Do you want to discuss boring politics? (16 Viewers)

[fernandopartridge]

In the fantasy world where the government is dependent on tax and borrowing to pay for its day to day spending, how does it practically work? Given that a lot of tax isn't paid daily? How does the government pay for things today based on hypothetical taxes paid today?

 

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[skybluetony176]

Who do you think buys government bonds?

I have a suspicion you’re going to be left really disappointed when Labour win and admit the state can’t intervene everywhere and/or increase public expenditure significantly.

With respect, Socialists have never had the best reputation for economic management.

Thank god the Tories have been in power for the last 14 years, we’ve never had it so good. Phew. They’ll walk this election based on their record in government.

 

[MalcSB]

Have you seen the state of the country you stupid tory c**t

Good to see a high standard of political debate is being maintained. What was the essence of the message left by the last outgoing Labour government? Words to the effect of “don’t bother looking for the money, there’s none left”.
They are all as bad as each other.

 

[fernandopartridge]

Good to see a high standard of political debate is being maintained. What was the essence of the message left by the last outgoing Labour government? Words to the effect of “don’t bother looking for the money, there’s none left”.
They are all as bad as each other.

I'm sure the note was a serious statement. How can a sovereign currency issuer run out of money? Please explain to me mr high-minded?

 

[wingy]

The absolute gymnastics trying to define the continuation of this failed brand!

 

[Mucca Mad Boys]

Have you seen the state of the country you stupid tory c**t

I guess we’re both stupid c**ts if we both voted Corbyn in 2019.

As a principle, if you rely on government to fix all your problems and provide all of your needs, it’s a sure way to be a) disappointed and b) poorer.

Dw, you’ll be calling Starmer a proto-Tory in 12 months when his future chancellor is an ex-banker…

 

[Mucca Mad Boys]

I'm sure the note was a serious statement. How can a sovereign currency issuer run out of money? Please explain to me mr high-minded?

Co’mon Fern, you know full well it doesn’t mean literally run out of money.

If the answer is to print more money, it’ll fuel inflation and interest rates. When interest rates nearly hit 6-7%, we were on the precipice of a mortgage and pension crisis and economic collapse. The BoE had to intervene to buy up bonds (Government debt) to shore up the situation.

The trigger for that was an announcement of a mini-budget that announced modest tax cuts and an energy cap (more costly than the tax cuts, btw).

 

[wingy]

Co’mon Fern, you know full well it doesn’t mean literally run out of money.

If the answer is to print more money, it’ll fuel inflation and interest rates. When interest rates nearly hit 6-7%, we were on the precipice of a mortgage and pension crisis and economic collapse. The BoE had to intervene to buy up bonds (Government debt) to shore up the situation.

The trigger for that was an announcement of a mini-budget that announced modest tax cuts and an energy cap (more costly than the tax cuts, btw).

Not when you're collecting Vat at twenty percent!

 

[clint van damme]

Good to see a high standard of political debate is being maintained. What was the essence of the message left by the last outgoing Labour government? Words to the effect of “don’t bother looking for the money, there’s none left”.
They are all as bad as each other.

I high standard of debate which brings up a note that was left as a joke! Alright Robin Day!

 

[Mucca Mad Boys]

Thank god the Tories have been in power for the last 14 years, we’ve never had it so good. Phew. They’ll walk this election based on their record in government.

They deserve to be kicked out of government - I’ve never voted Tory. I’m pointing out that if you expect a new Labour government to be radical and promise big spending increases in public services, you’re going to be disappointed. Don’t believe me? See Wes Streeting’s comments on the NHS - he unambiguously says they will be no money without meaningful reform. The one area that the public would overwhelmingly support increasing expenditure for.

The shadow-chancellor, Rachel Reeves, is a ex-banker who refused the label of ‘socialist’ hours after her leader did.

With specific policies that appeal to me, I’d vote for Labour this election.

 

[Mucca Mad Boys]

Not when you're collecting Vat at twenty percent!

Thank you for fixing the economy Wingy!

 

[David O'Day]

I high standard of debate which brings up a note that was left as a joke! Alright Robin Day!

The treasury note? The one first left in 1964 by Tory Reggie Maudling for Jim Callaghan?

