Clarke and Dawe, Australia’s John Bird and John Fortune, on the Greek economy.
If it were a private company there’d be a fire there on Saturday, about 4 o’clock in the morning.
Still a busy weekend for me, but I didn’t want to let one particular event pass without comment.
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The United States’ credit rating was cut for the first time when Standard and Poor’s lowered it from triple-A to AA+, citing the country’s looming deficit burden and weak policy-making process.
Standard and Poor’s on Friday revised the nation’s rating downwards to a AA+ with a negative outlook, despite a push back from the White House, which said the rating agency’s analysis of the US economy was deeply flawed.
And my comment is this: holy shit! Okay, it’s not unexpected but it is unprecedented in modern times. Is this the end of the idea that governments can just spend money they don’t have on crap we don’t need more or less indefinitely by taxing us more now and running up debts for which they’ll need to tax us in the future? We can but hope so.
Seriously, can someone who speaks American make sense of these remarks on the subject of America’s worrying debt level and the possibility of the country losing it’s top credit rating?
“…we might as well do it now – pull off the Band-Aid, eat our peas.”
“They’re in one week and they’re out one week… You need to be here. I’ve been here. I’ve been doing Afghanistan and bin Laden and the Greek crisis. You stay here. Let’s get it done.”
The words are English and I can understand them just fine, but the some of the sentences have left me confused. Don’t mistake this for snooty English criticism of how the Yanks use the language. They can use it any way they want or not at all as far as I’m concerned. If they want fanny to mean arse and bum to mean tramp and all those other little difference that’s more than fine by me as I need only learn a little vocabulary rather than a whole language, and like lots of others I watch enough American TV that I’m pretty confident in my ability to get by. But this time, and admittedly it’s not unprecedented when it comes to American presidents, I just don’t know what the fuck he means.
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The Treasury will publish full accounts for all Whitehall departments to give taxpayers an idea of what the public finances would look like if it was a company.
The move will for the first time bring into one place the future liabilities of accrued pension liabilities for public sector workers and the future costs of schools and hospitals built using the private finance initiative.
Not before time. All this off book stuff has been hiding the true cost of the profligacy of recent British governments (including the current one) for way too long.
Experts suggest that this will add an estimated £1,200billion from debt in the accounts of 1,500 public bodies to the Government’s books.
Adding in the official national debt figure of £909billion, it takes the overall total debt bill to more than £2,000 billion, as at the end of 2009/10.
And that’s not the highest estimate I’ve ever heard. I’m sure the old Burning Our Money blog gave higher estimates of the real debt now and then, but let’s assume that £2,000 billion, or two trillion if you prefer, covers it all. How much is that in meaningful terms?
Well, this sort of thing has been done before of course, but since that picture has a bit of cash in it I thought it’d be interesting in a random kind of way to start from there. In it I can see a couple of tenners, a couple of twenties and 22 £1 coins. If you were to throw away that £82 and follow it up by throwing away another £82 a minute later and so on and so on then in 24 hours you’d have thrown away just over a hundred grand – £118,080 to be precise – and if you kept it up for a year you’d have chucked just over £43 million. But if you started a little while ago, actually just over two thousand years ago at midnight on New Year’s Day, year Zero AD, then by now you’d have thrown away only – hah, only – £86 billion and some change. Change in this case meaning £730,232,238. Clearly a long way to go to equal the UK’s debt by chucking away money at that same rate of £82 per minute – and let’s be honest if we saw someone chucking away eighty quid every sixty seconds we’d think he was an idiot. Starting from 0AD again, from today you’d have to keep going for another 44,373 years. Worse still, you wouldn’t finish until halfway through October.
Now that’s a very simple calculation and doesn’t allow for such things as meal breaks, sleep, days off, sick leave, holiday time and dropping dead with well over 460 centuries to go, so you might be thinking of sharing the workload a bit. If you enlisted the help of ninety nine other people and covered for each other to allow for breaks and a bit of sex – probably quite good sex if you’ve ever fancied doing it on a huge pile of money – to breed replacement money wasters you could get it done in just a few generations. But of course there’s an even faster way to do it which involves almost no effort at all.
