Preparedness for when

Frugalsod

moneyistooshorttomention wrote: »

There IS a plus side to a cashless economy - down to the fact that there are parts of Britain that function to an astonishly high extent on a "cash in hand/black economy" basis and people who don't live in a part of the country that operates a LOT on that basis simply wont realise just how prevalent it is. That is - until they move to one of them...and realise that there is a bit of a mindset of a substantial proportion of the people somehow not quite identifying themselves as part of Britain as a whole...

That is one of the "levers" that the Government has to hand as a way to possibly affect the rest of us and push for this cashless economy they would like - ie because there is this weakness (that is positively entrenched in some areas).

The Government aren't total fools (a long way towards....but not quite there...:cool:) and they must know that fact.

The question is as to what to do about it - and I would personally argue that everywhere in the country should be on "normal footing" (ie tax is paid as due) - but I'm blowed if I could say how to get from point A (huge Black Economy) to point B (everyone paying tax as per due).

It would help a lot to weaken any Government arguments as to why we should all go cashless though if someone could think of a way to deal with this....:cool:

The black economy will always exist if there is a reason for it. The fact that taxes have been switched to spending since the 1980's is the main reason. There becomes a 20% instant incentive to join the black economy purely because of VAT. Abolish sales taxes and transfer the burden of taxation to wealth and incomes then you might see a reduction in the black economy.

The government are fools, because the primary problem is excessive levels of private debt and that means until they deal with that they will continue to have a faltering economy based on increasingly on dodgy stats.

One suggestion has been a debt jubilee financed by QE. The money would be given to everyone and they would be required to pay off debts. After that they would be free to spend anything after all debts paid. So if you have lots of debt it could be used to pay off the most expensive debt like store cards or payday loans. Then without this debt you would have more money to either spend or save.

To fix the banks you would have to bring in new rules such as possibly changing how they operate completely or be wound up. At the moment 97% of all money is created by high street banks and maybe we should end this as it becomes dependant on ever expanding credit to keep stable. Which is the problem now. At the moment there is too much debt for the current economy. So it has to shrunk significantly.

What this means is that It could take multiple rounds of QE and debt jubilees to deflate the credit bubbles to levels where everything is stable. Longer term we need to switch banks to 100% reserve constrained which is more in keeping with living on a planet with finite resources.

moneyistooshorttomention

Hmmm...I'd not heard the idea of a debt jubilee before now and have very distinct reservations about the idea. Debt is debt is owed for evermore until its paid back. Otherwise the financially prudent would always subsidise the financially imprudent (as well as the unlucky) and I tend to believe in fairness too much to go along with that idea.

All well and good if everyone (prudent and imprudent alike) had debt - and a similar level of it at that. However - as that isn't the case - then its too unfair to be a valid proposition.

Can we have an explanation of "reserve constrained" please?

[Deleted User]

Frugalsod wrote: »

In time I will probably have to deal with the enforcement brigade but since I am happy it is not a problem.

You don't need to "deal" with them. You can simply ignore them.

So a sudden inspection will not catch me out.

I would strongly advise against allowing them to conduct an "inspection".

GreyQueen

MTSTM seems to feel that the cash in hand society is a bad thing. I beg to disagree. My family usually operate this way and we see it as a form of working class solidarity against the gougers and rentiers of the classes above us.

My folks get excellent service from their favoured tradespeople, even unto getting a CH system repaired on Boxing Day - because the men concerned know there will be cash on the day and we never saw you, guv, should questions be asked.

We live in a society where tax avoidance of almost unimaginable scale, by some of the biggest businesses in the world is tolerated, but the independant tradesperson is expected to work extra hard in order to give the State its cut.

The money paid in cash to the tradesmen is mostly post-tax income, after all. When grubbyments take too many gouges out of the money chain, they paralyse and pauperise the rest of us.

If it helps, think of the Grubbyment as being like an organised crime syndicate, sending 'da boys' around to take protection money off you. They won't spend it on things you'd approve of, in most cases, so why encourage them by making it easy?

A truly decent society relies on the head which wears the crown resting very uneasily on its pillow at night, wondering what the populace will do next. And dreaming of the rattle of tumbrils over the cobblestones.....

