Inflation

[BillyStubbsTears]

This is a brilliantly clear sighted exposition of the inflation crisis we currently have.

https://t.co/9Y0hQKORO3

He gets right to the core of the problem.

The Govt (correctly) printed about £10k of new money for every adult in the country to ward off the worst of the COVID economic problems.

That's £10k for every adult of new money now sloshing around the economy, chasing at best the same amount of goods. Prices will inevitably go up in that scenario.

But as he also says, if YOU haven't got £10k more in your bank, someone else does have your slice.

A fair long term policy would be to take that money back from the people who have secured it. But that's absolutely NOT what Sunak is doing. He's recouping money by NI increased which specifically exclude the very richest from paying anything extra.

We KNOW  how to deal with this because we had exactly this problem after WWII. You squeeze the money back out of the richest. You tax them heavily. You limit how they can invest their wealth, forcing them to fund Govt bonds which pay back less than inflation, so you bleed the wealth out of them. And you invest in the future of the mass of the population. Better schools. Free further education. Supporting jobs.

It worked after the War. Thirty years of unbroken growth, reduction of debt and inequality and a healthier society.

[River Don]

But isn't this inflation being generated by exceptionally high natural gas prices?

Demand is returning and the supply is not keeping up. Germany has closed its nuclear empower plants, China is trying to switch from coal to gas. Russia is holding back supply for its own geopolitical reasons.

[tyke1962]

This is a brilliantly clear sighted exposition of the inflation crisis we currently have.

https://t.co/9Y0hQKORO3

He gets right to the core of the problem.

The Govt (correctly) printed about £10k of new money for every adult in the country to ward off the worst of the COVID economic problems.

That's £10k for every adult of new money now sloshing around the economy, chasing at best the same amount of goods. Prices will inevitably go up in that scenario.

But as he also says, if YOU haven't got £10k more in your bank, someone else does have your slice.

A fair long term policy would be to take that money back from the people who have secured it. But that's absolutely NOT what Sunak is doing. He's recouping money by NI increased which specifically exclude the very richest from paying anything extra.

We KNOW  how to deal with this because we had exactly this problem after WWII. You squeeze the money back out of the richest. You tax them heavily. You limit how they can invest their wealth, forcing them to fund Govt bonds which pay back less than inflation, so you bleed the wealth out of them. And you invest in the future of the mass of the population. Better schools. Free further education. Supporting jobs.

It worked after the War. Thirty years of unbroken growth, reduction of debt and inequality and a healthier society.

Why aren't the Labour Party on it Billy ?

Genuine question .

[drfchound]

Get an email off to number ten to let them know that there is someone who knows how to run the economy properly.

[normal rules]

Covid was about the best thing that happened to my bank account. Never saved as much money.

[River Don]

Covid was about the best thing that happened to my bank account. Never saved as much money.

If enough people have saved for a couple of years and are looking to spend now, then that would be inflationary.

[tyke1962]

Get an email off to number ten to let them know that there is someone who knows how to run the economy properly.

They know how to run the economy alright Hound it tends to work along the lines of the wealthy pay the most in taxation which statistically they do so we will leave that one alone and screw the lower paid because governments of both persuasions don't much care for collectivism and have eroded it .

Which leaves the middle classes who decide elections give or take .

You can pretty much work that one out for yourself hound of that I'm sure .

The consensus with regards to taxation is always " not me bro " .

Twas ever thus .

[drfchound]

Get an email off to number ten to let them know that there is someone who knows how to run the economy properly.

They know how to run the economy alright Hound it tends to work along the lines of the wealthy pay the most in taxation which statistically they do so we will leave that one alone and screw the lower paid because governments of both persuasions don't much care for collectivism and have eroded it .

Which leaves the middle classes who decide elections give or take .

You can pretty much work that one out for yourself hound of that I'm sure .

The consensus with regards to taxation is always " not me bro " .

Twas ever thus .

No argument coming from me on that tyke.
However we know someone who knows better don’t  we.

[danumdon]

We KNOW  how to deal with this because we had exactly this problem after WWII. You squeeze the money back out of the richest. You tax them heavily. You limit how they can invest their wealth, forcing them to fund Govt bonds which pay back less than inflation, so you bleed the wealth out of them. And you invest in the future of the mass of the population. Better schools. Free further education. Supporting jobs.

It worked after the War. Thirty years of unbroken growth, reduction of debt and inequality and a healthier society.
[/quote]

BST What you state is very laudable but it wont happen in this day and age, we all know that the state will end up hammering the squeezed middle and the real rich will get away with it again.

