Not quite true, Ancient Rome spent very judiciously indeed. In 586 AUC/167 BC, for example it even indefinitely suspended Direct Taxation for Roman citizens.
I am constantly amazed by the ability of a Tory Chancellor to find new ways to give away money he does not have? I am very supportive of boosting the economic activity but at some point the wealth creators and wealth holders will have to pay for it. I am wondering exactly when that pay back will be, and what will the mechanisms for doing it be?
I was having a similar conversation with someone who is a bit more clued up about such things than I am and was told that after WW2 our deficit was something like 250% of GDP and now we are at 101% so really “nothing to worry about”. He then said something like: Sunak and Johnson are banking on all their infrastructure spending generating enough income in the future to pay down our debts to more respectable levels, but then also said that the only time we would need to worry is if interest rates had to rise and we were at the same time in the middle of a recession because that would lead to inflation. Now I’ve really tried hard to understand this new fangled thing called Modern Monetary Theory (which I think is what he was discussing) and have had to conclude that it is some sort of Magic Money Tree. I also fear that Venezuela may have tried it but forgot to pull back at the right time.
The post war governments were able to handle high levels of debt effectively. GDP to debt ratios fell from 250% at the end of the war to around 50% by the end of the 1960s. They did this because GDP grew consistently around 2.5%, there was full employment and there was a increasing but not spiralling inflation. If you think of a fraction with GDP as the numerator and debt as the denominator if the former is growing faster than the latter you can deal with debt without effecting public spending, which is what post war governments did. This does at leas show that the There is not alternative brigade are wrong and austerity is not a given.
Me The first
3 years ago
If only we can automate the damn fruit picking
Nick Whitehouse
3 years ago
Of course, one way to reduce the debt would be to re-introduce rationing. After all it lasted after WW2 for eight years. Think of the benefits- less money spent on food and clothes – all available for taxation. It would also help the health of the nation – no obesity and cost to the NHS. And finally, if the debt was really reduced, we could dispense with that temporary tax – namely income tax. After 200 years, the politicians could actually keep their word – although I am not sure that my definition of temporary would cover 200 years; perhaps I should try!
Wishful thinking. No government in history – certainly not in British history – has ever spent money intelligently.
Not quite true, Ancient Rome spent very judiciously indeed.
In 586 AUC/167 BC, for example it even indefinitely suspended Direct Taxation for Roman citizens.
Ah those were the days… 😄
I am constantly amazed by the ability of a Tory Chancellor to find new ways to give away money he does not have?
I am very supportive of boosting the economic activity but at some point the wealth creators and wealth holders will have to pay for it.
I am wondering exactly when that pay back will be, and what will the mechanisms for doing it be?
I was having a similar conversation with someone who is a bit more clued up about such things than I am and was told that after WW2 our deficit was something like 250% of GDP and now we are at 101% so really “nothing to worry about”.
He then said something like: Sunak and Johnson are banking on all their infrastructure spending generating enough income in the future to pay down our debts to more respectable levels, but then also said that the only time we would need to worry is if interest rates had to rise and we were at the same time in the middle of a recession because that would lead to inflation.
Now I’ve really tried hard to understand this new fangled thing called Modern Monetary Theory (which I think is what he was discussing) and have had to conclude that it is some sort of Magic Money Tree. I also fear that Venezuela may have tried it but forgot to pull back at the right time.
The post war governments were able to handle high levels of debt effectively. GDP to debt ratios fell from 250% at the end of the war to around 50% by the end of the 1960s. They did this because GDP grew consistently around 2.5%, there was full employment and there was a increasing but not spiralling inflation. If you think of a fraction with GDP as the numerator and debt as the denominator if the former is growing faster than the latter you can deal with debt without effecting public spending, which is what post war governments did. This does at leas show that the There is not alternative brigade are wrong and austerity is not a given.
If only we can automate the damn fruit picking
Of course, one way to reduce the debt would be to re-introduce rationing.
After all it lasted after WW2 for eight years. Think of the benefits- less money spent on food and clothes – all available for taxation. It would also help the health of the nation – no obesity and cost to the NHS.
And finally, if the debt was really reduced, we could dispense with that temporary tax – namely income tax.
After 200 years, the politicians could actually keep their word – although I am not sure that my definition of temporary would cover 200 years; perhaps I should try!