And yet they want to lower tax, including throwing £Bn’s away every year by abolishing inheritance tax?
Gauke helped design and implement policies that got us here. He can take a long walk into the wilderness, and keep walking.
One of the biggest economies cannot have no money.
I’m honestly grimly fascinated to rubberneck at what happens to the UK over the next few years, as we appear to be well into an economic doom loop:
* Our annual deficit (the amount we spend over our income) is 5.4% of GDP. Even on a great year, the UK can only manage 3% growth. Last few years has been 0%.
* We’re spending faster than we’re growing.
* Our cost of borrowing right now is 5.25%, meaning new debt (and existing debt rolled over) will exceed any likely boost to GDP we gain from it.
* More spending will worsen the debt/growth disparity (see previous point).
* Historically, nations only ran deficits during wartime. But the UK has run a deficit since 2001, which is pretty unprecedented.
* Our debt is a new problem, and we’re in uncharted territory.
* Our debt interest payments are now more than our defence and transport budget put together.
* Our debt is so large that the austerity needed to tackle it would be an order of magnitude larger than 2008. We wouldn’t just need to underpay a few nurses, we’d genuinely need to halt the NHS and/or social security to meaningfully reverse this debt cycle.
I cannot see a way out of this. This is not a matter of left vs right, of spending vs austerity, it’s just maths – any action we take makes us worse off. All economic measures have a negative gradient to them right now.
I can only see three outcomes:
1. Do nothing. Debt continues to rise, we need to offer increasing yields on our sovereign debt, we end up in a sovereign debt crisis and inflationary spiral like Argentina or Turkey.
2. Radical, radical austerity. Complete move to private healthcare, cessation of the state pension.
3. Default on our debt. Private pensions go to zero, many businesses go bankrupt, immediate austerity needed since no-one will lend to us anymore.
​
I do hope I’m wrong, but it’s just maths – recovery does not appear to be a mathematical option.
The only counterpoints I’ve heard to this is “cheer up” and “it’ll work out ok”. No-one has ever been able to tell me how, mathematically, we get out of this hole.
I think we should try *looks at notepad* transferring untold billions from the poorest to the richest again, that’s bound to work this time…
he can spend our lack of money on tax cuts for his mates so they can fuck off when it collapses, or infrastructure and investment so we can start growing. Place your bets as to what they will pick!
LVT would fix this.
the reason ‘there is no money’ is because they have wasted 100 billion in 4 years. straight into old-boys pockets and party donors coffers. they should all be in jail for fraud.
“We don’t have any money, we can’t raise taxes, so we **must** cut public services.”
[Starve the beast](https://en.wikipedia.org/wiki/Starve_the_beast) on Steroids coming here soon if you vote Tory or Tory-lite at the next GE. And the FT is making sure the point gets across in good time
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Archive link: https://archive.ph/NKnGt
And yet they want to lower tax, including throwing £Bn’s away every year by abolishing inheritance tax?
Gauke helped design and implement policies that got us here. He can take a long walk into the wilderness, and keep walking.
One of the biggest economies cannot have no money.
I’m honestly grimly fascinated to rubberneck at what happens to the UK over the next few years, as we appear to be well into an economic doom loop:
* Our annual deficit (the amount we spend over our income) is 5.4% of GDP. Even on a great year, the UK can only manage 3% growth. Last few years has been 0%.
* We’re spending faster than we’re growing.
* Our cost of borrowing right now is 5.25%, meaning new debt (and existing debt rolled over) will exceed any likely boost to GDP we gain from it.
* More spending will worsen the debt/growth disparity (see previous point).
* Historically, nations only ran deficits during wartime. But the UK has run a deficit since 2001, which is pretty unprecedented.
* Our debt is a new problem, and we’re in uncharted territory.
* Our debt interest payments are now more than our defence and transport budget put together.
* Our debt is so large that the austerity needed to tackle it would be an order of magnitude larger than 2008. We wouldn’t just need to underpay a few nurses, we’d genuinely need to halt the NHS and/or social security to meaningfully reverse this debt cycle.
I cannot see a way out of this. This is not a matter of left vs right, of spending vs austerity, it’s just maths – any action we take makes us worse off. All economic measures have a negative gradient to them right now.
I can only see three outcomes:
1. Do nothing. Debt continues to rise, we need to offer increasing yields on our sovereign debt, we end up in a sovereign debt crisis and inflationary spiral like Argentina or Turkey.
2. Radical, radical austerity. Complete move to private healthcare, cessation of the state pension.
3. Default on our debt. Private pensions go to zero, many businesses go bankrupt, immediate austerity needed since no-one will lend to us anymore.
​
I do hope I’m wrong, but it’s just maths – recovery does not appear to be a mathematical option.
The only counterpoints I’ve heard to this is “cheer up” and “it’ll work out ok”. No-one has ever been able to tell me how, mathematically, we get out of this hole.
I think we should try *looks at notepad* transferring untold billions from the poorest to the richest again, that’s bound to work this time…
he can spend our lack of money on tax cuts for his mates so they can fuck off when it collapses, or infrastructure and investment so we can start growing. Place your bets as to what they will pick!
LVT would fix this.
the reason ‘there is no money’ is because they have wasted 100 billion in 4 years. straight into old-boys pockets and party donors coffers. they should all be in jail for fraud.
“We don’t have any money, we can’t raise taxes, so we **must** cut public services.”
[Starve the beast](https://en.wikipedia.org/wiki/Starve_the_beast) on Steroids coming here soon if you vote Tory or Tory-lite at the next GE. And the FT is making sure the point gets across in good time