 

[clint van damme]

The treasury note? The one first left in 1964 by Tory Reggie Maudling for Jim Callaghan?

Think it might go back further than that.

 

[skybluetony176]

The treasury note? The one first left in 1964 by Tory Reggie Maudling for Jim Callaghan?

Didn’t that one say something along the lines of good luck, sorry we fucked it all up?

 

[fernandopartridge]

Co’mon Fern, you know full well it doesn’t mean literally run out of money.

If the answer is to print more money, it’ll fuel inflation and interest rates. When interest rates nearly hit 6-7%, we were on the precipice of a mortgage and pension crisis and economic collapse. The BoE had to intervene to buy up bonds (Government debt) to shore up the situation.

The trigger for that was an announcement of a mini-budget that announced modest tax cuts and an energy cap (more costly than the tax cuts, btw).

1. The government 'prints' or moreover creates at a strike of a key every single penny it spends, all of it. It uses tax and selling bonds (not borrowing the money) as a (demonstrably not very effective) way to manage inflation by removing money from circulation in the economy.

2. As long as there is no constraint of the intended resource to spend the money on, there is no automatic inflation from government spending. At this time, given the collapse in demand which is seeing many businesses failing, there is no real argument that the UK economy does not have the capacity for increased government spending.

As a principle, if you rely on government to fix all your problems and provide all of your needs, it’s a sure way to be a) disappointed and b) poorer.

LOL, have you got anything better than clichéd Tufton St soundbites? Remember - their proposed economic model of small government and low taxes for the rich was tried, it lasted a few weeks and was catastrophic.

 

[Mucca Mad Boys]

1. The government 'prints' or moreover creates at a strike of a key every single penny it spends, all of it. It uses tax and selling bonds (not borrowing the money) as a (demonstrably not very effective) way to manage inflation by removing money from circulation in the economy.

2. As long as there is no constraint of the intended resource to spend the money on, there is no automatic inflation from government spending. At this time, given the collapse in demand which is seeing many businesses failing, there is no real argument that the UK economy does not have the capacity for increased government spending.



LOL, have you got anything better than clichéd Tufton St soundbites? Remember - their proposed economic model of small government and low taxes for the rich was tried, it lasted a few weeks and was catastrophic.

Meanwhile, government ownership and centralised economies with high tax and spend hasn’t been tried?

If you want to rely on government, be my guest. I’ll live my live and you live yours, I don’t have a problem with that. Yet, you want to shout down people who think differently to you.

 

[fernandopartridge]

Meanwhile, government ownership and centralised economies with high tax and spend hasn’t been tried?

If you want to rely on government, be my guest. I’ll live my live and you live yours, I don’t have a problem with that. Yet, you want to shout down people who think differently to you.

Alright Darren Grimes

I am not sure why you believe I am advocating an entirely centrally planned economy owned by the state, I have never said anything like that. Though I do believe in state provided public service and utility provision, like the significant majority do in this country.

 

[Mucca Mad Boys]

Alright Darren Grimes

I am not sure why you believe I am advocating an entirely centrally planned economy owned by the state, I have never said anything like that. Though I do believe in state provided public service and utility provision, like the significant majority do in this country.

Well, whenever anyone talk about ‘x’ issue, your solution is more funding and more government ownership. What’s the logical conclusion of all this?

Pretty sure you’re an avowed socialist too. Dw, it’s not a dirty word or a slur, but it’s an insight into your worldview and ideal society.

 

[fernandopartridge]

Well, whenever anyone talk about ‘x’ issue, your solution is more funding and more government ownership. What’s the logical conclusion of all this?

Pretty sure you’re an avowed socialist too. Dw, it’s not a dirty word or a slur, but it’s an insight into your worldview and ideal society.

The issue constantly talked about on here is treating the government budget's like that of a household, I simply disagree with it.

Can you show me where I've advocated for government ownership of anything that isn't usually government owned in more prosperous countries than this one?

 

[CCFCSteve]

In the fantasy world where the government is dependent on tax and borrowing to pay for its day to day spending, how does it practically work? Given that a lot of tax isn't paid daily? How does the government pay for things today based on hypothetical taxes paid today?

