Sunday, October 31, 2010

Britain's Paedophile State Networks Operate Unchecked

I'm not in a good internet location currently but this article by Booker caught my attention.  This is the second time Booker's had a go at the scandalous targeted system of removal of children from families (Raoul Moat being but one of those targeted for the removal of his kids).  This topic is probably the most disturbing of all those to be found on the blogosphere about out of control state power.

The only explanation that I can find is that given by Brian Gerish of UK Column that networks of paeophiles are effectively running our country's child ''protection'' services.  As Kate McCann discovered, there is a huge child-pornography and prostitution industry that operates across Europe, untroubled by police, lawyers, politicians or anyone else.

At least and at last Booker's getting onto this topic.  How long before the public cotton to what kind of client state Labour has created these last ten and more years?  This needs a going over from Guido, and some naming and shaming.

Tim Montgomerie's closing in -

And EUreferendum is also aware of the true horror of what must be going on unseen, as Blair's system of targeted removal of children has played into the hands of paedophiles.

And note that the state paedophile networks also wants an end to the charity looking for missing children.  The work of this charity is being taken over by a new European agency called Missing Children Europe (See, which wants to control the search for missing children and combine it with hearing allegations of abuse, which any citizen can make against any other citizen.  This will be a great way to impose fear over the population, and is certainly the least attractice aspect of the coming One World Government.

Friday, October 29, 2010

Gordon The Great, Who Saved The Pound.

Britain's Former PM, and Hero, as portrayed on
Guido's blogging once more about the number of days Gordon Brown is attending Parliament.   Basically he's not attending at all.  This fact is met with the usual baying of the mob demanding he hand back his pay, which he isn't earning, or that he face the humiliation in the Chamber which is his due.

I had another thought, which I added in the comments -

He’s desperately hoping for a position in the IMF or the EU, but Cameron will not be seeking to assist him, I doubt.
Yesterday’s man is, in any case, despised by the IMF and the EU and the One World Government structures which he latterly signed up to, but only once Blair was gone, but that was too late to rescue the failed attempt to lock Britain permanently into economic subordination.
He is now rejected by those he thought would underwrite his future, because he failed to back Blair’s campaign to get Britain into the Euro in 1999, at the moment of maximum opportunity.  The EU and the IMF will never forgive him for this strategic loss.
Not only that but he then himself lost power to the dreaded Conservatives, who terrify the EU with their more than occasional talk of the R word. Brown lost the election despite wall to wall media and bureaucratic support, a campaign of electoral fraud and constituency rigging to shame a banana republic. He even fell for Nick Clegg’s ”you resign, Gordon, and we’ll sign into a Lib Lab coalition next” ruse.
The OWG will not forgive Brown for the lost opportunity to enslave Britain which the Blair years presented. We should not be jeering Brown.  We all should be eternally grateful to Brown for fucking up the Blair programme. He may have been mad, dyfsfunctional, aggressive and congenitally uncooperative, but the clunking fist saved this country, and sacrificed his own chances by doing so. It might have all been motivated by jealousy against Blair, as he wanted all the credit for destroying Britain for himself, to the point that he would do anything he could to jeopardise Blair’s chances, but in the process he saved us.  He should forever be known as St Gordon of Kirkcaldy. He should be mentioned in prayers at Westminster, as Gordon The Great.  In his dreams he saved the world economy by being the first to launch quantitative easing and rescue banks.  This is highly debatable.  But what is not at issue is that it was him who saved the Pound and His Country.

Speak All Of Our Languages In Parliament

Connor Morgan, Sinn Fein's Young Speaker - as if in a movie
I wrote a comment on Iain Dale's blog which was rejected as too large.  Iain is drawing attention to the fact that Sin Fein are speaking in the Youth Parliament today at Westminster, without swearing loyalty to the Queen, in Gaelic.  This is my comment

While Airey Neave was undoubtedly murdered by the INLA, they have always said that he was not targeted by them, but the details of how to murder him were passed to them from ''others''.

