Posted by Jake on Saturday, September 08, 2012 with 7 comments | Labels: Article, Big Society, budget cuts, Clegg, inequality, Liebrary, taxation
August 2012 threw up another howling hypocrisy in the “we are all in it together” mantra:
- The Bank of England admitted that the wealth enhancing benefits of its Quantitative Easing (QE) money printing exercise had gone to the wealthiest – giving them an estimated £600 billion boost to their wealth.
- Assorted Tory politicians jumped over poor bedraggled Nick Clegg for suggesting a wealth tax.
To put this in perspective, HM Treasury figuresshow the UK National Debt passed £1,000 billion this year. Just the £600 billion increase to the wealthy resulting directly from QE would pay off well over half of the national debt.
However the government prefers to pump QE money into inflating the wealth of the wealthy by £600billion, and pay off the debt by cutting jobs, salaries, services, and pensions for everyone else.
However the government prefers to pump QE money into inflating the wealth of the wealthy by £600billion, and pay off the debt by cutting jobs, salaries, services, and pensions for everyone else.
The amiable Tory MP Bernard Jenkin dismissed the notion of a wealth tax as the "politics of envy", advising not to 'strangle the goose that lays the golden egg'. Jenkin overlooks that while this particular goose ate all the corn, it hasn't produced anything from its nether regions that brought benefit to 90% of ripped-off Britons whose incomes have stagnated for decades.
And in spite of all the exertions of the corn-fed honkers, half of us have absolutely no assets according to Bank of England figures:
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Distribution of household financial assets - half of us have zero
SOMETHING COMPLETELY DIFFERENT
This article is ridiculous!the chart that has one solitary bar, valued at 600 bn for the wealthy isn't worthy of a school project.
ReplyDeleteAs Quantitave Easing was not in place in the years 2000 - 2010 there would be no value for it - therefore the graph makes perfect sense.
DeleteThe graph shows
ReplyDeletea) The increase in the national debt over the last few years
b) The total national debt as at 2011
c) The Bank of England's statement on the boost to the wealthy directly due to the Quantitative Easing programme.
Thus showing that the boost to the wealthy by QE is worth more than half the 2011 national debt.
As I said on Twitter the national debt is something over £7 trillion. Private debt is ~490% of GDP (according to Peston); or a bit over 100% of the net worth of the UK. Government debt is tiny by comparison and easily managed in a sovereign nation that can effectively borrow at 0%.
ReplyDeleteThe focus on government debt is a problem because it obscures the real danger that faces our economy. Which is that our private sector, particular our finance sector, is massively over indebted. It will be many years before enough of that debt is paid off (or enough zombie companies finally go broke) that demand will be able to pick up again. It took Japan 15 years in 1990, but we're way more indebted than they were.
And let's not forget that we face many international threats to our prosperity. So let's call it a generation of zero net growth.
QE is a drop in the bucket. But if we're putting drops in buckets the way to make them effective is to use them to give money to people not banks. If we make the single proviso that they must pay off debt before spending, then demand will increase again because everyone will have more disposable income. I'm in favour of a large amount like $5000 per adult. Which would be £250 billion in total or another 2% of GDP (@ £1.5 trillion). Smaller amounts might also work, but in for a penny, eh?
Of course no one has the imagination or grit to do such a thing. They'd rather give the money to the banks, who use it to gamble on commodity prices, and refinance their own massive debts. I'd as soon give money to a heroin addict.
Just for the record the finance sector alone accounts for debts totally 250% of GDP. What a wonderful contribution they're making to our well being. The banks need to be broken and smashed, and the rubble set to good use, under the Bank of Dave model. IMHO.
The graphs above show that the biggest increase in the gap between rich and poor happened under labour and the coalition have stabalised it. Unemployment is falling, the number of jobs is increasing and the gap between rich and poor is not widening.
ReplyDeleteYour graphs above show that the coalition have been more progressive than labour and it is labour who where the profligate party of bankers excess. Over a million working class private sector jobs were lost from 2008-2010. Labour did nothing for the poor and working class, except increase their number and their dependence on the state.
Labour abandoned the poor and the working classes and sucked up to the bankers and financial elite. I shall never forgive them for their treachery.
You really don't get it you Moron the Government is not in charge, it matters not who makes your laws so long as I have control of your money and since 1986 and the Big Bang bankers have been in charge!
DeleteJobs increasing. 0 hrs maybe. Not real worthwhile well paid jobs!
ReplyDelete