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Alice in Wongaland economy - new solutions needed Watch

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    Sorry if this is a gloomy piece. However, I think we should discuss the real state of Britain and not some fairy tale version of 'recovery' currrently being touted by the Tories.

    I liked this phrase - "Alice in Wongaland" - dreamed up Ann Pettifor of Prime Economics, a think tank - she says that the current 'recovery' in consumer spending and therefore major areas of the economy like retailing and services is unsustainable, as real incomes are continuing to fall. People are simply continuing to borrow too much.
    http://www.telegraph.co.uk/finance/n...d-economy.html

    It seems that with interest rates continuing at rock bottom, there is no incentive to save - and with inflation persisting and real incomes falling, a huge informal tax is being applied to the population to devalue government debt and (presumably) maintain the fiction that the banks are back in business. The reality is that they still represent a dire threat to every citizen in the UK as they are still too big to be permitted to fail.

    Overall, the picture continues to be gloomy. Unemployment has been kept lower by forcing down wages and marginalising millions of workers on casualised, zero-hours contracts. Pensions are in a total mess - private pensions have been systematically milked by fees and hedge funds. Only buy-to let landlords, egged on by the government, have a theoretical chance at decent retirement income, provided that property prices continue to escalate, due to too few houses being built and too many people chasing housing with insufficient funds.

    Utilities are being allowed to milk customers, with weak regulation and constant price increases. Alleged 'free markets' in energy do not exist, but are manipulated by the utilities corporate owners and allies.

    The difference between what actually needs to happen and what is happening is huge. What should be happening is:

    * Banks should be broken up into retail and investment operations, as they used to be. If the banks want to run casino operations, they shouldn't be permitted to do it at risk to taxpayers. Coalition response: NOT HAPPENING. Blather about internal ringfencing. Regulation if anything being weakened.

    * Large house building programmes are needed in the public sector and for Housing Associations. Coalition response: NOT HAPPENING. Some minor modifications to local authority rules, but it remains chronically underfunded.

    * There should be state control of major public resources like energy, rail and broadband that are currently all being delivered at constantly increasing prices and with no or insufficient improvement in quality. Broadband lags behind other countries. Rail is the most expensive in Europe. Energy prices have increased dramatically causing widespread hardship and squeezing the economy. Coalition response: NOT HAPPENING. Blather about 'shopping around' is their usual mantra. In reality there are no options for consumers. Expensive, ineffective infrastructure projects like HS2 are taking up the available money.

    * Taxes - tax havens should be shut down, businesses trading in the UK should be forced to pay taxes here on their turnover and clever methods of offshoring taxes via fee transfers abolished. Large IT corporations like Apple, Google and others that refuse to pay taxes should be prevented from operating here without a special tariff, designed to replace the lost tax income. The UK should be going along with the EU's efforts to deal with this. Coalition response: NOT HAPPENING. Lip service is paid to tax haven reform but the reality is that no serious action is taken. Tories are deeply in bed with Google and unwilling to work against their financial interests.

    Perhaps even more depressingly, Labour currently have no worthwhile policy answers on the above.

    We need a new Labour leadership and a clear programme to get us out of this dismal hole. David Cameron, Nick Clegg and George Osborne are unwilling to do this because they are in hock to private interests. Ed Milliband seems unwilling to do it because Labour are also still tied up in kowtowing to some large corporate interests.
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    1 and 2 should definitely be happening. I don't understand why the Coalition hasn't regulated on those two issues.
    I disagree about services though. The situation with rail and energy at the moment is hardly ideal but there is no reason to believe the state can or will do a better job. If you look at countries with more successful rail/energy/broadband than ours you will find that there are countries where, for instance, the rails are mostly publicly-owned and others where the rails are mostly privately-owned. I think we're more likely to get somewhere working with what we've got than hopping those services between two ideological camps whenever it seems trendy to do so. Also, if the state takes these back on then we have yet another burden on already creaking public finances. I'm not certain how effective the investment in HS2 is supposed to be compared to a similar investment in expanding the current standard network, but it is nonetheless a long-term investment, so characterising it as 'taking up the available money' doesn't make sense to me. Any transport project of a similar scale is likely to face huge backlash due to NIMBYism, but we cannot expect to stay competitive as country with our transport services as they are.

