Not so Lunatic Ramblings Part One
20 July 2011 by BernardAs if any of us need reminding, there are all manner of shenanigans going on at the moment with Messrs Murdoch and Murdoch, Ms Brookes, Mr Coulson, Mr Cameron, the Metropolitan Police and a whole host of supporting characters.
It is all very exciting. So much so that regular television programmes are being re-scheduled - newspapers are being closed down and the rich and famous are being jetted into London to face the prying questions of our democratically elected representatives.
Big deal! Hiding behind all this media super-hype, the government are pushing ahead with their privatisation agenda. And the cost: Cameron gets to feel a little uncomfortable, a few coppers bite the dust but will no doubt find “nice little earners”, the government gets its pants singed but get to push out their message and enact their policies and the Murdoch circus, for the cost of a “pie”, get a huge sympathy share rise on the markets.
Perhaps now is a good time just to reappraise ourselves of what the government’s message is and, more importantly, why that message is fundamentally flawed. The government want us to believe that there is a deficit crisis in the UK and that we are spending beyond our means. The government want us to believe that the solution to this deficit crisis is to cut public spending. As the squeaky little meerkat would say - “simples!”
However, and to continue the comedy genius, as Foghorn Leghorn would say “just a cotton-pickin’ minute there boy.” Public spending is actually an investment, not a debt and public servants – the vast majority of whom are low paid – deliver vital services to our communities. The vilification of public services by the government is not, in reality, an answer to the supposed deficit crisis but is in actuality motivated by a desire to cut and privatise these vital services. The truth is that there does not need to be a single penny taken away from any public services or a single job lost.
No more comedy. The deficit is due to the recession. Even Messrs Murdoch and Murdoch are affected by the recession and so what could be better for them than off-loading some hacks at one of their papers. “It’s the same all over the country” they can argue. “We feel your pain” they can say. “We didn’t want to let our hacks go – they were our family”.
Yeah, yeah, whatever.
But this approach to the recession results in less people working and, by extension, that there will be less being spent and hence less revenue. Meanwhile, back in government, expenditure increases as more people are without work and will be entitled to benefits.
This is the “simples” explanation - if the government cuts more jobs it will exacerbate the deficit crisis – more people will be unemployed and there will be less revenue. So more people will be unemployed and there will be less revenue. So more people will be unemployed and there will be less revenue. Ad infinitum.
“Okay Poindexter, got the explanation so what’s the answer?” is what you are thinking. Dead easy, the answer to the crisis is to create jobs. Currently there are less than 500,000 vacancies, while 2.5 million people are unemployed. Do the math, as the Americans would say.
“But there’s millions of foreigners and scroungers getting the dole. Sort them out” you reply. Good point yet “getting tough” on welfare will not work since there are no jobs available. Oh, and then there’s the small point of sending all those foreign johnnies back – perhaps all those foreign johnnies’ governments would do the same and then what would you do for a beer and Full English Breakfast next time you’re in Corfu, Benidorm or Ibiza? As for the scroungers, have a little chat to some of Mr Murdoch’s former hacks, they may not quite so condemnatory in a month or two.
No, this tough approach will simply cause more misery – it is the only possible outcome of the coalition government’s policies.
That is why we must resist this government’s policy of savage cuts, and reject their flawed arguments. What we actually need is a new economic strategy based on public investment, job creation and tax justice. Johnny Marbles, the now infamous “pie-man”, was wrongly linked to UK Uncut so you can’t use that as an excuse to stop you checking out their credentials at www.ukuncut.org.uk. Just as a taster, the Tax Justice Network estimates that £25 billion is lost annually in tax avoidance and a further £70 billion in tax evasion by large companies and wealthy individuals. Mmm, that’s a lot a public sector jobs and public investment sloshing around when it should be getting put to good use.
Basically we all need to put across the arguments for the alternatives and force the government to implement them. Over the next few weeks on www.visitscunthorpe.com there will be constructed a compelling case against the government’s cuts, so keep reading – there’s nothing worth watching on the telly after all.
