Tough Fiscal Advice

daviesee

rjsterry wrote:

It's not the amount of debt, but whether you are good for the money.

troll / Or invade a Country and take it's oil :twisted: /troll

notsoblue

daviesee wrote:

rjsterry wrote:

It's not the amount of debt, but whether you are good for the money.

troll / Or invade a Country and take it's oil :twisted: /troll

I wonder if theres a good return on investment for that though? I mean, given how much of the money that the US has spent on the war in Iraq, will there be a dividend for them. I mean, clearly their private sector has benefited from the war machine being put into action, and a new market has (kinda) been opened with preferential exploitation. But how much has the US as a country benefited from it?

Stevo_666

Rick Chasey wrote:

Stevo 666 wrote:

TheStone wrote:

Rick Chasey wrote:

Name a developed nation that hasn't run a deficit in 2010/11?

Norway?
Maybe not a fair comparison.

For the love of god, don't get him started on Scandanavia :-)

Depends how you define 'deficit' but here it is by current account balance, looks like there were over 50 and you'll be delighted to know that Norway was 5th on that measurement...
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_current_account_balance

That's BOP though (measures the flow in and out of the country), nothing to do with gov't deficits!

Low BOPs means heavy importers, High BOPs mean high exporters.

Just testing to see if you knew what a deficit was so I pulled out the first result from google ;-)

Here's one from the Guardian so it must be right. Korea and Norway - so I've named two. Happy?
http://www.guardian.co.uk/news/datablog/2010/may/27/debt-deficit-oecd-countries-data

rick_chasey

Stevo 666 wrote:

Rick Chasey wrote:

Stevo 666 wrote:

TheStone wrote:

Rick Chasey wrote:

Name a developed nation that hasn't run a deficit in 2010/11?

Norway?
Maybe not a fair comparison.

For the love of god, don't get him started on Scandanavia :-)

Depends how you define 'deficit' but here it is by current account balance, looks like there were over 50 and you'll be delighted to know that Norway was 5th on that measurement...
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_current_account_balance

That's BOP though (measures the flow in and out of the country), nothing to do with gov't deficits!

Low BOPs means heavy importers, High BOPs mean high exporters.

Just testing to see if you knew what a deficit was so I pulled out the first result from google ;-)

Here's one from the Guardian so it must be right. Korea and Norway - so I've named two. Happy?
http://www.guardian.co.uk/news/datablog/2010/may/27/debt-deficit-oecd-countries-data

S'not gov't deficit is it though?

For that you'd need tax income versus gov't expenditure.

But anyway, I get the point :P

Stevo_666

Anyhow, I did try to make a valid point about the simple relationship between income and expenditure, so it wasn't just cheap point scoring :-)

Maybe you can explain to me the how the socialist plan to carry on spending when a country is already up to its eyeballs in debt actually works? (which seems to be what the original article seemed to be getting at).

rick_chasey

Stevo 666 wrote:

Anyhow, I did try to make a valid point about the simple relationship between income and expenditure, so it wasn't just cheap point scoring :-)

Maybe you can explain to me the how the socialist plan to carry on spending when a country is already up to its eyeballs in debt actually works? (which seems to be what the original article seemed to be getting at).

I wouldn't know, I'm not socialist.

Nah, I'm kidding.

It's a fine line currently to tread between debt servicing and harming the economy. It's all very well cutting everything but if you cut too much, you reduce the income you have to service the debt in the first place.

I think (and the IMf muted the same) that the UK is too far on the cutting side...

Anyway, it's how you put the pieces together. Tax breaks for the poorest (since they spend more of the extra money they get, so the multiplier effect is greater), and well placed taxes at the top end (rather than blanket...) - as well as closing loopholes (including stopping tax men waving £bns in tax revenues for enormous corporations.

That kind of thing. The Tories talk of cutting the top band (who, by comparision to other bands, have the lowest multiplier effect for tax cuts) when they should be listening to their yellow friends and cutting from the bottom.

Stevo_666

[Edit: Actually you didn't answer my question, it was related to government spending in line with the point of the thread, although I guess we're 1-1 on the vaguely worded questions now :-) ]

TBH I'm not against tax cuts for the poorest - take them out of tax and increase the benefit of working vs dependency. Although the rest of us do get a ride on the coat tails of any exempt band increase.

