If you are interested in how money works and why a teacher (or police officer) costs a lot less than their salary then have a look at this.
And here’s a diagram that may help visualise the spend and tax circuit that we discuss.
Theresa May has promised “the greatest expansion in workers’ rights by any Conservative government in history” if she wins on 8th June. She claims: “There is only one leader at this election who will put rights and opportunities for ordinary working families first.”
However, a recent report by the Ministry of Justice shows a stark contradiction between those words and the actions of her government.
In my previous post on government spending (How are we going to pay for it?), I wrote that unless people choose to save it, then extra government spending all comes back as extra tax. If this were true, then what does not come back, the deficit, must be equal to private sector savings? We can test this by plotting data available in the Quarterly National Accounts provided by the ONS. Continue reading “What is the deficit?”
When you listen to all the discussion about balancing the budget, about how any increase in spending needs to be matched by an increase in tax, why does no one mention that an increase in spending automatically generates extra tax?
There is no need to raise tax rates!
This week is Mental Health Awareness Week . What an excellent time for the Conservatives to pledge an extra 10,000 mental health staff by 2020 – it’s surely just minor carelessness that they’ve managed to lose 4,800 mental health staff on their current watch so far.
We are more aware today of the need for change within the EU than any time during the last ten years. Since 2010 the Euro Group, which is made up of European Finance Ministers, has successfully sidelined the elected European Parliament. In effect the Euro group operates outside of the Treaties and is no longer accountable to either National or European Parliaments.
The Euro Group now controls all economic policy, the supervision of private banks the rescue packages given to failing states, like Greece, and policy on Austerity.
It is not only the state that seems intent on centralising power. Capital also centralises its ownership. So Lloyds and most of what is now HSBC may have been founded in Birmingham and much of Barclays came from Liverpool but they are all now in London living in the lap of luxurious central government ‘quantitative easing’.
What about the regions?
“I read the news today oh boy, about a lucky man who made the grade…” which recently tends to be a dot.com entrepreneur who has made billions from a tech start-up employing a handful of people. These success stories are usually accompanied by reports of a company downsizing, rationalizing, restructuring, consolidating, streamlining or one of many ingenious euphemisms used to soften the news of job losses. The workers are always the first to feel the slice of the austerity cleaver. The business is butchered to provide maximum profit for its shareholders with its employees consigned to the offal pile; leaving a lean, mean, money making machine.
Marine Le Pen, the SNP and the Conservatives seem to think that taking back control is about getting smaller. The international corporations and the global banks seem to have a different view. There danger lies.