LEAVE the Conservative Party and save your country!

rick_chasey

Dorset_Boy said:

rick_chasey said:

I literally posted the tweet where I got it from. Was that clarification not enough?

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

You posted the tweet 3 hours after your original post.
If you're going to make assertions you have an obligation to at least use correct figures, or present them correctly.

So what do you think of the actual point?

kingstongraham

coopster_the_1st said:

rick_chasey said:

I literally posted the tweet where I got it from.

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

- Intentionally posts misinformation
- Gets called out on it
- Tries to blame someone else

It is projected to be going up by 6%. That's not misinformation.

Austerity except for conservative voting blocs.

rjsterry

Dorset_Boy said:

You don't want to argue the figures because you have deliberately misrepresented them. Alternatively, why can't you acknowledge you got them wrong?

I believe there was consideration to a review of the triple lock earlier this year and it was decided to leave it in place. The triple lock is nothing new and will always result in the State Pension at least keeping pace with CPI, but the inflation rate for pensioners is generally considered to be higher than CPI.

I think Rick's point was about the contradiction of announcing cuts/pay freeze because revenue is down, just a few days after announcing big spending increases elsewhere. Of course it's a political point: the spending decisions are political, as they always have been regardless of who is Chancellor. Let's not pretend Sunak didn't have any choices.

coopster_the_1st

rjsterry said:

Dorset_Boy said:

You don't want to argue the figures because you have deliberately misrepresented them. Alternatively, why can't you acknowledge you got them wrong?

I believe there was consideration to a review of the triple lock earlier this year and it was decided to leave it in place. The triple lock is nothing new and will always result in the State Pension at least keeping pace with CPI, but the inflation rate for pensioners is generally considered to be higher than CPI.

I think Rick's point was about the contradiction of announcing cuts/pay freeze because revenue is down, just a few days after announcing big spending increases elsewhere. Of course it's a political point: the spending decisions are political, as they always have been regardless of who is Chancellor. Let's not pretend Sunak didn't have any choices.

Here comes the poodle to defend his master...

rjsterry

Pross said:

rick_chasey said:

Dorset_Boy said:

rick_chasey said:

Dorset_Boy said:

rick_chasey said:

How about some evidence that the budget more political than the gov't would ever admit?

Freezing public sector pay ( who don't vote tory).
Cutting foreign aid (to please tory voters)
Dramatically increasing funding for the military (the juxtaposition of cutting the soft cuddly external power projection to be replaced with hard power is straight out of the populist book)
Increasing the state pension by 6% as they are trapped by the same pensioners who keep them in power.

That doesn't sound like a rational argument for prudence. It sounds like picking the winners and losers.

Where do you get a 6% increase in the State Pension from Rick?
It's going up by 2.5% in April, and hasn't increased by 6% in a year probably since the triple lock was introduced.

https://twitter.com/matt_dathan/status/1331913138405576705?s=20

Sun journalist

You can see the point I'm making, right?

There's money for guns and for pensioners, but not for public sector workers and foreign aid.

I would at least figure there was some rational thinking behind cutting it all, even if I disagree with it, but the above makes it look like it's giving cover for political choices. Never let a good crisis go to waste.

Well you didn't make reference to a real terms increase in the State Pension. You clearly implied there would be a 6% increase as a result of yesterday's announcement.
I can see what you were trying - namely to make a political dig, and I suspect you deliberately tried to make the increase something it isn't.

Interestingly, given that the State Pension increases by the highest of 2.5%, National Average Earnings or CPI, it seems the IFS are suggesting that neither CPI or average earnings will increase by more than 1.47% pa between 2021 and 2025.

As for the Foreign Aid budget, I think they said on the radio it is still the highest percentage of GDP amongst the G7.

Also, the public sector might be having a pay freeze, but another million in the private sector will be having their pay terminated.

Look I'm not here to argue the numbers - slice and dice them if you want, pensioners are getting a pay rise above inflation to the tune of £6bn collectively over the next 5 years - I'll back the IFS here.

Get bogged down in the weeds if you want but look at the broader picture here.

If this was about saving money because of rona, why hand pensioners and the military more money?


(I personally find the 'private sector having their pay terminated so public sector should see a freeze' argument very unconvincing because I cannot ever in my life remember an argument going the other way (private sector pay is going up so lets pay the public sector more) and if it was made it would be equally unconvincing.)