The bit about taxes for the higher income brackets - not sure about spending multipliers - but more important is the entrpreneurs who create businesses and jobs should not be demotivated or put off doing what they do. At the moment I think tax rates for these people are at a level where it provides a disincentive to work that bit harder or even set up in the UK for those with the choice. I've already heard several entrepreneur types saying word so the effect 'why should I bother when so little benefit accrues to me?' when they risk their capital and generally work bl00dy hard to establish and grow businesses. Without these people being able to what they do best there will be less for those lower down the income scale.

rjsterry

Moot≠mute :evil:

Sorry, do go on . To extend the earlier analogy of spending less than you earn, if you cut spending so much that you can't get to work, you are never going to pay off the debt.

TheStone

rjsterry wrote:

Sorry, do go on . To extend the earlier analogy of spending less than you earn, if you cut spending so much that you can't get to work, you are never going to pay off the debt.

But if it costs you more to get to work than you earn ... it's not worth going to work.

rick_chasey

Stevo 666 wrote:

[Edit: Actually you didn't answer my question, it was related to government spending in line with the point of the thread, although I guess we're 1-1 on the vaguely worded questions now :-) ]

TBH I'm not against tax cuts for the poorest - take them out of tax and increase the benefit of working vs dependency. Although the rest of us do get a ride on the coat tails of any exempt band increase.

The bit about taxes for the higher income brackets - not sure about spending multipliers - but more important is the entrpreneurs who create businesses and jobs should not be demotivated or put off doing what they do. At the moment I think tax rates for these people are at a level where it provides a disincentive to work that bit harder or even set up in the UK for those with the choice. I've already heard several entrepreneur types saying word so the effect 'why should I bother when so little benefit accrues to me?' when they risk their capital and generally work bl00dy hard to establish and grow businesses. Without these people being able to what they do best there will be less for those lower down the income scale.

Ah I guess I was making the assumption that a growing economy = growing tax bill (all other things being equal) - so easier to service gov't debt.

I'm always sceptical of how much taxes at the top end hurt entrepreneurs - since wherever you go, as long as it's fundamentally capitalist, you will get entrepreneurs, high tax or not. Taxes in the UK were, for the top end at 95% from the '40s till the '70s and jobs / firms were still created.

I'm not suggesting going back to that, but I don't believe there is much historical precedent to suggest that what you state is actually case (at least, to the extent where the cost would be bigger than the reward).

leodis75

Yeah I can imagine working for a 10th of what I earn now in horrid worse condictions whilst the owner of the business makes millions if not billions of profit on the back of my cheap labour.

Ben6899

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Amen, brother.

I don't have any debt and I still spend less than I earn. Not by chance, but a conscious effort to be a responsible member of society.

Wilkins Micawber wrote:

Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Only in this day and age, it results in misery even for the folk who spend nineteen pounds nineteen and six.

rick_chasey

Ben6899 wrote:

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Amen, brother.

I don't have any debt and I still spend less than I earn. Not by chance, but a conscious effort to be a responsible member of society.

Wilkins Micawber wrote:

Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Only in this day and age, it results in misery even for the folk who spend nineteen pounds nineteen and six.

It's easy to be smug when you're saving (and I am), but with inflation and interest rates at what they are, I really should be putting my (little) money to work.

Unfortunately, when you're 23, that's not straightforward!

Don't even have a credit card, which, although I've paid of all my uni debt already, and I've never been overdrawn, will apparently count against me if I ever need a loan/mortgage.

*sighs*

PBo

Rick Chasey wrote:

Ben6899 wrote:

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Amen, brother.

I don't have any debt and I still spend less than I earn. Not by chance, but a conscious effort to be a responsible member of society.

Wilkins Micawber wrote:

Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Only in this day and age, it results in misery even for the folk who spend nineteen pounds nineteen and six.

It's easy to be smug when you're saving (and I am), but with inflation and interest rates at what they are, I really should be putting my (little) money to work.

Unfortunately, when you're 23, that's not straightforward!

Don't even have a credit card, which, although I've paid of all my uni debt already, and I've never been overdrawn, will apparently count against me if I ever need a loan/mortgage.

*sighs*

get one with a small limit, use it for the same budgeted thing every month (say - food shopping?) pay it off on time. No cost to you, and helps build up your credit rating

Ben6899

Rick Chasey wrote:

Ben6899 wrote:

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Amen, brother.

I don't have any debt and I still spend less than I earn. Not by chance, but a conscious effort to be a responsible member of society.

