Osbornes medicine is working!

[I1L2T3]

Yes and the value is based on what someone will pay and not what it costs to provide, so a private sector service wouldn’t increase GDP just by employing extra staff or paying the staff more, unlike the public sector, the government can just borrow more money and employ more people to do very little or pay its staff an higher wage and GDP increasing by the extra amount being paid in wages regardless of whether the service they provide is better or worth more.

 

I see your point but only agree to a point. Like most people I want to see our services run efficiently with the right number of staff in the right places. We know some parts of the public sector are under-resourced, e.g. not enough nurses, not enough tax is collected, borders are leaky, policing etc... In those examples some increases in numbers could have positive economic effects. I fully accept the point that in other parts of the public sector you do get what you term as daisy counters, staff that could be shed with minimal impact.

 

I read something interesting the other day about part-nationalisation of the banks after 2008. Nearly 200,000 banking staff were reclassified as public sector workers. That accounts for part of the big jump at that time.

[MrSmith]

I see your point but only agree to a point. Like most people I want to see our services run efficiently with the right number of staff in the right places. We know some parts of the public sector are under-resourced, e.g. not enough nurses, not enough tax is collected, borders are leaky, policing etc... In those examples some increases in numbers could have positive economic effects. I fully accept the point that in other parts of the public sector you do get what you term as daisy counters, staff that could be shed with minimal impact.

 

I read something interesting the other day about part-nationalisation of the banks after 2008. Nearly 200,000 banking staff were reclassified as public sector workers. That accounts for part of the big jump at that time.

 

So basically we had some banks that were a drag on the economy and we put them into the public sector which instantly increased GDP, because money the government spends (wastes) increases GDP, whilst money private companies spend doesn’t.

[I1L2T3]

So basically we had some banks that were a drag on the economy and we put them into the public sector which instantly increased GDP, because money the government spends (wastes) increases GDP, whilst money private companies spend doesn’t.

 

They're still a drag on the economy. They don't pay their own keep. They don't lend very much. They're still loaded with toxic debt. Putting them in the public sector didn't increase GDP, it was just a statistical reclassification.

 

On the plus side their jobs could be reclassified as private sector jobs and hey presto! George Osborne has created 200,000 new private sector jobs.

[MrSmith]

They're still a drag on the economy. They don't pay their own keep. They don't lend very much. They're still loaded with toxic debt. Putting them in the public sector didn't increase GDP, it was just a statistical reclassification.

 

On the plus side their jobs could be reclassified as private sector jobs and hey presto! George Osborne has created 200,000 new private sector jobs.

 

It must have, because all government spending increases GDP and it doesn't matter where the money comes from that they spend (waste), hence the increase in GDP just after the crash. We didn’t just start producing more, it was the government spending more that increased GDP and much of that spending was on the banks.

[chem1st]

The system we have now is being changed to a single benefit. - UC. This will (computer glitches aside of which there will be many no doubt) in theory allow claimants to work and their benefits to be adjusted dynamically according to their earnings. Of course the old system was unwieldy and created disincentives to work. UC should solve that problem. Without the need to jack up taxes to provide benefits to everyone whether they want them or need them.

 

Personal allowances are a very good part of the tax system. Letting low paid workers keep their hard earned instead of taking it and giving it back in the form of top up benefits is an efficient and sensible way of doing things. Personally I'd increase the threshold further and get rid of "tax credits" which are just benefits with another name and have nowt to do with tax.

 

UC is littered with problems. I broadly support it, as it is a step in the right direction.

 

UC is 'minimum income', but as before, income will be determined based upon geographical location, age, family composition and size.

 

What we have now is a de-facto minimum income. And a highly inefficient one at that. With too many work disincentives and regressive deductions upon earned income.

 

The problem now, and under UC is high EMTRs/MDRs, and higher effective taxes for the poorest, it's essentially a regressive tax system, when you consider minimum pricing policies in the wider economy, charged primarily as land rents, but hidden in the price increases placed upon goods as they move through the service sector...

 

Especially when you consider our crazy land tax system, which is very very highly regressive. Where the landless are taxed, to fund the lifestyles of the large landowners. People get paid to merely own lots of land, land they will never mix their labour with or even walk upon!

 

---------- Post added 26-04-2013 at 22:51 ----------

 

GDP is a poor measurement. A large chunk of it is merely fictitious rents (imputed rents). Rents which do not exist.

In 2007 some 6% of our GDP was these 'imputed rents'. These are which do not exist, they are not paid.

 

Worryingly a lot of our growth in GDP has come from an increase in imputed rents.

 

It now makes up more than 8% of our GDP.

 

Imputed rents are increasing all the time, the government sets the price floor and increases it above inflation. Wallah, imputed rents are up.

 

They up social housing rents, and imputed rents go up.

 

What are imputed rents?

 

They are the rents homeowners would pay to themselves, if they had to rent from themselves.

 

So let's rejoice that homeowners are paying themselves more rent and that our economy is growing. (These people don't pay themselves a bean, but the government count it, and it ups GDP).

[I1L2T3]

It must have, because all government spending increases GDP and it doesn't matter where the money comes from that they spend (waste), hence the increase in GDP just after the crash. We didn’t just start producing more, it was the government spending more that increased GDP and much of that spending was on the banks.

 

As far as I know it was a statistical reclassification, nothing else. Certainly you could point to the billions in government support given to the banks and claim that without it the jobs would have gone. In that sense it could have helped maintain GDP to en extent. The other point of course is that if the banks had gone then the sudden withdrawal of funding for businesses could have resulted in business failures and a reduction in GDP, and also problems for households if loans were called in. Finally a lot of support given to banks was used to repair their balance sheets. The maths isn't simple, it needs a certain amount of mental gymnastics to understand it all.

[erebus]

Thank god the manufacturing industry although having dropped in output is still there, and let us all praise Cameron selling so many military defensive products to compliant Middle East States. What a great job securing the future of our wonderful defence industry, and if they are then shipped to Syria, is just not our responsibility. Bravo Cameron and let us hope the ordinance too, or support mechanisms increase experientially too. Corporate interests in the defence sector need a stimulus and let us encourage the overthrow not just of the awful Syrian regime but that repressive dangerous state Iran. We need a booming defence industry, save our manufacturing industry!!!

[I1L2T3]

Thank god the manufacturing industry although having dropped in output is still there, and let us all praise Cameron selling so many military defensive products to compliant Middle East States. What a great job securing the future of our wonderful defence industry, and if they are then shipped to Syria, is just not our responsibility. Bravo Cameron and let us hope the ordinance too, or support mechanisms increase experientially too. Corporate interests in the defence sector need a stimulus and let us encourage the overthrow not just of the awful Syrian regime but that repressive dangerous state Iran. We need a booming defence industry, save our manufacturing industry!!!

 

Labour were just as bad. Tony Blair now provides consultancy services to governments all over the world, some of them reported to be dodgy.

[Anna Glypta]

Labour were just as bad. Tony Blair now provides consultancy services to governments all over the world, some of them reported to be dodgy.

 

But he's now reported to be worth £40,000,000. It just shows he knows how to create wealth..Well at least for himself.

[I1L2T3]

But he's now reported to be worth £40,000,000. It just shows he knows how to create wealth..Well at least for himself.

 

He also knows how to avoid tax on it.