I'm slightly torn on this. It's pretty tough for someone who has lost their job seeing someone else getting a payrise funded by taxpayers but equally freezing pay is limiting money that can be spent in the private sector and help safeguard jobs. Certainly during the GFC it was quite annoying hearing Unions moaning about pay freezes when virtually everyone I knew in the private sector who managed to keep their job was being expected to take a pay cut for the privilige. I would also expect public sector employees to get an annual rise of at least the rate of inflation when the economy is growing though.

That said, I also find the argument that public sector workers havehad to work hard to help everyone through the Covid crisis. Whilst that is undoubtably true of public sectors workers in parts of the health service, social care, public health etc. it isn't the case across the board and I've found many of those in the public sector that I have to deal with on a daily basis have taken the changes they have to work due to Covid as an excuse to perform worse than before. I would argue that those in the private care sector have had to work much harder than a person working in the planning department / highway maintenance team / parks department but the private care companies continue to have to work with the shoestring profits they make from running services on behalf of the local council.

As ever the spending priorities seem out of kilter though but I suspect cutting overseas aid plays well with the core of voters that elected a Johnson government.

Sounds about right to me. 6 weeks to even validate applications. No site visits under any circumstances. All despite construction being told to keep going.

coopster_the_1st

kingstongraham said:

coopster_the_1st said:

rick_chasey said:

I literally posted the tweet where I got it from.

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

- Intentionally posts misinformation
- Gets called out on it
- Tries to blame someone else

It is projected to be going up by 6%. That's not misinformation.

Austerity except for conservative voting blocs.

There was no context. Rick was doing his usual where he intentionally posts something as misinformation without the context in the hope others continue to spread the misinformation.

I see you have fallen for it!

Pross

coopster_the_1st said:

rjsterry said:

Dorset_Boy said:

You don't want to argue the figures because you have deliberately misrepresented them. Alternatively, why can't you acknowledge you got them wrong?

I believe there was consideration to a review of the triple lock earlier this year and it was decided to leave it in place. The triple lock is nothing new and will always result in the State Pension at least keeping pace with CPI, but the inflation rate for pensioners is generally considered to be higher than CPI.

I think Rick's point was about the contradiction of announcing cuts/pay freeze because revenue is down, just a few days after announcing big spending increases elsewhere. Of course it's a political point: the spending decisions are political, as they always have been regardless of who is Chancellor. Let's not pretend Sunak didn't have any choices.

Here comes the poodle to defend his master...

Or someone who managed to read the very obvious point that was being made.

pangolin

Is anyone with the opposing view to Rick going to address the topic rather than talking about what the 6% is 6% of?

rjsterry

pangolin said:

Is anyone with the opposing view to Rick going to address the topic rather than talking about what the 6% is 6% of?

Not sure I have a view either way. I can believe the infrastructure spending could be said to be a more effective stimulus than giving public sector workers an extra couple of hundred pounds a year each, but appearances are important and it looks odd. I suspect the cut in aid spending will not have a huge impact either way (at least compared to the impact of the drop in GDP from which the percentage is calculated), but it allows all the trite "charity begins at home" idiots to do a bit of nationalist virtue signalling. It would be nice if politicians occasionally show their working, but we might not like what we see and there's no real incentive to do so. Much easier to just throw your supporters something titbits and claim it as the *right* thing to do.

Dorset_Boy

kingstongraham said:

coopster_the_1st said:

rick_chasey said:

I literally posted the tweet where I got it from.

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

- Intentionally posts misinformation
- Gets called out on it
- Tries to blame someone else

It is projected to be going up by 6%. That's not misinformation.

Austerity except for conservative voting blocs.

The State Pension is not going up by 6%. Without explaining that the increase is a forecast of an increase in real terms over a 4 year timescale, it is misinformation.
I'll guarantee that the State Pension will not go up by 6% in any single year between now and 2025.

The IFS forecast it will rise by 6% IN REAL TERMS OVER THE NEXT FOUR YEARS.

They are different things.
Chasey only provided an explanation over 3 hours after his original ill informed post, and then tries to deflect the fact that he has been called out for it. Quelle surprise.

pangolin

Dorset_Boy said:

kingstongraham said:

coopster_the_1st said:

rick_chasey said:

I literally posted the tweet where I got it from.

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

- Intentionally posts misinformation
- Gets called out on it
- Tries to blame someone else

It is projected to be going up by 6%. That's not misinformation.

Austerity except for conservative voting blocs.