I'm an higher rate tax payer, I've worked very hard to get to where i am, in fact i would imagine a good number in this thread find themselves in the very same position, i've made many a sacrifice to better myself including getting on my bike and moving to where i could best achieve my ambitions, took me years to get back to where i and my family wanted to be, is is fair to once again soak us for even higher taxes (we now pay the highest taxes for over 30years) in the name of equality and a better society for all?

I'm in a position where i can just take it easier and manage my income to suit me rather than allow the government to  dip in and increase the benefit state out of the stratosphere at mine and others expence, what if a large proportion of the squeezed middle did this , where would it end?

Surely we can't keep on going down this same road to beggar us all for the sake of "society"

[tyke1962]

Get an email off to number ten to let them know that there is someone who knows how to run the economy properly.

They know how to run the economy alright Hound it tends to work along the lines of the wealthy pay the most in taxation which statistically they do so we will leave that one alone and screw the lower paid because governments of both persuasions don't much care for collectivism and have eroded it .

Which leaves the middle classes who decide elections give or take .

You can pretty much work that one out for yourself hound of that I'm sure .

The consensus with regards to taxation is always " not me bro " .

Twas ever thus .

No argument coming from me on that tyke.
However we know someone who knows better don’t  we.

You'd imagine paying individual higher taxes in Australia wouldn't affect the UK economy too much Hound .

But hey everyone has an opinion apparently .

 

[BillyStubbsTears]

We KNOW  how to deal with this because we had exactly this problem after WWII. You squeeze the money back out of the richest. You tax them heavily. You limit how they can invest their wealth, forcing them to fund Govt bonds which pay back less than inflation, so you bleed the wealth out of them. And you invest in the future of the mass of the population. Better schools. Free further education. Supporting jobs.

It worked after the War. Thirty years of unbroken growth, reduction of debt and inequality and a healthier society.

BST What you state is very laudable but it wont happen in this day and age, we all know that the state will end up hammering the squeezed middle and the real rich will get away with it again.

I'm an higher rate tax payer, I've worked very hard to get to where i am, in fact i would imagine a good number in this thread find themselves in the very same position, i've made many a sacrifice to better myself including getting on my bike and moving to where i could best achieve my ambitions, took me years to get back to where i and my family wanted to be, is is fair to once again soak us for even higher taxes (we now pay the highest taxes for over 30years) in the name of equality and a better society for all?

I'm in a position where i can just take it easier and manage my income to suit me rather than allow the government to  dip in and increase the benefit state out of the stratosphere at mine and others expence, what if a large proportion of the squeezed middle did this , where would it end?

Surely we can't keep on going down this same road to beggar us all for the sake of "society"
[/quote]

It's not "beggaring us all". That's a trope that the very wealthy want you to believe is what is threatened. But it's not.

After the War, people in your and my positions were incomparably better off by 1975 than they were in 1945 or 1925. The ones who were NOT incomparably better off were the top 1% who were squeezed hard. It's that same top 1% who are dominating the Cabinet and the argument today. And they really don't want to lose their wealth over the next generation while you and I get better off. Because they saw that happen to their grandparents and they aren't going to let it happen again.

[BillyStubbsTears]

Covid was about the best thing that happened to my bank account. Never saved as much money.

If enough people have saved for a couple of years and are looking to spend now, then that would be inflationary.

Bang on. That's the major driver of inflation. The fuel price hike adds to that, but it's not the primary cause.

[big fat yorkshire pudding]

Or, we could really incentivise the rich to spend their excess in a targeted way. Perhaps certain government bonds with decent returns.  I'd say most would be quite happy to do something with their money for a fairly modest return.  Is that not a more positive action than taxation?

[Branton Red]

It worked after the War. Thirty years of unbroken growth, reduction of debt and inequality and a healthier society.

.......and then we joined the EEC 

An economic recovery is in itself inflationary. Demand rises and Supply, reduced during the preceding downturn, is initially restricted whilst business' take time to increase output to match this rise in demand. This accounts for all the inflation we are currently seeing (inc gas/oil prices).

The Covid recession was particularly deep and fast and the recovery has been rapid meaning inflation is growing quickly.

All helped by the UK (and other) Governments furlough scheme which means we came out of the recession with no major increase in unemployment and hence no underlying major problem with the economy to hinder the recovery.

The middle classes and above, have saved more money than they normally would in lockdown, and now want to enjoy themselves and spend it, increasing demand and therefore inflation.

It is inevitable interest rates will rise further. We've had over 10 years of unprecedentedly low interest rates, that period is coming to an end. In that 10 years the Government has singularly failed to take advantage of the low cost of borrowing to significantly invest in the infrastructure of the economy. We, and the Government, are worse off for this failure.

