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Likelihood of UK double-dip downturn dwindles

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Comments

  • mewbie_2
    mewbie_2 Posts: 6,058 Forumite
    1,000 Posts Combo Breaker
    Really2 wrote: »
    I think it will be income tax related increases. NI is going to kick the low earners harder.
    Great.

    Really bloody great.
  • Cleaver
    Cleaver Posts: 6,989 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    StevieJ wrote: »
    The stimulus is more like an artificial bone graft i.e. it provides a structure/scaffold to enable the bone to grow back and heal, it doesn't actually replace the bone.
    Thrugelmir wrote: »
    QE is like blood. The body can't function without it circulating. At the moment there's not enough in the system to reach the toes and fingers.....
    StevieJ wrote: »
    You mean QE is like a transfusion, with life (economy) saving attributes :confused:

    QE is like making love to a beautiful woman. It costs you a lot more money than you think and will probably come back to haunt you, through tax and NI rises.

    Oh, hang on, that last bit isn't right...
  • tomterm8
    tomterm8 Posts: 5,892 Forumite
    Part of the Furniture Combo Breaker
    Joeskeppi wrote: »
    I always imagined the "stimulus" was filling a hole, now that it's filled it can be turned off and we just carry on.

    The counter argument seems to be that the stimulus is filling a hole which has a leak, so when it ends we'll be back where we started eventually.

    Stimulus is not free. Cutting interest rates has a price in terms of misallocating resources, and fiscal stimulus has a cost in terms of interest payments. QE has a cost in terms of future inflation. All of these costs amount to the fact that future trend gdp growth is slower than it would have been.

    Think of it as similar to taking out a loan to buy a laptop. You get a laptop today, but over the course of the loan you pay more.
    “The ideas of debtor and creditor as to what constitutes a good time never coincide.”
    ― P.G. Wodehouse, Love Among the Chickens
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Really2 wrote: »
    I think it will be income tax related increases. NI is going to kick the low earners harder.

    But not the pensioners.
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • Really2
    Really2 Posts: 12,397 Forumite
    10,000 Posts Combo Breaker
    edited 17 September 2009 at 10:52PM
    StevieJ wrote: »
    But not the pensioners.

    How much can a pensioner earn before they pay Income tax? (do they have a personal allowance after state pension etc.?)

    I can't see the government being to concerned with taxing the better off pensioners more TBH.
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Really2 wrote: »
    How much can a pensioner earn before they pay Income tax? (do they have a personal allowance after state pension etc.?)

    I can't see the government being to concerned with taxing the better off pensioners more TBH.

    I think it is around £10k with a £1 for £2 restriction over around £22k (gradually reducing to the normal pers allowance for the better off).
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    StevieJ wrote: »
    You mean QE is like a transfusion, with life (economy) saving attributes :confused:

    Amputation although painful could be overcome with an artificial limb. This blood transfusion as has no quantifiable volume......
  • Really2
    Really2 Posts: 12,397 Forumite
    10,000 Posts Combo Breaker
    StevieJ wrote: »
    I think it is around £10k with a £1 for £2 restriction over around £22k (gradually reducing to the normal pers allowance for the better off).

    OK I go for income tax increase with an increase of the personal allowance to help the poorer (I presume that would help pensioners also)
  • Afriend_2
    Afriend_2 Posts: 476 Forumite
    Really2 wrote: »
    OK I go for income tax increase with an increase of the personal allowance to help the poorer (I presume that would help pensioners also)

    I think the poorer will be hit by indirect taxation (perhaps increase VAT to 20%?) and removal of some benefits (the benefit system being too complex and in need of reform). VAT rises could be legitimised by saying excessive consumption got us in to this mess, and that it's to fill the budget hole left by the labour government.
  • Really2
    Really2 Posts: 12,397 Forumite
    10,000 Posts Combo Breaker
    Afriend wrote: »
    I think the poorer will be hit by indirect taxation (perhaps increase VAT to 20%?) and removal of some benefits (the benefit system being too complex and in need of reform). VAT rises could be legitimised by saying excessive consumption got us in to this mess, and that it's to fill the budget hole left by the labour government.

    See I thought VAT, but then I thought increase in VAT would cause inflation. I am not sure if the government want to cause inflation as they (well I believe) want to keep the base rate as low as possible for a long time. (well until they have paid back some of their debt off)

    But they could well do still as it is a consumption based tax, it is just that I think the government will want to keep their debt cheap to service.
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