Stimulating the global economy

This comment was removed because the moderators found it broke the house rules. Explain.

That's a really fantastic idea, Gordon. Let's give the lower paid people, who you say are inclined to spend more, increases in their tax credits so they can go out on the High Street and spend it all on a new plasma TV., car, or holiday abroad.

Just what planet are you living on, Mr Brown?

Nick,

when will he ever learn.

He is now giving the clearest signal yet that we can now expect a Spring election.

It will be announced that the tax credit system is the best way to get people to spend, your analysis is correct on that, because they will spend.

However, the credits will not be paid immediately, it will be in your April paypacket. After the election then the situation will have deteriorated and the taxpayer will then be hit, it is impossible for there not to be tax increases.

I am not being represented by Brown or his government, I do not want my children and grandchildren to be saddled with debt. Disgraceful.

This comment was removed because the moderators found it broke the house rules. Explain.

CEH

It is a wise man who recognises his failings.

You are forgiven provided you don't stray back into your irritating repetitive pseudo-intellectual blathering ways.

Confucius say "Pigs might fly"

This comment was removed because the moderators found it broke the house rules. Explain.

There are some of us out here who have been saying that the lower paid have been over-taxed for a very, very long time. So why hasn't Mr. Brown been listening?

Now the fat is in the fire and his job is on the line, he comes out and justifies reducing taxes on the lower paid.

Anybody with any experience in infrastructure development knows that there is a substantial time lag between inception and the actual project. So rather than his ministers moaning about the Olympics I have become a convert to the idea as it will create needed jobs.

I also note that Mr Brown has taken it upon himself to bully Mr Obama. Mr Obama, however, has a mandate.

"Gordon Brown has signalled that he regards help for people on low incomes as the most efficient way to stimulate the economy. "

Hm, so doubling their taxes was not a productive move then.

No doubt many of the postings currently awaiting moderation make the same point, but "a shot across the bells"?

Er, pardon?

I'm tired of listening to Brown repeatedly telling the public that he wants tax cuts and that he wants to help businesses.

I have just received my tax bill from my accountant and although my business turnover has remained static, and gross profit remained static, my tax has increased by over 10%. Small business tax rates, which for small companies with 5 employees like ours, are defacto personal tax rates because I receive most of my income as and when as a dividend. My taxes will rise again next year, in total and for this tax alone, by some 15%, from a rate of 19 to 22%. In addition my rates, both commercial and domestic have risen.

When Greedy Gordon came to power he promised a regime of non-spin. We had 12 moths of reality and most people realised that GG was simply not up to the job, the only area he could claim some credibility was his handling of the economy. This has turned badly south, any and every indicator points to a very bad performance. And yet we have endless spin about how good GG is. GG is now spinning like mad, assisted unfortunately by the BBC, and is portraying himself as a tax cutter - he is simply NOT. He is either deliberately lying, or deluded.

Spinning is lying, as the aim is to mislead and misrepresent, which is a fib.

Stimulating the poor is all very worthy but it's not going to get an economy going again. They will enjoy having a bit more cash in their pockets no doubt but it is business that needs to get us out of this, nothing else can. So what about making it easier for business to do business - cut some red tape for big and small business. Or offer to take some of the red tape burden into government.

Having said all that, I thought they were going to let it rip on big projects? Surely this is a reversal of policy?? Please advise

This is how out of touch and Old Labour Brown is. He's certainly no saviour if this is all he can propose

Ah I see, the "tax cuts" that have been mooted aren't really going to be tax cuts are they?

Despite the doubling of taxes in the last 11 years he still hasn't "re-distributed" enough has he? Never mind that he's turned the welfare state into the benefit state he's incapable of learning.

So we can look forward to some more bribes to the client state to keep their vote and wipe out the 10p sour taste.

Meanwhile we'll keep recruiting obscenely paid "elf n safety co-ordinators" and social service directors that tick boxes into the public sector.

I don't suppose he cares who's going to pay for it all - he'll retire with millions no doubt (and a knighthood for his "public service")

The sooner this idiot is kicked out the better.

Condemning protectionism is certainly the right message to send. But is this not at odd with "British jobs for British workers"?

No consideration for helping people on low incomes keep their job then? After all, now the crunch has hit Main street they're the ones who'll be feeling the brunt.

And instead of using the labyrinthine and expensive tax credits system, how about temporarily raising the levels taxation starts at, thus making everyone feel that bit wealthier?

And given the crash of sterling will be having an inflationary pressure on prices (imports get more expensive), which further borrowing will only exacerbate, this may be too little, too late.

And is anyone else stunned at how brazenly Brown tried to pass himself off as Mr Problem Solver? His incessant lies over the levels of borrowing, love of regulation and source of the British economic problems beggars belief.

"... the prime minister said there was a huge debate about what works, and suggested that government faced a choice between cutting taxes, boosting infrastructure spending and helping people on low incomes."

face a choice between cutting taxes and helping people on low incomes?

how do you cut taxes and NOT help people on low incomes?
is he going to reinstate the 10p "long term" tax band?
why not give help to everyone regardless?

gordon brown has taken a full time job, broke it into two part time jobs ("creating more jobs") and subsidised both part time jobs with taxpayers money! (tax credit system) "helping people on low incomes"

it may produce good soundbites to point at when faced with an awkward question, but in the real world, its a ludicrous way to run the UK!

It has to be in one of 8 to 14 'awaiting moderation' already, but I have to add that a shot across the bells sounds pretty serious to me, mano a mano.

How can we be expected to believe a Man who couldnt predict this mess and budget for it happening ,is the right man to now take decisions to burden us all with massive debts for many many years to come.....

The sooner there is an election the better because while people see his face daily they will be reminded of the disaster he has caused....

The only thing that they can do, is change the way figures are calculated like was done with inflation,but he is in la la land if he thinks he can get away with that......

why does gordon brown think it is good practice to give money to individuals to "stimulate the economy" yet when he could have given us all some help with mortgages (which would have stimulated or helped the housing market) he cut us all out and gave the money directly to the banks?

"Shot across the bells"? - obviously a typo

9 edgarbug

Don't be surprised about a "shot across the bells". Nick didn't know the difference between prostate and prostrate when he presented the Today programme on radio 4 in the summer.

So much for an Oxford degree!!!

12 graemepirie


Couple of "elf n safety" stupidities in the Western Daily Press today.

