I was watching the budget and thinking yesterday, and then looked some stuff up. I must be simple and need someone more learned to tell me more - so i thought where shall i ask? - I know -Charlton Life- thats where all the fiscal experts are.
Heres my thoughts:
We have a deficit of £120 billion - difference of in and out - debt basically i think?????
We poured £125 billion in real money (not shares or gilts/prmoises) but money into the banks to rescue them
We poured £200 billion in QE in the last few years
Am i missing something? I must be.
And onemore thing - why do economies have to keep growing?
Why do we give care that its .6% and not 1.2%?
What if we just did well enough to stay the same?
ENd of the world?
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Unfortunatly, further cuts needed to be made and we should have lowered the taxes to get more money in people's pockets and get them out spending which will help produce growth.
But my question is why do we care about the deficit, why should we give a shit about growth, if we had 3 times the deficit down the back of the sofa why did we not just sort it out, i watch the news likeit's Brass Eye to be honest and it makes me laugh all the shit they want you to care about and i DONT - BUT i would love someone to tell me why i should care.
As for the slimy Eton lot they always look aftet their own , always divide and rule the working man so i gave up getting too bothered about them ages ago - still cant wait for old wossername to die though.
National debt total amount of debt, if this gets too high people will question our ability to pay, and pull the plug?
Inflation and growth seem key to capitalism, problem is you also get negative growth.
National debt is the total we owe.
The government has succeeded so far in reducing the deficit (i.e. the total amount we are borrowing each year), but total debt continues to rise as we are still spending more than we're getting in.
I MUSt be missing something.
Be some fun when it does decide to make its long awaited presence felt at the global meltdown party!
Or is this too simplistic?.
It always makes me pised off iwhen a company says "profits rose only by 3-4 5-6 % this year" its still profit !! surely thats the main thing.
The banks loaned money they didnt have gto people who couldnt pay it back. If they didnt have it---then it didnt actually exist---so why are we paying it back ?
Quatitive easing ---WTF is that all about?
We have more people working than ever before and we are still f++Ked !
Whilst this Gov are not geting in right in any way i understand seeing MilliTwat and Ed Balls up saying where its all wrong is pure dogShit.
Without growth people lose jobs and can't find new ones but with growth you can move jobs before time is up
The super rich always get richer but with growth every one else has a chance to improve their lot... without growth there are two choices - tax the super rich or austerity with everyone paying the price.
And continuous growth makes it a lot lot easier to govern ... more money in taxes coming in so no hard choices to make
There is an argument that the UK is already rich enough, pressure on world resources etc. so growth is antisocial in the bigger picture... but year on year growth with occasional crashes is the way it has always been managed
And there is the argument that an occasional crash is good for the system - bit of a wake up call... bit like relegation but don't do it too often!!!
Part of the reason we have no growth is that the City is not booming... that bit that everyone loves to kick pays a lot of taxes and is a big part of the economy - in fact it is a world leader... I don't know the exact numbers but expect the government will get most of its money back from HBOS and RBS problems when they sell the shares back - in the US they have already got rid of AIG but again I don't know if the Fed is up or down overall
It is really just jargon for printing more money.
It's full name might help: "quantative easing asset buying programme".
The commercial banks held assets (matching their liabilities which are mainly savers' monies.) These assets are for example mortgages, corporate bonds, gilt-edged stock and sovereign debt from overseas governments. The trouble was that no one wanted to trade in these classes of assets in the way they previously had. Meaning that the market for loans, etc, pretty much ground to a halt. This was exacerbated by the demands from Govt. and the FSA that the banks increased their capital ratios and therefore had to set aside more money rather than lend it.
So the deal with the Bank Of England was that the banks SWAPPED their assets for cash. They weren't just given the cash.
So, unless the actual assets lose value (through defaults, etc) the eventual cost to the public purse is nothing. It is very possible that a profit might actually be made because these assets pay interest or dividends which are more than the nothing that would have been obtained from any interest on the previously non-existent cash.
So, the Bank Of England now has more (much more) in the way of liabilities, that is, cash in circulation. But in the way of accounting, that is precisely matched by the value of its assets, that is the bonds, stock, etc.
I said on another thread that I am awaiting the BoE's annual report for the year ended Feb 2013. Last year, they paid some £2.3bn to the Govt. This would have been the profit it made on QE. I'm expecting more (much more?) this year and that might go some way to explaining why the deficit was a little less than had been anticipated. I think it reflects badly on the media, particularly the likes of Robert Peston and Stephanie Flanders at the BBC that these extraordinarily important matters are not properly explained to their viewers/readers. But hey, it's much more important that the media give prominence to reality dross and gossip. We get what we deserve I suppose.