Wilkins Micawber wrote:

Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Only in this day and age, it results in misery even for the folk who spend nineteen pounds nineteen and six.

It's easy to be smug when you're saving (and I am), but with inflation and interest rates at what they are, I really should be putting my (little) money to work.

Unfortunately, when you're 23, that's not straightforward!

Don't even have a credit card, which, although I've paid of all my uni debt already, and I've never been overdrawn, will apparently count against me if I ever need a loan/mortgage.

*sighs*

I am not smug in the slightest, Rick. It's not about being smug.

It's about sensible and responsible consumers having to carry irresponsible ones who insist on living beyond their means. And it's also about how that annoys the living fuck out of me.

I want a new winter frame. As things stand, I could spunk several bar on something really flash but that'd be slightly irresponsible (considering it's only a winter frame and I have my eye on some very nice carbon for summer). It's come to the point where I am choosing the frame with dimensions that allow me to use the existing ancillaries - on my current winter bike - and spend even less. It's a cycling specific example, but hey this is a cycling forum.

rjsterry

PBo wrote:

Rick Chasey wrote:

Ben6899 wrote:

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Amen, brother.

I don't have any debt and I still spend less than I earn. Not by chance, but a conscious effort to be a responsible member of society.

Wilkins Micawber wrote:

Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Only in this day and age, it results in misery even for the folk who spend nineteen pounds nineteen and six.

It's easy to be smug when you're saving (and I am), but with inflation and interest rates at what they are, I really should be putting my (little) money to work.

Unfortunately, when you're 23, that's not straightforward!

Don't even have a credit card, which, although I've paid of all my uni debt already, and I've never been overdrawn, will apparently count against me if I ever need a loan/mortgage.

*sighs*

get one with a small limit, use it for the same budgeted thing every month (say - food shopping?) pay it off on time. No cost to you, and helps build up your credit rating

Indeed. There's nothing wrong with borrowing money if you can afford the repayments - how would most people buy a house, or businesses invest without it; it's unaffordable borrowing that gets people in to trouble.

rick_chasey

I never said there is anything wrong with borrowing!

It's just annoys me that I need to use a credit card to prove I'm financially sound.

rjsterry

Rick Chasey wrote:

I never said there is anything wrong with borrowing!

It's just annoys me that I need to use a credit card to prove I'm financially sound.

How else would they know whether you are good at meeting repayments? The other comment wasn't directed at anyone specifically.

noodles71

Rick Chasey wrote:

Ben6899 wrote:

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Amen, brother.

I don't have any debt and I still spend less than I earn. Not by chance, but a conscious effort to be a responsible member of society.

Wilkins Micawber wrote:

Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Only in this day and age, it results in misery even for the folk who spend nineteen pounds nineteen and six.

It's easy to be smug when you're saving (and I am), but with inflation and interest rates at what they are, I really should be putting my (little) money to work.

Unfortunately, when you're 23, that's not straightforward!

Don't even have a credit card, which, although I've paid of all my uni debt already, and I've never been overdrawn, will apparently count against me if I ever need a loan/mortgage.

*sighs*

That is a no brainer at the moment at your age. Invest it in a Oil ETF (Exchange Traded Fund) and get your hands on some physical gold or silver. The oil is exposed in the short term with possible recession but China and India are growing so quickly their use of it will make US/EU consumption fairly irrevelant in the medium to long term. This is more certain than your pension fund manager mugging you every year and your pension going nowhere.

And the only way out of the poo in the west is money printing and/or inflation. You can have some painful days but I put everything I had in 2006 80% Silver/ 20% gold and my house deposit has now turned into enough to pay for the whole thing.

noodles71

daviesee wrote:

It makes for hard reading....
http://www.bbc.co.uk/news/business-16918000

I can't say that I think he is wrong though

Try watching their shows "Toughest place to be a......"
http://www.bbc.co.uk/iplayer/episode/p0 ... Fisherman/

The previous one about a dustman in Hammersmith being sent to Indonesia is heartbreaking seeing how much a guy does for £14 a week compared to what happens here for a lot lot more. It does reinforce Dr Mahatmir's point but he is quite biased against the western financial system after Soros and the IMF tried to ruin Malaysia when he was their PM.

It is currently a 2-way street that is the only way out of poverty for most people in the developing world. If the wages were not cheap enough then the natives would be restless as the manufacturing jobs would not be there. If the politicians in the developing world could educate their populations so they could compete on R&D, design and more knowledge based roles without taking so many bribes and perpetuating corrupt governments then they could rightfully demand a bigger share of the pie.

rick_chasey

noodles71 wrote:

Rick Chasey wrote:

Ben6899 wrote:

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Amen, brother.