Children at a Bristol school, who bake cakes at school as part of their edukshun were told by the head-mistress that they couldn't be sold (as they have been for years for Children in Need) on heath and safety grounds.

And an elderly lady was told she couldn't travel on a bus as her "wheely bag" was a safety hazzard.

Madness.

It looks to me that Brown's trips around the world are mostly posturing to cover up his own very costly mistakes leading up to this crisis.

Is there no limit to this ludicrous Gordon Brown for what he will do or say?

Gordon Brown know thinks it prudent to slag off the man (Bush) who has the clout to push through any changes in the financial system.

People have said that Brown is a strategic genuis - personally i think he is someone who wants to get credit from other peoples misery and make party political points out of murdered babies.

Gordon Brown is a monster, he is also complete unfit for office. The party political point scoring freak needs removing from office before he does any further damage to this country.

Aww the little Eichmann's referred posts to the mods again. Poor baby... no more tears.

Nick

Increase Tax Credits? Here's a fully funded plan

1.Write off the £x billion owed to the Treasury by reason of overpaid tax credits.
2. Increase tax credits at a cost of £x billion.
3.Transfer the resultant additonal payments direct to the Treasury to - er - replenish the amount writen off under 1.

nb New Brown strategy. Having got into a unholy mess by over-spending, running up huge levels of Government and Personal debt and achieving record low levels of saving we will:
a) encourage personal spending and discourage saving
b) do some really serious extra Government spending and borrowing.

Breaking news. Monster Raving Loony Party goes mainstream.

I read this blog often.

Does it always consist of recycled Labour propaganda ?

It certainly appears so..

As for Gordon's ideas..
1. the banks are deleveraging
2. It is not finished yet,.
3. Consumer confidence is shot
4. House prices have another 50% to fall to be affordable again .. and mortgageable under new lending rules.

So the recession is going to last another 12 -36 months..
and spending money by Governments will make NO - repeat none - difference.

Except increase taxes in the long run..
So Gordon's policy is to increase taxes long term?

Well surprise..

And I would expect any semi competent political journalist to see that...

Nick
Just heard your latest bulletin from USA on BBC TV 6 o'clock news. The most blatant pro - Brown propoganda I 've ever heard; a disgrace and you should be ashamed. Even the toenails have now disappeared.

9:
Too true. That should of course read 'shot across the bows'. No doubt Nick will blame his proof reader.

re: 7, stanilic

Brown tried to bully Obama
Cos he lacks his charisma and glamour,
And you're spot on to state
That he has no mandate,
That Brown should be thrown in the slammer!

(The reason that Brown is a bully
Is that his thoughts are all woolly,
Incoherent with spin
And with nothing within,
Nu-Lab can do nothing but sully).

I love the way that small businesses complain about their level of taxation and want support when some of them relied on cheap credit to keep them going and enabling them to take too much out of the business.
I love the way that people with mortgages want help, when they took unrealistic mortgages on.
I could go on, but the point isn't that all small business owners and mortgage holders have made poor decisions. Most of them have be very sensible and dare I say prudent. The point is that support for these groups must be carefully planned so that there is not excessive support for those who do not deserve it. Inefficient businesses should not be supported by tax payers' money and excessive life styles funded by impossible mortgages should result in belt tightening or down sizing.

However putting money into people's pockets probably won't do much good as our manufacturing base is non-existent so the money will go out of the country.

I just can't work out what is best.

Nick,

Your PM the economic genius having messed up our economy here has gone to New York to give us here the impression it has all to do with the world and not due to him. He wants to appear as a statesman, a global economist to boost his fortune at home. It is not new to him, in 2000 on he went around Europe preaching them to adopt his economic model at home. Look where it had led to.

Will this egocentric deluded person ever learn.

I just wonder whether the typo is that the "e" should have been an "a".

An eye watering thought ...

I am old enough to remember a Chancellor of the Exchequer called Anthony Barber. He also thought that he could defy economic reality by spending money when the coffers were empty.

Fortunately, the banks adopted sensible policies way back in 1969 and the effects of Barber's budget were catastrophic.

Gordon Brown's "prudence" whilst he was Chancellor was a myth. He and Blair just accelerated Britain's progress towards third world status by fifty years and his latest madcap schemes will only increase the rate of acceleration.

Great idea!!!! Tax reductions so people can go out and buy....... imported goods, thereby stimulating the.... er... Chinese economy.

Right.

I must have missed something. Probably the bit where this money would have stayed in the UK economy to our long term benefit.

The man is an idiot or a scoundrel. Take your pick. I reckon maybe both.

@4, shellingout, but you're children and grandchildren are already saddled with debt.
Brown, and before him blair, thatcher, all of them have squandered this countries assets and resources while we have looked on in disbelief.

I am seriously thinking of stopping paying my tax bill for this year, [35k] because it is being spent by people without a clue on finances and are treasonous to boot. May I humbly suggest we all do the same.

Ok, lets be honest here, which political leader is every prime minister following here. Even the President of the EU was complaining that Brown was getting all the limelight about the current crisis.

The Governor of the Bank of England has suggest his support for a fiscal stimulus, and most economists would agree also.

To cut back on spending on a time such as this, would be madness. Yes currently there is debt higher than would be liked within the treasury, every other major economy is the same as clearly the treasury doesnt have 37 billion pounds kicking around just waiting for the banking sector to fail. But injecting money into peoples pockets will massively increase individual spending, and stop the spiraling fall in inflation.

Yes borrowing will go up, sure the level of this borrowing is up for debate, but GOVERNMENT debt is (or was before the bail-out plan) lower than firstly before 1997, and also lower than almost all the big EU players. Borrowing more is a necessary evil that will have to exist until the economy settles down once more.

So far as tax cuts for lower incomes, this is completely the right thing to do, not least because lower incomes will be the hardest hit, but also as said, they have the highest spending rates. The comment about people buying plasmas and such, is a joke, is this not a time where we want people spending money on luxury goods and for inflation to rise and the economy regenerate?!?

Anyone who says this problem is a result of the governments policy should look at the graphs of global shares and compare it with the FTSE, Britain is part of a global economy, sure it was possible for America to isolate itself in the 1920s, but it is completely obsurd to say that Britain can insulate itself against global markets in the 21st century.