[SydneyRover]

Nine years of stifled growth through Austerity compounded by brexit and covid have also added to the misery I guess.

[SydneyRover]

Or, we could really incentivise the rich to spend their excess in a targeted way. Perhaps certain government bonds with decent returns.  I'd say most would be quite happy to do something with their money for a fairly modest return.  Is that not a more positive action than taxation?

The government may have to look at denominating them to a more stable currency which wouldn't be a good look pud?

[BillyStubbsTears]

It worked after the War. Thirty years of unbroken growth, reduction of debt and inequality and a healthier society.

.......and then we joined the EEC 

An economic recovery is in itself inflationary. Demand rises and Supply, reduced during the preceding downturn, is initially restricted whilst business' take time to increase output to match this rise in demand. This accounts for all the inflation we are currently seeing (inc gas/oil prices).

The Covid recession was particularly deep and fast and the recovery has been rapid meaning inflation is growing quickly.

All helped by the UK (and other) Governments furlough scheme which means we came out of the recession with no major increase in unemployment and hence no underlying major problem with the economy to hinder the recovery.

The middle classes and above, have saved more money than they normally would in lockdown, and now want to enjoy themselves and spend it, increasing demand and therefore inflation.

It is inevitable interest rates will rise further. We've had over 10 years of unprecedentedly low interest rates, that period is coming to an end. In that 10 years the Government has singularly failed to take advantage of the low cost of borrowing to significantly invest in the infrastructure of the economy. We, and the Government, are worse off for this failure.

Yes we joined the EU.

If you know your history, you'll know that from the 50s until the 70s, every country in Western Europe did even better than us, both in absolute economic growth and in spreading the wealth more equitably. Because they combined fiscal repression with the massive advantages of open trade.

[BillyStubbsTears]

Or, we could really incentivise the rich to spend their excess in a targeted way. Perhaps certain government bonds with decent returns.  I'd say most would be quite happy to do something with their money for a fairly modest return.  Is that not a more positive action than taxation?

We could. Essentially we did in the 50s and 60s "incentivise" the wealthy to invest in Govt bonds. By effectively giving them nowhere else to invest their wealth.

But here's the key. We need a generation, like we had then, of the very wethy being forced to accept below inflation returns. Effectively, for them to subsidise the rest of society. It's payback time for the past 40 years where the very wealthy have unfairly appropriated the majority of the proceeds of growth. [1]

[1] That's a stone cold fact by the way, not a political rant. The proportion of national wealth owned by the very richest had skyrocketed since the 1980s, back to levels not seen since the days of the Great Gatsby. Deflating that obscene bubble of wealth is vital to societal well-being over the rest of this century. But Sunak will never do that. Because he's one of them.

[Sprotyrover]

Probably because they spent their Marshall funding on rebuilding their industries aka the German Wirschaft wunder, we spent ours on the NHS.

[SydneyRover]

And I can't see how this is going to help with the imbalance between massively wealthy and the rest?

''Steve Barclay: PM's new chief of staff pledges smaller state''

''In his first public comments since then, Mr Barclay writes: "Now it is a priority to restore a smaller state - both financially and in taking a step back from people's lives.

"It's time to return to a more enabling approach. To trust the people, return power to communities, and free up business to deliver."

The government is speaking in tongues, the first is the levelling up tongue where vast swathes of the country will see improvements to all facets of their lives, apparently more sunny uplands, well paid high tech jobs ............... and then there is the small government tongue, where do these incongruent arguments work together?

£30 billion taken out of welfare during Austerity and lower gdp, lower gdp due to brexit and Sunak at the helm?

[danumdon]

We KNOW  how to deal with this because we had exactly this problem after WWII. You squeeze the money back out of the richest. You tax them heavily. You limit how they can invest their wealth, forcing them to fund Govt bonds which pay back less than inflation, so you bleed the wealth out of them. And you invest in the future of the mass of the population. Better schools. Free further education. Supporting jobs.

It worked after the War. Thirty years of unbroken growth, reduction of debt and inequality and a healthier society.

BST What you state is very laudable but it wont happen in this day and age, we all know that the state will end up hammering the squeezed middle and the real rich will get away with it again.

I'm an higher rate tax payer, I've worked very hard to get to where i am, in fact i would imagine a good number in this thread find themselves in the very same position, i've made many a sacrifice to better myself including getting on my bike and moving to where i could best achieve my ambitions, took me years to get back to where i and my family wanted to be, is is fair to once again soak us for even higher taxes (we now pay the highest taxes for over 30years) in the name of equality and a better society for all?

