State of the UK Economy

Wookster

It is small wonder that the UK economy is stuck in a rut of nil to negative growth. Looking at the picture the IFS presents of a rising entitlements bill, which it thinks can only really be paid for by further tax rises, it is amazing the pound retains any credibility at all.

No one’s going to have the confidence to invest and spend in the UK economy, given this growth-destructive trajectory of a steadily increasing tax burden. This is a truly desperate state of affairs that demands swift and decisive action. Unless the Government acts soon to get growth going again by putting money back in people’s pockets with some meaningful tax cuts, it is staring certain election defeat in the face.

Its very hard to argue with the above statement.

michaels

Just one question - where is that entitlements bill money going other than in to people's pockets? (and people who are likely to spend 100% of the money unlike tax cuts that are likely to be saved)

grizzly1911

Tax cuts aren't going to happen for Janet & John in the street. Shave a bit their take a bit somewhere else.

The credibility of the pound has been hammered by QE and low interest rates.

Generali

michaels wrote: »

Just one question - where is that entitlements bill money going other than in to people's pockets? (and people who are likely to spend 100% of the money unlike tax cuts that are likely to be saved)

You ignore the deadweight costs of collecting the taxes.

I am of the opinion that a large part of what is undermining European economies is the deadweight loss resulting from excessive tax collection and redistribution. All you end up with is huge market distortions caused by rent seeking.

dryhat

currency war>>>>>>trade war>>>>>>world war

grizzly1911

Nologo wrote: »

This is a world war, but its being fought with currency created out of thin air and added to the supply.

The difference is between the East and the West, when China's leaders create trillions of units of currency just by typing into their bank accounts and spending it on whatever they want, they choose to spend it on infrustructure and things that are good for the people.

In the West our leaders who when their bank accounts get low they just legally hack into it and type a new balance, lately it has been to the tune of £50Billion every time, but they just give it to the incompetant banks who give it out in bonuses.

Perhaps that £50bn a time has actually gone in to replace the capital sucked out by consumers and paid to the east voluntarily in the shape of consumer purchases? With a negative balance of payments we simply aren't topping up the leaky bucket any more.

We the west are in effect paying for their infrastructure?

Conrad

Wookster wrote: »

Its very hard to argue with the above statement.

I'm a low tax kinda guy, but isn't it the case that succesful nations such as Germany have a higher tax burden?