Give the job to a government.
If, or when, Greece defaults it will be bad. Obviously not as bad as it will be if they keep staggering on, being forced to increase debt by being made to take bail out after bail out, but we can still say that a default is Not A Good Thing. It’s just the least worst thing.
However, if a Greek default is Not A Good Thing what the hell do we call a US default?
TWENTY days out from a possible default on its loans by the world’s richest nation, America’s political leaders apparently agree that it should never have come to this. But on how best to put things right, they remain at loggerheads, deeply divided along ideological lines, anxiously protecting what Barack Obama has termed their ”sacred cows” – for Republicans, low taxes; for Democrats, coveted entitlement programs such as the national pension scheme and subsidised healthcare for seniors.
The US has racked up debts of more than $US14 trillion, roughly equal to its gross domestic product, and the trajectory portends fiscal disaster.
Without painful remedial action, the debt is expected to climb beyond $US20 trillion within five years, and hit $US25 trillion by 2021, just as the US is facing unprecedented challenges that threaten its global economic standing.
Clinton, for all that he didn’t know what to do with a really good cigar, left the country with a budget surplus. The US still had debt of course, but at least it wasn’t running up lots more. Two fiscally irresponsible spendthrifts later and there are suggestions that the US, the world’s largest economy, may have to default.
Has that even happened before? And what might that mean for other countries whose debts are proportionately even larger?
Is from Michael Pascoe, who is described as “one of Australia’s most respected finance commentators”, although back in January I called him names for saying the Queensland floods provided an economic stimulus and thus giving a good example of the broken window fallacy at work. And while I’m not sure about some of what he says about events in Greece here I can’t argue with this:
… we tend to only do as much as we need to do. If governments are so hopelessly inept and short-sighted as to generously pay people for not working, many people will not work.
And of course Greece is not the only place where that point is becoming increasingly relevant, eh?
It was less than 48 hours ago that I was sitting here abusing the Cobbleition for being as bad a bunch of bastards as Labour was because, like Labour, they’re sticking the details of innocent people into a police database. Now I’m going to have to do it again.
This is Chancer of the Exchequer George Osborne speaking in 2006 on the then Chancer Snot Muncher McDoom’s decision to impose a stealth tax on private pensions shortly after Labour came to power nine years earlier.
George Osborne, the shadow chancellor, said: “Gordon Brown’s pension raid was one of his first and worst acts as Chancellor. Pensioners will be paying a heavy price for many, many years to come.”
So I’m looking forward to hearing what he has to say to justify this news:
George Osborne, the Chancellor, is considering a £7 billion “raid” on middle-class pensions perks.
Discussions have begun at the Treasury over the move which would see the axing of tax relief currently paid out on pension contributions by people who pay income tax at the higher rates of 40 per cent and 50 per cent.
[…] The Sunday Telegraph understands that the plans for ending so-called “higher-rate” relief have restarted as Mr Osborne targets immediate cash flow savings as easy “wins”.
Some Conservative MPs expect the axing of higher-rate relief to be merely the first stage in a more extensive and radical plan which would end up with all tax relief – including on contributions made by people paying the basic 20p rate of income tax – being abolished, saving £22 billion a year in total.
So, Gordon took £5 billion a year and it was, according to The Boy George, one of his worst acts as Chancer and one for which pensioners would pay for years to come, and now the hypocritical shit is thinking about taking £7 billion – which is more or less exactly the same fucking amount after adjusting for inflation (38% since 97). Like I said, I’m looking forward to hearing how Georgie justifies this. I mean, what the fuck is he thinking of by even considering it? I know the country has money problems, thanks in no small part for the profligate spunking away of other people’s money by the aforementioned connoisseur of nasal effluence, but you know what, George? You could try maybe spending less fucking money instead. The Telegraph even tells you how.