The State Pension is not going up by 6%. Without explaining that the increase is a forecast of an increase in real terms over a 4 year timescale, it is misinformation.
I'll guarantee that the State Pension will not go up by 6% in any single year between now and 2025.

The IFS forecast it will rise by 6% IN REAL TERMS OVER THE NEXT FOUR YEARS.

They are different things.
Chasey only provided an explanation over 3 hours after his original ill informed post, and then tries to deflect the fact that he has been called out for it. Quelle surprise.

You asked where he got it from. He responded an hour later. Are there some posting time limit rules the rest of us aren't aware of? Do you start a chess clock every time you click post?

kingstongraham

If it helps, you can consider the argument won if you like.

Unless you think inflation is likely to rise above 2.5%, it's going to rise in real terms. That's a choice.

kingstongraham

Numb to this now

https://twitter.com/PaulLewis/status/1331857096971870209?s=19

Dorset_Boy

pangolin said:

Dorset_Boy said:

kingstongraham said:

coopster_the_1st said:

rick_chasey said:

I literally posted the tweet where I got it from.

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

- Intentionally posts misinformation
- Gets called out on it
- Tries to blame someone else

It is projected to be going up by 6%. That's not misinformation.

Austerity except for conservative voting blocs.

The State Pension is not going up by 6%. Without explaining that the increase is a forecast of an increase in real terms over a 4 year timescale, it is misinformation.
I'll guarantee that the State Pension will not go up by 6% in any single year between now and 2025.

The IFS forecast it will rise by 6% IN REAL TERMS OVER THE NEXT FOUR YEARS.

They are different things.
Chasey only provided an explanation over 3 hours after his original ill informed post, and then tries to deflect the fact that he has been called out for it. Quelle surprise.

You asked where he got it from. He responded an hour later. Are there some posting time limit rules the rest of us aren't aware of? Do you start a chess clock every time you click post?

FFS, is you first response to always defend Chasey whatever he says, because it seems to be the case, even when he has been well out of line - the likes of Chasey and you are happy to call out the likes of Andrew Neill for using incorrect stats.
Be consistent, not hypocrites.
No context to his original statement and there wouldn't have been any had I not called him out on it. It just suited his agenda.
He isn't man enough however to admit his errors 99% of the time, and uses deflection instead.
It devalues any good points he makes.

john80

rick_chasey said:

I literally posted the tweet where I got it from. Was that clarification not enough?

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

Rick the big picture guy. Now that is funny.

surrey_commuter

Dorset_Boy said:

kingstongraham said:

coopster_the_1st said:

rick_chasey said:

I literally posted the tweet where I got it from.

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

- Intentionally posts misinformation
- Gets called out on it
- Tries to blame someone else

It is projected to be going up by 6%. That's not misinformation.

Austerity except for conservative voting blocs.

The State Pension is not going up by 6%. Without explaining that the increase is a forecast of an increase in real terms over a 4 year timescale, it is misinformation.
I'll guarantee that the State Pension will not go up by 6% in any single year between now and 2025.

The IFS forecast it will rise by 6% IN REAL TERMS OVER THE NEXT FOUR YEARS.

They are different things.
Chasey only provided an explanation over 3 hours after his original ill informed post, and then tries to deflect the fact that he has been called out for it. Quelle surprise.

Whilst you are in no position to guarantee pension will not go up by 6% in any one year before 2025 I wonder what % likelihood you would place on it happening

Dorset_Boy

surrey_commuter said:

Dorset_Boy said:

kingstongraham said:

coopster_the_1st said:

rick_chasey said:

I literally posted the tweet where I got it from.

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

- Intentionally posts misinformation
- Gets called out on it
- Tries to blame someone else

It is projected to be going up by 6%. That's not misinformation.

Austerity except for conservative voting blocs.

The State Pension is not going up by 6%. Without explaining that the increase is a forecast of an increase in real terms over a 4 year timescale, it is misinformation.
I'll guarantee that the State Pension will not go up by 6% in any single year between now and 2025.

The IFS forecast it will rise by 6% IN REAL TERMS OVER THE NEXT FOUR YEARS.

They are different things.
Chasey only provided an explanation over 3 hours after his original ill informed post, and then tries to deflect the fact that he has been called out for it. Quelle surprise.