As for growth, well, I don't rate much of what's in the bible but seven years of fat, seven years of lean, pretty much sums it up. Continual growth is not possible. It's just the unattainable holy grail for politicans who like to spend such vast quantities of other people's money.
Growth is important because it increases tax haul.
Osbournes untargeted budget cuts have put low paid front line workers on the dole with little prospects of jobs and savings are offset by social security costs. Targeting middle managers would have been more productive, as they have safety nets and more likely to find employment. Thatcher did same but had the offset of boost to economy of privatisations. Current mob are just creating a slump.
Budget was fiddled by unprecedented budget underspends which will turn out to be an accounting trick. George's cuts and falling tax revenues far outweigh the issues Darling faced as allowing banks to fail was a no-no given our lack of manufacturing base.
Although the deficit has reduced, govt borrowing has gone up by 25% since the coalation took over and is growing every year. He said we need to be cutting services much more than we are, otherwise we will go bankrupt.
On a slightly different matter, I appluaded what Anthony Howoritch (I think it was) said on Question Time yesterday - that we should have just let the banks collapse in 2008 & that "savers" should not be compensated for losing money in a bank. If you are taking interest on your money you should see this as a risk & suffer the consquences. If you want your money "safe" then by all means lock it away in a safe or a bank vault, but don't expect ANYT interest, and even be prepared to pay for it to be looked after.
We will all get a vote in 2015 but with a lack of true choices with visibility of all of the facts... perhaps there are sites which cover this or do we as Charlton Fans have to start one?
Just for April 2014.
100% Income Tax
100% Capital Gains Tax
100% Corporation Tax
Nothing paid out in benefits
Nothing paid out in state pensions
How much would that bring in? I bet it would clear the defecit in those 30 days.
money i.e. the pound is like the government agreeing to pay you the value of the note, to therefore set up a currency system rather than us having to carry little bits of gold around.. They can therefore 'print more money' which is effectively what QE is, but in turn that can mean the currency loses value because there are effectively more notes in circulation.
This in turn can create inflation because the price of imports go up
In terms of growth, obviously new companies and their growth and new jobs, is offset somewhat by those that fail, but also by periods of decline, cumulatively over decades assuming there is enough growth compared to decline the level of production/ consumption is increasing, where will it all end eh.
We will be paying higher tax higher prices getting smaller sized portions and products for the same price as we paid for larger amounts of the same products for years to come
I do t have the answer and it is hurting me and my family quite hard right now and I have took a huge risk to try to earn enough money to ease the pain but ultimately someone has to pay for it and it is all of us
I am hoping that things get better but the deficit ain't shrinking
And listening to the mugs who were in power when it seems the worst of this deficit was gathering pace tell others they don't know what they are doing is sickening to the stomach
I just wish they would shut up put their heads together and find a real solution to the problem I mean wtf are we paying them for
The 'bankers' and others that benefited the most from the boom are now rich enough to avoid paying the most during the downturn.
Thus the over-arching well-being of the economy gets stuffed.
Here's my cure (I can dream or maybe I've drunk too much champagne tonight): We need more energy, Cyprus has plenty of gas. They need, what £10bn? BP's turnover is nigh on £400bn, and even after they paid US fines for the Gulf oil spill, profits were still £13bn last year. They have £19bn of cash in the bank. So, and it's been done before, (remember the Hudson Bay Co and the East India Co?) Let's suggest to BP that they buy Cyprus - lock stock and barrel. BP take control of all the Russian owned assets in Cyprus (in revenge for BP getting stuffed by the Russian oil companies) and make it available to us.
Cyprus starts using proper pounds rather than the euro. We all get free villas and move somewhere warm!
The energy one is interesting but I don't make you right on BP and Russia:
guardian.co.uk/business/2013/mar/22/bp-share-buyback-russia-rosneft-tnkbp
Quick google search and this came up only 12 hours old ... BP now own 20% of Rosneft and have escaped an unstable machine at the same time as selling anything that moves in the US... and giving money back to their shareholders
But I do make you right on Cyprus! They are short €16BN and the ECB/IMF offered €10BN so yes BP/Rosneft should cut a deal on Cyprus gas... funny how the Cyprus finance minister is in Moscow as we speak!