To be fair, your question did make me wonder how government expenditure physically gets paid ie the mechanism. I honestly didnt know. I read that there’s something called a ‘ways and means facility’ run by BoE which by the looks of it the government uses for cashflow and deficits, It basically ties into issuing short term bonds to BoE (QE).

I presume you’ve seen this the below though. Interesting exchange !

The government does not spend taxpayers’ money: that clears the government’s debt to the Bank of England

A reader of this blog, who I do not think I have met, secured the following Freedom of Information answer from HM Revenue this week: It would, of course, be possible to say ‘So what?’ and leave it at that. HMRC raises money and pays it to the Bank of England. But...

www.taxresearch.org.uk

I don’t necessarily agree with the authors assessment. We have been running a built up deficit inc ‘overdraft’ (for want of a better word) for a long time so it’s no surprise income/receipts go first to BoE and then out to the treasury. So in a sense I agree with you, it’s not tax receipts paying for government expenditure but borrowing or the ‘overdraft’. I know you don’t like the personal spending analogy but guess it’s like your wage going into your overdrawn bank account to reduce it, even if only for a short time, and then using your overdraft or additional loans to pay the bills.

Whichever mechanism you believe in though, the results are ultimately the same, tax receipts still matter and so does having some actual or perceived control over spending. Without it you’ll get either higher borrowing costs (from bonds) and/or debasement of currency and potential inflation (from excessive QE).

 

[David O'Day]

Even these cunts are giving the tories a kicking

 

[skybluetony176]

Has anyone seen Sunak today? Has he gone into hiding? Or any other Tories for that matter other than the morning rounds before the letter became public knowledge. Not seen any coverage of them anywhere regarding anything.

 

[CCFCSteve]

Has anyone seen Sunak today? Has he gone into hiding? Or any other Tories for that matter other than the morning rounds before the letter became public knowledge.

In a fridge

 

[skybluetony176]

In a fridge

On the Labour battle bus

Seriously though am I missing something or have they all disappeared from public view?

 

[CCFCSteve]

Even these cunts are giving the tories a kicking

Yeah, both parties have a ‘hole’ in their projections and neither are being honest with the electorate. The country’s likely to give labour the benefit of the doubt after 14 years though, which it’s difficult to argue with

I don’t mind Sunak, certainly compared to Truss and Johnson but he’s let himself down with some mistruths recently. In the statement in the rain he said U.K. was growing faster than the US, for one quarter correct (we had negative growth end of last year so not hard) but it’s a lie on any other comparison. I think his is, or certainly should be, better than that.

 

[David O'Day]

Yeah, both parties have a ‘hole’ in their projections and neither are being honest with the electorate. The country’s likely to give labour the benefit of the doubt after 14 years though, which it’s difficult to argue with

I don’t mind Sunak, certainly compared to Truss and Johnson but he’s let himself down with some mistruths recently. In the statement in the rain he said U.K. was growing faster than the US, for one quarter correct (we had negative growth end of last year so not hard) but it’s a lie on any other comparison. I think his is, or certainly should be, better than that.

The 2k is just not fucking true

how many more people have to say it

 

[skybluetony176]

Comments from Lord Gus O'Donnell, a former permanent secretary of the Treasury are interesting

“O'Donnell calls it a "grubby" process in which civil servants are required to provide calculations based on assumptions provided to them by ministers. He adds that the civil service would not have been acting independently because it was required to act on what the government told them to do”

So basically even the part that the treasury did look over is still bullshit based on fantasy scenarios that the Tories have conjured up in their own heads. No wonder Sunak has disappeared.

 

[Brighton Sky Blue]

Meanwhile, government ownership and centralised economies with high tax and spend hasn’t been tried?

If you want to rely on government, be my guest. I’ll live my live and you live yours, I don’t have a problem with that. Yet, you want to shout down people who think differently to you.

Look no further than the golden age of American economics shortly after the New Deal. Relatively high taxes, more but not absolute state intervention, a more unionised workforce etc etc.

Incredibly popular and a key part of the country’s prosperity at the time.