Whilst you are in no position to guarantee pension will not go up by 6% in any one year before 2025 I wonder what % likelihood you would place on it happening

For it to go up by 6% in one of the next 4 years, either CPI or NAEI have to rise by 6%. Highly unlikely, so I'd suggest a less than 5% chance.
If the triple lock gets abandoned then the chance is likely to be even less.

surrey_commuter

Dorset_Boy said:

surrey_commuter said:

Dorset_Boy said:

kingstongraham said:

coopster_the_1st said:

rick_chasey said:

I literally posted the tweet where I got it from.

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

- Intentionally posts misinformation
- Gets called out on it
- Tries to blame someone else

It is projected to be going up by 6%. That's not misinformation.

Austerity except for conservative voting blocs.

The State Pension is not going up by 6%. Without explaining that the increase is a forecast of an increase in real terms over a 4 year timescale, it is misinformation.
I'll guarantee that the State Pension will not go up by 6% in any single year between now and 2025.

The IFS forecast it will rise by 6% IN REAL TERMS OVER THE NEXT FOUR YEARS.

They are different things.
Chasey only provided an explanation over 3 hours after his original ill informed post, and then tries to deflect the fact that he has been called out for it. Quelle surprise.

Whilst you are in no position to guarantee pension will not go up by 6% in any one year before 2025 I wonder what % likelihood you would place on it happening

For it to go up by 6% in one of the next 4 years, either CPI or NAEI have to rise by 6%. Highly unlikely, so I'd suggest a less than 5% chance.
If the triple lock gets abandoned then the chance is likely to be even less.

After Boris vaccinated everybody by springtime average earning could soar like an eagle, this, as you suggest, would mark the end of the triple lock.

What we should all remember is that the miracle of compound growth means we should all be cheering on the triple lock.

morstar

surrey_commuter said:

Dorset_Boy said:

surrey_commuter said:

Dorset_Boy said:

kingstongraham said:

coopster_the_1st said:

rick_chasey said:

I literally posted the tweet where I got it from.

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

- Intentionally posts misinformation
- Gets called out on it
- Tries to blame someone else

It is projected to be going up by 6%. That's not misinformation.

Austerity except for conservative voting blocs.

The State Pension is not going up by 6%. Without explaining that the increase is a forecast of an increase in real terms over a 4 year timescale, it is misinformation.
I'll guarantee that the State Pension will not go up by 6% in any single year between now and 2025.

The IFS forecast it will rise by 6% IN REAL TERMS OVER THE NEXT FOUR YEARS.

They are different things.
Chasey only provided an explanation over 3 hours after his original ill informed post, and then tries to deflect the fact that he has been called out for it. Quelle surprise.

Whilst you are in no position to guarantee pension will not go up by 6% in any one year before 2025 I wonder what % likelihood you would place on it happening

For it to go up by 6% in one of the next 4 years, either CPI or NAEI have to rise by 6%. Highly unlikely, so I'd suggest a less than 5% chance.
If the triple lock gets abandoned then the chance is likely to be even less.

After Boris vaccinated everybody by springtime average earning could soar like an eagle, this, as you suggest, would mark the end of the triple lock.

What we should all remember is that the miracle of compound growth means we should all be cheering on the triple lock.

It will have to be removed before generation entitled look likely to benefit though.

rick_chasey

Dorset_Boy said:

kingstongraham said:

coopster_the_1st said:

rick_chasey said:

I literally posted the tweet where I got it from.

I'm getting off the merrygoround.

Tories are increasing pensioners pay and military spending but are cutting other things. That is a political decision, not one in the name of prudence and therefore the cuts should be seen for what they are.

You're like my boss halfway through a project where he's worried about this typo or that typo rather than where we actually are with the project.

Me - a big picture point

you - quibbling over details.

- Intentionally posts misinformation
- Gets called out on it
- Tries to blame someone else

It is projected to be going up by 6%. That's not misinformation.

Austerity except for conservative voting blocs.

The State Pension is not going up by 6%. Without explaining that the increase is a forecast of an increase in real terms over a 4 year timescale, it is misinformation.
I'll guarantee that the State Pension will not go up by 6% in any single year between now and 2025.

The IFS forecast it will rise by 6% IN REAL TERMS OVER THE NEXT FOUR YEARS.

They are different things.
Chasey only provided an explanation over 3 hours after his original ill informed post, and then tries to deflect the fact that he has been called out for it. Quelle surprise.

I used it as part of an example to spell out a wider point. You can see that, right?

It seems you’re just nitpicking to get one over on me.

I’m sure you’re right. But I sort of don’t care because it wasn’t what I was trying to say.