Saving £7 billion a year would be the equivalent of axing three government departments – Energy and Climate Change, whose budget is £2.9 billion a year, Environment Food and Rural Affairs, also £2.9 billion, and Culture, Media and Sport, (£1.5 billion).
Depending on your point of view one of those departments has a track record of incompetence that would have seen it chopped long ago had it been in the private sector, another appears to be so busy plotting Britain’s economic destruction that it can only save a fortune in the long run by abolishing it now, and the third appears not to be a fucking government function anyway. Alternatively you could make the supposed bonfire of the QUANGOs into an actual fucking bonfire by getting rid of the fucking lot, rather than the entry level Foreman Grill of the QUANGOs that still left billions being spent on rent seekers and time waster. And the EU, oh George, do we even need to go over yet again how much money Britain’s membership of this Debt of the Month Club is costing everyone in the country? It’s not even just the regular annual cost these days but the additional costs of the bailouts and loans to other member nations whose creditworthiness is considered too risky for them to be able to borrow money from the usual sources.
Lots of options, George, but the one that seems to find most favour at the moment involves screwing yet more money out of Britain’s dwindling stock of economically productive citizens. That you’re going for the well off, people who’ve on salaries far larger than I’ve ever been lucky enough to earn, is neither here nor there. The message is coming through loud and clear, George: if you’re a high earner you’re better off not earning it in Britain, because the government is eyeing your fucking wallets again. Once again I’m singing the same depressing chorus – it’s like Labour never really went away, isn’t it?
Fucking exactly like it.
And the devious, hypocritical, tax-happy, thieving shower of cunts call themselves Conservatives? Bwahahahahahahahahahahahahahahahahahahahahahahahahahaha!
Well, not quite since it’s not quite being ignored completely, but since what there is in the news seems to be a couple of short articles linked on the home pages of the Teletubbygraph (near the top) and the Daily Wail (almost at the very bottom and behind an awful lot of guff about slebs), and as far as I could see bugger all on the Beeb, Indie, Grauniad, Express, Metro, Standard, Mirror or Sun, where it’s being spoken of at all it’s in pretty bloody hushed tones. Yes, of course these few protestors were in much smaller numbers than the thousands who turned out to complain that they might not be able to suck quite so freely at the tax tit as they have over the last decade or so, and they weren’t complaining about the loss of things that everybody likes to think of as free but in reality are simply paid for in advance through tax or in arrears through the national debt and, perhaps most importantly, they weren’t smashing anything up. But they were protesting about the very large national debt elephant in the room, an elephant that has now grown so big that even some socialists are getting worried enough to call it a crisis.
[…] we will have to find conservatively £1.1 trillion over the next five years! 33% of our debt is held by foreign governments contrary to what some in the labour movement have been saying.
The government is going to cut £83bn over five years which is 9% of the £1.1 trillion we have to find over the next five years. This is based on optimistic estimates about the economy. The government and city economists have got this wrong consistently over the last three years. […]
Be wary of those who say the debt is not a problem and that has been bigger in the past. There is a very good reason for that as we have spelled out above. It is likely with the cuts and reduced growth they bring on will mean at some time we will have go to the IMF. Their cuts as a condition for loans will be much tougher.
We have to show that we are facing a crisis – which the coalition is walking blindly into it. But we have to build an alternative solution that does not mean we pay for a crisis made by the bankers, governments and the wealthy.
When socialists say that, even if they can’t resist finishing with a jealous dig at the wealthy and the banks, you have to recognise that the country is well and truly in the shit. And it’s worth pointing out that while accusing everyone else of understating the scale of the problem they themselves are using on the headline figure of a trillion given by the ONS for the national debt, rather than the ONS estimate of around four trillion once all the off book liabilities are included.
Okay, so let’s list all the ways out of it.