I'm in a position where i can just take it easier and manage my income to suit me rather than allow the government to  dip in and increase the benefit state out of the stratosphere at mine and others expence, what if a large proportion of the squeezed middle did this , where would it end?

Surely we can't keep on going down this same road to beggar us all for the sake of "society"

It's not "beggaring us all". That's a trope that the very wealthy want you to believe is what is threatened. But it's not.

After the War, people in your and my positions were incomparably better off by 1975 than they were in 1945 or 1925. The ones who were NOT incomparably better off were the top 1% who were squeezed hard. It's that same top 1% who are dominating the Cabinet and the argument today. And they really don't want to lose their wealth over the next generation while you and I get better off. Because they saw that happen to their grandparents and they aren't going to let it happen again.
[/quote]


I think we can all agree that there is a massive difference between the populace from 1925, 1945 and 1975 to what we have now.

The nation has grown fat and idel on welfare, to such an extent that some have made it a lifestyle choice. We have such a fickle and privileged demographic that they would never put in the hard yards that the generations from pre and post war did.

I would say it’s got to the state where our privileged and entitled society know no other way, I’m all for progress and developing a fair and equitable society but what do we have to work with ? Could you imagine school leavers today going down a pit or working in fields all day, not a chance,

Our hard earned taxes and benefits society has created this .Very easy to get taxpayers to  underwrite to this.

The difficulty to get the top 1% to pay there dues is always a difficult conundrum, maybe some sort of land tax may suit but there will always be winners and losers in any attempt to even up society.

Would you be happy to have to pay more tax than you pay now?

[Sprotyrover]

This is a brilliantly clear sighted exposition of the inflation crisis we currently have.

https://t.co/9Y0hQKORO3

He gets right to the core of the problem.

The Govt (correctly) printed about £10k of new money for every adult in the country to ward off the worst of the COVID economic problems.

That's £10k for every adult of new money now sloshing around the economy, chasing at best the same amount of goods. Prices will inevitably go up in that scenario.

But as he also says, if YOU haven't got £10k more in your bank, someone else does have your slice.

A fair long term policy would be to take that money back from the people who have secured it. But that's absolutely NOT what Sunak is doing. He's recouping money by NI increased which specifically exclude the very richest from paying anything extra.

We KNOW  how to deal with this because we had exactly this problem after WWII. You squeeze the money back out of the richest. You tax them heavily. You limit how they can invest their wealth, forcing them to fund Govt bonds which pay back less than inflation, so you bleed the wealth out of them. And you invest in the future of the mass of the population. Better schools. Free further education. Supporting jobs.

It worked after the War. Thirty years of unbroken growth, reduction of debt and inequality and a healthier society.

So some Cockerney wide boy with some sort of mental illness which causes him to gesticulate constantly is telling us that the richest 1% of the population have become £60/70 grand richer and they are funding their kids to out bid the other 99% of us on the housing market.??? I lost the will to live at that point.we all know why we have a problem and it has nothing to do with what this idiot is spouting! Every country is cuttings it's investment in fosill fuels, coal plants shutting down all over the globe and there is a massive competition  for the other fossil fuel, Natural Gas. Coupled with our reduced capacity to buy and store the stuff when it's cheap is yet another conundrum!

[danumdon]

Probably because they spent their Marshall funding on rebuilding their industries aka the German Wirschaft wunder, we spent ours on the NHS.

The ironic thing about the Marshall funding was that whist the Germans tooled up for manufacturing to explode  with new equipment the spiives  in this country pocketed our Marshall funding and brought the old and knackered tooling and machinery that the germans were selling off to upgrade.

[SydneyRover]

''The nation has grown fat and idel on welfare, to such an extent that some have made it a lifestyle choice. We have such a fickle and privileged demographic that they would never put in the hard yards that the generations from pre and post war did''

yep DD, nail in head, the first thing to go should be food banks which is now the only growth industry, up 1100% since 2010, having all these loafers (ahem) turning up for food on a regular basis, if we didn't have them we wouldn't have hungry people would we?

[danumdon]

''The nation has grown fat and idel on welfare, to such an extent that some have made it a lifestyle choice. We have such a fickle and privileged demographic that they would never put in the hard yards that the generations from pre and post war did''

yep DD, nail in head, the first thing to go should be food banks which is now the only growth industry, up 1100% since 2010, having all these loafers (ahem) turning up for food on a regular basis, if we didn't have them we wouldn't have hungry people would we?

I’m all for helping the real poor with whatever they need be it foodbanks or accommodation as long as they don’t turn up watching Netflix on their iPhones.