Enoch Powell believed the CIA targeted Mountbatten, Neave and other key British nationalists, presumably to facilitate our entry into the EU.  Neave died the day that it became obvious Thatcher would win the leadership.  The CIA had decided it wanted Britain submerged inside the EU, and used the INLA to do its dirty work.

There is a lot we don't know about how we've ended up inside the EU as it is today, and a lot we don't know about who controls it.

Any Conservative leader who stands against the EU publicly is sorted in fairly short order - Thatcher, IDS are the primary examples.  Cameron has chosen to back down and say nothing to the current raft of EU abuses of our freedoms.  Then again maybe he knows what the consequences would be if he did.

If Sinn Fein won't swear loyalty to the Queen, will they swear loyalty and bow down to the EU?  That is who they and we serve nowadays, and is why Ireland is a bankrupt country inside the Euro.  Irish and British nationalists have much in common in the certainty that we must both somehow find a way out of our EU imprisonment.

If the young speaker finds it easier to imply threats of violence against Britain, than face the reality of the current power structure, he is living in the past, and should open his eyes.  

We are both prisoners of a new empire now.  It threatens us all with a collapse of civilised standards - of our economies, of our democracies and our respective nations.  

I hope the young Irish speaker addresses the real culprits, and doesn't merely look deep into the past to run over old ground where there is already an agreement in place, that if a majority of the people of Northern Ireland desire separation from Britain, it would have a democratic basis, and would take place.  

You might hope, given such an agreement, that Sinn Fein would see that we need to cooperate to face a common threat now.  Or will it be like WW2 all over again, where past hatreds are seen as more important than current realities?  Hitler was delighted, and Ireland escaped the worst.

This time Ireland's economy is facing serious degradation sooner than Britain's, but the solution will be as before.  Only through cooperation between fellow independent nations will we find the way out of the mess that's been created by the crazed dreams of economic empire by Euro-idealists, as they reach desperately for the next bail-out, until finally their economic rust bucket cracks.

As for his choice of language, who cares? We could have Welsh spoken again and Cornish if it helped the cause of democracy.  Gaelic is just as welcome, whether it be Brythonic , or an earlier form of the language.

Nothing Grabs

It's beach time again, and boats.  Obviously that means I'm not in the UK, but far away where sometimes the minutiae of daily politics in Britain seem remote and not so significant.  A quick browse of events suggests nothing worthy of blogging, and I will be away for a few days now.  A couple of thoughts while signing off...

The big event of next week will be the Federal Reserve's decision about quantitative easing.  So much expectation has been built up that this will save the world's economy from a downturn, yet that is an odd basis on which to construct optimism, to say the least.   There are limits to the amount the Fed can do, in buying large IOU notes and then issuing cash to splurge across asset markets, keeping prices higher a while longer before they finally come back down to earth.


Cameron and Hague are proving disappointing as eurosceptics as many predicted they would be.  I reserved judgement before the election, and said that even if they were to prove disappointing, the right vote in the General Election was still Conservative, as one Carswell sitting in the Commons was worth a thousand Farages, stuck outside the real action in The Commons.

However in the European Elections, coming up in two more years, you could imagine a surge in UKIP support, in the light of Cameron's unwillingness to confront the issue.  This in turn might translate into more seats lost by the Conservatives in the Commons in 2015.

The only way to neutralise the issue will be to hold an IN/OUT referendum.  And Carswell is proposing as such.  Who knows?  Events might give this traction.  UKIP could offer to stand down if the referendum is held.  The issue will not be going away.  Meanwhile we all feel somewhat disappointed, and will need to endure a few more years of idiocy, corruption and bankruptcy before the Euroblanket is removed and we can breathe fresh democratic air, and grow our economy once again.

I"ll be back when the regatta's over, or when some event grabs my attention.

Wednesday, October 27, 2010

Euro Bail-out Fatigue Threatens Governments Everywhere

Greek Opposition Politicians Do Not Support Papandreou's Austerity
The Germans are tiring of being the EU's bankers.  And the eurozone countries struggling in severe deficit are tiring of the terms imposed for granting them bail-outs.  