- Tax more
- Spend less
- That’s it
Now the first of those carries with it some problems. The first is that of any government’s tax base the poorest have virtually no ability to pay more while the wealthiest, the people who can most afford more tax, have the ability to get out of the country with all or most of their money. That leaves the bulk of the burden of taxing the government’s way out of debt to fall on everyone in the middle, the ones who aren’t wealthy enough to do a runner easily but aren’t poor either – though they fucking well will be before long. The second problem is that when the government owes so much – something like 60% of GDP at the lower national debt figure of a trillion pounds, and well over double GDP at the higher estimate of four trillion – even squeezing the middle income earners might not be enough, especially when it’s still spending at a rate of nearly £700 billion a year and rising while only raising a bit over £600 billion in taxes. The third problem is that those middle income earners form quite a large group of voters and may balk at the idea of having to stump up £100 billion just to stop things getting worse, and much much more if the government seriously wants to begin paying off the excesses of its predecessors. The final problem is that sucking yet more money out of the economy hurts. Every pound taken from a company is a pound that it can’t spend on things that would grow its business – which could have created new jobs – while every pound taken from an individual is money they can’t spend in the shops, save for their future or buy shares in a company that might grow and create more jobs and wealth if it can just get some more investment.
Spending less is vastly simpler and really has only one major problem: as well as the millions of middle income earners who have to pay both for public spending and the debt Britain has millions of public spending junkies too, and they really don’t want the money taps turned off. In fact they so desperately don’t want the taps turned off that thousands of them are prepared to go to London to demand still more of other people’s money and throw things through other people’s windows.
And this could have been used by the media as an illustration of Britain’s financial problems: that so many more protested about the cuts than went to complain about the real lack of cuts suggests that there are far more receivers of government largesse than contributors to the funding of it, though of course many of the latter may have been working – they have tax bills to pay after all. Instead you might not have noticed that any protest in favour of more cuts even happened at all if you weren’t looking out for it, and so the UK’s enormous and increasing debt elephant continues to wander around the room almost completely unremarked by most of the country and largely so by the media.
However, aside from those two papers that ran articles on the Rally Against Debt I did notice something in The Sun that demonstrates pretty clearly why the Rally Against Debt was and is so necessary: as a result of cost cutting the DoT is having to hire more staff. Apparently, and almost straight out of a Yes Minister plot, they didn’t realise they needed more until it came time to start laying off the ones they’ve got.
And it’s this kind of lunacy that has fucked Britain.
UPDATE – further evidence of lunacy, if any were needed, was the Mainly Fail’s take on it.
[…] at a protest opposite the Houses of Parliament today, it was a much more sedate affair, with a paltry 350 people showing up.
But the motives behind the protest may go some way to explaining why it was so poorly attended.
Rather than demonstrating against spending cuts – which are leading to many people across the country losing their jobs – today’s event was held IN SUPPORT of them.ers-gather-outside-Parliament-demand-MORE-cuts–unsurprisingly-350-showed-up.html#ixzz1MPCjJb1E
Jesus fucking Christ with a begging bowl, there was a time when the Mail would have been tearing into the fantasy that cuts inevitably mean losses of real jobs rather than the vast numbers of make-work positions that have been created over the last ten to fifteen years. I’ve hinted at this before but I shall now be very blunt about it: if as a result of this very half hearted attempt at austerity measures so much as one teacher, nurse, doctor, firefighter, copper, binman or member of the armed forces loses their job it can only be because at least one chair polishing, paper shuffling, over compensated, parasitic cunt has kept theirs. The Mail, rather strangely for something that’s occasionally accused of being a righty rag, does not make this point. Meanwhile the Tele, who were more neutral, have moved the link off the home page since I blogged this.
The lame-stream media’s under-reporting of the Rally Against Debt and their inability to understand the need for it really does speak volumes about where the UK is headed. It will be very cold comfort to those who turned up (I admit that from ten thousand miles away I could only be there in spirit – I’m not wealthy enough to be able to hop on a plane for a short visit and my views on flying should be well known to both my readers) if all they achieve is to be able to point out that they warned everyone back in May 2011 when Britain is where Greece is now and say “We told you so” . On the other hand, at least Old Holborn got his
face mask in the papers again.