I thank Gordon Brown for the action he is taking, sure he is making poltically un-popular decisions, but when you look around the world and see the state that some countries are in, and then you look at our NHS and educational system and historically low taxes compared with other countries which have an NHS, i thank Gordon Brown and i pay tribute to him when he loses popularity.

People should remember the last DOMESTIC recession, and compare it with this GLOBAL one, and realise how much things have improved.

That's a great topic and a good end to the week, Nick. Thanks!

I'm really pleased the Prime Minister has identified the issues with saving and the already rich, and the corporate welfare and protectionism issues. That should answer a lot of concerns I've seen from finance experts in the media and regular folk.

Getting everyone on board helps stop individuals cheating, and investing in the bottom keeps the roots of the economic tree watered. The Guardian carries an article on this which adds other detail that fleshes out more potential behind the 'Brown plan'.

(And just in case folks missed it: someone spoofed my identity earlier in this topic. It's not the first time it's happened, and not worth commenting on more than that.)

Charles,

You promised. I'm really disappointed in you.

(Can't wait to see what you said, though).

gthebounceranddavincimaster wrote:

Stimulating the poor is all very worthy but it's not going to get an economy going again. They will enjoy having a bit more cash in their pockets no doubt but it is business that needs to get us out of this, nothing else can. So what about making it easier for business to do business - cut some red tape for big and small business. Or offer to take some of the red tape burden into government

Its no good just helping business if no one can afford to buy anything. The consumer spending money is the only way to kick start the economy. Stimulating the poor seems the logical way forward.

How patronising can Brown get, " give money to the poor and they'll spend it "; what on Gordon , beer and fags? He is obsessed with tax credits, why cant he just cut taxes like every other government? Now he's off to the US to save the world, the man has completely lost the place. He destroyed the British economy and the rest of the world is aware of this fact, does he honestly think they'll take advice from him. Perhaps he should join gamblers anonomous, they'll teach him that tossing good money after bad doesn't recoup your
losses, it just adds to them. Resignation, and an admission that he can't cope with the job would however be his best course of action, before the economy is completely ruined.

I feel so safe with Gordon in charge and the fact that he is such an honest politician. No double talk, no spin, no unvalidated claims about the countries financial history over the last 11 years.
How come that non of the money lost in this crisis ( I forgot to say global!) belonged to public service pension funds? Odd that.

Nick writes: "Gordon Brown has signalled that he regards help for people on low incomes as the most efficient way to stimulate the economy."

So that explains why he doubled the rate of tax on the UK's lowest paid.

An obviously good and clearly forward-thinking Chancellor!

That was a totally unnecessary, badly thought through bit of national economics. Funny that, despite all the clamour at its stupidity, Brown couldn't bring himself to change his mind.

And the short term, GBP2.7BILLION quick fix was only to cover a single year... So next year there has to be another injection, or else people will still be worse off.

What's the betting that GB and little Darling "offer" 2 or 3 Billion as "special support for the poor" in the upcoming pre-budget statement. It won't be new. It wll be "catch-up" money, because Brown stole it and may feel an intsy bit ashamed. So he should be.

The idiot didn't realise that even an Iron Chancellor could bend. (Just look what you can get metal to do...)

You don't need to have medical qualifications to be a Minister for Health.

Nor to have fought a war before becoming Defence Secretary.

You don't need to be an economist to be Chancellor.

But you have to be a bit of a prat if you allow your acolyte to insert the phrase "post neo-classical endogenous growth theory" into ANY speech.

Goodness help us all. That acolyte is now in charge of Education...

Let's just lie back and enjoy the "post neo-classical endogenous learning theory". Don't want kids to get their memories all clogged up with transient stuff like facts...

And hope that, when the politicians sit down to talk about "how to save the world", they all have to complete a form with the questions:

1 "Just when did you recognise your country had a problem?"
2 "When were you first told that your own management of your economy could lead to problems?"
3 "Why did it take you so long to straddle that gap?"
4 "Where were you when it all went wrong?"

Then:

14 "Just how much does your country have in its bank account?"
15 "How deep is your recession likely to be?"
16 "How much clean (or even dirty) energy production have you invested in, to make sure your country will become fairly self-sufficient in the light of global fossil fuel shortages?"

And (for a bonus 10 points):

67 "Have you worked out what you're going to do (i.e. do you have an exit strategy like good old Tony Blair), when the electorate kicks you out?" Please explain. Please don't include being given a job by a Bank...

Bit sad really.

I'm one of those folk who didn't like the whole spinning thing, but (after years of a government hanging by a thread) hoped that a new approach would bring some explosion of potential.

Illusions closed down with Ecclestone. Shattered by the real impact of "Education, Education, Education".
Cheated out of money that has been frittered away.

Just hope all those folk at the meeting (which has no real authority anyway) pick up the Brown myth and chuck it away. Then start to talk some sense.

People should remember the last DOMESTIC recession, and compare it with this GLOBAL one, and realise how much things have improved.

That was a seriously good post. I enjoyed reading it as it nailed all the issues and was very readable.

I remember how bad things were during the Tory years and never want to live through that again.

Labour is more clearly beginning to deliver policy on a sound economy and kind society, and I like what I see.

Nick, I would have thought that by now, you would have gathered that the vast majority of your readers hold markedly different political views from you. It must give you considerable satisfaction, and indeed pleasure, as you produce reams and reams of Labour propoganda that they pay your wages!

This comment was removed because the moderators found it broke the house rules. Explain.

Brown is doing what all politicians do when they have messed up at home.... leave the country and start lecturing others in how to do things.

In this case having buried the UK in a mountain of debt, he conveniently forgets he was Chancellor who got us to this parlous position, and now seeks to stake a claim to be the 'International Chancellor' believing can now tell all the other countries to follow his disastrous lead, sure in the knowledge, his masters voice, the BBC, will lap it up and sycophantically make it their business tell us how lucky we are to have such a brilliant Chancellor and Prime Minister.

Fortunately not all the world is made up of New Labour toadies, and in the world of the currency markets, that have taken stock, found they don't like what they see with the UK economy, and so flogged off sterling to record lows.

No vote of confidence for the ‘Dear Leader’ there Nick is there?

@28..

Who's Nicks proof reader?


Campbell..Mandelson..CEH?

Gordon Brown's "prudence" whilst he was Chancellor was a myth. He and Blair just accelerated Britain's progress towards third world status by fifty years and his latest madcap schemes will only increase the rate of acceleration.