Open Europe -

The Telegraph reports that Greek PM George Papandreou has said he will call national elections if his party fails to win upcoming local elections. The main opposition group - New Democracy - has not yet confirmed if it would honour the conditions of the EU-IMF €110bn bailout plan. A socialist rebel candidate opposed to the terms of the bailout currently leads the polls for the Athens region. Yields on 10-year Greek bonds jumped 31 basis points to 9.57%.

Meanwhile, Ireland's government said yesterday that budget cuts of €15 billion are needed over the next four years, double the amount previously expected, in order to meet EU targets, reports the WSJ.

For the people of Greece and of Ireland a quick euro-divorce with attendant default, devaluation and reissuing of their own currencies would be a far easier route ahead.  Yet their politicians feel obliged to keep within the terms of the bail-outs they've reached for to cover the growing financial chasm which their countries are suffering.  That goes for the incumbents anyway. 

If any of the current governments were to fall, elections might throw up new governments that reject the austerity programmes, which stretch ahead for years.  And so too might a new German government reject the idea of continuing with the bail-out programmes.  Merkel's popularity is falling almost as quickly as Obama's.

In the US, a new Tea-Party compliant Republican regime might reject the bottomless guarantee, which supporting the endless Euro bail-outs entails.  The current regimes that hold on in the West are all that stand between the Euro and oblivion, and almost all of them seem to have little prospect of being re-elected.  It means that change will come along.  The certainty that the Euro must be saved at all costs will be the likely first casualty of their demise, whether the countries are bail-out granting ones like the USA and Germany, or bail-out receiving ones like Greece and Ireland.  The same fatigue applies equally to all parties to this bottomless Euro-pit.

From other media -

The WSJ reports that bank lending to businesses in the euro periphery remains weak.  The austerity programmes and the fiscal situation do not inspire the confidence of traders and bankers in these countries, making deficits likely to continue.

Anyone want to offer a translation of the cartoon bubbles, go ahead!

FT - So Greek yields are back over 10 per cent. Again. Greece five-year CDS widened sharply on the day too, according to Markit.
And what’s amazing is how little it’s taken to upset the patient.
There have been a few Greece-related rumbles in recent days, but the immediate trigger appears to be this revelation from the Greek finance minister, concerning the post-bailout bid to fix Greek finances (via the Athens News Agency):
Papaconstantinou further predicted that Greece will have a negative growth rate of between -2.5 and -3.0 percent in 2011, noting that the growth rate this year will be -4.0 percent…
See what he did there? Papaconstantinou slipped in a possible 3 per cent decline — which isn’t the official 2011 budget prediction of -2.6 per cent.
So what, you might say. Tiny. But surely fiscal slippage is worrying when austerity as extreme as the Greek experiment is embarked upon, and the alternative is… default.

Tuesday, October 26, 2010

British Visas Are A Potential Goldmine

A regular reader sent me this from yahoo Finance.  If Americans can effectively sell citizenship, and raise millions of dollars, why can't Britain and other countries which are desirable destinations for people to live, do the same thing?

The question is how much should be charged?  $500,000 seems quite cheap to the writer of the article.  This is a potential goldmine.  The citizenship buyers going to the US are also a source of venture capital and jobs.

Every day investors around the world choose to put their hard-earned cash into the U.S. Billions of dollars flow in the form of foreign direct investment, as when a group of Brazilians bought Burger King, and foreigners purchase hundreds of billions of U.S. stocks and bonds, as measured by the Treasury's TIC data.
But a small number of investors show up on these shores drawn by something more valuable than financial returns: the prospect of U.S. citizenship.
Related Video