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Comments
OH Boy, I like your argument about advertised and non-advertised vacancies - it's a winner!
Now give me your job or I will kill you! Or even better: give me £1000 and I will stop all those people who want to kill you, doing so.
Get the point?
Your
opinions, while valuable in your own minds will not be shared by everyone, even
though you think everyone should share and agree with them.
Compromise is the only way forward. You both have different ideologies. You both firmly believe that your ideologies are the only way to escape the mess we are currently in. the only problem with this is that the nation is in an economical mess and until we get out of it there is no point arguing ideological methods for running it.
To get out of the current mess we are in requires temporary radical changes to the way the country conducts business.
Some say that tax avoidance and tax evading costs us millions in lost revenue, but as Black flag points out it’s all done within the legal framework we currently have, so protesting to the companies who play the system and get out of paying what would be considered 'fair' is pointless. What you need to do is lobby parliament to either change the tax laws and close the currently used 'loopholes' then the companies would have two choices. Pay up or leave the country.
Now we don’t want them to leave because if they leave then we lose all tax revenue which would be bad for the public sector because the public sector is funded by the government tax receipts and less income means less outgoing and cuts to public service.
The more money the government makes in taxes the more money can be spent on the public services.
The government cannot create new public sector jobs without money and since we have little of it right now you can either borrow it or make it with new or different tax revenues. borrowing is out of the question as far as most people are concerned because if you look at our current debt and deficit it is clearly very high and it would be very irresponsible to add more to that, especially when the interest payments on that debt is currently running at over £100m a day.
So who do you tax?
I would suggest a limited amount of increased corporation tax alongside changes to the tax laws and loopholes currently used by the corporations and the super rich.
You give them both the carrot and the stick.
The stick would be a doubling of the corporation tax until the deficit is paid off, with the carrot being a halving of what the corporation tax was before the increase. So if it takes two years of increased taxes to pay off the deficit then you give them two years of really low taxes so that they can make more profit.
It’s a simple idea but I don’t see why it could not work. Don’t forget that this is a tax on profit. Its money they have already made so they are only giving a little bit more of it to the government.
It does not solve the problem of job creation but it does stop job cuts. I would argue that the only jobs that the government should create are the public sector jobs, but we already had 5 million public sector workers before the cuts started, so creating more would not be economically unviable until the government starts making more money. The private sector would be the responsible party for creating new jobs.
We need to stop arguing about what services are provided by public or private sector. Both can and have provided good and bad services so there is no right or wrong as to who provides it. Examples for both sides can be given for most if not all services.
its just my humble opinion.
Compromise is the only way forward. You both have different ideologies. You both firmly believe that your ideologies are the only way to escape the mess we are currently in. the only problem with this is that the nation is in an economical mess and until we get out of it there is no point arguing ideological methods for running it.
To get out of the current mess we are in requires temporary radical changes to the way the country conducts business.
Some say that tax avoidance and tax evading costs us millions in lost revenue, but as Black flag points out it’s all done within the legal framework we currently have, so protesting to the companies who play the system and get out of paying what would be considered 'fair' is pointless. What you need to do is lobby parliament to either change the tax laws and close the currently used 'loopholes' then the companies would have two choices. Pay up or leave the country.
Now we don’t want them to leave because if they leave then we lose all tax revenue which would be bad for the public sector because the public sector is funded by the government tax receipts and less income means less outgoing and cuts to public service.
The more money the government makes in taxes the more money can be spent on the public services.
The government cannot create new public sector jobs without money and since we have little of it right now you can either borrow it or make it with new or different tax revenues. borrowing is out of the question as far as most people are concerned because if you look at our current debt and deficit it is clearly very high and it would be very irresponsible to add more to that, especially when the interest payments on that debt is currently running at over £100m a day.
So who do you tax?