Over a year ago, on this blog, I lamented the arrogance of the City and a greedy society and said Britain was heading towards third world status. People preferred not to hear that and let house prices rip. Now the pigeons have come home to roost the same people are looking for someone to blame.

Some of the smart folks in the city and around the country have accepted they've made mistakes. To some extent, I think, a lot of people have to follow that lead and accept their own mistakes and reality. When that hurt passes they'll stop lashing out and start feeling better about themselves.

Gordon Brown has a plan to deliver a way out of this situation. These things can take a while to understand but when people see what it can deliver and feel comfortable with that the general mood should improve. Heck, in a couple of years some of you will probably be laughing at how worried you were at the time.

By the way,Nick...which particular Keynes book did your Lord and Master pick up from the Treasury..and when?

If it was "Essays in Persuasion",then I would guess he only got it for a bit of light reading on the plane to the U.S yesterday.. otherwise,if he had read it about 11 years ago, we wouldn't be in the mess that we now find ourselves in due to his mishandling of the Economy.

I think Brown's first consideration is how he looks during the UK recession. These trips are about spin and presentation, getting across an impression that Brown is busy solving the world's problems, along with a few soundbites for the six o'clock news.

While this ridiculous media circus is going on, the UK sinks deeper into debt. With each day people are losing their jobs, and their homes. All of this made worse by Brown's own irresponsible policies.

I'm getting a little tired of seeing Brown off on his jolly trips abroad. Some of us will be lucky to manage a day trip to Skegness in the next couple of years.

#35 tomireland

Sorry - I was being facetious.

This comment was removed because the moderators found it broke the house rules. Explain.

In 1986, the famous American motorcycle company Harley-Davidson came within 20 minutes of going bust as they had run out of cash whilst developing a new 'evolution' engine.

A private company stepped in to provide enough capital to keep the company going.

And President Ronald Regan slapped onerous tariffs on Harleys Japanese competitors.

Protectionism.

Harley-Davidson pulled through and actually went on to become the most successful American company of the past two decades and the tariffs on the Japanese competitors were eventually lifted.

So, we need to be careful not to assume that all protectionism is bad.

Unfortunately, nothing the G20 can do now will stop the rot ... business confidence is very low and in my humble opinion will not show a significant improvement until some time in 2010.

some great reading on this blog, cant wait to see whats being said 3 months from now

Does Brown give you lines to take/ Give Brown Credit check list?

When will the Worm (You) turn and say what you really think about the dire straights Brown has left this country get into?

What is it like being sent to interview and report on a monster who will use the death of a child for political point scoring?

Surely you must be getting to the end of the road in reporting Brown's agenda.

I think Nick, You must be as sick of Brown as the rest of the population. How such a monster could have got into No.10 is beyond me.

Why?

For those who say he is well intentioned - I say Hitler was well intentioned but look what he did to his country.

I am reminded today why Tony Blair was so good as a brief clip showed Tony Blair doing something for Children in need. Obviously Gordon Brown will not do anything unless he thinks he can get some credit from it.

#48Charles_E_Hardwidge wrote:

"Over a year ago, on this blog, I lamented the arrogance of the City and a greedy society and said Britain was heading towards third world status. People preferred not to hear that and let house prices rip. Now the pigeons have come home to roost the same people are looking for someone to blame."

Just a year ago, Charles?

Most of us recognised a huge problem a decade ago. Where were you then?

The City was allowed to get out of control.

Thatcher did some things I really felt were overdue. Some bits that I worried about.

But the Big Bang changes came with fairly strict regulations.

Your big buddy GB relaxed as much as he could, putting in place regulators who just did not do a job, in order to be seen as a "leader of choice in economic interests".

Now he's a world leading manager of a global economy?

For goodness sake, the guy drove our own into the ground.

Get real.

Oh. Forgot. You're in computer gaming. Just how real is that?

How about reducing the waste of employing all these management consultants?
They are billed to the government at well over £1000 a day plus expenses, and yes they even get paid to put in a competitive quote for a job whether they get it or not.

By such profligate spending are hard working families taxes spent. A friend, working for one of the big 3 says they cannot believe it - and he's a taxpayer as well.

This is off topic but so what because this is more important than the Worlds economy going down the tubes.

I challenge you to spend a bit of time tonight watching the BBC's Children in Need programme and if you do not end up putting your hand in your pocket then you must have a heart of stone.

To be fair to gordon brown I doubt the Conservatives would have done any better if they had been in power.

I suspect though that they would not have claimed to have abolished the economic cycle , no more boom and bust or wasted so much money.

I used to cut costs in a previous living. With all due modesty I was good at it.

This Government saves money where it shoudl spend and spends where it should save..

As for the econpmy looking different in three month's time ... of course it will.

It will be MUCH worse.

And only the economically illiterate can't see it...

(which means the BBC, and most MPs)

Last month we lost £4bn in trade, physical and intangible combined.

And the month before that was £4bn as well.

And the month before that.

And indeed for months and months before them.

In fact, it's spookily reliable; as a country we make a trading loss of £4bn a month.

It's called "going broke".

But never fear, let's borrow a shedload to give it to people so they can break that trend, maybe get it up to £6bn or more.

Isn't Britain wonderfully placed to withstand this "downturn"?!!

It would be really helpful if Nick were to leave his mandate published on a link at the top of his blog.

Viewed from an objectivity that is my transient priviledge as a new Nick blogger and also a new blogger of any blog, it seems that he throws up a bunch of pretty disconnected provocative sentences and a pack of little terriers and lap-dogs snap and bark at them as they tumble down into their psyche's. Squeals of delight and pain alternate until the next batch of manna descends from Nick's pen.

Is anything achieved? How do you answer that question if there is no concensus on the purpose of the blog? Like so many news sponsored blogs it seems to be just a fishing exercise. In this case Bebe, Nick puts out some bait... the fish gather, they nibble and bite, express their view on its tastiness and wait for the next feed.

Everyone claps when a view from the blog appears to have penetrated the hallowed corridors. So you all should! You have performed well. Nick too.

The job of politics is to create and apply the policies which keep individuals ordered in society such that business can be productively pursued and wealth created. (see the 1800-1840 debates around Factories, Police and Poor Law Acts). So politicians are just doing what they do so business can prosper and order is kept.

