Opinion: UK is on its way to complete economic collapse.

Original post by Anonymous

The current pandemic which has affected the economy very adversely. Millions are going to be job less and unemployed . UK has no natural resources or manufacturing and relies wholly on services and tourism (which has come to a halt due to covid). And now the PM wants to give citizenship to Hong Kong citizens, which is going to exacerbate the situation further as initially most will need affordable council housing and welfare benefits to adjust, as there arent many jobs.
Venzuela an oil rich country collapsed a few years ago. I think UK could be heading in the same direcction

And of course a hard no deal Brexit won’t help but then most people on this forum are staunchly in favour of Brexit at no matter what cost.

Reply 29

Original post by Anonymous

The current pandemic

Original post by Anonymous

Agree.

Original post by Anonymous

obviously

You guys all the same person right?

Reply 30

Original post by Frazzle27

Spending is what will limit the economic effects of COVID and will hopefully reduce the economic impact.

The most important thing is to keep the taxes as low as possible.

The lower the taxes, the more work places will entepreteurs afford to keep, and the cheaper the product, hence more buyers.

Reply 31

Original post by PTMalewski

The most important thing is to keep the taxes as low as possible.

The lower the taxes, the more work places will entepreteurs afford to keep, and the cheaper the product, hence more buyers.

Which is why Delaware is the most prosperous part of the USA and why Finland is a dump compared to Somalia?

Reply 32

Original post by Quady

Which is why Delaware is the most prosperous part of the USA and why Finland is a dump compared to Somalia?

You could as well argue that Moon's economy produces lower GDP than North Korea, that would be equally clever.

Reply 33

Original post by PTMalewski

You could as well argue that Moon's economy produces lower GDP than North Korea, that would be equally clever.

OK. I mean thats true and supports my point

Try this out then
https://ourworldindata.org/grapher/country-level-taxes-vs-income

There is a clear positive correlation between GDP/capita and tax revenue as a proportion of GDP.

Sure, correlation doesn't imply causation. But it'd be difficult to demonstrate the opposite be true.

Reply 34

imlikeahermit

14

Just wait until Brexit becomes brexit and we kill the economy completely!

Reply 35

Original post by Quady

OK. I mean thats true and supports my point

Try this out then
https://ourworldindata.org/grapher/country-level-taxes-vs-income

There is a clear positive correlation between GDP/capita and tax revenue as a proportion of GDP.

Sure, correlation doesn't imply causation. But it'd be difficult to demonstrate the opposite be true.

Of course there is, as more developed countries also tend to have higher taxes. There are two main reasons for it. One is that taking 20% from a rich man, does not strike him as much as taking 10% from a poor man. Another reason is that highly developed typically introduced democracy around the moment when they were reaching extreme advantage over other countries, and as Karl Marks said, 'To make socialism prevail in the country, it is enough to introduce democracy'. People appreciate social handouts but aren't as good at noticing how taxes affect product prices.

There is also a correlation which says that as long there is no war, the country is generally in order, and there is reasonable population, the countries with lower taxes develop much faster. Take a look at China, their incredible growth rates that keep going for decades. In the 80ies they were much poorer, and their economy was backward relative to the East Block countries. Right now the living standards in China are better than in many East Block countries, they're becoming better than top ones of that former Block, and overall their economy is becoming world's top.
A similar experiment was done in Romania, they lowered the taxes very much, and most of the time they're over 5% which is much higher than EU's average, and sometimes they were getting over 10%.

I see where you're coming from, the socialist argument is that higher taxes can be used to build more infrastructure, help disadvantaged etc. but the problem with these is that public administration is often very inefficient, putting money to irrational projects or to rational projects in irrational way (eg. typical EU funds problems in many countries: they would repair a road for EU funds, half a year later destroy it because they got funds for new sewers- terrible planning no private businessman would have done), but also giving handouts to people who would exploit it and so on.

And even if we assumed, that 0% of public money is wasted, which isn't even realistic, the more money the state has to spend on different projects, the more administration workers the state has to hire. Which isn't just making work places, because welfare doesn't come from redistribution, for the same logical reason you can't make something from nothing and 1 is not equal to 0. To make any welfare or economic development, you need to take a resource and add the values of work and knowledge to it. The administration doesn't to it, it at best can help, but it has to be efficient, which often doesn't happen, for several reasons I could describe, and I'm not doing here to save some space in this already long post. But even if it is efficient, it costs money, and here we could switch to the most important thing I believe, that's the economic backfire or unseen results.