I don't have any debt and I still spend less than I earn. Not by chance, but a conscious effort to be a responsible member of society.

Wilkins Micawber wrote:

Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Only in this day and age, it results in misery even for the folk who spend nineteen pounds nineteen and six.

It's easy to be smug when you're saving (and I am), but with inflation and interest rates at what they are, I really should be putting my (little) money to work.

Unfortunately, when you're 23, that's not straightforward!

Don't even have a credit card, which, although I've paid of all my uni debt already, and I've never been overdrawn, will apparently count against me if I ever need a loan/mortgage.

*sighs*

That is a no brainer at the moment at your age. Invest it in a Oil ETF (Exchange Traded Fund) and get your hands on some physical gold or silver. The oil is exposed in the short term with possible recession but China and India are growing so quickly their use of it will make US/EU consumption fairly irrevelant in the medium to long term. This is more certain than your pension fund manager mugging you every year and your pension going nowhere.

And the only way out of the poo in the west is money printing and/or inflation. You can have some painful days but I put everything I had in 2006 80% Silver/ 20% gold and my house deposit has now turned into enough to pay for the whole thing.

i'll steer clear of ETF's for now...

http://en.wikipedia.org/wiki/2011_UBS_r ... er_scandal

http://www.investopedia.com/terms/j/jer ... z1ltWTmKxE

gabriel959

Physical gold is as safe as you can get these days. It is the only real money and nothing else.

rick_chasey

gabriel959 wrote:

Physical gold is as safe as you can get these days. It is the only real money and nothing else.

I was always under the impression gold was pretty volatile - hence all those headlines last summer re- the record breaking gold price.

As for a good investment, I'm not so sure...

http://ftalphaville.ft.com/blog/2011/12 ... -standard/

gabriel959

Volatile? The fundamentals for gold are clear. It hedges against inflation and hyper-inflation, deflation, currency debasement (like today). Tell me of a safer investment and I will keep quiet



In any case the price that you are seeing is the ETF gold price, which isn't gold IMO. When it comes to buying physical you are paying higher prices, during the price drops of october and december the physical premiums went through the roof (up to 9%) so i

Beats any ISA, share or bond.

It is also Tax free.

Stevo_666

Been out on the bike today so not had time to reply till now - have to pass the time somehow rather than just sitting on internet forums ;-)

Rick Chasey wrote:

Ah I guess I was making the assumption that a growing economy = growing tax bill (all other things being equal) - so easier to service gov't debt.

Other things being equal that's true but if you're still spending like it's going out of fashion then that increases the debt. Every extra pound spent adds to the debt pile, but the argument about the effect of Government spending cuts on economic growth is both complex and much less clear.

Rick Chasey wrote:

I'm always sceptical of how much taxes at the top end hurt entrepreneurs - since wherever you go, as long as it's fundamentally capitalist, you will get entrepreneurs, high tax or not. Taxes in the UK were, for the top end at 95% from the '40s till the '70s and jobs / firms were still created.

I'm not suggesting going back to that, but I don't believe there is much historical precedent to suggest that what you state is actually case (at least, to the extent where the cost would be bigger than the reward).

Entrepreneurs are one part of it and the feedback I'm getting from my contacts suggest that this is having an effect on entrepreneurial activity - quite a bit of this sort of capital is mobile.

The other element is investment decisions by multinationals - I know about this because in many cases I've been been part of or privy to those investment decisions. In some cases countries have lost millions in tax revenue because they wanted too big a slice of the cake, while other countries were smart enough to realise a smaller % of something is more than a bigger % of nothing. The companies where I was involved in this sort of thing were by no means unusual, so taken across the whole corporate 'world', that must be huge amounts of tax revenue year. A bit difficult to know if you you've never worked in that sort of environment, but that's the way it is.

rjsterry

gabriel959 wrote:

Volatile? The fundamentals for gold are clear. It hedges against inflation and hyper-inflation, deflation, currency debasement (like today). Tell me of a safer investment and I will keep quiet



In any case the price that you are seeing is the ETF gold price, which isn't gold IMO. When it comes to buying physical you are paying higher prices, during the price drops of october and december the physical premiums went through the roof (up to 9%) so i

Beats any ISA, share or bond.