I would suggest a limited amount of increased corporation tax alongside changes to the tax laws and loopholes currently used by the corporations and the super rich.
You give them both the carrot and the stick.
The stick would be a doubling of the corporation tax until the deficit is paid off, with the carrot being a halving of what the corporation tax was before the increase. So if it takes two years of increased taxes to pay off the deficit then you give them two years of really low taxes so that they can make more profit.
It’s a simple idea but I don’t see why it could not work. Don’t forget that this is a tax on profit. Its money they have already made so they are only giving a little bit more of it to the government.
It does not solve the problem of job creation but it does stop job cuts. I would argue that the only jobs that the government should create are the public sector jobs, but we already had 5 million public sector workers before the cuts started, so creating more would not be economically unviable until the government starts making more money. The private sector would be the responsible party for creating new jobs.
We need to stop arguing about what services are provided by public or private sector. Both can and have provided good and bad services so there is no right or wrong as to who provides it. Examples for both sides can be given for most if not all services.
its just my humble opinion.
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A well written piece by Bernard which grabs your attention with its amusing style.
Unfortunately it’s laced with inaccuracies and therefore makes the wrong conclusions.
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Bernard asserts that we do not need any cuts because UK Uncut and the Tax Justice Network believe we can fill the gap with "£25 billion … lost annually in tax avoidance and a further £70 billion in tax evasion by large companies and wealthy individuals".
Poppycock. Tax avoidance is legal and is a measure of people’s ingenuity in keeping what is rightfully theirs from people who expect the better-off to pay more than their fair share by imposing higher tax rates. Previous experience has shown that when tax rates are cut then more revenue is raised because people are prepared to pay their "fair share" of taxes here in the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />UK rather than go abroad or risk evasion. As for tax evasion, we all know people who work in the black economy and many people take advantage of those services to avoid paying VAT etc; complicated tax and benefit rules force many into the black economy because they can't afford not to. I have more sympathy for the hard worker in the black economy than I do for the bone idle shirkers who can work but don't.
As for companies and corporations, they operate in the EU's Single Market and can organise their business affairs to minimise excessive corporate taxation by basing their operations in the most tax friendly country (assuming they do business there). There is no way the EU will let such member states restrict this practice.
Also, taking money out of people's pockets by increasing taxes reduces their ability to spend on goods and services provided by the private sector, thus reducing demand and entrenching a recession. Therefore taking money out of the private sector to pay for an increased public sector is just another form of redistribution of wealth - not a means of creating jobs as Bernard alleges.
So if the government is spending more than the productive economy can support in taxes then we are indeed "living beyond our means" as the Coalition Government constantly points out. So if we can't increase the tax revenue then the obvious solution is to cut public spending.
The most obvious way of saving money is by being more efficient with the resources we have got. As discussed in my Privatisation and Outsourcing for Dummies post we can save money by privatising unnecessary functions of the State and outsourcing the necessary functions. We would raise revenue from the sale of assets, save on annual expenditure and have increased tax revenue from profitable privatised and outsourced service companies.
The biggest saving we could make is to reduce the bloated welfare budget. The first cut could be achieved by reducing the entitlement of non-UK citizens
Many countries around the world severely restrict the benefits that can be claimed by migrants and there is no reason why we should not do the same without fear of reprisals. If we do not renew the visas for temporary workers then we could cut the number of migrants seeking work.
For our home grown scroungers the safety net has become a hammock - I would severely restrict the length of payment of JSA in order to encourage the work-shy back to employment as soon as possible. Bernard's argument of "less than 500,000 vacancies while 2.5 million people are unemployed" is disingenuous and ignores the fact that these are advertised vacancies, not the potential number of vacancies. What's the point of advertising a job if the Welfare System provides more money than the going rate for the job?
The one thing I do agree with Bernard is that the Tories will always use the budget or a recession to justify their policies rather than argue from first principles that increased self-reliance and co-operative action for the common good is always better than coercive state interference.
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