Aaron Task and Daniel Gross discuss the visa program on Tech Ticker.
You can't simply purchase an American passport (at least not legally). But since 1990, foreigners with as little as $500,000 in cash have been able to invest their way to a quick green card, putting them on the path to citizenship. Quick, somebody call Lou Dobbs!
Yes, the U.S. government lets people with cash to jump the line for a green card through the EB-5 program.
Starting in 1990, 10,000 visas have been set aside each year for the EB-category. The program was designed to encourage foreign investors to create jobs by starting a new business or preserve jobs by investing in money-losing businesses. If they agree to invest $1 million, foreigners can get a visa, apply for green cards, and become conditional permanent residents.
After two years, provided they've made good on their promise to invest, created 10 jobs (family members don't count), and the business is still an ongoing concern, they can apply to have those conditions removed. And after five years with a green card, holders can apply for citizenship.
Of the 10,000 visas in the program, 3,000 are set aside for "targeted employment areas" -- rural areas, or places with an unemployment rate that's 150 percent or more of the national average. For these visas, the threshold is lowered to $500,000.
Another 3,000 visas are set aside for investments in "regional centers" -- areas or industries designated by states. (A full list of regional centers can be seen here.)
Some organizations, professional service firms, and companies promote the program as a whole, or market investment in particular projects as appropriate for EB5 aspirants, such as a ski resort in Vermont. Other entrepreneurs having a tough time raising cash are now seeking to use the program to tap into new sources of financing. The Wall Street Journal reported last week that developer Bruce Ratner is seeking to use the program to help raise funds in China for his massive, controversial Atlantic Yards development in Brooklyn, N.Y.
Now, many may view the prospect of giving favorable immigration treatment to investors as problematic. The phrase "bring us your moneyed investors yearning to breathe free" doesn't have the same poetic heft as the inscription about the tired, poor, huddled masses etched on the Statue of Liberty. From its inception, the price of citizenship has traditionally been a willingness to leave behind the old world and work hard -- not write a check to support the construction of a bunch of ski-in, ski-out condos.
But I happen to think this is a very good thing. If it were fully utilized, the EB5 program would bring at least $7 billion annually and create or preserve 100,000 jobs per year. It's not much in the grand scheme of things -- there are currently about 130 million Americans with payroll jobs. But given the trauma inflicted upon American workers in the past three years, every little bit helps. And this is something the U.S. should be doing more of.
One cure for the vast overhang of excess housing would be to offer expedited citizenship to people willing to purchase vacant homes in places in like Las Vegas or Detroit.
In fact, it's surprising that more people don't take the U.S. up on its offer. Consider the changing shape of the world's economic geography: We've got American companies with lots of cash that are reluctant to invest at home because they see better prospects abroad. Thanks to that same dynamic, millionaires are being minted by the millions in China, India, and Brazil, and elsewhere.
Unfortunately, the EB5 program has never come close to maxing out. According to U.S. Citizenship and Immigration Services, in 2009, just 1,028 people applied for EB5 status and 966 were approved, up from 776 applications and 485 approvals in fiscal 2007. Applications and approvals rose sharply in fiscal 2010, to 1,727 and 1,271, respectively.
I'm guessing the lackluster numbers can be chalked up to a failure of marketing rather than the limited attraction of the underlying product, or of its expense. In fact, the investment-related green card should probably be priced higher. Here's a thought experiment: Ask how much you'd have to be paid to give up American citizenship for you and your family and assume that of a randomly chosen foreign country. Something tells me the bidding would start at a point much higher than $500,000.

