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No, really, economics sure is hard

Richard Murphy says:
October 24 2016 at 9:13 am
So you want to cut tax rates

Tell me, what services will you cut, and why, with what consequences?

But we don’t need taxation to fund spending, do we? Not with the magic money tree?

104 thoughts on “No, really, economics sure is hard”

  1. Tell me, what services will you cut, and why, with what consequences?

    1. The arts council.
    2. Taxing poor people to subsidise middle-class lefties is abhorrent.
    3. Poor people keep more of their hard-earned cash; lefties wail.

  2. Best joke I have heard in a long time:

    ‘ Richard Murphy says:
    October 24 2016 at 9:46 am

    I know how business works’

    Said without irony…..

  3. Discretionary funding for refugee minors. Any council that spends taxpayer money on something they do not have to do should have central funding reduced by this amount.

    Diversity initiatives
    Equality initiatives

  4. Rob

    Public health does a lot of good stuff – we only notice it when it stops – vaccinations etc. Certainly all the funding for fake charities and the weird anti sugar campaign can go. Not sure that is 90% though.

  5. Andrew C

    The fat cvnt has not informed Companies House of his change of address for several of the entries.

    How does this square with his criticism of incorrect and out of date records of companies and officers, alleging tax evasion etc

  6. Ken – councils spend lots of money on things they do not need to do.
    Libraries, park upkeep – just mow the grass a few times a year and trim hedges once a year. Council houses – what need for the council to run a department providing them, sell them to a housing association.
    Mayoral vehicle – why? Use of own car works for everyone else.
    Tons of things councils spend money on that they do not need to. They simply want to or has not occurred to them not to.

  7. The toy train set.

    Crossrail 2

    Crossrail 1 –if there is still time.

    Windwank subsidies

    Cuts of Marxian Uni crew

    Abolish student loans –even while paying for 10% + to get a Uni science/engineering education free –as in the old days.

  8. Thanx for that link, AndrewC. Just taken a Googlewalk round the Murph’s new neighbourhood. Yuk, that’s nasty. The architects must’ve spent whole minutes coming up with the designs for that lot. It’s not council, is it?

  9. Andrew C, thank you for that link.

    This one amused me:
    “Fiscal Responsibility – status: dissolved”

    But I see he now has “Cambridge Econometrics Ltd”. Looks like an attempt to copy Oxford Economics, but only implying the university link rather than actually having one.

  10. Bravefart, nice as that would be to catch him out on, the only ones with his old address are where either the company has been dissolved or he has resigned. The current ones are all up to date.

    Unless there’s a time after a company is dissolved when you still need to keep records up to date; does anyone know?

  11. Apropos Mr Ecks’ list- What I don’t understand about wind farms is that we’ve plenty of wind in this country already. Why are we spending cash installing these big fans to make more?

  12. His address is 19a so that sounds like flat. Looking at street view for 19 not 19A is a rather humble 2 up 2 down. I wonder if he is a regular in the Six Bells pub a few doors down, probably not being a Quaker but maybe he pops in for the quiz.

  13. Actually you don’t even need the magic money tree.

    If you reduce excessive tax rates, you actually collect more revenue – so no need to cut any services.

    Nigel Lawson proved this thirty years ago; was Murph not born then perhaps?

  14. “Green energy subsidies.”

    They don’t come from tax revenues do they, more impositions on the energy bills of everyone (domestic and business) in the country. So cutting them wouldn’t per se result in any free tax revenue to spend elsewhere. You could of course abolish the subsidies and increase energy taxes by the same amount so bills remained the same and tax revenue went up, or you could just put a supertax on renewable energy income. The latter probably better than the former as cutting subsidies would involve not paying contractual obligations, whereas increasing taxes is entirely in the power of the State at all times and levels.

  15. @Fen Tiger

    Amusing indeed. Basically saying, we’ll hammer bits of data into any number of shapes and you can take bits and pieces of it to use as you want. Just so long as you pay us.