Blog's are a god-send! Everyone who might otherwise actually do something disruptive gets to blow off steam, opinions are easily monitored and fed back into the ordering process.

By the way, if Nick or any of you want to remain confused about the guiding principles that cause such inconsistency of political pronouncements and actions over any period of time (and so perpetuate this and other blogs) then do not read Naom Chomsky's "What the USA Really Wants". Additionally, definitely do not consider the socio-economic mechanics of dynastic preservation through history. If you did you might realise that our political masters' masters now derive as much of their wealth from the offshore manufacturing of what we consume as they do from the financial and technical services that we provide to those offshore resource extraction and manufacturing concerns. It is our job to consume and not manufacture. The historically tight-knit light engineering and minor product, manufacturing capacity that remains has always been pretty inpregnable to big business families... so don't expect anything more than consumption stimulus, and blind-siding of small entrepreurs. Big money wants big business opportunities... it is the Global Green Industry that is going to provide that (look at the numbers). That will need lots of technical education, lots of private inventiveness and lots of big development budgets... So expect lots of school building and upgrading, lots of technology grants to small business, lots of small green tech companies being eaten up by big companies receiving lots of government help to exploit the world market for the resulting technology services (don't worry about building it... "we" have offshore factories to do that) and lots of innovative, experimental green projects dotted across the country. Don't worry they don't have to be economic to run right now... we just need them as reference sites when selling our first to market, green tech services to the rest of the world.

Labour, Conservative, SPD - it makes no difference, you are just rubbing the same dry stick whatever rhythm you are using.

Wouldn't you rather be moving off the old treadmill through your "debates" instead of just re-covering the treads?

So Brown is planning to bribe the poor to ensure they continue to vote for him, while telling the middle classes that its in their best interest - hows that for spin.

I expect we'll be seeing the pensioners getting their little extra winter bribe again this year too (not that pensioners don't deserve it) as they did a couple of elections ago.

All Brown has to do now is make sure that things remain painful until the election so he can point at the tories and keep mentioning black wednesday.

of course he'll be using the words global, investment, novice, and listening as if they're the only words in the language.

Makes me sick.

Perhaps Nick was born within the sound of Bow Bells, and that explains his confusion.

This is already true. A self employed person earning say £30k pa buys a van for £20k. This does the following:

Increases tax credit by £20,000 at 39% in 2008/09, worth £7,800
Does the same for 2009/10, another £7,800 (this is how tax credits work)
100% capital allowances save tax and national insurance at 28%, £5,600.

Result, cost of van £20,000, tax saving/credits £21,200. An effective rate of 106%. Pays for the road fund licence and insurance as well as the van. And we trust these people to run the economy??

cyfa @ 61

god babe, that was boring ...

cyfaHead @ 61

The somewhat doleful evidence of these blogs does point towards your theory of a useful 'safety' valve for the proles.

Likewise, those popular satirical shows such as Bird and Fortune.

However, I view these blogs mainly as a opportunity to impart ideas.

An idea can be a very powerful thing.

I suspect you may be correct with "our political masters' masters" comment.

We proles, worthy or otherwise, just have to get on with it as best we can.

In the long run maybe we'll get a more equitable world.

People on low incomes aren't going to save our economy let's face it. They're going to pay off their debts and save for Christmas and annual holidays. They're not going to go out and spend what is effectively our money if they've got any common sense. What about middle earners who in this present climate have a great deal more to lose. They're also the voters who won't forget the fact that they have been cast aside in a scramble to save Gordon Brown's bacon.

Nick,

surely people can see what is going wrong.

A simple question to which I do not expect a reply.

Exactly how much do you 'earn'?

Same with the consultants, the heads of Quangoes, the police, the firemen, the hospital consultants, the doctors, the nurses, the employees of the state the pensioners, the young, without the state there would be nothing.

How much are the employees of the busted flush known as Lehmans getting, you seriously could not make it up!

How many Turkeys are actually going to vote for Christmas, this is a banana republic, and still the soldiers die, or are injured and for what, oh yes Gordon did tell us at the labour party conference, the Dictatorship of Oil.

If a tax cut of any useful size was given out, I think I'd use it to pay off my debt and buy plane tickets for me and my family to emigrate.

The only real way to stimulate the economy would be to raise the threshold at which anyone starts paying tax, and that would help the poor more than anyone else proportionally speaking.

"Targeting" it is a nice idea in theory but in practice it just doesn't work and takes too long and most people who it's supposed to be targeted at don't claim/get it anyway.

I wonder if his "tax cut to help the low paid" will be the same as his "help" when he doubled the lowest tax rate, or will it be the same as his "help" when he said that you get loft insulation vouchers as long as you're over 104 years old and it's below minus 10 degrees every day for 6 weeks?

Ah, the wonders of Gordon Brown and his "help". I could do without his help. The most useful thing he could do as far as I'm concerned would be to walk off a cliff.

#48

No Charles.

You're guaranteeing we're having a great laugh right now. Thanks for that.

(So glad it was a spoof, I'd have missed you lots.)

I'd just like to correct my own comment at 66 which should read 'an opportunity for an interchange of ideas'.

Ideas, good or bad, are not exclusive to me.

I'd hate people to think that I am on any sort of ego trip, although you do need a minimum amount of confidence to be a blogger, even those who are aliased.

#61

Are you and Charles related? Clearly you'd be from the inteligent side of the family.

Why aren't the press pointing out that Gordon Brown was the Chancellor during the buildup to this whole mess and that he is responsible. He is responsible. The buck stops there. The BBC reporting looks like the government's press releases at the moment. We need change that we can believe in in UK politics, and that change gets rid of Gordon Brown.

"I remember how bad things were during the Tory years and never want to live through that again." Charles_E-H is definitely a Labour spin doctor - obviously part of Dolly Derek Draper's so called online rebuttal clowns....

I too remember the Tory years and the Labour ones before them and I'd take the Tory years anytime! Funny how Charlie Boy never remembers the winters of discontent and the disgraceful way the unions ruined lives and businesses....funny how Charlie Boy never remembers that Tony Blair AND Gordon Brown have tried to grab some of Mrs Thatcher's lustre by inviting her to Downing Street etc! Even the Chief o the Treasury said in 1997 that the Labour Government inherited a thriving economy and fortunately decided to carry on exactly the same policies! And if Charlie Boy wants to thrown in Black Wednesday perhaps he could explain why the short selling of the nation's gold actually cost about 200 million more than the total lost on Black Wednesday? Brown has lost /wasted/ given away to the idle and feckless is ten times what was lost on Black Wednesday!