Back to 2024: after 14 years of spending cuts and real terms wage cuts, where has the money gone? Why is the economy not strong as the austerity merchants predicted?

 

[MalcSB]

Comments from Lord Gus O'Donnell, a former permanent secretary of the Treasury are interesting

“O'Donnell calls it a "grubby" process in which civil servants are required to provide calculations based on assumptions provided to them by ministers. He adds that the civil service would not have been acting independently because it was required to act on what the government told them to do”

So basically even the part that the treasury did look over is still bullshit based on fantasy scenarios that the Tories have conjured up in their own heads. No wonder Sunak has disappeared.

Sunak really is a twat, but then so is Starmer.

I haven’t decided how to vote yet, I have voted for both Tories and Labour in the past. I await the manifestos with interest.

The outcome of the election is inevitable. I’ll come back on this thread in 4 years and see how things are going then.

 

[MalcSB]

Look no further than the golden age of American economics shortly after the New Deal. Relatively high taxes, more but not absolute state intervention, a more unionised workforce etc etc.

Incredibly popular and a key part of the country’s prosperity at the time.

Back to 2024: after 14 years of spending cuts and real terms wage cuts, where has the money gone? Why is the economy not strong as the austerity merchants predicted?

Covid may have had some impact.

 

[CCFCSteve]

The 2k is just not fucking true

how many more people have to say it

I’ve not said it is ? There is a hole in both parties projections though.

Hunt only met his fiscal rules in March budget with commitments to real terms public sector cuts. Reeves said she would follow fiscal rules so it will be either cuts or tax increases from somewhere

In addition there’s now the £10bn infected blood pay out and less interest rate cuts than anticipated increasing interest bill, both of which were unknown at the time of the budget

Growth figures might be a bit better than forecast but either way both parties know there is a currently a hole to somehow fill.

 

[skybluetony176]

Covid may have had some impact.

Minimal at best. If you look at any trend of anything affected by austerity we’re pretty much bang on trend to where we would have been regardless of covid. The truth is austerity has been proven to be an awful idea and a political choice that damaged growth and robbed services of the money it needed. It’s going to take a generation to undo the failures of austerity.

 

[Mucca Mad Boys]

Look no further than the golden age of American economics shortly after the New Deal. Relatively high taxes, more but not absolute state intervention, a more unionised workforce etc etc.

Incredibly popular and a key part of the country’s prosperity at the time.

Back to 2024: after 14 years of spending cuts and real terms wage cuts, where has the money gone? Why is the economy not strong as the austerity merchants predicted?

I’ve studied that period of history quite well and that’s an oversimplification.

There was no prosperity in the USA until the WW2 and the war economy was in full flow. The USA was in recession until WW2 broke out and unemployment peaked in 1938 at around 19% and 39% of Americans polled in 1939 felt the administration was delaying recovery. The New Deal achieved a lot but it didn’t get the USA out of recession and historians remain split on its successes and the historiographical consensus is that the WW2 kickstarted the USA.

The war economy post-WW2 was run until up until the 1970s.

 

[CCFCSteve]

Minimal at best. If you look at any trend of anything affected by austerity we’re pretty much bang on trend to where we would have been regardless of covid. The truth is austerity has been proven to be an awful idea and a political choice that damaged growth and robbed services of the money it needed. It’s going to take a generation to undo the failures of austerity.

Nothing to do with financial crisis and the impacts of that ? That’s not denying austerity negatively impacted growth and public services.

I’d imagine the costs and borrowing incurred from covid will outweigh the cost and impact of anything else

edit - just to clarify I was talking financial cost not human. Although saying that guess covid would’ve possibly caused greater human cost as well

 

[Mucca Mad Boys]

Minimal at best. If you look at any trend of anything affected by austerity we’re pretty much bang on trend to where we would have been regardless of covid. The truth is austerity has been proven to be an awful idea and a political choice that damaged growth and robbed services of the money it needed. It’s going to take a generation to undo the failures of austerity.

The state has grown and austerity effectively ended in 2017. Cuts in ‘real terms’ are not really cuts, it means the rises in expenditure didn’t match inflation. Which isn’t always necessary.

The furlough and COVID loan schemes and energy bill caps alone added massive amounts to public expenditure.