“We need to redistribute wealth”

No, that is exactly what we do not need to do. Society is based upon a person’s right to the product of their labours (or their ancestor’s labour) and thus the state has no right to take it away.Wealthy people create growth opportunities for society. Only those with a large amount of capital can start up or expand new businesses. If they didn’t exist the economy would not grow as fast and the jobs would not exist at the lower end of the scale.

If you say to the uber-wealthy that you will tax them in such a way as to “punish” them for earning too much money, they will simply go elsewhere to a country with a more enlightened tax structure. The country then loses access to their investment capital and the jobs this creates.

I happen to agree with you in the case of soccer players – grossly overpaid morons who produce nothing of any value whatsoever in my opinion. It has been pointed out to me, that they do “earn” what they are paid in the sense that by playing for a team, that team makes more money from the supporters who buy tickets, pay to watch them on TV or buy replica kit.

@ Sevillista

“But if you are against ID cards, you are choking off a key potential area for more Government efficiency.”

I am not against efficiency, except where it means more efficient meddling and fascist intrusions into a persons right to privacy. ID Cards is about control and centralisation of power. I can see the benefits (one piece of plastic to carry around etc.) but the dangers associated with them are too great.

And no, I do not have a club-card or credit card. My oyster cards (I have three) are all unregistered and I swap them around and my mobile phone has an old SIM that was never registered with my name and address.

And that’s fair enough, as I said.

Just don’t be moaning about public sector workers asking you for the same information 10 times and being highly inefficient by having to ask the same questions and process the same information and receive the same documentation 10 times.

I’m sure your liberty concerns mean that you don’t have a Clubcard, mobile phone, oyster card and credit card too.

Not so mobile when they’re under house arrest in Dubai, though. It seemed like such a good idea, as well…

But surely it is possible for ID cards to be an efficiency saving and service quality improvement in the medium-term?

Currently there is:
a) A lot of duplication of collecting and processing data
b) A lot of time spent attempting to share data between Government due to Data Protection laws
c) Difficulty to track people through the system, leading to absent parents disappearing and not paying maintenance, fraud etc
d) A lot of pain for citizens who get asked for the same information several time by Government

Provided the potential staff cuts (though more efficient data collection), fraud cuts, service improvements are made, then doesn’t that begin to make ID cards sound like they have good points?

There are of course the liberty, Data Protection, and IT Project Risk associated with the project on the flip side.

But if you are against ID cards, you are choking off a key potential area for more Government efficiency. A fair choice – but no whinging about public sector duplication if you make that choice. You would be preferring the inefficiency to the reduction in liberty.

What if the cuts were to include the following:

Scrapping Trident
Scrapping ID cards
Scrapping NHS Connecting for Health

What about those kinds of cuts? They would save many billions. And anyone whose job depends on ID cards deserves to lose it.

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/04/shrink-the-state-a-leftist-aim.html

(NB the top 1% are rather mobile you know!)

It was curious then to read this line in Tuesday’s The Times:

“Mr King’s statements pushed the price of two-year British government bonds to their highest ever level.”
http://business.timesonline.co.uk/tol/business/economics/article6835005.ece

But the analysis goes on and becomes technical and more complicated. A fiscal surplus would have somewhat depressed aggregate demand and the Monetary Policy Committee of the Bank of England would therefore have had less need to raise interest rates to meet its inflation target at the time.

Other things equal, with lower interest rates, there would have been a greater market demand for mortgages and the house-price bubble would have been even greater in the absence of contra-cyclical measures to curb bank lending – as there were not.

There is no obvious and uncomplicated story line about admonishing the government for not tightening its fiscal stance in the early part of the present decade. The story needs to cover also the controversial issues of whether the Bank of England – and, for that matter, the US Federal Reserve Bank too – ought to have taken account of asset price bubbles in setting interest rates, not just consumer price indices.

“American house prices rose 124% between 1997 and 2006, while the Standard & Poor’s 500 index fell by 8%; half of US growth in 2005 was house-related. In the UK, house prices increased by 97% in the same period, while the FTSE 100 fell by 10%.”
Robert Skidelsky: Keynes – The Return of the Master (Allen Lane 2009) p.5.

I regard GB as partly to blame for where we are by allowing the house-price bubble to continue to inflate and the mountain of consumer debt (£1.4 trillion) to grow.