Monday, October 25, 2010

Brilliant Parable On The Perception Of Fairness

From a comment on Politicalbetting yesterday on the Tax And Benefits System -
Ben M. It’s time for you to get real about the tax system and fairness and I hope the following helps achieve this:-
The Tax system
Suppose that every day, ten men go out for beer and the bill for all ten comes to £100…
If they paid their bill the way we pay our taxes, it would go something like this…
The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
The tenth man (the richest) would pay £59.
So, that’s what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.
“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by £20″. Drinks for the ten men would now cost just £80.
The group still wanted to pay their bill the way we pay our taxes.
So the first four men were unaffected.
They would still drink for free. But what about the other six? The paying customers?
How could they divide the £20 windfall so that everyone would get his fair share?
They realized that £20 divided by six is £3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.
And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid £2 instead of £3 (33% saving).
The seventh now paid £5 instead of £7 (28% saving).
The eighth now paid £9 instead of £12 (25% saving).
The ninth now paid £14 instead of £18 (22% saving).
The tenth now paid £49 instead of £59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
“I only got a pound out of the £20 saving,” declared the sixth man.
He pointed to the tenth man, “but he got £10!”
“Yeah, that’s right,” exclaimed the fifth man. “I only saved a pound too. It’s unfair that he got ten times more benefit than me!”
“That’s true!” shouted the seventh man. “Why should he get £10 back, when I got only £2? The wealthy get all the breaks!”
“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!
And that, Ben is how our tax system works.
The people who already pay the highest taxes will naturally get the most benefit from a tax reduction.
Tax them too much, attack them for being wealthy, and they just may not show up anymore.
In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
Based on an article from David R. Kamerschen, Ph.D.
Professor of Economics.

Guido's Admiration For Cameron Shines Through

Guido's Monday Morning Cartoon
Guido Fawkes has his own way of showing admiration.  Cameron's selling off great swathes of Forestry Commission lands to raise a few billions of Pounds is the topic he is highlighting this morning.  Farmland and forestry are at record highs and fetching good prices.  Unlike Gordon Brown's selling off the gold at the bottom of the market, this is far more intelligent.

The way that this is applauded by Guido is to call Cameron a C.U.N.T.  I suppose that inasmuch as Gordon was a stupid C....., Dave is a clever one.

Sometimes I feel I need an interpreter when trying to understand the Y Generation and their use of the English language.  Of course, they never drilled in front of a Seargeant Major as we X Generation did, and have felt free to put new values on words which were previously fixed in their definition.  Cunt to us was usually a bad word, though not in every case.

Our RSM, fort example, screamed - ''Fawkes, you're  a cunt.''

Then a second later, in quieter voice.  ''No.  You're not.  Cunts are useful.''

David Cameron will be most assured by the compliment, I am sure, by the idea that he might at least be a useful one.  Guido is spiking his language with yet another twist in the meaning of a very ancient word, it seems, or am I being overly complicated?  Sheakespeare, he is not.  But his audience still has to think deeply to be able to follow his meanings, especially on Mondays.

Sunday, October 24, 2010

EU Referendum Campaign Believes Cameron Will Implement Petition By 1 Million Voters

This article in The Daily Express points out that the EU Referendum Campaign believes David Cameron has committed himself to passing a law that will trigger legislation if a petition is signed by a million voters.
Jon Gaunt, radio presenter and spokesman for the EU Referendum Campaign, said: “There is a massive disconnect between the political class and ordinary people and this is an issue where people can rally behind the flag and say it’s not right. The EU Referendum Campaign is not saying let’s get out of Europe. We are just saying let’s have a debate about this and let’s have a vote.”
The campaign has a petition on the internet which it hopes will attract the signatures of hundreds of thousands of voters.
In the run-up to the election, David Cameron outlined plans to trigger legislation in Parliament for any petition backed by one million or more citizens.
While that democracy pledge did not survive the coalition agreement, one million signatures calling for an EU referendum would be impossible for politicians to ignore.

Friday, October 22, 2010

Osborne Constructs The Road To Economic Sanctuary

Thank God he lost the election.
Jeff Randall is the only commentator to start talking totals of government expenditure as well as the details.  Yet even he fails to mention the totals of government revenues, and prefers to keep himself safely away from asking the real question as to how much tax revenue can the government expect to collect next year to finance its plans.  He blogs - Between 2000 and 2010, had government's annual expenditure just kept pace with inflation, the budget would have risen from £343 billion to about £450 billion. In the event, Alistair Darling spent £669 last year and Mr Osborne will spend £697 billion this year. In real terms, over the past decade, there has been a 50 per cent increase in the state's outgoings.