Sunak keeps saying how because rona is so costly he has to freeze lots of spending right?

Only when it’s meat and drink for the hardcore Tories suddenly there’s more money available.

If it’s not pensions it’s the military. You can see that, surely?

It’s not even like benefits have been given the same rise - on the contrary.

I don’t buy the “I’m doing it because rona” line because it doesn’t explain what is actually happening.

surrey_commuter

@rick_chasey why all the talk of having a £40bn hole to fill with increased taxes, why wouldn’t they just borrow more.

If your answer is that yes they should, does that mean they that for them MMT is a fig leaf?

rick_chasey

surrey_commuter said:

@rick_chasey why all the talk of having a £40bn hole to fill with increased taxes, why wouldn’t they just borrow more.

If your answer is that yes they should, does that mean they that for them MMT is a fig leaf?

So I'm not a purist MMT guy. I see the argument but I wouldn't run policy that way if I was Sunak.

I just seem quite extreme compared to you because you're a long way along that spectrum.

I do ultimately believe at some point you have to pay for spending through taxation. There are various reasons for why running a deficit is OK, and there are short term reasons for why you should be spending well beyond what the tax receipts are, and they all orientate around maintaining growth or protecting future growth (from economic scarring during downturns etc).

Where I differ from MMT types is I do believe that if you want to keep borrowing costs low, you need to show a level of prudence, and I don't think aiming for full employment is a practical target (though I think there are undervalued advantages of having a hot labour market, but they make markets more egalitarian and we know brits hate that). The reason why EM countries can't borrow like the UK can is because it has not demonstrated said prudence.

So I understand those arguments. I just think both parties, but the Tories in particular, get the timing 180 degrees wrong. They do literally the opposite of what you should. And they do that, because they are, despite what they seem, not following economic advice and consensus (as we have seen with Brexit) but are using economic rationale for purely political decisions which aim to keep the nation divided just like you see over the pond.

Ultimately I think the cost of borrowing is, compared to other options, a really helpful indicator for where UK gov't spending should be.

kingstongraham

The irony is that the Conservatives could do a lot more without spooking the markets because the markets know they hate it. Look at how much they have already done without shifting the dial. Labour just couldn't because they're Labour

It feels like they are just too eager to get back to austerity because it's what they do, even though it's not the right time for it.

surrey_commuter

rick_chasey said:

surrey_commuter said:

@rick_chasey why all the talk of having a £40bn hole to fill with increased taxes, why wouldn’t they just borrow more.

If your answer is that yes they should, does that mean they that for them MMT is a fig leaf?

So I'm not a purist MMT guy. I see the argument but I wouldn't run policy that way if I was Sunak.

I just seem quite extreme compared to you because you're a long way along that spectrum.

I do ultimately believe at some point you have to pay for spending through taxation. There are various reasons for why running a deficit is OK, and there are short term reasons for why you should be spending well beyond what the tax receipts are, and they all orientate around maintaining growth or protecting future growth (from economic scarring during downturns etc).

Where I differ from MMT types is I do believe that if you want to keep borrowing costs low, you need to show a level of prudence, and I don't think aiming for full employment is a practical target (though I think there are undervalued advantages of having a hot labour market, but they make markets more egalitarian and we know brits hate that). The reason why EM countries can't borrow like the UK can is because it has not demonstrated said prudence.

So I understand those arguments. I just think both parties, but the Tories in particular, get the timing 180 degrees wrong. They do literally the opposite of what you should. And they do that, because they are, despite what they seem, not following economic advice and consensus (as we have seen with Brexit) but are using economic rationale for purely political decisions which aim to keep the nation divided just like you see over the pond.

Ultimately I think the cost of borrowing is, compared to other options, a really helpful indicator for where UK gov't spending should be.

Thanks for the detailed reply. Whilst I am sure I will never change my mind I am interested in the thought processes and it seems that one of the reasons why it makes no sense is that it is being used as cover for political expediency by people who then make contradictory comments.

Why wouldn't the BofE keep buying gilts? that way they control the level of available funds and costs of financing?

If the BofE buys £10bn of gilts with made up money what happens when the gilt falls due? does the Treasury pay the bearer? and if so the BofE now sits on a £10bn (plus coupons) by what mechanism does it transfer the money back to the Treasury?

rick_chasey

surrey_commuter said:

rick_chasey said:

surrey_commuter said:

@rick_chasey why all the talk of having a £40bn hole to fill with increased taxes, why wouldn’t they just borrow more.

