Monday 11 March 2013

11th March 2013

The thing is, a country is not a household in the sense that Mrs Thatcher argued.

In a household you have an income, the income has to be shared between various demands, somewhere to live, fuel to heat the living space, food to feed the inhabitants, perhaps a couple of shillings set aside for a rainy day and of course a funeral plan.

Its granny's tins on the mantle piece economics.

And if anything is left over a holiday would be nice and presents for the kids at Christmas.

In a country of course you have no income unless you raise it from the folk who live in the country. That is called taxation!

Then you spend it on things the folk who live in the country need, security, a bit of help when things aren't going well, educating the young and ensuring that the elderly don't starve or die of hypothermia.

So how do you  manage a countries affairs differently than a households?

Politicians of left and right are arguing until they are blue or red in the face, (or jaundiced like the lib dems)!

And of course the commentariat are offering their two penn'orth as well.

That we're in a fix is not at issue.

Whose fault it is, is part of the narrative that is being spun.

And Ukip of course blame johnny foreigner i.e. Europe and Immigration.

What could we do to improve matters given that after two (is it really only two?) years of austerity we are in fact deeper in debt than we were when Gordon Brown departed Downing Street.

Well, we are being advised by  the con-dems to do various things.

Welfare to work.

Make work, work, by reducing welfare, if welfare payments are lower than the lowest paid work, then folk will take a job! Obvious really! Especially obvious if you are a member of the Millionaire's cabinet.

There are two flaws in this thinking. There is a high percentage of people who are working and claiming benefits not because welfare pays to much but because work pays too little. The less people have in their pockets the less likely they are to buy luxury stuff so demand is stifled and fewer people are needed for manufacturing, so unemployment increases and more folk rely on benefits to keep body and soul together.

That is an unvirtuous circle.

The bedroom tax.

If you only need one room then you should only recieve enough in benefit to pay for one room, so we'll take some money off you, and whilst we're at it we'll decide how many rooms you need.

It's a bit like saying we live in a country that's too big for us so we'll move to a smaller country, which will be cheaper to run. It might be a bit small, we might have to share, but after all, so many people want to move here, perhaps we could rent it to them and move to the Isle of Man?

Spend less on security.

Let's reduce the Army, this is bad thinking! (less jobs for working class lads from Northern towns and cities = more benefit payments), let's reduce the policeforce and the prison service and hand over to Group 4, more bad thinking (think Olympic security fiasco and Clockwork Orange!).

Actually the best plan is not to replace Trident and use the expertise, skills and technology to make something useful like baby monitors and medical equipment.

Raise more money.

Well in my household if we need something we usually sell something or part exchange it to raise the cash.

Loads of people buy and sell their stuff on ebay, which is why the charity shops have little or nothing to sell.

So look around, what could we flog on ebay? There must be loads of stuff:  the Dome, the Olympic Park, the odd palace and castle, the National Trust, after all we sold the QE2, the Royal Yacht and Tower Bridge!

If we raised enough on ebay we could reduce the debt altogether.

Then we could plan to do three necessary things to help us over the long haul.

Make sure that there is a relationship between the top earners and the bottom. a factor of 20 is sometimes suggested.

So if I earn a hundred a week the CEO of a footsie 100 could expect 2000, not unreasonable.

Introduce flat rate income tax at a level that pays for what most reasonable folk need to remain secure and functioning in a post modern society and get rid of VAT, Corporation and Inheritance taxes.

Start making things that folk actually need, here in the UK so that when they decide to buy something the money stays home and doesn't go walkabout round the global shopping mall.

Lewis Carroll had it right, forget common sense, lets start imaging curious things before breakfast, we might all be better off.

No comments:

Post a Comment