  16. Murphy’s hypocrisy is never-ending. He has long been a critic of charitable status for schools but now quite happy to become a director off a company owned by a charitable trust whose stated aim is:

    “The Charity is established to advance education in the field of economics for the benefit of the public”

    So it seems education is a worthwhile cause but only when it is teaching things Murphy agrees with.

  17. @ Richard
    Cambridge Econometrics actually does have a connection with the University- it was set up by (?Professor) Terence Barker, who is Director of the Cambridge Centre for Climate Change Mitigation Research. Dr Barker owns 45% of the voting shares and is Chairman of a “Charity” that owns 51% of the voting shares. He also has stated that “the climate change problem requires urgent action aimed at decarbonising the world economy.” and that “Where many current calculations get it wrong is in the assumption that more stringent [climate mitigation] measures will necessarily raise the overall cost, especially when there is substantial unemployment and underuse of capacity as there is today.” He hasn’t noticed that minimum wage legislation, not the government budgetary surplus, is the primary cause of the majority of unemployment in the UK and most other first-world countries. Such ignorance from a self-professed economist presumably means that he considers Murphy to be a kindred spirit.

  18. I wouldn’t cut funding for speed-bumps. There’s more to road design than just building race tracks, and some roads do need traffic-calming measures. (As I’ve said before, if we privatised all the roads, we’d still expect the new private owners to do most of this stuff. The saving to be made here is by having stuff done more efficiently, not by not having it done.) As I understand it, though, the reason we have speed-bumps is that they’re the cheap and easy option: it’s just a pile of tarmac, after all. The better, more effective traffic-calming measures are more expensive. If councils weren’t blowing so much of their money on stupid shit, we could hope for more money to be spent on road design, not less.

    Ideally, I’d privatise loads of roads — and, in residential areas, give automatic share ownership (or some other mechanism to have a say in how they’re run) to residents. But it could take fifty years to sell that to the electorate. In the meantime, how about splitting off the road-building bits of councils, separating their budget and bank accounts, and have people fund the road-builders separately to the rest of the council. Maybe make the head road-builder an elected post, too.

  19. Bloke in North Dorset

    5-a day coordinators
    Real nappy coordinators

    Abolish DCMS.

    Beat me to it. You can add 90% of Defra and DCLG.

    Someone of less use than Ritchie in a pub quiz would be difficult to imagine.

    Given past performance it wouldn’t take long for him to be a team of one and then barred for arguing with the quiz-master.

    Crossrail 1 –if there is still time.

    For all intents and purposes its finished. What we need to do is find someone competent to run it at a profit.

    If you reduce excessive tax rates, you actually collect more revenue – so no need to cut any services.

    Nigel Lawson proved this thirty years ago; was Murph not born then perhaps?

    To the extent that he accepts the Laffer Curve he doesn’t accept we’re past the peak, and probably never would.

    http://www.t*xresearch.org.uk/Blog/2012/11/26/laffer-said-when-tax-rates-are-cut-tax-revenues-will-rise/

    On a more serious note:

    1. Increase the free pension age to retirement age.
    2. Introduce a payment for GP visits.
    3. Increase State pension age to 80 – this is a long term goal but future generations will tank us.
    4. Cancel free bus passes. Its ludicrous that my wife qualifies for one.

  20. Bloke in North Dorset

    I forgot coordinators:

    Sack everyone in govt, including local govt, who has coordinator in their job title, and their managers pour encourager les autres.

    In my experience when asked what they do the answer is always “coordinate”. They have no responsibility or direct deliverables.

  21. BiND

    The pensions (and other OAP benefits) are big. Very difficult to get rid of politically – the old vote and they want their stuff.

    Osborne did a decent thing increasing the pension age – it just needs to go further.

    We need more than just GP fees, we need to discuss what we expect of healthcare in old age in future. This is why the NHS is creaking so much now despite the fact that it is getting the same percentage of GDP as it did in 2008. Expectations have crept up and costs are also rising.