It is also Tax free.

Presumably until you turn it back into 'real money' to spend it. Or do you pay for things with bags of gold That graph also suggests that Rick has missed the boat on that one - do you expect gold values to continue growing at that rate?

rick_chasey

Britain is a big enough place that firms will always do business here, tax or no tax.

The 50% income tax and the bank levies haven't stopped London being a key Banking centre. It always will be, (especially if it stays in line with European legislation) since banks will always have to have a key European hub. For America they go to NY and for Asia they go to HK.

It's not like the Isle of man or something.


As for tax, bigger companies could start paying them to begin with: http://www.guardian.co.uk/business/2011 ... -with-hmrc

http://www.telegraph.co.uk/finance/news ... igher.html

If said tax is in return for better investment in services, infrastructure etc, then the tax money isn't p!ssed down the drain either. It makes the country a more attractive place to invest, since, y'know, they'll be better educated, will probably get there on time and spend less time being ill.

Stevo_666

Rick Chasey wrote:

Britain is a big enough place that firms will always do business here, tax or no tax.

The 50% income tax and the bank levies haven't stopped London being a key Banking centre. It always will be, (especially if it stays in line with European legislation) since banks will always have to have a key European hub. For America they go to NY and for Asia they go to HK.

It's not like the Isle of man or something.


As for tax, bigger companies could start paying them to begin with: http://www.guardian.co.uk/business/2011 ... -with-hmrc

http://www.telegraph.co.uk/finance/news ... igher.html

If said tax is in return for better investment in services, infrastructure etc, then the tax money isn't p!ssed down the drain either. It makes the country a more attractive place to invest, since, y'know, they'll be better educated, will probably get there on time and spend less time being ill.

Your first sentence makes it sound like you didn't read or didn't believe what I told you. While to some extent many firms have to be here, there is a large amount of discretionary capital that goes where it gets the best return - I have seen it for myself many times and it is very significant.

Those sort of articles that you linked are evidence that the sort of investment and funding decisions that I mentioned above do actually take place. Make the tax environment more attractive and companies will be happy to invest more and will actually start pulling profits into the UK and paying more tax.

But keep banging the pot about multinationals not paying enough tax - proves I can do a decent job and will increase the demand for my services as the pressure to collect more tax forces multinationals to hire people to stop greedy governments taking all their profits ;-) (You may think that is a joke but at one place i worked, if we had simply given in to all demands by tax authorities around the globe we would have paid more in tax than our annual pre-tax profit - ridiculous !)

London_Falcon

Back to the credit card point that RC raised.

My strategy was to find one that gives the best rewards (1.5% back in Nectar points for example).

Set it up to pay off the full amount every month by Direct Debit - this gives you up to 6 weeks interest free credit but guaranteed no interest payments.

Use it for as much of your daily expenditure as possible but remember that anything big (new bike) will come out of your bank balance at the end of the month. Do not use it if it will bump you overdrawn.

A small example - say we spend £120 per week at Sainsburys. That £90 back in Nectar points from the credit card per year. Plus another £90 from my actual Nectar card that is registered with them. £50 a week petrol from sainsburys or BP is also double points.

Annual holiday goes on the nectar credit card - 1.5% back plus consumer protection if they go bust.

Longer post than was intended but final point - we went on a trip to new York a couple of years back and cashed in £700 of nectar points to pay for a large chunk of it and paying by DD means I have never paid a penny in interest.

gabriel959

rjsterry wrote:

gabriel959 wrote:

Volatile? The fundamentals for gold are clear. It hedges against inflation and hyper-inflation, deflation, currency debasement (like today). Tell me of a safer investment and I will keep quiet



In any case the price that you are seeing is the ETF gold price, which isn't gold IMO. When it comes to buying physical you are paying higher prices, during the price drops of october and december the physical premiums went through the roof (up to 9%) so i

Beats any ISA, share or bond.

It is also Tax free.

Presumably until you turn it back into 'real money' to spend it. Or do you pay for things with bags of gold That graph also suggests that Rick has missed the boat on that one - do you expect gold values to continue growing at that rate?

No, I am not planning to turning it back to the kind of paper we have got now. Not the kind one person can press a button and pop an extra £50bn in the economy at least.

I also don't expect gold to keep going up forever but look at the current economic scenario and I will tell you that for the foreseeable future gold will keep going up. I would be surprised if we are not close to $2000 before the end of the year.