    "Broadband lags behind other countries" isn't sufficient grounds to argue that broadband is doing badly. There have been enormous improvements recently with uptake of fiber-optic broadband. Customers, for the most part, DO have a choice of which broadband provider to use and the prices are about adequate. The next move of the goverment should be to make a more convincing investment in rural broadband
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    (Original post by Fullofsurprises)
    Sorry if this is a gloomy piece. However, I think we should discuss the real state of Britain and not some fairy tale version of 'recovery' currrently being touted by the Tories.

    I liked this phrase - "Alice in Wongaland" - dreamed up Ann Pettifor of Prime Economics, a think tank - she says that the current 'recovery' in consumer spending and therefore major areas of the economy like retailing and services is unsustainable, as real incomes are continuing to fall. People are simply continuing to borrow too much.
    http://www.telegraph.co.uk/finance/n...d-economy.html

    It seems that with interest rates continuing at rock bottom, there is no incentive to save - and with inflation persisting and real incomes falling, a huge informal tax is being applied to the population to devalue government debt and (presumably) maintain the fiction that the banks are back in business. The reality is that they still represent a dire threat to every citizen in the UK as they are still too big to be permitted to fail.


    Overall, the picture continues to be gloomy. Unemployment has been kept lower by forcing down wages and marginalising millions of workers on casualised, zero-hours contracts. Pensions are in a total mess - private pensions have been systematically milked by fees and hedge funds. Only buy-to let landlords, egged on by the government, have a theoretical chance at decent retirement income, provided that property prices continue to escalate, due to too few houses being built and too many people chasing housing with insufficient funds.

    Utilities are being allowed to milk customers, with weak regulation and constant price increases. Alleged 'free markets' in energy do not exist, but are manipulated by the utilities corporate owners and allies.

    The difference between what actually needs to happen and what is happening is huge. What should be happening is:

    * Banks should be broken up into retail and investment operations, as they used to be. If the banks want to run casino operations, they shouldn't be permitted to do it at risk to taxpayers. Coalition response: NOT HAPPENING. Blather about internal ringfencing. Regulation if anything being weakened.

    * Large house building programmes are needed in the public sector and for Housing Associations. Coalition response: NOT HAPPENING. Some minor modifications to local authority rules, but it remains chronically underfunded.

    * There should be state control of major public resources like energy, rail and broadband that are currently all being delivered at constantly increasing prices and with no or insufficient improvement in quality. Broadband lags behind other countries. Rail is the most expensive in Europe. Energy prices have increased dramatically causing widespread hardship and squeezing the economy. Coalition response: NOT HAPPENING. Blather about 'shopping around' is their usual mantra. In reality there are no options for consumers. Expensive, ineffective infrastructure projects like HS2 are taking up the available money.

    * Taxes - tax havens should be shut down, businesses trading in the UK should be forced to pay taxes here on their turnover and clever methods of offshoring taxes via fee transfers abolished. Large IT corporations like Apple, Google and others that refuse to pay taxes should be prevented from operating here without a special tariff, designed to replace the lost tax income. The UK should be going along with the EU's efforts to deal with this. Coalition response: NOT HAPPENING. Lip service is paid to tax haven reform but the reality is that no serious action is taken. Tories are deeply in bed with Google and unwilling to work against their financial interests.

    Perhaps even more depressingly, Labour currently have no worthwhile policy answers on the above.

    We need a new Labour leadership and a clear programme to get us out of this dismal hole. David Cameron, Nick Clegg and George Osborne are unwilling to do this because they are in hock to private interests. Ed Milliband seems unwilling to do it because Labour are also still tied up in kowtowing to some large corporate interests.

    You real are a barrel of laughs aren't you? Economic indicators show a depressed economy and you're all doom and gloom. Economic indicators show an improved economy, and you're all doom and gloom. Just what would make you happy? Everybody at an equal level of misery? Those who have worked hard and bettered themselves penalised to help out those who haven't chosen to work hard?

    As long as you find a savings account that pays out more than the inflation rate then you're doing well. With current inflation rates set out at 2.8%, if you can't get a savings account that pays out more than that, then I'm sorry, but you're dense and you're on your own.

