The problem is where there is a total lack of vision, morality and responsibility with the ConDems. The UK is drifting into a very awkward financial position within the next 5 years. Their deficit target is currently 25% over budget for this financial year and they are taking soundings with the bond markets at the moment on kicking the balanced budget 'can' even further down the road. This seems to kicked by a year or more every year! The problem if they do, before it has been balanced books the dept will be over 90%+ of GDP which is where it becomes unaffordable. The only temporary 'can' kicking way out of this mess then is lots and lots of QE to fund Government spending and to keep a false low interest rate bond market. The end result very high 15%+ inflation (maybe even hyper-inflation), which cripples industry, pensioners, savers and anybody else on a fixed income. Time to dust the Glam rock and punk records off as it will be the 1970's all over again, not to mention needing a loan from the IMF, if the French socialist in charge has any left, where it will have probably all have been
wasted spent in King Canute style on trying to save the Eurozone.
The problem with no growth the only way they can get the deficit under control is by raising taxes (which will make the current depression deeper and unemployment rate worse) or by making real cuts which they will never do and using the savings to make tax cuts, which will rebalance the economy towards the private sector and provide some much needed growth.
The current Thick Clegg tax the rich agenda is just a deluded fool at their worst. His cynical aim of getting more LibDem votes at the expense of the health of the country is sickening. What will start off as taxes for the very rich when they fail will then become taxes for middle incomes and finally for all. His only rational is not to ask if they should be legally robbing more money off us like the Sheriff of Nottingham to make us all even poorer serfs. With their current poll rating they are in desperation mode to steal anything off anybody as long as it feed their client voters.
Why is it guaranteed to fail? The Laffer curve. They are already on the wrong side of this for the top 30-40% of taxpayers. So more taxes will reduce revenue.
Now the top 1% earners in this country starts at about £150,000. Above £100,000, you have a 50% tax rate until your personal allowance is zero, which with employee NI is 62%. Then above £150k it is 45%. So there is not much room here for more tax rises as once you have taken off the tax you are left at the lower end with about £6500 a month or £1650 per week not exactly a fortune! Now this 1% also includes a few thousand very rich, so say they are taxed an extra £1m per year, that may raise a billion or two, but that will not compensate for the tax loss of the ones that leave the UK and would not make much of a dent on the £120bn annual deficit anyway! When the top rate of tax was 60%, top earners paid 11% of income tax, when it was reduced to 40% this increased to 24%! An example of the Laffer curve at work is the recent rise from 5% to 7% stamp duty on properties over £2m, which has reduced the tax take in this area by 30%.
So to stop the country hitting the rocks around 2017-2018 when the UK debts will be 90-100% of GDP, which then makes them unaffordable, it is absolutely criminal and a dereliction of duty that they are not cutting all discretionary spending like Overseas Aid to buy time to sort out the current economic mess. It is estimated by the Taxpayer Alliance that over £80bn is wasted every year. Getting to grips with this and Overeas Aid as an easy win, could buy up to 5 more years to sort the economic mess out. I think we may well look back on the current
bunch of idiots Government as being as bad as the last lot of charlatans who got us into this mess in the first place.
Author
Topic: Foreign Aid (Read 1369 times)