What he might also have mentioned was that government revenues also boomed by a similar percentage until 2008, after which they went sharply into reverse. At April 2008, they hit a high point of £606 billion.  In April 2009, they reported in, a cool £100 billion less than that, at £498 billion.  Hardly a mention was made at the time by Labour's loyal media that the nation's finances were crashing.  

By April 2010, the revenue situation was so bad that Gordon Brown/Darling declared that the intended annual spend of £670 billion had in fact come in at £620 billion, which enabled him to claim the borrowing requirement had miraculously fallen just in time for the election.  

Throughout 2009 and early 2010, revenues had been reported month on month as being consistently down on the previous year.  It seems likely that revenues were around £475 billion, but, until someone can explain Brown and Darling's methods of basic arithmetic, it is impossible to fathom.  

I just took the £620 billion claimed spending figure to April 2010, and deducted the claimed borrowing figure of £145 billion, but even that could be ''optimistic''.

I have not seen an accountant's figure for the April 2010 revenue figure anywhere, despite searching for one.

Given all the financial chicanery carried out by Brown and Darling in their last six months in office, it might be impossible to ever arrive at the true figures for either revenue or spending at April 2010. (See the 2009 December Treasury Outturn Report which has no less than £180 billions worth of unexplained accounting adjustments).  

So many billions were flying around in bank rescues and bail-outs at the time that the true national accounts for general expenditure were easily reduced to fog, and this Brown and Darling seem to have achieved exactly that, to hide the fact that on general expenditure, borrowing was in truth probably nearer £200 billion in April 2010, than the £145 billion claimed.  (And that excludes all money spent on banks)

If a double dip recession kicks in in 2011 as many expect to happen (recessions and depressions are rarely a single wave event), the estimated revenue figure of £475 billion could easily fall again, probably to a figure below £400 billion, which according to Jeff Randall would not be a bad estimate of where spending should have been, had the credit boom not expanded Brown's revenues, and made him imagine he'd abolished the economic cycle.

The two figures, revenues and expenditure should, though, be considered as one sum, not as two separate sums.  Osborne may have done all that is politically possible in the CSR to tailor expenditure for now, but as Jeff Randall says, he is still intending to spend nearly £700 billion in one year.  The key question is what will government revenues be to support this level of spend?  If the £400 billion figure is indeed looming for April 2012, we are going to be in an even deeper mess than we are being yet told.  

Osborne, however, had made a few comments prior to the election that he didn't believe the spending figures and revenue figures being announced by Darling, and he announced the setting up of The Office for Budget Responsibility.  Now in power, he has held back from accusing the previous regime of lying, which would not help confidence, and would make his own situation with the markets worse.  Right now he is hoping like all governments that their economies will lift and growth will bail him out.  The only problem will be, if the recession doesn't lift as he hopes, but it deepens as credit contracts further.  The currently proposed cuts will the be about one quarter of what will actually be required in that event.  That will present some real political challenges.

In an interview with the FT, Osborne signals that he recognises the situation could yet get a lot worse before it gets better.

Mr Osborne believes that even in the event of a double-dip recession, he would have to maintain fiscal discipline, arguing that it would be necessary to avert renewed concern about Britain’s ability to pay its way. “The country needs a decisive plan,” he told the BBC.
He said monetary policy rather than fiscal policy was a better way of boosting an ailing economy, implying that a new round of quantitative easing was possible. “There is, of course, the freedom of the Bank of England to deploy monetary tools as well.” (FT)

Osborne's task in the coming year will be extremely interesting.  He may be leading the world in taking decisive action to reduce the government's deficit, but the amount he's cut as yet is unlikely to be nearly enough.  The key to surviving, both financially and politically,  is that he keeps the confidence of markets, and this he recognises well enough.  

People are already mentioning that 5 year and 10 year gilts are at record lows, but as yet the 30 year gilt is not falling.  Once 30 year money can be borrowed at 2.5%, then Osborne could be said to be on safe ground, as he will be able to turn to the Gilts markets for the huge amounts that will be required, without interest costs sending the budget soaring out of control.  He will be able to borrow with payback dates well into the future,  a generation away in fact, to set up the spending that will be needed to construct a complete economic recovery.  