  22. @BiND

    Murphy always gets this wrong. F*ck me. Laffer never ever ever said something as dumb and absolute as reducing tax rates results in more tax take.

    He said that there was a rate at which tax take was optimised. Above and below that rate you’d get less. That’s all. That’s all he said and he never even claimed to have invented the concept which has been documented literally for centuries.

    He is such an arrogant, ignorant annoying cunt.

  23. I sneeze in threes

    I think Murphy’s home address is

    The “19a Covent Garden” address relates to his most recent directorship. Which I have not heard him mention on his website.

  24. Bloke in North Dorset

    Ken,

    The pensions (and other OAP benefits) are big. Very difficult to get rid of politically – the old vote and they want their stuff.

    I know but that doesn’t mean the problem can’t be tackled. I think there’d be a lot of surprise that older generations get it and know they have to pay more. Most of the gnashing of teeth comes from their children as they see their tax free inheritance disappearing.

    We need more than just GP fees, we need to discuss what we expect of healthcare in old age in future. This is why the NHS is creaking so much now despite the fact that it is getting the same percentage of GDP as it did in 2008. Expectations have crept up and costs are also rising.

    Agreed, but see my point above. Making the elderly sell their houses is more unpopular with their children than with the elderly. My son is under no illusion, and understands, that our house is also part of the savings plan and may have to go if we live long enough and/or need to go in to care.

    It won’t won’t happen and would be politically suicide to even start a conversation but a move to insurance based health care would also provide the incentives to save costs. It would also remove a rasion d’etre for all those who want to rule our lifestyles because it puts a strain on the NHS, that would be the insurers job through the pricing mechanism.

    As a cost saving measure it isn’t much but I like the move to list treatments that bring little or no benefit, but its a start.

  25. Bloke in North Dorset.
    I understand some countries do part free health and part paid/insured?
    Personally, despite being pretty ill myself, I don’t have a problem paying to see a GP. Have paid to see an NHS consultant privately in the past – quicker by about 6 months.

  26. We’re maybe looking at pensions the wrong way.

    The received wisdom is that, a) we’re living longer, and so, b) can’t afford pensions.

    But we’ve always been living a little bit longer, and yet (until recently) pension provision has got better and better.

    Increasing the pension age is a retrograde step, and certainly not in keeping with human progress.

    What I can remember pretty clearly from the 80’s and early 90’s (though experts will know much better than me):

    a) Defined benefit schemes, though worthy, were the cheap option for businesses. Non-defined benefit schemes opened up the possibility of earlier retirement and greater gains. (Don’t laugh).

    b) Living longer was already an issue. But we’re not talking about huge gains per year after all. A little upwards nudge on contributions was all that was required, easily covered in rising living standards.

    c) Fewer workers per pensioner. So what? A private scheme is individual, so not relevant.

  27. Martin,

    Apparently Argentina is one of the countries. It has become increasingly common for Americans with means to fly down for their care rather than pay the American prices. Anecdotally the quality of care is similar to what can be had in the US, for most treatments, when paying in cash. I have no information on the quality of public care though.

  28. @ Andrew Duffin
    As a pendant I must amend your comment.
    *Geoffrey Howe* demonstrated the Laffer curve more than *40* years ago through increasing the tax take *significantly* by reducing the top rate of tax.
    As a side-effect he increased unemployment among tax advisers – the schadenfreude amongst us youngsters in the City earning a modest wage (pre-Big Bang City salaries were in line with what people actually earned) was both audible and even visible.

  29. @Jack C

    There is always that. DB schemes are fixed and (in theory) DC schemes could run away with returns on investment and so, in theory, be better.

    We haven’t really “always been living longer”. In 1945 it was pretty much 50/50 when you were born that you would ever live long enough to collect your state pension. There were 10 workers for every pensioner so state pensions were not a drain. I think it was calculated recently that if the pension age didn’t rise, then by 2030 we’d have just 2.2 workers for every pensioner.