The point is, that if the taxes are high, it's more difficult to create work places or even start a business at all (which is something I've not only read a lot about, but also experienced first hand), as all the stuff you're going to need costs more money which you may not have. There are also increased costs of running the business, like taxes in fuel, electricity or the work itself.
Now, the reason why even fairly educated people have problems finding jobs, is that employers are not allowed to pay them the money these people can produce. They have to pay the minimal wage+taxes, which might be more than the income an inexperienced worker can produce, and many employers can't afford it. It's bad both for these people who can't find employment for years, and for the employers, who find difficulties finding and training the staff as many simply can't afford training them from the bottom when they have to pay taxes and minimal wage higher than the income a new worker can generate during the first months.

Now, the classic liberal argument, from which you can draw further conclusions, including the above, is that if taxes are lower, poorer people can afford to start and run business, it's cheaper to hire people so it's easier to develop business, and the final product is cheaper- so more people can afford to buy it, their living standard improves because they can afford more things and companies can develop because they can sell more stuff, thus it makes sense to produce more, thus to hire more people. And the bigger the demand for workforce, relative to supply, the more of their spare money they have to pay to their workers, so welfare distribution naturally becomes more equal, while productivity is at possible maximum.

(edited 3 years ago)

Reply 36

Original post by PTMalewski

I see where you're coming from, the socialist argument is that higher taxes can be used to build more infrastructure, help disadvantaged etc. but the problem with these is that public administration is often very inefficient, putting money to irrational projects or to rational projects in irrational way (eg. typical EU funds problems in many countries: they would repair a road for EU funds, half a year later destroy it because they got funds for new sewers- terrible planning no private businessman would have done), but also giving handouts to people who would exploit it and so on.

You're making the fallacy that private business is rational. Clearly that's not the case.

Businesses fail, 20% within the first year, 60% within the first three. That's not effective capital allocation.

The financial system went kaput a decade ago due to the irrational aggregation of irrational loans.

I own shares in BrewDog, to this day that company owns land it bought ten years ago for a new brewery only to then work out getting utilities connected would cost too much. Businesses rip up stuff they have only just built pretty frequently. Take the A380 in the airline industry, even pre-covid that was being retired with half its lifespan left because of duff projections.

The Internet came out of irrational/inefficient public sector spend. Sometimes some decent stuff comes from it.

Reply 37

username5252758

12

Original post by PTMalewski

I see where you're coming from, the socialist argument is that higher taxes can be used to build more infrastructure, help disadvantaged etc. but the problem with these is that public administration is often very inefficient, putting money to irrational projects or to rational projects in irrational way (eg. typical EU funds problems in many countries: they would repair a road for EU funds, half a year later destroy it because they got funds for new sewers- terrible planning no private businessman would have done), but also giving handouts to people who would exploit it and so on.

When you are old enough to enter the world of work you are going to be in for one hell of a shock when you found out just how badly managed, irrational and wasteful a lot of private companies are.

Now, the reason why even fairly educated people have problems finding jobs, is that employers are not allowed to pay them the money these people can produce

The office cleaner does not produce money for the business in any meaningfully measurable way. Yet the business continues to employ her. You may want to dwell on that.

I get the impression you've read a basic A level economics and believe it makes you sound smart. It doesn't. The real economic world is not as simplistic or dogmatic are you think.

Reply 38

Original post by Quady

You're making the fallacy that private business is rational. Clearly that's not the case.

Businesses fail, 20% within the first year, 60% within the first three. That's not effective capital allocation.

The financial system went kaput a decade ago due to the irrational aggregation of irrational loans.

A decade ago you already head what was over what communist parties wanted to achieve in the west a hundred years ago.

You've not adressed my points at all, you're just talking of accidental stuff. Sure lots of business fail. The higher the taxes, the more must fail. You're also not noticing that even failing businesses give more to the economy than state administration. Even if a business fail, it always either gives money to other people by buying services and stuff, or produces something. The state administration can only steal money from people.
Denying logic with correlations is not a good way of finding solutions. First you need to establish a sytem which can logically work. Only then you could use statistics to watch things too complex for logical thinking abilities.

Original post by Trotsky's Ghost

The office cleaner does not produce money for the business in any meaningfully measurable way. Yet the business continues to employ her. You may want to dwell on that.

Good luck with working on anything while drowning in dirt. The point of hiring a cleaner is that people with higher qualifications don't have to waste their time on cleaning the workplace.

Original post by Trotsky's Ghost

I get the impression you've read a basic A level economics and believe it makes you sound smart. It doesn't. The real economic world is not as simplistic or dogmatic are you think.

Okay, maybe the next time you try, you will be able to deliver some logical reasoning instead of pure instults. This time you've failed. If you actually understood how economy works, you would have explained where am I wrong, instead of throwing the rough comparision without adressing what do I know or say. You don't even seem to know what the word 'dogma' means.

(edited 3 years ago)

Reply 39