COOLTRIKERCHICK

I have had a bit of a break through with hubby re the TV license, I told him again to buckle our belts rightnin, we really do need to ditch the TV license.. As its just under £13 a month.. He has agreed to set our boys Wii uo on the TV, and we will just watch catch up all week.. I keep telling him it will be just watching programmes a day or two later than when they were first broadcasted..

So fingers crossed we will be cancelling the TV license... How do you cancel it? At the moment I am paying by monthly DD, can you cancel it online??

COOLTRIKERCHICK

We always used to pay our staff by cash,

Just because we paid them cash didn't mean we were part of the black economy.. All taxe insurance etc was paid ... It was just easier to pay cash...

So I don't think people should jump to conclusions when it comes to cash payments etc

ivyleaf

Mrs LW - I don't think the type of PO savings account you're thinking of, which I and our children also had, exist any longer.

They do have savings accounts and ISAs, but they are all held by the Bank of Ireland by the look of it, and children can't have an account until they are 11, goodness knows why.

Does anyone else remember the sort of savings accounts whereby we bought savings stamps at school which were stuck into a book? I've no idea who operated the accounts, but the stamps had pictures of Prince Charles or Princess Anne on them (both were children then, of course)

Frugalsod

COOLTRIKERCHICK wrote: »

I have had a bit of a break through with hubby re the TV license, I told him again to buckle our belts rightnin, we really do need to ditch the TV license.. As its just under £13 a month.. He has agreed to set our boys Wii uo on the TV, and we will just watch catch up all week.. I keep telling him it will be just watching programmes a day or two later than when they were first broadcasted..

So fingers crossed we will be cancelling the TV license... How do you cancel it? At the moment I am paying by monthly DD, can you cancel it online??

You can cancel it online.

http://www.tvlicensing.co.uk

Frugalsod

moneyistooshorttomention wrote: »

Hmmm...I'd not heard the idea of a debt jubilee before now and have very distinct reservations about the idea. Debt is debt is owed for evermore until its paid back. Otherwise the financially prudent would always subsidise the financially imprudent (as well as the unlucky) and I tend to believe in fairness too much to go along with that idea.

Debt Jubilees were very common in biblical times and later. It basically allowed all debts to reset.

http://theconversation.com/the-debt-jubilee-an-old-testament-solution-to-a-modern-financial-crisis-11816

At the moment the prudent are subsidising the imprudent through zero percent interest rates and other forms of financial repression. So where would they be worse off? Because if we allowed banks to have normal interest rates of 6% then many home owners would be insolvent. The Current interest rate policy is said to be there to help the borrower it is really there to save the banks, not the people.

moneyistooshorttomention wrote: »

All well and good if everyone (prudent and imprudent alike) had debt - and a similar level of it at that. However - as that isn't the case - then its too unfair to be a valid proposition.

Not everyone will have debt and not all will save. In a debt jubilee of the type I have described everyone might get £5000 each time. If you have no debts then you can either spend it or save it. It could be given to everyone including children and it could be transferrable to parents to clear the mortgage. So a family of four might get £20 000 which they could use to clear existing debts then use the balance to pay off some of the mortgage. If they are have no debt then you could save what is left.

moneyistooshorttomention wrote: »

Can we have an explanation of "reserve constrained" please?

Basically it means that they cannot lend more than they have taken in deposits. At the moment banks might take in £100 and then lend out £3300 or more. This is why housing is a massive Ponzi scheme dependent on excessive levels of credit.

moneyistooshorttomention

All in favour of cash GQ:) - actual physical money, rather than figures on a computer screen that have been "magicked up" into existence iyswim. Nothing there to "charge negative interest" on either:) if they decide to start pulling that stunt.

As long as that cash has had the relevant taxes, etc, paid on it when it was earnt.:)

Concept of "working class solidarity" - now that's a phrase I can see me pondering on in idle moments (like the next long bus-ride I have to take to get to something basic - like my dentist/bank/optician:rotfl:). Hmmm...:think:. I've heard of that one back in my trade union days and thought it just meant "trade unionists supporting other trade unionists when they were taking strike action"??? I hadn't realised it got used in other ways.