Covid - 19

[Taffvalerowdy]

Taff......you are good with figures......no no not those figures!!

How much do you think our council tax bills will rise to pay for all this?Field hospitals,help for self employed etc etc etc

More likely that Central Government will be the means of paying off all this debt.

There are a few ways,

1) Austerity Mark 2 - although, it would be Super Austerity. Given that Boris did well Up North, and it would be political suicide to cut Services - particularly the NHS and Care - unlikely you go this way. But there will be some cuts in some areas.

2) Increase taxes. Not the Tory way, and given that a 1p or 2p rise in Income Tax would hit the working man/woman hardest, unlikely. Similarly, increasing the Top Rates would be political suicide.

3) Inflate the debt away - let inflation increase, wages up, prices up, Tax Revenues (in absolute terms) up

 

[55282]

Where has the money come from to pay for it? 1)

Where will the money come from to increase wages? 3)

Not wanting to sound negative but curious.

 

[Taffvalerowdy]

1) Borrowings
3) Let inflation loose

 

[aswan_dam]

All major countries in the world borrowing and spending billions or trillions of pounds. Who are they borrowing from?

I reckon it must be Gringotts in Harry Potter.

 

[aswan_dam]

Never understood economics.

 

[swantastic]

Quantitatively ease into a second world country we are steadily becoming anyway and spend it wisely while keeping labour the **** away from the pot that they will piss up the wall till it's empty again before handing it back to others to blame for thier piss poor performance ?

 

[55282]

1) Borrowings
3) Let inflation loose

So why was there no monies available to support the NHS,build new hospitals?
But there is now.

 

[Taffvalerowdy]

So why was there no monies available to support the NHS,build new hospitals?
But there is now.

Simple answer - politics ....... and the necessity of the present situation. 10 years ago, UK debt had grown exponentially so the decision was taken to prioritise cutting the debt. Now ‘bugger the debt’ we must spend what we have to - the ‘debt’ problem will be a problem for our children/grandchildren to resolve .....

 

[55282]

Simple answer - politics ....... and the necessity of the present situation. 10 years ago, UK debt had grown exponentially so the decision was taken to prioritise cutting the debt. Now ‘bugger the debt’ we must spend what we have to - the ‘debt’ problem will be a problem for our children/grandchildren to resolve .....

And the Tories looking for future votes?

 

[Taffvalerowdy]

And the Tories looking for future votes?

Don’t they always ..... (and Labour)

 

[aswan_dam]

So our children/grandchildren will now have to deal with global warming and massive coronavirus debt.

Good luck with all that.

 

[55282]

So our children/grandchildren will now have to deal with global warming and massive coronavirus debt.

Good luck with all that.

And BREXIT

 

[Taffvalerowdy]

So our children/grandchildren will now have to deal with global warming and massive coronavirus debt.

Good luck with all that.

Easy answer is to inflate the debt away ... let inflation run loose. If someone earns say £25,000 today, they’d pay c£2,500 in income tax. If in 3 years, with high inflation, they were earning £30,000, they’d pay c£3,500.

40% extra in tax from that one guy.

If Net cost of goods today is £10,000, VAT @20% means Total cost of goods = £12,000. VAT receipt for Government = £2,000

if in 3 years, the net cost of those same goods is £12,000, VAT @ 20% means total cost of goods = £14,400.
VAT receipt for Government = £2,400

20% extra from that one type of product.

The rates of Tax (be they Income Tax or VAT) are unchanged, yet a huge increase in a Tax take for the Government!

 

[Taffvalerowdy]

And BREXIT

..... another opportunity to raise funds for the Exchequer

 

[Matthew Bound Still Lurks]

I have got the right title for you Matt!!.......'The Skeptical Cyclist'.............

With good reason

https://www.amazon.com/dp/0816029091/?tag=not606-20

 

[DragonPhilljack]

All major countries in the world borrowing and spending billions or trillions of pounds. Who are they borrowing from?

I reckon it must be Gringotts in Harry Potter.

They are just printing money, there was a time when money was linked to gold reserves, but even the high street banks print money especially when they lend you a loan, you are then increasing their deposit holding, think they adjust the reserve requirement later, the reserve requirement is set by the Bank of England

 

[aswan_dam]

Easy answer is to inflate the debt away ... let inflation run loose. If someone earns say £25,000 today, they’d pay c£2,500 in income tax. If in 3 years, with high inflation, they were earning £30,000, they’d pay c£3,500.

40% extra in tax from that one guy.

If Net cost of goods today is £10,000, VAT @20% means Total cost of goods = £12,000. VAT receipt for Government = £2,000

if in 3 years, the net cost of those same goods is £12,000, VAT @ 20% means total cost of goods = £14,400.
VAT receipt for Government = £2,400

20% extra from that one type of product.

The rates of Tax (be they Income Tax or VAT) are unchanged, yet a huge increase in a Tax take for the Government!

Or...with more people unemployed, that's less people to tax and more unemployment benefit to pay out. (see USA). And with businesses not re-opening that's less revenue in corporation tax.

 

[55282]

Dougie Sharpe knew the score.

 

[aswan_dam]

They are just printing money, there was a time when money was linked to gold reserves, but even the high street banks print money especially when they lend you a loan, you are then increasing their deposit holding, think they adjust the reserve requirement later, the reserve requirement is set by the Bank of England

This is where I start getting lost...

 

[DragonPhilljack]

Easy answer is to inflate the debt away ... let inflation run loose. If someone earns say £25,000 today, they’d pay c£2,500 in income tax. If in 3 years, with high inflation, they were earning £30,000, they’d pay c£3,500.

40% extra in tax from that one guy.

If Net cost of goods today is £10,000, VAT @20% means Total cost of goods = £12,000. VAT receipt for Government = £2,000

if in 3 years, the net cost of those same goods is £12,000, VAT @ 20% means total cost of goods = £14,400.
VAT receipt for Government = £2,400

20% extra from that one type of product.

The rates of Tax (be they Income Tax or VAT) are unchanged, yet a huge increase in a Tax take for the Government!

One problem with all that, Interest rates and the security of the Mortgage market let inflation run lose, and you run the risk of hyperinflation.......