Cameron and Brown Share a Common Policy... But Neither Realise It

Cameron and Brown go on blasting away about the National Insurance increase without actually listening to each other.      If they did,  they might realise their supposedly opposite policies, are actually the same in effect.    Permit me to illustrate.

Cameron berates Brown for "wasting £6Bn" which he doesn't need to, and for planning an N.I increase next year which he calls a "jobs tax".     And Brown rips into Cameron,  claiming that to "take £6Bn out of the economy"  would be the worst thing to do before the recovery is sound. 

But Brown is mis-describing mercilessly  (innocently I think).    For, with regard to "taking money out of the economy",  that  is exactly what  taxing the populus with the extra 1% on National Insurance,  is.  Tax takes money from the economy to pay for government.    So he's describing the exact opposite of what would happen if a new Tory government cancelled his 1% tax rise:    rather than "taking £6Bn out",   that £6Bn would be left within the (commercial) economy.      

What he means to say of course, but fails to,  is it would take the £6Bn out of government funds  - which he wants to re-spend inside the economy.

Equally though,  Cameron is mis-describing :  he implies that cancelling the N.I. tax increase next year if he comes to power,  would somehow "ease" the load on businesses by not adding to 'jobs taxes'  -   but the difference is,  he  won't  spend that money back into the economy from government (because he is so adamant that we must cut the budget defecit more quickly),  while Gordon would.

This shows that both of these two policies would in fact have the same net effect.     Cameron wouldn't take the £6Bn in extra tax,  but wouldn't spend it back in the economy either;   and Brown would take the extra tax,  but would re-spend it all back on public services. 

So, despite their protestations that they are so different,  this particular sample of policy would produce results not a jot different from one another.   

One thing is sure - those spin-doctors of theirs obviously do think we're all stupid. 

AT LAST...... Someone Points the Finger at the Ratings Agencies

AT LAST.....   when the financial crisis bit us all in the backside, and the documentary programmes started to be made,  one massive truth seemed to emerge.   Among all the greed and double-dealing that doubtless went on in the banks, one big, unmentioned fact seemed to be lurking in the background, particularly in relation to how otherwise uninvolved financial institutions were dragged into buying these "repackaged" mortgage-debt instrument, CDOs.  

The Credit Ratings Agencies.    Standard & Poor and Moodys being the best known, these are the outfits whose job it was to "grade" the risk of all those obsure investment products.  But they seemed to have run out of labels - except for "AAA".   

http://news.bbc.co.uk/1/hi/business/8639224.stm

Conservatives reveal their 'Big Stick' to beat Sun Readers with

This week the Conservatives revealed their 'Big Stick'  -  and with it, the truth about where they're going to cut all those needed billions from,  among Government spending.

First sign I saw of it, was seemingly a Conservative PR Tweet (Twitter is just a PR machine, after all).   At first I thought it was a spoof : surely the Cons were not being so crude ?   But yes - they were - and are -  and a few clicks over to their blue blog on the Conservative website, and there was their own press release for it - this is it verbatim:
"This new poster underlines our positive agenda for welfare reform - http://twitpic.com/1h3db6     10:54 AM Apr 20th  via Echofon"  

And there too was Theresa May banging on about all those terrible welfare dependents too : 
http://blog.conservatives.com/index.php/2010/04/20/we-need-to-tackle-welfare-dependency/

Well blow me down.   So the Tories are going to slash and burn in the welfare budget..  no big surprise really.  

It was always clear that all the parties would have some serious cost-cutting up their sleeve : and we're not surprised that no political party wanted to show their cards in that area before the election.    And with the Tories,  you just knew they wouldn't funk it: they would have some serious cuts in mind.

 
Now no-one would dispute that we do have some perfectly fit,  but yet work-shy people lolling around in this country..   just pop into the betting shop or a high street pub at ten to eleven on a Tuesday morning, and see who's propping up the bar.    Not retired folk, that's for sure.   And no-one would dispute that at a running cost - the UK welfare budget - of  £170,000,000,000 a year at the moment  - one-third of all government spending, or about  £500 million per day (yes, per day)  -  that there is doubtless some fat to be cut off.

But these are going to be sorely painful cuts,  and some of them will fall on people who thought the Tories were their natural political choice: all those Sun readers for example.   So why did the Tories admit it so openly before the election ?  

What makes me smile is that Boris Johnson made a joking reference at the start of the campaign to the Tories being misunderstood - saying in so many words that   "... after all [we're] not a load of boss-eyed maniacs  ...  seeking to grind the face of the poor into the dirt....".   

Only the Lib Dems give their figures... and even they are still £157,000,000,000 short

Yesterday the Liberal Democrats released their manifesto in the UK general election and were the first to put their figures in the back.

But, like the Conservatives and Labour,  the only actual contribution that they show,  to the cutting of our enormous Government spending defecit of £167Bn,  is around a flat £10Bn a year, from next year. 

They offer to raise the threshold of personal tax to £10,000  -  but that costs a staggering £17Bn in itself.  So, dutifully, they scrape up an odd £17Bn to pay for that from a mix of some cuts and from some tax increases.

Then over the page, they set out their "Savings".   But look all down this list, and you'll find about £10Bn saved - next year, not this - and then about the same for four more years ahead.   But this defecit of ours is an annual committment - we're not short £167Bn once, we're short that much every year.   So saving an odd ten off the top is good,  but barely a fifteenth of the pain we'll need to inflict to solve this problem eventually.

This is the problem with all three parties.   None of them can bear to show us the true horror of that much cash needing to be saved.   In truth, since the gap is around £170Bn now and annual government spending is around £700Bn,  we need to somehow reduce the cost of government by around 25%.   Yes 25%.  A quarter.   Or, to split it between taxes and expenditures,  we need to raise tax revenues by at least 10-12% and cut spending by at least 10-12%.   But that is still massive on both sides of the equation.   And none of them will explain any of this. 

Will we find out more in the third (economy-focussed) TV debate ?   I doubt it.