No, he’s not a zombie, but we’re still spending ridiculous sums of money fighting the war on a vague sense of unease and it’s clear from statements made by Obama, Cameramong and others in the last day and a half that finally having slotted Bin Laden doesn’t mean bringing back soldiers or winding down on the security theatre. If anything, they tell us, it means the opposite because of the desire of the wild-eyed religioloons to avenge Bin Laden’s death, itself an act of vengeance for 9/11 which in turn, according to some of the loons, was an act of revenge for occupation of Muslim lands, itself a reaction to one lot invading another lot and the constant threat of almost everyone there to wipe Israel off the map or words to that effect.
Now I’m not going to go all bleeding heart on you and say things like an eye for an eye means we all end up blind. There may be something in that but while thinking about this latest concern over possible revenge of revenge of revenge something quite different occurred to me. As I mentioned the other day, our act of revenge has cost well over a trillion dollars, taken nearly a decade and indirectly cost the lives of more than twice as many as were killed in the atrocity we’ve been trying to avenge. Some might say that turning fewer than 3,000 dead into more than 9,000 is, in hindsight, a good enough reason to stop, but it’s not the only one. Look again at the money – more than $300 million a day.
This isn’t about putting a dollar value on the lives of those who died on September 11th 2001 because it can’t be done and would be distasteful even to try. However, revenge cannot come at any price for one very simple reason. Each act of terrorism or even the threat of it is relatively cheap, but if each act of revenge is even a tenth as costly as getting Bin Liner has proven to be then before long we in the West, the ‘free’ countries, will bankrupt ourselves. And the horrible thought that occurred to me last night was this: maybe that was the plan all along.
Seriously, have a think about it. Did the West beat the Soviet Union in a gunfight? No, it just outspent it. Various things made this possible, not least of which was free(ish) markets and an absence of five year plans made it easier to make the money, and of course there were other things besides the Soviet economy involved, but they were provoked into spending more than they should faster than they should have. Bin Laden, whatever else he was, wasn’t stupid. Couldn’t it have occurred to the bastard to try the same thing with us, to wound pride cheaply but deeply in the hope of an expensive and drawn out response? I’m not the only one to think so (from the Ludwig von Mises blog):
Mises wrote, “No foreign aggressor can destroy capitalist civilization if it does not destroy itself.” [implying] that the sole way a foreign aggressor can contribute toward capitalist civilization’s destruction is to goad it into destroying itself.
That was what Osama Bin Laden was trying to do all along. And the war party (along with its enablers at the Fed) has been playing right into his hands. Even now that Bin Laden is dead, they have given every indication that they will continue to do so.
From the Washington Post:
Did Osama bin Laden win? No. Did he succeed? Well, America is still standing, and he isn’t. So why, when I called Daveed Gartenstein-Ross, a counterterrorism expert who specializes in al-Qaeda, did he tell me that “bin Laden has been enormously successful”? There’s no caliphate. There’s no sweeping sharia law. Didn’t we win this one in a clean knockout?
Apparently not. Bin Laden, according to Gartenstein-Ross, had a strategy that we never bothered to understand, and thus that we never bothered to defend against. What he really wanted to do — and, more to the point, what he thought he could do — was bankrupt the United States of America. […]
The campaign taught bin Laden a lot. For one thing, superpowers fall because their economies crumble, not because they’re beaten on the battlefield. For another, superpowers are so allergic to losing that they’ll bankrupt themselves trying to conquer a mass of rocks and sand. This was bin Laden’s plan for the United States, too.
On Monday I said that despite everything, especially despite being dead, Bin Laden was technically still ahead on points, though when I said it I was really only thinking how he managed to hurt our liberty just by tempting our governments to take it away from us and – oh, the irony – keep it locked up for safety. Now I wonder if he isn’t even further ahead than I’d thought. I suppose the answer depends on for how much longer the US can and wants to carry on spending 300 million dollars a day.