    It’s not that we’ve suddenly acquired the ability to live a lot longer but many more of us are not dying along the way so more of us will make it to 80+.

    In the last 50 odd years, the average time spent in retirement has rocketed from 7 years to 17.

    It’s all going to go badly wrong. Thank goodness I am a baby boomer and sat on an undeserved £0.5m equity in my house. Cause I have naff all pension and am going to need it. And I expect by the time I do retire, the c*nts in charge will have decided that with all that equity, I don’t deserve a state pension.

  30. Liberal Yank – a friend had a relative ill in Bosnia, needed a chest operation. The surgeon was willing to do it in hospital and have him recover at home (probably better service there anyway). The friend took the payment over – multiple bottles of good whisky.
    Hopefully the surgeon would not start on the payment before the operation… the patient survived anyway.

  31. Zoopla says that the Fat Comptroller’s house was bought for £330k and estimates its value today at £329k.

    What sort of neoliberal trick is that?

  32. Andrew C,
    Yes, but workers per pensioner is relevant to the state pension only, because it’s unfunded.

    And 7 to 17 years in retirement is not a huge amount over 50 years. The required increase in contributions per year is pretty minimal (bearing in mind increases in salary and reductions in cost over that period: the diminishing value of mortgage payments, and children moving into employment, etc).

    I fully appreciate that the wheels have come off, my point is more the reasons why.

    Clearly low interest rates and huge deficits have an affect, but neither were caused by increases in longevity.

  33. Andrew C

    And I expect by the time I do retire, the c*nts in charge will have decided that with all that equity, I don’t deserve a state pension.

    Yep. I’ve been assuming that any state contribution to pensions will be fully means tested before too long. If not, then it’ll be a bonus.

  34. @ Jack C
    A pretty reasonable analysis and comment from an inpert.
    However, a pendant I feel inclined: (i) the main increase in life expectancy is down to a reduction in infant mortality, which has little relevance to the choice of retirement age; (ii) the increase in life expectancy is not “always” but since the Victorian improvements to public health which followed a drop in general health and adult life expectancy due to poor housing for industrial workers following the Industrial revolution; (iv) increasing the pension age is *not* retrograde – it is a recognition of the increases in both life expectancy and the time in which men are *fit* to work – it is a result of human progress, both from medical and public health advances and from mechanisation that lessens the strain of physical labour wearing men out (this latter can be seen from the narrowing of the differential between the life expectancies of men and women (v) DB schemes were never the cheap option for businesses – they were *better value for money* which isn’t quite the same thing – in the 1990s they appeared to be cheap because the investment gains during a “bull market” and a *wrong* accounting.
    standard led to companies under-reporting costs* (vi) fewer workers per pensioner *is* a problem for the state pension which operates a “pay-as-you-go” system with no funds – no-one sensible relates it to private schemes since they, like you, can see that it isn’t relevant.
    You are quite right that the gains in life expectancy in any short period can be compensated for by a small increase in contribution rates – but state pension age was set at 65 more than 70 years ago (in 1910 it was 70) and the life expectancy of 65-year-old male retirees has more than doubled in the last 25 years so a long period of neglect of the problem has turned the small increase into a more-than-doubling of contributions needed.
    Doubling contributions (employer and employee combined) to well over half net (after tax & NI) pay isn’t tolerable: Jack Tar fishing for herring in the sleet in the North Sea in the winter sees more than half his pay going to pay the pension of Sue Smoothie sitting at home getting pension credits while her kids are at nursery/primary school and asks WHY?
    Pensions were not intended to provide for a twenty-five-year-long holiday – they were to enable people to live decently after the guy was no longer strong enough to so a manual job. When Bismarck invented a state pension, the pension age was higher than average life expectancy.

    *Your memory is right – it is just that most of the stuff that you read was wrong. Stupid arrogant middle-aged accountants who refused to listen to intelligent young actuaries. You have a good point about a few guys being able to retire early if they cashed in their DC pension fund at/near the top of the 1990s bull market.

