....dismal Autumn statement ...dismal future

[Lordship 516]

"We send the EU ?350m a week. Let's fund our NHS instead. Vote Leave."

The figure was wrong & the real figure was close to ?250million. Now a grinning Hammond is reporting that Brexit will cost about ?60billion over the next four years - this is ?288million a week, so the aggregate cost for the next four years will be in the order of ?538million per week - ?28billion per year.

That would house a lot of needy families, pay for a lot of social care & shorten a lot of NHS waiting lists.

No clue or hint of what the costs beyond 2020 might be, no hint of where the economy might land - more bad news to come, for sure.

But this is not a problem for May & Hammond - the JAMS will pay for it, the working poor will pay for it, those needing social care will pay for it & the long queues at the NHS will pay for it all.

Thank you Gove, Johnson & Farage, thanks a bunch for the wonderful prospect of Brexit

[JohnL]

But IDS still blames Labour and mixes up Defecit and Debt yet again

Idiot,

[jaywalker]

The ?60bn extra deficit forecast is based on a 'we don't know what's going to happen to the economy' when we actually brexit but we think it will be much the same as before. The forecast will therefore be the mean around a normal distribution of outcomes in the model - but this is precisely a Taleb situation in which there is no underlying probability distribution (not even just 'fat tails'). That is, the UK has been put in a situation in which complex non-linear feedback processes (the mythical 'the economy') will shift from a current relatively stable state to something completely different (like water to steam, or as here, one fears, ice). No one knows what that will look like (it might be good, it might be horrific: but there are enough signs that the economy is getting cold not hot to make the whole thing look deeply worrying.

[????]

I agree with most of that jaywalker - the two reasons I voted remain were the uncertainty and, on a vague bit of idealism (that just about remained in my soul) in the ideal that the people of Europe (including us) could hopefully work out the problems, of which there are many, of the EU collectively.

Where I differ a bit is the economic signals are above most expectations thus far (including mine) and consensus has thus far been overpessimistic - now, I'm not saying things wont get worse in the near future, because I think they will but it's not looking as catasrophic as our worst fears. The other thing is we are not in a vacuum, "events dear boy events" - the US election has changed things and there are plenty of 'events' on the horizon in Europe.

[uncleglen]

There is no way the people of Europe could work out the 'problems' when most of the people are out for themselves- (look at how the tax-evading/fiddling people-including the tax-collectors themselves- of Greece behaved)including the 750 MEPs and all the rest of the Kafka-esque bureaucracy machine.This is the FTs take prior to the referendum

https://www.ft.com/content/8e10bb3c-a7d1-11e4-be63-00144feab7de

[Earl Aelfheah]

The deficit is unsustainable in the long term, so there has to be a strategy to grow the economy and increase the tax take and / or to cut spending.

Where does the majority of public spending go? It?s not on the unemployed, but those receiving in-work benefits and to pensioners. To address the former, we need to either reduce the cost of living (primarily spiralling housing costs), and / or increase wages (which means looking at productivity and the types of jobs we?re creating). To address the latter we will have to have immigration and we will need to reassess the ring fence around pensioners.

In terms of productivity, we need investment in high tech machinery and infrastructure. Following the crash, there should have been a much bigger and sustained fiscal stimulus aimed at investing in the real economy IMO, not just printing money to sure up banks? balance sheets and inflating asset prices. Instead of cutting corporation tax, have a progressive system and use the money we might have 'cut' to help businesses invest it in high tech facilities and technology and to go towards technical skills training. This will help improve productivity in the long run and will make us a good place to set up business just as cutting tax does, but for much more positive reasons that just being a cheap place to do business.

We need drastic action to discourage the concentration of resources in the hands of the very wealthiest. Give a millionaire ?10 they?ll bank it. Give it to a struggling family and they?ll spend it in the real economy, supporting a local business and returning some of it to the exchequer in the process. It?s not fashionable, but there really does need to be much more emphasis on redistribution, support for smaller businesses (which means taxing larger corporations). The preponderance of a small number of massive multinationals and chains, is not good for the economy. An effective market needs competition and the advantage of huge economies of scale have the effect of blocking new entrants to any given market and stifle that competition. Small businesses keep money circulating in the economy in the same way as getting money into the hands of low and middle earners has a multiplier effect.

Housing should also be a priority for investment. We need a public house building programme. It won't be popular, but make the case for bringing down house prices and rents (and thereby the cost of housing benefit). Stop subsidising the private rental sector, which only drivers up prices and in trun the benefits bill. Instead invest in state owned housing. The state should borrow to do this, but over the long term, as with any mortgage - at the end of it which we have state assets which belong to us all. I would rather my tax money spend on building up a good stock of affordable housing than see it frittered away on lining the pockets of a private landlord. Stop right to buy. People have a right to a roof over their head, they do not have a right to own their own house. The state should not be buying people houses, it should be making sure they have somewhere to live.

Stop giving benefits to wealthy pensioners. Protect those who need it, but stop giving Richard Branson a heating allowance and free public transport. We should support those who need it, but not pander to wealthy individuals our of political expediency. It may not always be fair, but in straightened times, we have to prioritise the most needy, not an entire cohort indiscriminately.

The NHS is a problem. We have to make a decision about how much we value it. I personally think it should be valued and if that is the general view, we will need to pay more tax.

We have to accept that the deficit is going to be an ongoing problem for some time. We should however, have a clear plan for reducing it over the long term and it can?t just be ?cut spending?. That?s not worked and on it?s own isn?t likely to in the future either.

Sorry for the stream of consciousness...

[jaywalker]

rahrahrah Wrote:

-------------------------------------------------------

>

> We have to accept that the deficit is going to be

> an ongoing problem for some time.

I agree with virtually everything rahrahrah; but there is a plan for the deficit. It is called inflation. Every time there is inflation one has to remember that the chief beneficiary is the economy's largest debtor: the government. Particularly, when combined with inappropriately low interest rates so new government debt can be serviced for next to nothing. Problem is that this creates massive distortions of the kind you mention, and the IFS are worried about today (those who will suffer are those who cannot wage-bargain).

The elephant in the room is what you say about immigration. We have an absolute need of it (economically - I would also say socially); but it has become unacceptable. Oh dear - perhaps that was time for political leadership. But we did not and will not get it.

I also agree with you ???? - that there was no meltdown. I see it rather as a slow-motion crash of epic proportions (with impact probably still a couple of years away). Rather like you are on a plane and the engines cut out but you can glide over the ocean for while before the inevitable. Time even for a couple of glasses of champagne and some escape fantasies.

But also that the EU may well not exist by next summer even if we have not by then triggered article 50 - as you say, events. We may well try to brexit at exactly the same time as other countries are trying to re-forge alliances. A North European Free Trade Association perhaps (encompassing Scandinavia and Germany) - not France if they go mad with the national front.