the rest of the west, pegged to the dollar, either explicitly or implicitly, doing the same in a de facto manner) and the ballooning deficits of the public sector in the 70s and private debt bubble from the 80s.

Its just the decline became more visible by the 80s as a snowball effect of unproductivity and financialization took hold.

Vietnam, "Guns n Butter", the hugely expensive Apollo program, etc etc

All leading to Bretton Woods II collapsing in 1971

Once the creation of money was decoupled from any tangible asset, it was always going to be a slow motion car crash towards economic armageddon.

It's taken nearly 45 years to reach a point where interest rates are near zero and only QE is keeping the global economy on life support.

[Guest UK Debt Slave]

(Another duplicate post! Why does HPC keep doing this?)

Edited October 23, 2014 by UK Debt Slave

[gf3]

Everybody keeps going on about the increasing debt. Who is on the other side of the coin?

If the level of debt is always increasing then there must be some people or companies with masses of money who are the people which companies?

[Bear Goggles]

A living wage assumes that we all have the power to just magically increase our wages from the magic money tree. As a self employed person, I don't.

Well, quite.

But the other side of that coin is that if you cannot earn enough to live by working, then what's the point in working? And if the answer to that question is that government tops up your earnings with benefits, then you have to ask yourself whether the companies that are paying less than someone can afford to live on, would still be able to find people to do those jobs if the government didn't make up the difference.

My feeling is that the answer to that question is actually 'yes', and that contrary to popular belief, the majority of people will do anything to try and improve their life through hard work - even if that hard work is ultimately fruitless - we would just have people in work that cannot afford to eat. In fact this situation is already happening to a certain extent.

Therefore I can only conclude that these "social benefits" are in place to stop real destitution and risking serious social unrest. That's why no one in mainstream politics is suggesting actually reducing benefits by a significant amount. It's left to commentators like Alistair Heath to bemoan the lack of real austerity and argue on pure economic terms, without acknowledging the reality of what real austerity would mean socially and politically.

[porca misèria]

Everybody keeps going on about the increasing debt. Who is on the other side of the coin?

If the level of debt is always increasing then there must be some people or companies with masses of money who are the people which companies?

Insurance companies, for whom it's (effectively) a legal requirement.

People with annuities. Or rather, annuity providers (note: not at all the same thing as pension funds, though those might also lend to government). Yes, that's insurance companies again.

And people who do business with government through innocent-looking channels like this or this.

And institutions of all kind, from banks to regular companies to schools to charities, wanting "safe" keeping for credit balances.

[gf3]

Well, quite.

But the other side of that coin is that if you cannot earn enough to live by working, then what's the point in working? And if the answer to that question is that government tops up your earnings with benefits, then you have to ask yourself whether the companies that are paying less than someone can afford to live on, would still be able to find people to do those jobs if the government didn't make up the difference.

My feeling is that the answer to that question is actually 'yes', and that contrary to popular belief, the majority of people will do anything to try and improve their life through hard work - even if that hard work is ultimately fruitless - we would just have people in work that cannot afford to eat. In fact this situation is already happening to a certain extent.

Therefore I can only conclude that these "social benefits" are in place to stop real destitution and risking serious social unrest. That's why no one in mainstream politics is suggesting actually reducing benefits by a significant amount. It's left to commentators like Alistair Heath to bemoan the lack of real austerity and argue on pure economic terms, without acknowledging the reality of what real austerity would mean socially and politically.

The reason we have benefits is so they can drive down wages to a level lower than they could if they didn't have benefits.

If they got rid of benefits people without children would be better off. Because the 1% would be forced to share more of their profits with the workers.

[davidg]

@Davidg

Should have been deficit = twice the level of the rest of the EU.

Ahh ok fair enough then. You should go on Question Time.

I guess the only thing good going for the UK is the deficit is written in Uk Banana pounds rather than a foreign currency like France.

[Bear Goggles]

The reason we have benefits is so they can drive down wages to a level lower than they could if they didn't have benefits.

If they got rid of benefits people without children would be better off. Because the 1% would be forced to share more of their profits with the workers.

Forced by whom? The mob? The market?

Nobody is going to force the 1% to do anything without genuine political and economic change. That is exactly the opposite of what the politicians (and the 1%) want.