  35. It’s all going to go badly wrong. Thank goodness I am a baby boomer and sat on an undeserved £0.5m equity in my house. Cause I have naff all pension and am going to need it. And I expect by the time I do retire, the c*nts in charge will have decided that with all that equity, I don’t deserve a state pension.

    In fact, the cunts in charge are more likely to see you have no pension and decide to give you part of someone else’s “in the name of fairness and equality”.

  36. Okay, Squander Two, I’ll double down on the speed humps: throw in all traffic calming. The number of gormless fuckers cruising down the motorway middle lane at 50-something tells me the problem is more with allowing people on the roads who don’t know what they are doing. I like your idea of reforming road management though. I reported potholes on a busy 60mph stretch months ago: bugger-all done about it.

    How about making all pensions funded, especially the public sector ones? Make the folks grabbing the taxpayer-funded pensions have some interest in good economic governance. I’ve got public sector friends, and they simply have no clue; they just see everything in terms of taxing more.

  37. @ Jack C
    (I took so long to write my comment that I didn’t see your follow-up)
    The negative real interest rates are a vicious assault on private sector pension schemes but have no impact on debates about state pension age since the state pension is not funded.
    As you understand (I think) we really, really need to separate debates about the state pension from those about occupational pensions (including therein those for the self-employed). Occupational pensions are deferred pay – state pensions are a transfer between current workers and those over state pension age [I currently finance a part of my own state pension from the tax on my earnings]
    Andrew C is well-meaning but wrong – ELT 14 (1980-82) shows life expectancy for a 65-year-old man as 13.036, Lloyds (Bank) accounts shows the life expectancy for a male retiree as 28.1 years, more than double. That’s over 25 years not 50-odd – admittedly it’s not properly comparing like-for-like as one is the average of those with an occupational pension and just a state pension and the other is purely for those with an occupational pension, but we’re seeing life after retirement moving from less than 30% of working life to more than two-thirds – that’s not a small change.

  38. I know it is pointless to argue this on principle, but what annoys me about the state pension is that the public sector is changing the deal, years into it, but throws a hissy when the same happens to them.

    I started work, the public sector started raiding my pay. Part of the justification was the state pension, to be claimed at 65.

    I’d rather they just kept their grasping hands out, but they never do.

    At this point, one could argue a contract had been formed. A more solid one that their bloody social contract, at least.

    Then years later, I get told I can’t have my pension till 68. 3 years knocked off unilaterally.

    Yet when someone tries to change the public sector’s deal for them – junior doctors for example – they go apeshit.

    I understand the economics of the state pension are fucked up and raising the age is a blunt but effective way of fixing it, but the public sector’s hypocrisy annoys me.

  39. Cynic

    There’s no money to fill the potholes. What should we do about it? I see quite a lot of decent suggestions above…

  40. Bloke in Costa Rica

    Well, here’s my partial list:
    Ministerial Departments to be abolished
    • DCLG
    • DCMS
    • DEFRA
    • DID
    • DIT
    • Northern Ireland Office
    • Scotland Office
    • Wales Office
    • UK Export FInance

    The surviving departments will see a funding reduction of up to 100%.

    Non-ministerial Departments to be abolished:
    • CMA
    • FSA
    • Forestry Commission
    • Ofsted
    • Ofgem
    • Ofqual
    • UKTI
    • Ofwat

    I’d sell Ordnance Survey and the NS&I. The rest would get a frightening haircut.

    As for QUANGOS: kill basically all of them. Sack everyone who works for them (with statutory redundancy payments, I guess), take their archives (including electronic records) and shred them. As Sean Gabb pointed out years ago, this is a necessary step to stop their resurrection. Obviously any and all arts spending will be immediately zeroed out and any grants outstanding will be clawed back.

    Local government will be audited: any inessential activity like diversity will result in a reduction of the central grant by 200% of the spend. The audit will be repeated 12 months later and councillors will be personally surcharged by the amount spent on inessentials.

