Tax hikes OR cuts in Services?

[observer]

Seems the basic question for the next election is now being framed, which do you want? Most economists are warning that any sudden withdrawal of stimulus funding or a return to the credit binge that caused the financial mess in the first place, could retard economic recovery for another ten years or worse, plunge us into another (so-called W) recession. As we all know, the post election period will be painfull, irrespective of who forms the Government; but I think we should consider the pros and cons of the two options.

[asperity]

A combination of the two seems to be inevitable. The behaviour of Brown, who is pretending alls well and spending money we don't have, will only make it more painful when reality kicks in

[Paul Kennedy]

Worth considering that just because less is spent on a service, that service will be cut. There is much inefficiency in service provision, some of it brought about by the users of services.

[observer]

Appreciate your sincerity Paul; alas your Party has never been one for fine surgery, but rather general butchery. They will cut the public sector with a vengence, not just the top execs etc: not just the PC created jobs; but the jobs of Plebs - turning them into tax consumers rather than tax-payers. Then with the cost of unemployment and other benefits soaring; they'll hit the most vunerable, making (as usual) the peasants carry the can for the antics of the city. However, this will be a particularly dangerous manoevre given the rising social instability due to uncontrolled immigration, the last gasp of trade unionism, and the need to sustain recovery investment. Tax hikes would seem the less risky option, provided they are targeted at those who can afford it.

[Bazj]

the jobs of Plebs - turning them into tax consumers rather than tax-payers.

 

Someone on say ?35,000 a year paying a few grand a year in tax/NI having lost their job (salary paid by government) doesn't become a net drain on the taxpayer; we would actually be better off surely? We don't pay the wage, but we lose the tax/NI. They would still get family allowance etc. so cut away if you ask me....

 

How many tens of thousands of non-jobs have this government created since coming to power???

[Lt Kije]

Asperity has it about right

[Eagle]

Loo, you are Neville Chamberlain and I claim my ?10.

[observer]

As a Tory Baz, I understand your struggle with political myopia: but there are consequences to every action of Governments: a bloke working for a Council is providing a service and at the same time pays tax: throw him on the dole and your still paying him dole to do nothing and paying his stamp etc. Plus, with so many idle hands harbouring a sense of injustice, it won't be long before the pent up anger is released on our streets, with inter-racial riots and increased crime levels - so not a simple equation. In principal, the Tories are correct in wishing to bring down borrowing and seek a balanced budget; the question is, how and how long you allow. A sudden cut of ?50billion would no doubt compromise any recovery and extend the recession. The punitive effects of their zeal for cuts would fall ultimately on the poorest and most vunerable in our society; when the cause of our ills - the Bankers - walk away with golden hand-shakes. Indeed, none of the main Parties are committed to clamping down on the bonus culture, which is now re-emerging in the City - thus the rich and reckless ride off the field on their horses, while the PBI get slaughtered - yet again.

[asperity]

It really depends on which bloke working for the council you're talking about. Some jobs are pretty essential (binmen spring to mind immediately for some reason) while others are not (gay outreach advisors etc). So there is obviously room for cutbacks there without bringing hordes of outraged workers onto the streets (apart from hordes of gay outreach advisors of course). Employers in the private sector deal with lean times by cutting expenditure which includes cutting staff deemed to be surplus to requirements (however distasteful this is to everone involved). In the public sector, however, it seems the reaction to lean times seems to be to take on more staff as it's only taxpayers' money

[observer]

Not disagreeing Asp, if you read my second post: there is indeed lots of scope for cuts, such as PC created posts, they could scrap Trident and ID cards without us noticing. However, despite Cameron's attempt to re-brand the Conservatives; it's their nature to seek small Government, cut services whole-sale; de-regulate etc etc. The only successfull Country emerging from the slow down has been China - why? - because they control their own banking system and greedy little city traders can get a bullet in the back of their head. However, we require surgery not butchery.

[asperity]

As regards the greedy bankers, the government has used our money to buy some of the banks, but somehow managed to neglect to take control of the same banks' management. How incompetent is that?

[Bazj]

As regards the greedy bankers, the government has used our money to buy some of the banks, but somehow managed to neglect to take control of the same banks' management. How incompetent is that?

 

How Nu Labour is that more like....

 

As for being a Tory Obs; I'm afraid I'm far to far to the right in too many ways for them to embrace me!!

[observer]

Your right Asp; but none of the Parties are getting a grip of the bankers, and indeed, it may require international co-operation to do so. That's OK then Baz, we're roughly in the same area then!

[asperity]

Your right Asp; but none of the Parties are getting a grip of the bankers, and indeed, it may require international co-operation to do so. That's OK then Baz, we're roughly in the same area then!

 

I'm sorry Obs but where does "none of the parties" come into it? The party in power, the party that spent taxpayers money buying the banks' debts is NuLiebour under the leadership of Prudence Brown. They are allowing the banks to do what they want and stick two fingers up to the rest of us. The opposition parties are doing what they've done for the last 12 years - nothing. I'm afraid it's going to take more than a change of government to get us out of Gordon's mess

[Lt Kije]

Hang on a minute

 

No party in power would have let the banks go under, who ever was in would have to have done the same thing.

 

Reality check over

[asperity]

LtKije you are probably right in saying that whatever party was in power they would have done the same but that doesn't mean it was the right thing to do!

[Lt Kije]

I agree with you on that Asp All the banks have leared from this is, If they fail they will be bailed out

[observer]

What is happening here is: that the finance industry are holding Government's to ransom, the fact that the bail out has shown their existence is essential to the capitalist system, and now they're saying "oh thanks for the loan, we'll pay it back, and we can be left un-regulated, to return to buisiness as usual". Having preached democracy and free market capitalism to the rest of the world; the rest of the world have seen in this collapse the fragile nature of global capitalism as proposed by the West. Capitalism has been saved by socialist measures, and the realisation is dawning that some new economic model is required, which recognises the need for economic institutions to be accountable to ordinary people.

[Lt Kije]

All good points Obs

[observer]

I hate to say it but, the more I hear, it would seem Gordy is the only one with a handle on the situation. The banks need heavy regulation (or continued nationalisation), but this can't be achieved by one country alone, it needs international agreement - and he seems the only one who recognises and is pursuing this at the moment. There needs to be, for example, a clear seperation between commercial banking and investment banking, and a limit on the size of banks, so that they are never too big to be allowed to fail. Perhaps the best outcome at the next election would be a hung Parliament, with Gordy at No 10, and Vinny at No 11?!

[Peter T]

After his promises to the Unions yesterday, the sooner he goes the better.

Does he think the whole country has amnesia? His promises mean nothing. IF he was as good as he thinks he is, we wouldn't be in such a mess in the first place.

[observer]

Whilst the Bliar Government encouraged the credit binge and colluded with the City; I'm not sure you can blame Gordy directly for the actions of City bankers and traders: niether am I sure that the Tories, who scrapped city regulation in favour of a light touch approach, would have made any difference. In fact, their inclination to allow the banks to fail and go bankrupt without any Gov support, would probably have resulted in chaos worse than the great depression.

[Lt Kije]

All good point Obs I find it amazing that Tory supporters forget it was there legislation that helped the banks to get out of control

What do you think Peter T

[asperity]

All good point Obs I find it amazing that Tory supporters forget it was there legislation that helped the banks to get out of control

What do you think Peter T

 

Who's legislation LtKije? Banks have been regulated by the FSA under the Financial Services and Markets Act 2000. Correct me if I'm wrong, but haven't we had a Labour Government since 1997?

[Lt Kije]

Yes Labour brought in the act. It put the finishing touches on what the Tories had started