There is a long way to go, with 30 year money still at over 4%.  It will not fall much further until the next leg of recession pushes money out of other markets to buying sanctuary in longterm gilts.  But at least Osborne knows where the path to sanctuary lies if or when a serious second leg to the recession kicks in, and he is readying himself to take the necessary steps.  

He will no doubt get us through the next leg down, one way or another, and at least he is preparing the ground now for the option of using huge monetary stimulus, while he seeks to get the fiscal picture under control.  He has made the right diagnosis, and is applying the right cure.  Reducing fiscal borrowing opens up the opportunity to use large scale monetary stimulus later on, at the point when optimism hits the floor.  Yet hopefully next time quantitative easing is resorted to, not all the money will be needed to bail out foolish lending by banks, and a programme of national reconstruction of roads, railways, broadband, airports and airport links can be carried out, hugely increasing the country's longterm competitiveness. 

Thank God Gordon Brown lost the election.  His fiscal position would have deteriorated so fast, that monetary stimulus would not have been accessible with markets unwilling to lower longterm borrowing rates.  Gilts would be edging rates up, not down.  We would have been driving down a blind alley to crash into a wall.  Osborne's constructing a road out of Brown's impasse.  It will take years to get out, but at least we will get out if we get the fiscal position back under control.

(Jeff Randall's piece)

I commented on Conservativehome as follows -

The fact is that Osborne only has two taps to turn on to fill the bath. The first is tax revenues. These are falling an have been since April 2008, when they peaked at GBP 608 billion. They fell to GBP 498 billion in 2009, and were probably around GBP 475 billion in 2010, yet the figures were obscured by Brown and Darling's chicanery.
If revenues keep falling in a double dip, they could head below GBP 400 billion. Yet Osborne aspires to spending GBP 700 billion a year.
He will then need the second tap, which is monetary stimulus or quantitative easing. The best way to borrow is longterm at 30 years. In a recession the coupon might fall to 2.5%, which would enable Osborne to raise GBP 1 trillion, to fund a huge programme of construction, roads, rail links, broadband, airports and so on.
In such a crisis public sector wages would have to be cut by 15-20%, and the fiscal position kept under control, or the monetary stimulus would not be accessible. Osborne knows he has to win the fiscal battle to be able to draw on bankers' funds into the future, which he might well need to do.
The minimum wage would need to be reduced at the same time.

Thursday, October 21, 2010

Fraser Nelson And Osborne Agree Low Paid Should Not Be Taxed

Fraser writes - I would prefer for Osborne to set his own definition of fairness: i.e. that people who work hard for low salaries are charged no tax.

The reason this is not being talked about is because the level of the minimum wage is too high to permit such a sensible idea.  It would need to be lowered from the current GBP 6 an hour to about GBP 3.50 for a no tax zone of low pay to be created.

The suggestion of lowering the minimum wage at all brings out blood-curdling socialist screams of agony, let alone lowering it all the way to GBP 3.50 an hour.  Yet in a double dip recession, such a move will become inevitable.

Comments on the BBC say that in the CSR, government spending is being returned to the levels of 2006, which doesn't sound all that bad.  Yet these moves are being made on the assumption of rising government revenues.  What if Osborne's and everybody's assumptions prove to be optimistic, and the double dip recession kicks in hard in 2011?  The government might only receive the revenues it received in1996, and not the equivalent of 2006.  Osborne could be faced with a far worse canvas than he is planning on right now.

The problem is to estimate the extent to which the fast growth in the economy from 2001-2008 was based on excess credit expansion, which is now being reined back.  If the falling level of credit in the economy has its likely knock-on effects on growth, a double dip could well be on the cards.

More extreme measures would become necessary, and one of those would have to be the resetting of the minimum wage.