    There will be a five-year freeze on new Civil Service hires, allowing natural wastage to reduce headcount. Pay rises would be at CPI. At the end of the five years, when recruitment restarts, no government or civil service job can be advertised in paid media. Craigslist will be fine for most of them.

    The BBC will be abolished, and its copyrightable material auctioned.

    Tertiary education funding for teaching will be entirely abolished. As a quid pro quo, fee caps will be removed and government oversight withdrawn. Student loans will not be guaranteed by the government. This will likely reduce enrolment to its natural level of approx. 7% of school leavers.

    Child support and housing benefit will end. Tax credits will be replaced with an increase in the personal allowance. All other benefits will be cash-only.

    I think that would probably save about £150 billion a year.

  41. Cynic,

    Theoretically Social Security is supposed to be fully funded. A lot of effort was put into trying to achieve this during Carter’s years. Unfortunately politicians change. Reagan and O’Neil pandered for votes by raising benefits so we’ll never know for sure if the changes would have worked.

  42. BiCR,

    I’m not sure what the cash value of British benefits are but if they are similar to the US, 50p on £1, then switching to a full cash benefit system should be far cheaper.

  43. @Liberal Yank

    I’m English, so was thinking of the UK system. I don’t think ours ever was.

    There’s a story, not sure if it is true, that the guy who cooked it up over here said that the trick with the National Insurance fund is that there is no fund.

    For us, National Insurance is a lie: despite the claims the money is ring-fenced and there is a fund, it is just another income tax that the government spunks immediately on whatever, dosh being fungible.

    https://www.ft.com/content/810d4dae-0297-11e4-a68d-00144feab7de

    There’s been talk of merging it with PAYE (normally referred to as “Income Tax”) to simplify things, but the exemptions between the taxes are different so there would be losers.

    The cheekiest thing is that as well as EmployEEs NI, there’s also EmployERs NI tax on your salary. Because most folks don’t know about tax incidence, they think their employer pays it due to the name.

    Throw all three income taxes together and your real tax rate suddenly looks rather nasty.

  44. Cap new child tax credit claims at two children ( exceptions for rape, multiple births, but no cultural exceptions )
    Cut the starting point of new child tax credit claims by £10.50 a week.
    Freeze the rate of LHA until April 2018.

    Oops, all those are already in place, or about to be.

  45. Put £6 a week on the applicable amounts for pensioners, pension credit and the state retirement pension. And abolish the winter fuel allowance.
    Net result is some government staff are freed up to go and answer the ‘phones for HMRC within 20 minutes, and a small saving in overall spending as pension income is taxable.

    Get rid of the 25p increases in pensions at age 80 – these generate pointless letters and enquiries.

    Get rid of healthy start vouchers and just stick the cash equivalent onto the qualifying benefit claim. The healthy living advice is covered in pregnancy and again when you go to Slimming World due to the weight not coming off. The staff doing the admin, and the advisers on this at Public Health England can join their colleagues on the ‘phones for HMRC as above.

  46. @john77
    Thanks for your responses. Two (inexpert) points though:

    1) DB pensions went from being over-funded to functional to entirely unaffordable in really a very short space of time. Something other than life expectancy has gone wrong.

    2) By retrograde, I mean that provision is going backwards. And this is not what we expect, given increases in living standards and so on. Yes, an increase in life expectancy makes raising the retirement age “logical”, however we might also say that working hours should increase for the same reason. We’re all fitter and stronger, and need less time for housework, so we could easily work longer hours.

  47. Jack C, don’t forget the Carney effect. If interest rates halve from 1% to 0.5%,the effect on pension funds is much heavier than if they drop from 4% to 3%. I got a mortgage around 1985 at 12%. The world and its financial dynamics have changed beyond recognition in my lifetime. An actuary planning pension scheme returns has a lot of wriggle room. The rule of 72 shall be your guide – divide 72 by the interest rate and see how it changes from 1 to 15. Currently pension schemes still seem to quote on a 20 x multiplier, expecting a 5% yield. A big bust is just around the corner, the asset inflation caused by QE

  48. Cynic,

    I know the US system fairly well and have little understand of British retirement plans. Our SS dollars are used to buy government bonds because they are seen as the safest investment. Of course politicians use those funds because they are there which is part of why we have so much debt. Most of the $20bn is money we own SS.

