are we still a fair country

[Ferru123]

See http://en.wikipedia.org/wiki/List_of_co ... e_equality

Have a look at the 'Gini coefficient, before taxes and transfers' table.

According to that info, we have less inequality than Spain, Japan, Finland, Australia, France, Italy and the USA.

Do you consider those countries to be reasonable comparisons?

Jeff

whereas i, and most writers on this topic do see germany, france, sweden etc as a reasonable comparison.

[mister man]

ill have a pint of birra moretti please but
i hope thats not a bar in the UK

see relative rates of tax per £.


Beer
£ per pint tax
5% ABV or
12˚ Plato
level of tax comparison
Austria 0.10
Belgium 0.08
France 0.05
Germany 0.04
Italy 0.12
Netherlands 0.10
Spain 0.04
Sweden 0.31
UK 0.38

[mulberryhawk]

Quite. I worry that this country is out to scare off the goose that lays the golden eggs...

The Treasury has pledged to spend £1.2 trillion on the bail-out since the crisis began. But the real outlay has been much smaller. By March it was committed to spending £456.33bn: £123.93bn in loan or share purchases, which required an actual cash injection from the government to the banks, and £332.4bn in guarantees and liabilities. It costs taxpayers up to £5bn a year just to service the loan that the crisis incurred.

Arguably more rotten than golden depending on your pov.

[Ferru123]

Given that the financial sector has the power to mess up our economy whether it's based here or abroad, but accounts for 10% of our tax revenue, personally I'd rather it stayed here...

Jeff

[mulberryhawk]

If the financial sector was not so bloated and over leveraged then taxpayers wouldent have to backstop the system with over £1 trillion.

Even Qe ( which I think its fair to say you are not the biggest fan of ) is a direct consequence of the UK`s over reliance on the Financial sector.

Historic low interest rates and high inflation can both be traced back to the failings of the banking sector.

SO one one hand you champion the financial sector but on the other you protest at the monetary policy being used by the BOE to keep the sector afloat......

In the interests of a balanced argument though, it does employ hundreds of thousands of workers and contribute to the state coffers.

I just wonder how you would weigh up the costs and benefits of having one sector so pivotal to an economic models success.

[Ferru123]

If the financial sector was not so bloated and over leveraged then taxpayers wouldent have to backstop the system with over £1 trillion.

Where do you get that figure of £1 trillion from?

AFAIK, the UK bank bailouts came to mere billions (and were drawfed by the debts racked up by the previous Labour government).

Even Qe ( which I think its fair to say you are not the biggest fan of ) is a direct consequence of the UK`s over reliance on the Financial sector.

That's debatable.

I bet Greece wishes they could print money right now, and they don't have a huge financial sector.

The fact is that, even without the bank bailouts, we'd still be saddled with a huge amount of sovereign debt and low exports bringing wealth into the economy (only we'd have 10% less money coming into the Exchequer, meaning deeper cuts and/or higher taxes would be necessary). So we'd still be reaching for the QE lever IMHO.

I just wonder how you would weigh up the costs and benefits of having one sector so pivotal to an economic models success.

It would be great if we could have a more diversified economy - Having too many eggs in a single basket is never a good idea.

But I wish that the other sectors of the economy were bigger, not that fragile UK economy were given a further kick in the nuts by losing the financial sector...

Jeff

[mulberryhawk]

I plucked the £1 trillion figure out of thin air for impact:) ,only joking heres the link

http://www.guardian.co.uk/politics/real ... ng-bailout

The £1 trillion firewall was esentially set aside to be used but it wasent needed. The point still remains that over £1 trillion of tax payers money was at risk due to the banking sectors "ingenuity"....

The debts racked up by the labour gov would arguably not have been racked up if the banking sector had not been allowed to use excessive leverage resulting in phantom gdp that in fact was reliant on asset prices continuing to soar.

If you look at Labours spending during their years in power their budget defeceit never exceeded the 3.5% level up until the crisis in 2007/2008. Not that im singing their praises, just pointing out the facts that they never broke any fiscal golden rules.

QE was in response to plummeting investor and consumer confidence which resulted in the collapse of asset prices globally, causing the nationalising of RBS and thus the assets on the banks balance sheet became the assets of the tax payers.

In order to support the share price of the bailed out RBS QE was used to buy up gilts reducing the rate the government could borrow at and also gentally encouraging fearful investors out of the government bond markets into the stock market in search of real yield to preserve the purchasing power of their capital.

QE in conjunction with record low interest rates allowed both companies and households to continue to pay back borrowed money on mortgage and card debt .

Thus supporting individuals asset prices allowing them to continue consuming, helping the economy to grow albeit somewhat anaemically but better than increasing interest rates resulting in a countrywide epedemic of non performing loans, further impairing the balance sheet of the banks which we now own and inevitably leading to the use of the whole £1 trillion.

So QE in effect was used to support the share price of the bailed out banks, support the asset prices now transferred onto the governments balance sheet, support consumption and the paying down of corporate and consumer debt, to reduce the borrowing rate of the government enabling them to support the ailing economy, and also had the beneficial side effect of inflation devaluing sterling making our exports more attractive and imports less attractive helping to rebalance the economy.

Not to mention that inflation also reduces the overall debt burden of both the government and individuals. Ok, it comes at a trade off which is a slight rise in the standard of living but that was probably overdue given the consumption mad model we have become accustomed to over the last decade.

[superfrank]

it's about time people stop believing the myth that the financial sector is somehow a massive net earner for the UK... it's bolux. investment banks earn most of their money from governments in one way or another (i.e. the taxpayer) and the rest from leeching on proper businesses.

Cleaners 'worth more to society' than bankers - study
http://news.bbc.co.uk/1/hi/8410489.stm

Hospital cleaners are worth more to society than bankers, a study suggests.

The research, carried out by think tank the New Economics Foundation, says hospital cleaners create £10 of value for every £1 they are paid.

It claims bankers are a drain on the country because of the damage they caused to the global economy.

They reportedly destroy £7 of value for every £1 they earn.

[steven1976]

Superfrank, if the banks arent bringing in new money and imports are higher than exports it very grim. Which it is and as much as people expect the government to sort out their lives it may come to a point where they cant when the 170billion debt needs repaying to china or whoever.

This guy is he helping paying large income taxes or hurting by spending 200k on a night out on foreign drinks ?

http://www.zerohedge.com/news/mystery-t ... -name-hope

[Ferru123]

Whitehall department savings scheme overspent by £500m, says report - http://www.bbc.co.uk/news/uk-politics-17276978

You couldn't make it up!

Jeff