By the time attention is given to the minimum wage, it would make sense to reset it to the level at which income tax and national insurance are not payable.  There are already six million people idle at home.  A double dip might send this figure soaring.  Extreme measures will be necessary to price people back into work.

This from a Politicalbetting thread -

  1. 453. Still not on the agenda is the minimum wage which is set at $9.50 in Britain, yet is $7 in the US including $2 an hour for tipped labour (some regions have variations). If Europe wants to compete, the minimum wage needs resetting to allow jobs to be created a lower rates. The rate of $9.50 might make sense inside the M25. What about in depressed northern cities and less successful places?
    If someone earns GBP 3.50 an hour over 40 hours and income tax and national insurance were taken out of the equation at this level, it would provide take home of GBP 140. That would make a sensible minimum, which would create a market for millions of jobs to help get the 6 million idle at home back out and working.
  2. 464. Thankyou, Tapestry, for reminding me that there is - incredibly - a way that yesterday could have been even worse for the poor.
  3. “the bonfire of civilisation as we know it”
    Osborne actions today will simply returned public spending to the historic trend, to a level of spending similar to that which was present in 2006. I don’t remember 2006 being the end of civilisation.
    We can argue about the speed, the size, etc, the individual things being cut, but giving it the end of the world stuff doesn’t do you any favours.
  4. 463 - The bonfire of civilisation?
    Come off it!
  5. 462.
    “If I was to post here that after 13 years in power Labour could legitimately point to things wrong in the country. . . .”
    Perhaps it is the (official) Tories’ fault that Labour’s attempts to enlarge/deepen the gap between rich and poor over 13 years were not even more successful? :-(
  6. 466. Oracle, would you apply the same logic to growth? After all, the meaning of the word ‘recession’ is simply a shrinking economy. When we were in recession, would a statement from Gordon Brown to the effect that “ah well, returning the economy to the size it was in 2006 can’t be so bad” have been greeted by you with a) approval or b) hilarity and utter disbelief?
    I’d suggest your own line of argument isn’t doing you a lot of favours.
  7. BBC had it funding cut?
    Lesson = cut it more next time.
  8. SallyC
  9. 463 - Clegg said it last month at the LD party conference. He said that the damage done in the 1980s would not be repeated.
  10. 464.It is no help to the poor having a government we cannot afford, just as it is no help to the poor legislating that they must be paid more, when the only result is higher unemployment.
    With tax and NI removed from salaries below GBP 7000 a year, the minimum wage could be set at a level which gets people back to work, instead of being held up at current ludicrous levels which ensures millions are sitting at home.
    The word ”minimum” is not being thought about. My first job earned me GBP 4.50 a week for six days a week on a farm in the 1960s. My second job earned GBP 9 a week. Within four years after that I was earning GBP 30 a week. I would not have had my first two jobs under today’s crazy laws, and would have been kept idle at home.
  11. 473. “when the only result is higher unemployment”
    Higher unemployment is a laudable concern, in which case I’d suggest your first port of call should be Mr Osborne, to talk him out of adding a million to the ranks of the unemployed at a stroke. That’s quite a day’s work.
    “I would not have had my first two jobs under today’s crazy laws, and would have been kept idle at home.”
    Has it ever occurred to you that it’s at least equally as likely that you’d simply have been in a higher-paid job in the first place?
  12. 474. The idea that farms could pay anything at all above agricultural wages in the 1950s and 1960s is ludicrous. They were set at the level that farmers were assumed to be able to afford. In those days sometimes people worked for goods alone. One farmer who didn’t observe the pay scales, paid me with two bottles of cider which were promptly stolen by another worker who was an alcoholic who watched where I put them in a hedge! Another time we were given potatoes. One farmer gave me ten shillings for a day’s work in cash. GBP 4.50 seemed quite a good pay at the time. There were few profits to pay from. Yet I loved the work, and proudly handed the GBP 4.50 to my mother each week for my keep. People have forgotten what hard times are like. They might soon be reminded if deflation kicks in hard in a double dip.