    Yes the current low interest rates doesn't help savers very much, but high interest rates don't help people who are in debt......the very same people you normally claim to represent. When interest rates were slashed in 2008, I had two types of friends. The ones with common sense who took the savings in their mortgage prepayments and overpaid their mortgages to reduce their personal debt. And those that took the extra £200 a month a spent it on goods. I fall into the first category as I will quite happily do with out luxuries to pay off personal debt, but the other group also benefit society by spending additional money in the economy. SO low interst rates are a win win situation. They promote spending and encourage the payment of personal debt.

    The banks still are in a weak position, but they've been strengthening that position day after day.


    More movement has been made on tax avoidance than ever happened under Labour. The nature of business means that one nation can't just implement the changes itself. If HMG tried to take on Google by itself it would fail miserably. Google would still avoid tax, and whatever tax it did pay in the UK , the government would loose as the company would just relocate outside of the UK but still be allowed to operate. It needs to be done on a global scale so Google has nowhere else to run to and as you can see, that's exactly what the government is doing.

    http://www.telegraph.co.uk/news/poli...avoidance.html
    https://www.gov.uk/government/news/p...ities-at-davos

    However, lets also remember that these nasty evil corporations aren't just banking all of this cash and sitting around on thrones made of bundles of cash and diamonds. The Share holders are the ones who get the money. And the Share holders are individual people investing their own money, pension funds making investments on behalf of other people. So if you have one knee jerk reaction to solve one problem you then end up with another problem being created of pension funds becoming under funded resulting in poorer pensioners. Investments not paying off resulting in a reduction in demand for goods that then creates a recession. And the whole cycle starts again.

    These things will take time to sort out. But they will be sorted out. So although I agree with your sentiments, as does the government its not as straight forward problem set as you make it out to be.


    Labour had 13 years to sort this out, but were the ones that drove the situation.
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    All of that talk, yet I bet you still won't admit Labour would have done a worse job. Personally I don't think the coalitions done half bad in the circumstances. They've had a plan and stuck to it, which is more than you can say for the opposition. "We would borrow to help the economy." Three months later "Perhaps borrowing isn't the right idea."

    There is a few qualms I have with some policies. Gay marriage I don't agree with, but that's my personal opinion. However I'd like to see more of a focus on 'working class' issues. For example, petrol costs an arm and a leg and between 60-80% of that is tax. Get this sorted man. The NHS has been rebuilt for what? I've got friends who work in the NHS and they've said the same people that were fired from the top jobs were reemployed under a new board. The NHS should be employing new doctors and nurses. Simple as that. I don't want my taxes spent on some bureaucrat at the top who does no work. I wanna see my the results of my taxes, and the NHS is failing to produce those results.
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    (Original post by uktotalgamer)
    All of that talk, yet I bet you still won't admit Labour would have done a worse job. Personally I don't think the coalitions done half bad in the circumstances. They've had a plan and stuck to it, which is more than you can say for the opposition. "We would borrow to help the economy." Three months later "Perhaps borrowing isn't the right idea."

    There is a few qualms I have with some policies. Gay marriage I don't agree with, but that's my personal opinion. However I'd like to see more of a focus on 'working class' issues. For example, petrol costs an arm and a leg and between 60-80% of that is tax. Get this sorted man. The NHS has been rebuilt for what? I've got friends who work in the NHS and they've said the same people that were fired from the top jobs were reemployed under a new board. The NHS should be employing new doctors and nurses. Simple as that. I don't want my taxes spent on some bureaucrat at the top who does no work. I wanna see my the results of my taxes, and the NHS is failing to produce those results.
    Fuel prices have gone up year on year since the Oil crisis in the 70s.

    This is however for many independent, yet intertwined reasons.

    By increasing fuel prices you encourage people to use less oil. Cars have become more efficient as a buy product with a lot higher mpg than a decade ago, and it's high oil prices that drive that as consumers push for it.

    Prices have also gone up due to developing nations needing more oil. That's a issue that has been overlooked.

    We have a high tax rate for petrol as we have a very high government out lay. If you cut petrol prices, tax revenue has to increase somewhere else. I quite lie the idea f people paying tax on what they use.

    Get a bike. I used to think I couldn't do without my car. I bought a bike a few months back. I cycle to my house to university everyday. A ten mile round trip. It's saved me a fortune and I'm fitter and healthier for it. I even bought some Panniers so I can go shopping.


    Overall, I actually think that the coalition has done quite a good job. The rate at which the deficit is increasing is slowing down so hopefully we'll see it stop and reverse. The economy is on the mend. Tax receipts from high income earners at an all time high, whilst tax breaks for low income earners have been increased.They've increased exports and are promoting non service sector industries to grow.