Those are sure indications that interest rates were held too low for too long as a result of GB changing the BoE’s inflation target in December 2003 – against the advice of the BoE – from 2½% at the old RPIX, which includes mortgage repayments for house purchase, to 2% by the CPI, which doesn’t include mortgage repayments or any element relating to house prices. The change in indices was made effective in February 2004.

Charles Goodhart was warning about the house-price bubble in Britain back in 2002:

“CHARLES GOODHART, a former member of the Bank of England’s monetary policy committee, warned yesterday that the Bank is failing to take sufficient account of the house price boom in setting interest rates.

“His warning comes amid growing fears among economists that house prices, fuelled by the lowest interest rates for 38 years, are getting out of control. Yesterday, new figures showed that homeowners are borrowing record amounts against the rising value of their homes. . . ”
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2002/04/06/cngood06.xml

The challenge for the government was, of course, that house-price bubbles are very popular with house-owners and in those times, the Conservatives kept chuntering on about the costs of business Red Tape and calling for more Deregulation.

This ONS chart shows how the CPI and RPIX indices have diverged in recent years:
http://www.statistics.gov.uk/CCI/nugget.asp?ID=19

For a brief guide to these price indicesand their differences, try this:
http://www.statistics.gov.uk/downloads/theme_economy/CPI-briefguide.pdf

A blanket pay freeze does seem to me to be a bit unfair. I would go for CPI linked pay rise upto say 25k. Half that upto say 35k. Freezes upto say 60k and cuts of increasing severity above that. Obviously I’m just jotting, but you get the general idea I’m sure.

Not only the Tories. While they’re clearly the worst offenders, the Lib Dems have gone further than ID cards/Trident too, in calling for a public sector pay freeze.

That’s an easy thing to call for – public sector workers don’t exactly get a lot of sympathy at the best of times – but actually there are plenty of public sector workers who are on very low wages and not to raise their wages at least in line with shopping-basket inflation is wrong.

It also hasn’t been thought out particularly well as there are lots of councils still negotiating Local Pay Reviews to fulfil the obligation to move towards Single Status Pay & presumably a wage freeze would also stop councils from signing (or at least implementing) those deals. Again, it’s those on low-incomes that tend to benefit the most from those agreements.

There’s plenty to be saved without going anywhere near anything that could possibly be described as a service.

Not denying that cutting several projects like Trident, identity cards etc would be a good idea. But the Tories are going a lot further.

Except – of course – it pins the blame for the current fiscal position on “profligate pre-crisis spending” (in which – let us remember – the Government stuck with their Golden Rules, only increased government spending by a couple of % of GDP, and left debt lower as a % of GDP than in 1997) rather than irresponsible, inefficient and irrational (at least from the point of view of their organisations rather than pure self-interest) behaviour of those in investment banks.

If he cared to turn his attention to countries abroad he would find a similar impact on debt, similar fiscal problems to resolve over the next decade and higher debt as a % of GDP than the UK.

It’s a mighty elephant.

http://blogs.ft.com/maverecon/2009/04/darling-is-doing-his-best-to-clean-up-browns-mess/

It is the best summary of the UKs fiscal position I’ve read. It’s actually quite complimentary to Alistair Darling. Buiter is absolutely savage in respect of Gordon Brown.

And Brown deserves it.

In case anyone is interested in unemployment, it should be noted that since the point of maximum private sector employment (2008 Q2), through to 2009 Q2 917,000 private sector jobs had been lost but public sector employment went up 283,000. Talk about using taxpayers money to hide away from the stats. Still, it’s only a few billion pounds. Well worth it if Gordon can keep unemployment below the Tories, eh?

@12 – though you might judge trends in relative productivity by trends in relative exam results…!

And relative inputs aren’t important?

Bring it on – I’m quite confident that if you compared private education to state education using the same methodology as the ONS Productivity Data (which Mr Prick and other right-wingers love to use as a stick to beat the public sector with) you wouldn’t like the results (public sector more productive, productivity decreased faster in private sector would be my guess).

Why doesn’t the TPA do this? Are they scared of having a debate with real facts in?

You know Keynes was quite keen on both sides of his argument…a surplus in the good times to call upon in the bad.

The fact that some other countries are in a worse position is not a strong argument for us to join them.

http://blogs.ft.com/maverecon/2009/06/fiscal-options-for-the-uk-sovereign-insolvency-inflation-or-serious-fiscal-pain/

http://blogs.ft.com/maverecon/2009/04/darling-is-doing-his-best-to-clean-up-browns-mess/