If politicians are allowed to print money to cheat the system, why are we not? Over the past 50 years, it seems as though people have forgotten how economies function. Some economies do well and prosper, some economies do badly and fail. If it fails, the politicians must answer to their citizens why they got it wrong and they should be accountable for their actions.
If this natural process is interrupted by printing money from thin air to postpone an upcoming crisis then no one learns the lesson. Here are some examples of how money in circulation has increased dramatically over the past 30 odd years:
and some fun cartoons:
UK debt reached £1,377bn in Q1 2013. Just think about that number for a second. Actually, its difficult to imagine a number like this in our heads because it is simply too large to compute. With debt forecast to reach 99% GDP by 2014, when will labour, conservatives and liberal democrats admit that government spending has not been cut by enough.
Here is UK debt in euros:
As you can see we are catching up with France and Germany on total debt. What about debt as a percentage of GDP?
As you can see our debt is spiraling out of control like it is for many of the eurozone countries.
On the face of it, VAT is actually the fairest type of tax. This is because its a flat tax that treats everyone equal and does not punish those who are successful like income tax. However, VAT is still a tax which gives government more money to spend. I feel the the UK VAT of 20% is very high and it drives a wedge between pre-tax income and post-tax consumption.
Sorry for yet another obama cartoon, but he is trying to implement a VAT tax in america.
Take a look at this graph from the office of national statistics:
Firstly, it shows how volatile the construction sector is in the UK. Secondly it shows that the UK services industry is booming while production has never really recovered from the crash.
The production side of the economy is directly effected by regulation and taxes, where as the services industry is propped up by government spending. The more the government spends, the more it has to tax. High taxes stifle growth in the production side of the economy and this reduces output. If our output is reduced the country suffers from a trade deficit and a budget deficit. The most effective way of reducing both is to produce more than you buy.
EU red tape is also having a massive impact on our productive sector and churns out new legislation every week.
Obama, Cameron and Milliband are all the same
It seems like a long time ago now, but back in 2012, Manchester airport did a trial run of full body X-ray scanners, which were funded by the EU to increase airport security. I know security in airports is important, but at the time I thought they went too far. My partner, who is a qualified radiographer here in the UK, said to me “I bet those scanners don’t abide by the Ionising radiation regulation 1999”.
Low and behold she was right, it was in fact someone she knew who was going on holiday through the airport that very week who happened to be a top dog in the field of radiation protection contacted the airport and they immediately took the scanners down.
What the underlying message of this story describes, is how far the state will go for your ‘protection’ in your best interest, even though you have not been asked personally whether you agree with the technology or not.
Anyway, in all cases, cartoon obama is best at describing these things.
What most people don’t understand is the fundamental effect the minimum wage has on the job market, particularly for young people.
If you increase the minimum wage, companies who wanted to hire workers can now only afford to hire fewer than they intended. Thus helping to create a void in the job market. The question is simple, would you rather have less people in work earning a good wage, or more people in work earning an OK wage? After all, the workforce of a country is its main source of productivity/prosperity.
I’ve just found this great MATT cartoon/drawing which relates to my older post about bailing out the euro, which I explained (with the help of Dan Hannan) is actually illegal. It was published in the Telegraph soon after Lady Thatchers passing.