OT: Market Reaction to Qasi's Budget

[Cursitor Doom]

I'm wondering if a white man would have got away with the exact same measures? Perhaps the markets are taking fright at his skin colour rather than the policy itself!

[Fredxx]

I think markets and business is pretty pragmatic. And the measures themselves will be considered and not the skin colour. There were already jitters in the market from the Tory magic money tree.

The market is clearly not convinced that a tax cut and borrowing will have the desired effect. I recall Trump doing the same, and that did have some stimulus. It's seen as a risk and markets don't like risk.

She's also deferred much tax revenue to next year, but then if Labour up the tax rate after, what is likely to happen is money taken out of companies next year instead of re-investment. I think her timing is quite smart if she thinks she'll lose the next election but I dislike the idea of generations to come will pay for our current (over) spending.

[Joe]

That's always been the case since 2008, if not earlier. The debt since then has been literally impossible to pay off out of taxation.

The only alternatives are default or enormous inflation, until the currency is worth no more than a hundredth of its current value. Although if they continue to run gigantic deficits, even inflation won't help, as the government will be taking on new debt at inflated values.

Why politicians believe that inflation of that order can be stopped before terminal hyperinflation, I don't know.

If, of course, they do believe that.

[Cursitor Doom]

Perhaps that's a large unstated part of the strategy: create inflation to shrink the national debt. It's a huge temptation for all heavily indebted countries (and there are very many of those in the first world....)

[Dave Plowman (News]

It does look suspiciously like a raid on the country to benefit the Tory moneybags. As a short term measure, before losing the next election.

It might have made some sense before Covid and the Ukrainian war with the subsequent effects to energy prices. But at this point in times looks like putting a boy who failed his CGE maths in charge of a bank.

Of course when the emergency interest rate arrives, and wipes out any tax savings for the average mortgage payer - and then some - even the Tory base will see what a bunch of charlatans are now in charge.

[R Souls]

This fiasco surely busts the age old myth of the Nasty Party being the party of economic competence.

[Fredxx]

The irony is because tax is generally paid by big tax payers the year after [1] it may well be Labour that benefits from the higher tax receipts!

Well, Labour do claim to represent the working population. Lets see if they do away with IR35 in the way they've made noises in the past.

[1] Complicated by advance balancing payments.

[Andrew]

Politicians only think short term. If they can kick the can down the road by bribing todays voters with their childrens money to get their votes, then that is all that matters.

Forget taxing the real massive windfalls, i.e. House Prices (because the great unwashed actually believe that the £5000 house in 1970, now 'worth' £650,000 is all theirs to keep), lets bang on about energy company windfalls (while ignoring the stupendous losses that they made in 2020).

After 10 years or so when the shit is about to hit the fan they just jump ship either into the Lords for a nice £300 a day for just signing in, or off to those lucrative private companies who they lobbied on behalf on while being an MP.

[alan_m]

They have also been printing valueless money for the past decade or more and at some time that would always come back to bite us in the arse.

[The Natural Philosopher]

Well its all rather against the orthodoxy that has resulted in the mess we are now in, so they probably fear for their jobs if it works

[The Natural Philosopher]

Basically politicians have been living on borrowed time and money since forever. They will invent a way out. Grabbing Russia's oiligarch money is a good start. Once Saudi runs out of oil we will grab their assets too.

[The Natural Philosopher]

ever since Bretton Woods died in fact. 1971

[R Souls]

It's got nothing to do with his colour. It's because he's an incompetent berk like the rest of the Nasty cabinet.

[Joe]

They haven't done that in my lifetime, I thought they had given up even claiming it.

Yer 'avin' a laugh. If Labour hates anyone more than Tories, it's the self-employed.

[Rod Speed]

Fredxx [e-mail] wrote

It isn't a magic money tree, they are saying that a cut in the income tax rate will boost the economy. That remains to be seen.

That last is bullshit.

And it is pretty clear that that those who bother to vote have never liked Labour saying that they are going to have higher taxes.

[Cursitor Doom]

Black men are *never* incompetent!

[zall]

Since the Napoleonic Wars in fact.

That is less clear. The USA did manage to wipe out most of its WW2 federal debt after WW2 had ended.

Have fun explaining why that didn't happen in the USA after WW2.

That utterly mangles the real story too.

Because that has been achieved before.

All they actually believe is that they can get away with it politically.

[Rod Speed]

We'll see...

[Rod Speed]

alan_m [e-mail]> wrote

Beats having the economy implode into another Great Depression.

[Brian Gaff]

Eh? The problem with the budget is that we are in many ways in uncharted territory in the world at the moment, and as they often say, whatever you do, you are damned if you do and damned if you don't as nobody knows what is the right move to make. There will be winners and losers either way, and it will cost money to repay what you borrow as interest rates rise. Its really no different to personal finance is it? What you have to aim for is smoothing out the peaks and troughs, but its a bit like trying to calm an angry sea, you can only react to the height of the next wave you can see on the surface, you have no warning or birds eye view. Brian