Charlie Boy - buffoon and ignorant of the reality of those years he whinges about. did he REALLY live during the Tory years or is he another spotty Labour oink in their HQ ? I think we should be told!

"Proof is the pudding"
If Brown keeps banging on about our strong fundementals why has sterling been in freefall recently? Maybe the rest of the world knows something that Brown does not.

I have never,and will not,disclose my occupation..other than it is on the board of a major multinational organisation.

Have any of you sycophantic Brown supporters ever met him?..ever negotiated with him..either as Chancellor or Prime Minister?

I doubt it.

If you had..I guarantee you would not have such supportive and confident views about him.

The man is an utter control freak, who listens to nobody...he simply tells others what to do..in accordance to his perverse views.

If you don't agree..he will bully you into submission.

This is what this Country has to deal with..a man with incredible insecurity (ever seen the fingernails bitten down to the quicks?)
for whom "failure is not an option".

Sorry..perhaps I shouldn't have said all this..but there are limits to ones patience.

JohnConstable @ #66/#71

Please don't attribute the 'safety valve' theory to me!

Give Machievelli and George Orwell their due.... not much under the sun is novel.

Although for our friend, at #72, Mr o'Ban GoBang's sake I won't be writing another one of those in this arena!

It is the competitive games of personal power and influence of "our political masters' masters" that are holding back all us proles on the planet from steady progress and development.

Most contributors to this blog seem to think it is the other political party's policies, or luminaries, that are at fault. Most politicians think so too. It is only when they have experienced senior cabinet level 'power' they realise where the real power lies... especially after their first "evaluation & appraisal" at Davos.

I would lay odds that many an idealistic junior Minister never made it to senior levels through their inability to adopt a suitable level of 'realism' when faced with the puppet masters demands and expectations of them.

I agree that this useful forum for the interchange of ideas, in the virtual halls of The Establishment, is often the best we mere proles can do. Certainly better than ranting on some fringe website. Perhaps that's why we have so many 'ranters' here.

I am refreshed by your "In the long run maybe we'll get a more equitable world.". So many here seem to be completely UK-centric when considering what would be good policy or not, and what would be fair and equitable.

Almost no direction aimed at fairness and equity amongst the population of the UK would have anything but a continuing negative impact upon the majority of the other 99% of the world's population. Unless it was through setting an example..

But I say no more... for fear of boring Sagamix @ #65 with real issues. He might lose some sleep.

Suffice to leave one more thought... and then to bed.

Ideal market economy models rely on "perfect" conditions brought on by a complete absence of concentrations of market power. The less this is true the more volatile and strong will be its movements away from steady states and the less equitable will be its distribution and exchange of resources.

Globalisation of commercial concerns, expansion of political boundaries, co-ordination and integration of financial markets all sound wonderful and sensible goals for GB and DC to aim for... because we have been told they are. But ECON01 already teaches us that they are ultimately a recipe for ever increasing economic instability, therefore unhappiness and therefore missing the whole point of human co-operation at an economic level.

The more energy you push into any closed system the more violent and unpredictable will be its movements.

Wonderful! If you are big enough to stand outside it and reap the "wave power".

Pretty Sad! If you are a prole in a rowing boat with one oar and no compass.

I'll add my oar, can this blog become a compass?

Maybe we can pick up a few swimmers before they too become part of the body count...

[John: my alias can be de-cyfa'd]

Dont..grieve[sic] @ #77

My heart goes out to you. It's tough at the top. Now you have seen the man's human foibles and weaknesses... deal with him with compassion! And firmness... Like all of us, he is a child inside looking for appreciation. Once he was an ideallist too. He dreamed of helping ordinary people to have good lives. Now he finds he, like you I expect, has to dance to a different tune..

Unlike you, most of his team don't know the plot. And he must deliver to two masters. Autocracy is the natural management style for technocrats... and does make negotiation and compromise tricky!

Look on the bright side... large corporations and industrial nations... the success of neither has actually done much in terms of absolute numbers of human lives left rotting in the limbo of cash-based societies without industry, or meaningful access to subsistence. Rather use your undoubted skills to benefit a wider constituency :-)

# 76 dontneedthegrief

Fascinating read.

Good to get objectivity to balance the rantings!

I beg your forgiveness! I had not guessed from reading the entries in this blog, and Nick's article, that we are actually discussing "Stimulating the Global Economy".

I though it was a discussion about whose going to pay for bailing out a few firms in the UK economy and who should shoulder the blame while minimising the pain in each of our pockets. How silly of me not too see the bigger picture behind your inconsequential partisan prattle.

Shape up guys! Believe it or not the industrial games played on behalf of 25% of the gobal population is not the global economy. At least not for the other 75%. Forget about Keynesian trickle downs and Adam Smith "Invisible Hand". The trickles are pretty invisible however incontinent you might like to believe our system to be.

If the economy we talk about is really global then it must be defined by individual human lives, not by measurements of only measurable contributors to GDP.

30 countries a globe do not make...

So how are you going to stimulate the other 200 or so into providing a decent level of existence to their people? Have you worked out yet why our system seems so difficult to extend into their realms? Do you think that once we get back on track that we will be better able to fulfill our destiny of uplifting them?

Try living in some of those places and you will realise that people are people where ever they are. They all just try to get some joy out of the process of staying alive and building the next generation. If life is short and mean they adjust with a verve and intensity of experience that transcends our inability to really help them, if it is long, comfortable and boring they spend their time blogging about the drama of a 10p tax, or lack of educational perfection for their kids, in the process wasting energy and passion that could be really be making a difference to the stimulation of a truly global economy of persons.

Stop playing amongst yourselves and start thinking about creating something meaningful... to the globe.

Bully, nanny, fear, terrorists threat, oil comming to an end, ban steal, hire crooks, Ban, war, ruin, disaster, traitor.

Now the good things about Labour,
(thinking)
(still thinking)
I got one, they have to have an election soon.

Please God, make it soon.

'He noted that around half of the money spent by the Bush administration on tax cuts had been saved rather than spent and that it was hard to speed up infrastructure spending.