Further to yesterday’s post about the Cobbleition spending yet more money the UK hasn’t got, I see this:
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For one thing, while Cameramong’s call for austerity is no bad thing it’s somewhat undermined by the sums of money the Cobbleition are continuing to spunk away. For another the EU’s track record of financial probity is not exactly golden, is it? When was the last time the auditors were willing to sign the books? Yes, exactly, I had to look it up too because it’s been so long – sixteen consecutive years now. And I’m sure part of the reason is because of things like this:
Audits of EU funded projects for 2009 found “quantifiable errors” affecting £9.5billion of spending, with “non-respect of public procurement rules” calling into question contracts worth £4billion.
Nine out of 10 audited road building projects across the EU were identified as proceeding with “unlawful use of award criteria” despite the breach of rules being detected before contracts were paid.
It’d be nice to think Cameramong will tell them to go piss up a rope on a windy day but I wouldn’t bet on it. Oh, what the fuck, it’s only money after all. Have some more, why don’t you, you loathsome shower of troughing bastards. But please try to remember one thing:
IT’S NOT YOUR FUCKING MONEY!
Well, they must have if they’re still spending more than £11 billion on foreign aid including £800 million to India, which despite a lot of poverty is a growing economy with a nuclear weapons program and a space program, and can now afford even more money not only for a gunfight in Libya but for aid there as well. I’ve no idea where they found the money but my hat’s off to them.
Browsing through Wikipedia looking for something else (can’t remember what) I came across this map which distorts countries areas according to their per capita contributions to or subsidies from the European Union.
Offered without comment. There’s really none necessary, is there?
Via Thoughts On Freedom I see that Britain’s position on the Heritage Foundation’s 2011 list of countries ranked by economic freedom is a comparatively lowly 16. And in all fairness to the massive foreheaded prick Cameramong, and though I can’t see much sign of him doing anything to change it, it’s too early to blame him for this. Tony? Gordon? This is on you.
A dramatic expansion of government intervention has taken place in the U.K. in response to the global financial and economic crisis. The government has nationalized or seized ownership positions in some of the major banks. Public finance has deteriorated markedly. Welfare benefits have become a daunting burden. The government deficit has widened sharply, and gross public debt has climbed to over 70 percent of GDP.
The U.K. has a high income tax rate and a moderate corporate tax rate.
Government spending has risen steadily since the 1990s. In the most recent year, total government expenditures, including consumption and transfer payments, climbed to 47.3 percent of GDP. Fiscal stimulus measuring 2 percent of GDP has aggravated the deficit and national debt.
Mind you, they make some absolute howlers so there’s room to doubt their accuracy.
The U.K. has long had an efficient regulatory framework.
Ahahahahahahahahahahahahahahahahahaha. Oh, but then there’s this.
Corruption is perceived as minimal.
Ahahahahahahahahahahahahahahaha. Oh God, I may need medical attention.
Tony? Gordon? This is your work, you worthless wastes of pig feed. And Dave, for fuck’s sake wake up and stop carrying on their “good” work. What the fuck did Britain do to deserve these bastards, eh? Oh yeah, that’s right. Millions voted for them, didn’t they?
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Jesus H Christ with an abacus, were you fucking like this back in the 90s when you were Chance
llor of the fucking Exchequer? Were you this innumerate, Ken? You Cobbleition fuckmonkeys are spending more this year than Labour spent last year. The only difference is that you are increasing spending at a slower rate than your predecessors, the key word there being ‘increasing’. Because an increase is not a cut, d’you see? So unless you’re just saying this in the hope of giving Polly Toynbee an aneurism, and to be fair that’s actually not a bad reason, and really you’re quite aware that spending is going up rather than down, I’ll ask the question yet again:
What fucking cuts?
It comes to something when even pollies from the so-called party of business think spending ever increasing amounts of someone else’s money can ever qualify as a cut. Profligate fucking twat.