If your answer is that yes they should, does that mean they that for them MMT is a fig leaf?

So I'm not a purist MMT guy. I see the argument but I wouldn't run policy that way if I was Sunak.

I just seem quite extreme compared to you because you're a long way along that spectrum.

I do ultimately believe at some point you have to pay for spending through taxation. There are various reasons for why running a deficit is OK, and there are short term reasons for why you should be spending well beyond what the tax receipts are, and they all orientate around maintaining growth or protecting future growth (from economic scarring during downturns etc).

Where I differ from MMT types is I do believe that if you want to keep borrowing costs low, you need to show a level of prudence, and I don't think aiming for full employment is a practical target (though I think there are undervalued advantages of having a hot labour market, but they make markets more egalitarian and we know brits hate that). The reason why EM countries can't borrow like the UK can is because it has not demonstrated said prudence.

So I understand those arguments. I just think both parties, but the Tories in particular, get the timing 180 degrees wrong. They do literally the opposite of what you should. And they do that, because they are, despite what they seem, not following economic advice and consensus (as we have seen with Brexit) but are using economic rationale for purely political decisions which aim to keep the nation divided just like you see over the pond.

Ultimately I think the cost of borrowing is, compared to other options, a really helpful indicator for where UK gov't spending should be.

Thanks for the detailed reply. Whilst I am sure I will never change my mind I am interested in the thought processes and it seems that one of the reasons why it makes no sense is that it is being used as cover for political expediency by people who then make contradictory comments.

Why wouldn't the BofE keep buying gilts? that way they control the level of available funds and costs of financing?

If the BofE buys £10bn of gilts with made up money what happens when the gilt falls due? does the Treasury pay the bearer? and if so the BofE now sits on a £10bn (plus coupons) by what mechanism does it transfer the money back to the Treasury?

So I have no formal training in this but my understanding is not much, it's ultimately just printing money, but done in a way to encourage more lending (as your lever to do that, lowering interest rates, has already been pulled).

I don't know the actual ins and outs of the plumbing and the mechanism of it all.

TheBigBean

surrey_commuter said:

rick_chasey said:

surrey_commuter said:

@rick_chasey why all the talk of having a £40bn hole to fill with increased taxes, why wouldn’t they just borrow more.

If your answer is that yes they should, does that mean they that for them MMT is a fig leaf?

So I'm not a purist MMT guy. I see the argument but I wouldn't run policy that way if I was Sunak.

I just seem quite extreme compared to you because you're a long way along that spectrum.

I do ultimately believe at some point you have to pay for spending through taxation. There are various reasons for why running a deficit is OK, and there are short term reasons for why you should be spending well beyond what the tax receipts are, and they all orientate around maintaining growth or protecting future growth (from economic scarring during downturns etc).

Where I differ from MMT types is I do believe that if you want to keep borrowing costs low, you need to show a level of prudence, and I don't think aiming for full employment is a practical target (though I think there are undervalued advantages of having a hot labour market, but they make markets more egalitarian and we know brits hate that). The reason why EM countries can't borrow like the UK can is because it has not demonstrated said prudence.

So I understand those arguments. I just think both parties, but the Tories in particular, get the timing 180 degrees wrong. They do literally the opposite of what you should. And they do that, because they are, despite what they seem, not following economic advice and consensus (as we have seen with Brexit) but are using economic rationale for purely political decisions which aim to keep the nation divided just like you see over the pond.

Ultimately I think the cost of borrowing is, compared to other options, a really helpful indicator for where UK gov't spending should be.

Thanks for the detailed reply. Whilst I am sure I will never change my mind I am interested in the thought processes and it seems that one of the reasons why it makes no sense is that it is being used as cover for political expediency by people who then make contradictory comments.

Why wouldn't the BofE keep buying gilts? that way they control the level of available funds and costs of financing?

If the BofE buys £10bn of gilts with made up money what happens when the gilt falls due? does the Treasury pay the bearer? and if so the BofE now sits on a £10bn (plus coupons) by what mechanism does it transfer the money back to the Treasury?

There's currently £890bn of gilts owned by the BoE. I believe the thinking is that when they fall due, they will be rolled over in some way, so the BoE's holdings will remain the same.

There was an agreement in 2012 that the BoE would hand back the interest received on its gilts. No idea if this continued.

I asked the economist that Rick quoted above whether he could see the gilts being written off, but the question was misinterpreted as unwinding, which he couldn't see happening at least for a very long time.