However, he pointed out, people on low incomes were inclined to spend.'

This all leaves me scratching my poor balding head in puzzlement!

Isn't it good when people save money, and build a bit of secure wealth for themselves?

People on low incomes are inclined to spend, indeed, because often they are just trying to keep shoes on the children and food on the table. In addition, there are those(certainly not all!!)who never learned how to save/spend/live with any discipline, and end up in financial trouble. Again, certainly not all, and not intending to sound hard-hearted toward those who struggle to live with dignity in this day.

But, isn't it a bit cynical of any government (on either side of the pond--I live on the western side, by the way) to say 'The way to get out of all this mess is to make sure those poor slobs at the bottom have a few extra bucks to go spread around at the shopping mall. While we're at it, let's make it easier for them to float loans for over-priced autos, which will depreciate at a dizzying rate whilst the poor schlubs are working like mad to pay them because they are totally upside-down in a bad loan, and need the car to outlast the life of the loan. Whatever they do, they must spend, spend, spend, not save, save, save!'

Doesn't this strike anyone out there as an ethically suspect approach to economics?

#9 Perhaps he is trying to avoid spelling it with the first vowel !!

#13 No, it is not. It follows the ancient and honoured dictum of - Don't do what I do; do what I tell you to do !!

I agree with Gordon on one thing: this has indeed been the age of irresponsibility.

Almost everyone agrees that the Banks have irresponsibility traded instruments they were unable to value, and lent beyond their ability to fund in the long-term.

Yet it was Gordon that encouraged this age of irresponsibility:
- Gordon who changed the banking regulatory system such that it was not fit for purpose
- Gordon who built his reputation on an artificial boom based on a mountain of public and private debt
- Gordon who increased taxes on hard-working families to pay for benefit dependency
- Gordon who took £5 billion per year from pension funds to discourage long-term saving and encourage a short-term spending spree
- Gordon who increased public sector borrowing before the credit crunch.

Gordon's solution to the age of irresponsibility?
- more long-term borrowing to fund short-term spending on imported good from China and elsewhere
- resoration of bank lending to 2007 levels
- help for banks and debtors and penalties for savers
- devalue sterling
- a bigger boom followed by an even bigger bust.

Gordon loves to swagger as a global expert, but there should be a rebalancing of the global economy that sees spending rise in Asia and in developing countries, and saving rates rise in the US and Europe. Gordon's policies have the opposite effect.

There is an inherent contradiction between Gordon's analysis (the age of irresponsibility) and his solution (encourage more irresponsibility)

CyfaHead

Some good comments especially about masters' masters and also the Global green Industry - their lies a god deal for the future!

Also from #77 "[John: my alias can be de-cyfa'd]"...clearly in that case you're just a Head :-)

I refrain from comment on both Brown and Nick as it is early yet and I feel a good day coming on so wish to avoid rage...

# 80 cyfaHead

Well said, and a breath of fresh air in this world of the self-absorbed.

In your last paragraph though, perhaps using the word 'with' rather than 'amongst' would have better reflected their current behaviour.

Makese sense - GB has spent and spent so we have no reserves left; the only way out of our hole is to borrow...borrow and borrow which will drive sterling down (this is all happening).

Only way back? An export led recovery.

Export's rely on other countries Importing our Exports; so, if other countries implement their protectionism measures like they are saying they will then where will that leave us?

Very high interest rates.

When will this happen? end 2009? In time for the conservatives to take over.

GB doesn't care - he knows he's lost this term and is on the way out of office, he's thinking a few years ahead - not at the next election (that for labour is lost), but the one after that.

Cynical? May be, will see in a couple of years time if I unfortunetly right.

Brown would do well to introduce a bit of protectionism. For instance how about a tax, equivalent to the basic rate of unemployment benefit for each job " outsourced " abroad. In the present economic climate there is no excuse for the British taxpayer subsidising jobs in India or anywhere else outside the UK. It looks like Obama will apply a like scheme in the USA, quite rightly, any head of state's first committment must be to his own people.

Along with this business of tax cuts we hear that taxpayers will have to pay for it later.

Let's hope that the poorer people who receive these extra tax credits are the ones made to repay.

I do not want to subsidise the poor even more than I do now. I'm not exactly poor but I have no money to spend. If these low income people are given money to spend and I can't join the spree, I DO NOT WANT TO PAY FOR THEM LATER.

Quite aside from the fact that anyone, rich or poor, with any sense will save rather than spend. I really can't see a trick like this "stimulating the economy" enough to drag us out of depression.

Nick - can you please tell us why no-one at the BBC in terms of you, Mr Peston et al. seems to want to discuss the elephant in the room - namely, that if sterling is on the brink of collapse (or indeed if it has already) - are we now going to be in a position where Brown will take us into the euro?

It certainly seems that that's the way things are heading - and of course as we're all rabidly anti-EU in this country thanks to the red-top and Murdoch press and their ilk - we're far too immature to be given the facts and to have a rational debate.

What is strange though is that despite all of these articles on the BBC website about the pound's "taking a pounding" and politicians prophesying that we're all doomed, no-one wants to discuss that particular question.

Is this all some machiavellian plot to get us in with the least fuss or what??

So, the Tories answer is to have George Osborne trying to wriggle his way out of his recent fall from grace by talking down sterling..........pathetic.

Bill McFadden

Has Mr Brown explained he has gone to the Arab Countries and China to ask for money for HIS problem?

Has it been reported that more Sharia law is now operating in this country?

Mr Brown selling out Britain and our way of life faster that Mr Blair did!

Brown is proposing utter barking madness.

From a man that took a tax band from the poor, so he plans to work out how much of their own money they can have back - tax credits.

Here's an idea, abolish tax credits, while we are at it, slash the number of quangos and non-jobs. 60 BILLION POUNDS is spent every year that way.

I reckon 20bn could be found easily.

In the meantime, have a bonfire of red tape, get off the back of small businesses with pointless regulation and also give them a tax cut.

Re-instate the 10p tax band and lift the 10p threshold up to something meaningful like £8000. Lift the 23p threshold likewise.

In one foul swoop, government spending cut, 100,000s taken out of the tax system and a 'fiscal stimulus' created.

No. We won't get it. Why?

Because cutting the 'client state' of quangos and non-jobs is a vote loser.