    Yeah. Not a bad job considering the abortion they inherited.
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    The conservatives have never been supporters of any of those key issues you mentioned (banking, I'm not sure) but public sector housing, public sector energy, public sector anything was always going to be a no-no.

    Plus in the recession under a conservative government it's no surprise that workers suffer, as you say, zero-hour contracts are acceptable because there is a large supply of workers who would do it for less. Imagine what would happen if the MW disappeared.

    That said, the lack of Labour response IS depressing
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    (Original post by MatureStudent36)
    Fuel prices have gone up year on year since the Oil crisis in the 70s.

    This is however for many independent, yet intertwined reasons.

    By increasing fuel prices you encourage people to use less oil. Cars have become more efficient as a buy product with a lot higher mpg than a decade ago, and it's high oil prices that drive that as consumers push for it.

    Prices have also gone up due to developing nations needing more oil. That's a issue that has been overlooked.

    We have a high tax rate for petrol as we have a very high government out lay. If you cut petrol prices, tax revenue has to increase somewhere else. I quite lie the idea f people paying tax on what they use.

    Get a bike. I used to think I couldn't do without my car. I bought a bike a few months back. I cycle to my house to university everyday. A ten mile round trip. It's saved me a fortune and I'm fitter and healthier for it. I even bought some Panniers so I can go shopping.


    Overall, I actually think that the coalition has done quite a good job. The rate at which the deficit is increasing is slowing down so hopefully we'll see it stop and reverse. The economy is on the mend. Tax receipts from high income earners at an all time high, whilst tax breaks for low income earners have been increased.They've increased exports and are promoting non service sector industries to grow.

    Yeah. Not a bad job considering the abortion they inherited.
    UK invests substantially less in cycling than many other European countries, to our detriment.

    But please, not the bold again, it's getting repetitive.
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    (Original post by That Bearded Man)
    UK invests substantially less in cycling than many other European countries, to our detriment.

    But please, not the bold again, it's getting repetitive.
    It's getting repetitive for me as well, but there seems to be large members of society that still haven't grasped how messed up things were between 2008 and 2010.
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    (Original post by Fullofsurprises)

    * Banks should be broken up into retail and investment operations, as they used to be. If the banks want to run casino operations, they shouldn't be permitted to do it at risk to taxpayers. Coalition response: NOT HAPPENING. Blather about internal ringfencing. Regulation if anything being weakened.

    * Large house building programmes are needed in the public sector and for Housing Associations. Coalition response: NOT HAPPENING. Some minor modifications to local authority rules, but it remains chronically underfunded.

    * There should be state control of major public resources like energy, rail and broadband that are currently all being delivered at constantly increasing prices and with no or insufficient improvement in quality. Broadband lags behind other countries. Rail is the most expensive in Europe. Energy prices have increased dramatically causing widespread hardship and squeezing the economy. Coalition response: NOT HAPPENING. Blather about 'shopping around' is their usual mantra. In reality there are no options for consumers. Expensive, ineffective infrastructure projects like HS2 are taking up the available money.

    * Taxes - tax havens should be shut down, businesses trading in the UK should be forced to pay taxes here on their turnover and clever methods of offshoring taxes via fee transfers abolished. Large IT corporations like Apple, Google and others that refuse to pay taxes should be prevented from operating here without a special tariff, designed to replace the lost tax income. The UK should be going along with the EU's efforts to deal with this. Coalition response: NOT HAPPENING. Lip service is paid to tax haven reform but the reality is that no serious action is taken. Tories are deeply in bed with Google and unwilling to work against their financial interests.

    .
    I'm not going to respond to the deleted but i will address the main points...

    Banks - Insufficient, lets not forget that it's the bad debt on Spanish retail arms that is sinking them. What needs to happen is a large increase in fractional reserves.

    Housing - I'd prefer to provide incentive's for the private sector but i agree with the sentiment. We do require an expansion of housing capacity.

    Public services - Each requires a different solution. Some should be devolved, some should have a public/private partnership, some should be freed from the state.

    Tax evasion/avoidance - So long as sovereign states exist it is unlikely to be in the interests of most countries to sort this, the best we could do is reduce tax evasion to EU countries.
 
 
 
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