Anyway, I would just accept that the UK's debt is overstated by £890bn.

surrey_commuter

TheBigBean said:

surrey_commuter said:

rick_chasey said:

surrey_commuter said:

@rick_chasey why all the talk of having a £40bn hole to fill with increased taxes, why wouldn’t they just borrow more.

If your answer is that yes they should, does that mean they that for them MMT is a fig leaf?

So I'm not a purist MMT guy. I see the argument but I wouldn't run policy that way if I was Sunak.

I just seem quite extreme compared to you because you're a long way along that spectrum.

I do ultimately believe at some point you have to pay for spending through taxation. There are various reasons for why running a deficit is OK, and there are short term reasons for why you should be spending well beyond what the tax receipts are, and they all orientate around maintaining growth or protecting future growth (from economic scarring during downturns etc).

Where I differ from MMT types is I do believe that if you want to keep borrowing costs low, you need to show a level of prudence, and I don't think aiming for full employment is a practical target (though I think there are undervalued advantages of having a hot labour market, but they make markets more egalitarian and we know brits hate that). The reason why EM countries can't borrow like the UK can is because it has not demonstrated said prudence.

So I understand those arguments. I just think both parties, but the Tories in particular, get the timing 180 degrees wrong. They do literally the opposite of what you should. And they do that, because they are, despite what they seem, not following economic advice and consensus (as we have seen with Brexit) but are using economic rationale for purely political decisions which aim to keep the nation divided just like you see over the pond.

Ultimately I think the cost of borrowing is, compared to other options, a really helpful indicator for where UK gov't spending should be.

Thanks for the detailed reply. Whilst I am sure I will never change my mind I am interested in the thought processes and it seems that one of the reasons why it makes no sense is that it is being used as cover for political expediency by people who then make contradictory comments.

Why wouldn't the BofE keep buying gilts? that way they control the level of available funds and costs of financing?

If the BofE buys £10bn of gilts with made up money what happens when the gilt falls due? does the Treasury pay the bearer? and if so the BofE now sits on a £10bn (plus coupons) by what mechanism does it transfer the money back to the Treasury?

There's currently £890bn of gilts owned by the BoE. I believe the thinking is that when they fall due, they will be rolled over in some way, so the BoE's holdings will remain the same.

There was an agreement in 2012 that the BoE would hand back the interest received on its gilts. No idea if this continued.

I asked the economist that Rick quoted above whether he could see the gilts being written off, but the question was misinterpreted as unwinding, which he couldn't see happening at least for a very long time.

Anyway, I would just accept that the UK's debt is overstated by £890bn.

cheers for the explanation - why would they not keep going and zero the debt?

TheBigBean

surrey_commuter said:

TheBigBean said:

surrey_commuter said:

rick_chasey said:

surrey_commuter said:

@rick_chasey why all the talk of having a £40bn hole to fill with increased taxes, why wouldn’t they just borrow more.

If your answer is that yes they should, does that mean they that for them MMT is a fig leaf?

So I'm not a purist MMT guy. I see the argument but I wouldn't run policy that way if I was Sunak.

I just seem quite extreme compared to you because you're a long way along that spectrum.

I do ultimately believe at some point you have to pay for spending through taxation. There are various reasons for why running a deficit is OK, and there are short term reasons for why you should be spending well beyond what the tax receipts are, and they all orientate around maintaining growth or protecting future growth (from economic scarring during downturns etc).

Where I differ from MMT types is I do believe that if you want to keep borrowing costs low, you need to show a level of prudence, and I don't think aiming for full employment is a practical target (though I think there are undervalued advantages of having a hot labour market, but they make markets more egalitarian and we know brits hate that). The reason why EM countries can't borrow like the UK can is because it has not demonstrated said prudence.

So I understand those arguments. I just think both parties, but the Tories in particular, get the timing 180 degrees wrong. They do literally the opposite of what you should. And they do that, because they are, despite what they seem, not following economic advice and consensus (as we have seen with Brexit) but are using economic rationale for purely political decisions which aim to keep the nation divided just like you see over the pond.

Ultimately I think the cost of borrowing is, compared to other options, a really helpful indicator for where UK gov't spending should be.

Thanks for the detailed reply. Whilst I am sure I will never change my mind I am interested in the thought processes and it seems that one of the reasons why it makes no sense is that it is being used as cover for political expediency by people who then make contradictory comments.