Because passing on a tax cut to everyone isn't focussing a bribe to Brown's core vote.

Because the State is so much more efficient at spending money than the private sector.

Because Brown essentially doesn't trust the British people to spend their own money wisely - he has to take it from us and spend it for us.

This is going to end in tears, scorched earth for a decade and the day of reckoning will be all the more painful.

# 92

I agree with you Bill.

The conviction that the Tories - or any other party come to that - will prioritise the needs of those not already wealthy is a triumph of hope over experience.

Also, do you want to know what was the one thing that turns the stock market crash of 1929 into the 1933 Great Depression.

It wasn't just tight monetary policy.

It was trade tariffs between countries. PROTECTIONISM.

It took a global war to shake the world out of it. Incidentally Germany suffered most from this depression and we know what happened there.

The UK is a 'value add' economy, we take something, improve it, sell it on. Be it invisibles or tangibles. So we rely on foreign capital flows.

Just how is setting up trade barriers going to get us out of recession?

Jesus wept.

To encourage the world out of recession quickly, the Doha talks need to liberalise more world trade, not less.

Nice to see Labour voters have about as much of a clue about the global economy as their leader.

Before I move on to Brown,an urgent message to Cameron!
Sack George Osborne immediately if your party is to have any credibility on fiscal matters.
His comments using the term "scored earth" are frankly disgusting and not in keeping with the position he holds.
His assertion re the pound is political suicide as well as economic suicide and its not as if you dont have 2 capable potential replacements in Clarke and Davis-OK Clarke is to near the centre for you and agrees with much of what Brown is proposing to do-but he would politically be a very very astute replacement for someone totally out of his depth.
With regard to Brown,he is clearly seeking a mandate to espouse Keynsian thinking,in a crisis you need a leader,and he is leading from the front,whether he is right or wrong only time will tell,but crucially,there are no progressive or imaginary solutions coming from elsewhere,hence the need in my opinion for the Tories to bring in an economic heavyweight.
If I were Chancellor - what would I do...
1) Target the low paid with the following
-increased energy allowance - but I would force all energy companies to IMMEDIATELY put all OAP's with an income of less than £40,000 joint pa,on to the lowest available tariff.I would then pay their bills direct from 1 December to 1 May by means of a voucher redeemable only to their credit supplier - this would target the money directy on the need.
2) I would reduce immediately by 20% for a period of 6 months - the fuel duty tax on unleaded petrol,diesel and domestic heating oil - from 1 May 2009 - I would reduce the reduction to 10%
3) I would instruct the Courts - based on the fact Courts evict homeowners NOT Mortgage Companies - to postpone reposession proceedings on ANY mortgage debtor who maintained 80% of normal monthly payment for a period of 6 months - you cannot simply ban reposession-this is a licence to allow people to cease mortgage payments indefinately and would be catastrophic- but you can say OK pay 80% or more of your normal payment for 6 months consecutively and we will stop reposession.
4) I would immediately instigate a "union jack sticker programme" - enforcing all retail outlets to identify ANY item grown,produced or manufactured in the UK, all Union Jack sticker produce would have an immediate 9if applicable VAT reduction of 5%,and in addition I would offer a tax break to the retailer pro-rata for the amount of UK sticker produce required.
5) Finally I would immediately commence a public works programme to bring in to line and available within a period of 6 months any UK property Council owned of any description,a to boost employment within the trades and building and b to provide cheap affordable housing options to all.

By no means exhaustive I believe these are quick relatively cheap options to stimulate spending and generate some growth at home.

Gordon Brown seems to be reading my blog entries! (I have been banging on about these exact policies fro weeks.) Oh dear we are really for it now!

Anyway, the only thing that has actually been done is to dramatically lower interest rates, not on the fiscal stimuli have yet been implemented.

So I am still left wondering:
What have they put in place to prevent the cheap money (lower interest rate) from just tuning into inflated asset prices (house prices) - as was one of the main contributors to the bubble economy we are supposed to be recovering from!

Answer: Nothing! - Unless anybody has seen, (or knows of) anything to the contrary.

I am left despairing of the logic of the 'good and the great' - it seems they want the economy to recover by inflating house prices once again and thereby recovering the equity release element boost to GDP - this is insane!

What a pleasure to read some sanity in some of the above entries to this newslog. I think a lot of this current financial slow down is caused by perceptions and there is no point in exaggerating the problems or putting the blame on one single cause as it skews the perceptions. And in a world of instant communications may deplete the resources of worthy causes in favour of unworthy ones.
At the risk of repeating myself, the beginning of these problems in my view began with the Enron "bubble". It began from there and continued with such things as obscure "property investments" which were sold in a rising market, but had no proper basis. Once such non-investments become part of "subsidiaries" the actual basis for the capital becomes more obscure. Now bring in the Hedge Fund factor, where there may be a good reason for the perception there is no actual capital in such "property investments" or "subsidiaries" and the shares in such companies may be "borrowed" and sold at a profit in large quantities. This may result in a complete collapse of said "property investment" and "subsidiaries". It also yields big profits for Hedge Funds on something which probably had no substance in the first place.
The above is "betting shop" economics based on perceptions and odds. Allowed to continue it could ruin the many in favour of a few super rich.
If my theory is right and part of the cause of the current recession is down to perceptions, then any prognostications, "sound bites" or "warnings" issued in the UK on the current situation – which are likely to be well aired by our ever vigilant media – will exacerbate our situation and could even damage it further.

Nick,

I listened to the criticism of George Osborne when he dared to utter a truth, the collapse of Sterling, and we were told that he is talking down the economy. Unbelievable, has nobody noticed what has happened to the pound, getting closer to parity with the Euro every day. Why did we not go in a couple of years ago when we could have gone in at 1.50 to the pound rather than 1.00 .

Look at the numbers, pensioner on £10,000 would have got 15,000 Euros, if we had gone in at 1.50 but at 1.00 the same pensioner will get only 10,000 at 1.00.

However, look at government debt, just add a few zeroes to the numbers and you will see the advantage of going into the Euro with a huge debt. That I think has been the plan all along, run up the debt, then win on the conversion. Surely the former chancellor never did have a cunning plan, we will soon be told it will be to our advantage to now enter the Euro, the five criteria have been met, we are so, gullible! well not all of us.

Imagine Gordon's legacy, the man will be even more famous than Edward Heath.