[SydneyRover]

''The nation has grown fat and idel on welfare, to such an extent that some have made it a lifestyle choice. We have such a fickle and privileged demographic that they would never put in the hard yards that the generations from pre and post war did''

yep DD, nail in head, the first thing to go should be food banks which is now the only growth industry, up 1100% since 2010, having all these loafers (ahem) turning up for food on a regular basis, if we didn't have them we wouldn't have hungry people would we?

I’m all for helping the real poor with whatever they need be it foodbanks or accommodation as long as they don’t turn up watching Netflix on their iPhones.

Oh right, not only do they have to be poor, they have to be miserable too

[BillyStubbsTears]

Danum

You say that things are different now. I respectfully suggest that doesn't tie in with what history tells us.

May I humbly suggest you read The Road to Wigan Pier?

90 years ago, in the depths of the Great Depression, George Orwell was pointing out that folk who had done alright for themselves were continually moaning about scroungers preferring life on the dole to working.

But then, when work came along with WWII, those same scroungers put in double shifts at the steel works and the powder works. And then they carried on working throughout the post-War decades.

I suggest, respectfully, that you are one of the ones Orwell would have been having a pop at. I think he would have forcefully pointed out to you that the vast majority of benefits go to supplement the wages of people who work f**king hard but haven't been as fortunate as you and me, and still don't earn enough to get by.

I think he'd have suggested that giving them a hand up, rather than contemptuously complaining at them would have been a better way forward.

[big fat yorkshire pudding]

''The nation has grown fat and idel on welfare, to such an extent that some have made it a lifestyle choice. We have such a fickle and privileged demographic that they would never put in the hard yards that the generations from pre and post war did''

yep DD, nail in head, the first thing to go should be food banks which is now the only growth industry, up 1100% since 2010, having all these loafers (ahem) turning up for food on a regular basis, if we didn't have them we wouldn't have hungry people would we?

I’m all for helping the real poor with whatever they need be it foodbanks or accommodation as long as they don’t turn up watching Netflix on their iPhones.

Oh right, not only do they have to be poor, they have to be miserable too

They could make better life choices.  The £300 phone (or even less) or the £1000 one?

There's lots of things to be said about second hand things, my kids have loads of it for example yet I know some who won't touch it.  We've recently given away over £1000 worth of stuff used by my kids as someone needed it.  It doesn't always need the state to create that choice does it?

Equally there's people I know that have taken handouts of food etc (particularly during covid) but have better cars and more expensive clothes than others. That is not right. It's important to make sure things actually go to the people who need it and then to give them the opportunity to get in to a better position.  Unfortunately (and people don't like to hear it) there are some people who just want everything handed to them from others and that's detrimental not just to society but those in genuinely awful circumstances.

[River Don]

Covid was about the best thing that happened to my bank account. Never saved as much money.

If enough people have saved for a couple of years and are looking to spend now, then that would be inflationary.

Bang on. That's the major driver of inflation. The fuel price hike adds to that, but it's not the primary cause.

I'm not sure it is you know. We haven't seen huge demand for retail, or new cars or holidays. I don't think that has happened.

What we did see was big rises in the costs of fuel and manufacturers and retailers struggling to pass it on. Fertilizers plants closing down and so on.

[SydneyRover]

''The nation has grown fat and idel on welfare, to such an extent that some have made it a lifestyle choice. We have such a fickle and privileged demographic that they would never put in the hard yards that the generations from pre and post war did''

yep DD, nail in head, the first thing to go should be food banks which is now the only growth industry, up 1100% since 2010, having all these loafers (ahem) turning up for food on a regular basis, if we didn't have them we wouldn't have hungry people would we?

I’m all for helping the real poor with whatever they need be it foodbanks or accommodation as long as they don’t turn up watching Netflix on their iPhones.

Oh right, not only do they have to be poor, they have to be miserable too

They could make better life choices.  The £300 phone (or even less) or the £1000 one?

There's lots of things to be said about second hand things, my kids have loads of it for example yet I know some who won't touch it.  We've recently given away over £1000 worth of stuff used by my kids as someone needed it.  It doesn't always need the state to create that choice does it?

Equally there's people I know that have taken handouts of food etc (particularly during covid) but have better cars and more expensive clothes than others. That is not right. It's important to make sure things actually go to the people who need it and then to give them the opportunity to get in to a better position.  Unfortunately (and people don't like to hear it) there are some people who just want everything handed to them from others and that's detrimental not just to society but those in genuinely awful circumstances.

A lot of assumptions going on there pud.