Why wouldn't the BofE keep buying gilts? that way they control the level of available funds and costs of financing?

If the BofE buys £10bn of gilts with made up money what happens when the gilt falls due? does the Treasury pay the bearer? and if so the BofE now sits on a £10bn (plus coupons) by what mechanism does it transfer the money back to the Treasury?

There's currently £890bn of gilts owned by the BoE. I believe the thinking is that when they fall due, they will be rolled over in some way, so the BoE's holdings will remain the same.

There was an agreement in 2012 that the BoE would hand back the interest received on its gilts. No idea if this continued.

I asked the economist that Rick quoted above whether he could see the gilts being written off, but the question was misinterpreted as unwinding, which he couldn't see happening at least for a very long time.

Anyway, I would just accept that the UK's debt is overstated by £890bn.

cheers for the explanation - why would they not keep going and zero the debt?

The classic answer is that QE might result in high inflation, so it would be a weapon in the armoury of the BoE to fight this (unwinding the QE). I wonder whether politically it sounds better to have a higher debt. Another reason is that it is uncharted waters, so no one knows and there is no real advantage to writing them off, so it's a sleeping dog that is best left to lie.

rick_chasey

TheBigBean said:

surrey_commuter said:

TheBigBean said:

surrey_commuter said:

rick_chasey said:

surrey_commuter said:

@rick_chasey why all the talk of having a £40bn hole to fill with increased taxes, why wouldn’t they just borrow more.

If your answer is that yes they should, does that mean they that for them MMT is a fig leaf?

So I'm not a purist MMT guy. I see the argument but I wouldn't run policy that way if I was Sunak.

I just seem quite extreme compared to you because you're a long way along that spectrum.

I do ultimately believe at some point you have to pay for spending through taxation. There are various reasons for why running a deficit is OK, and there are short term reasons for why you should be spending well beyond what the tax receipts are, and they all orientate around maintaining growth or protecting future growth (from economic scarring during downturns etc).

Where I differ from MMT types is I do believe that if you want to keep borrowing costs low, you need to show a level of prudence, and I don't think aiming for full employment is a practical target (though I think there are undervalued advantages of having a hot labour market, but they make markets more egalitarian and we know brits hate that). The reason why EM countries can't borrow like the UK can is because it has not demonstrated said prudence.

So I understand those arguments. I just think both parties, but the Tories in particular, get the timing 180 degrees wrong. They do literally the opposite of what you should. And they do that, because they are, despite what they seem, not following economic advice and consensus (as we have seen with Brexit) but are using economic rationale for purely political decisions which aim to keep the nation divided just like you see over the pond.

Ultimately I think the cost of borrowing is, compared to other options, a really helpful indicator for where UK gov't spending should be.

Thanks for the detailed reply. Whilst I am sure I will never change my mind I am interested in the thought processes and it seems that one of the reasons why it makes no sense is that it is being used as cover for political expediency by people who then make contradictory comments.

Why wouldn't the BofE keep buying gilts? that way they control the level of available funds and costs of financing?

If the BofE buys £10bn of gilts with made up money what happens when the gilt falls due? does the Treasury pay the bearer? and if so the BofE now sits on a £10bn (plus coupons) by what mechanism does it transfer the money back to the Treasury?

There's currently £890bn of gilts owned by the BoE. I believe the thinking is that when they fall due, they will be rolled over in some way, so the BoE's holdings will remain the same.

There was an agreement in 2012 that the BoE would hand back the interest received on its gilts. No idea if this continued.

I asked the economist that Rick quoted above whether he could see the gilts being written off, but the question was misinterpreted as unwinding, which he couldn't see happening at least for a very long time.

Anyway, I would just accept that the UK's debt is overstated by £890bn.

cheers for the explanation - why would they not keep going and zero the debt?

The classic answer is that QE might result in high inflation, so it would be a weapon in the armoury of the BoE to fight this (unwinding the QE). I wonder whether politically it sounds better to have a higher debt. Another reason is that it is uncharted waters, so no one knows and there is no real advantage to writing them off, so it's a sleeping dog that is best left to lie.

If I understand it right, there is also a level of smoke and mirrors here. It's all OK until people collectively decide it isn't and they panic. So if you do it forever to crazy amounts at some point enough people will sh!t the bed.

(Mary Poppins has had an oversized influence of my understanding of the world)

pblakeney

I am struggling with the connection of Mary Poppins and sh!tting the bed. 🤣🤣🤣