    I should note it would be stupid to not spend the money. If it just sat in the government’s general fund it would be effectively removed from the economy causing a major drag. If we had picked government programs with higher fiscal multipliers instead of cutting capital gains tax rates the added growth would have made the debt a non-issue. Privatizing means far more government involvement in Wall St which I hope most readers here are against.

  49. Diogenes,
    Exactly what I’m getting at, and obviously affects pre-Carney as well.

    Had one known in 1985 that the Cold War would end, and about China and so on, one might have expected the world’s financial dynamics to have improved by now.

  50. Jack C – some do work longer hours. By choice or by necessity.
    Most people seem to have the idea that they should only work one job and never do anything extra in terms of work unless they are getting overtime for it.
    Many can work another job, just refuse to do so.

  51. Bloke in North Dorset

    “There’s a story, not sure if it is true, that the guy who cooked it up over here said that the trick with the National Insurance fund is that there is no fund.”

    My understanding is that the original concept was that it would be fully funded but Bevan was over ruled and the pension was paid immediately to all and sundry.

  52. Bloke in North Dorset

    ?
    I know it’s wiki but …

    “Aneurin Bevan (pronunciation: /əˈnaɪrɪn/; Welsh: [aˈnəɨ.rin]; 15 November 1897 – 6 July 1960), often known as Nye Bevan, was a Welsh Labour Party politician who was the Minister for Health in the post-war Attlee government from 1945 to 1951.

    ….

    His most famous accomplishment came when, as Minister of Health, he spearheaded the establishment of the National Health Service, which was to provide medical care free at point-of-need to all Britons. He resigned when the Attlee government decided to transfer funds from the National Insurance Fund to pay for rearmament.

    https://en.m.wikipedia.org/wiki/Aneurin_Bevan

  53. Cynic said:
    “I’m English, so was thinking of the UK system. I don’t think ours ever was … For us, National Insurance is a lie”

    I think it was originally funded, but by “originally” I mean Lloyd George in 1911, not the Beveridge / Bevan 1940s disaster. It didn’t last long though, because people weren’t happy paying in without being able to get anything out for years while they built up the required “contribution record”.

  54. @ Jack C
    1) What went wrong was that the reward for deferred gratification (real interest rate on savings) went from positive to negative. So if you want your savings to be safe you are better off filling your attic with baked beans than investing in gilts – any positive real return (i.e. the money you get back can buy more bread and cheese than the money you put in) is wholly due to the risk premium [for other pendants – yeah, I do know there is an illiquidity premium but that is less than the negative real return on gilts]. Pension schemes were designed on the assumption thjat there is a positive real return on savings – when socialism turns it negative all the equations break down.
    Look at it this way – if return on capital is negative all businesses should close down and cash in their chips because they will have fewer chips tomorrow and fewer the day after the day after tomorrow and fewer still the day after that. But Denis Healey and Gordon Brown expect businesses to fund pension fund deficits created by their stupidity and Osborne was willing to go along with it for a couple of years – he failed to grasp how long it would take – rather than cut benefit payment or public sector pay by 20+% like the Irish.
    The real return on gilts is -1.8% so if you want to pay someone £10 in 30 year’s time you need to invest £17 now. That is just plain ridiculous. What Is more, if you think you would be better off seeking a positive real return from equity investment you will be faced with a higher levy from the PPF because you are taking a risk
    2) The two major advances in housework were the vacuum cleaner and the washing machine, both of which came in my grandmother’s time.Since then the amount of time of paid work by women has increased massively, so it is quite correct to say that we can. and do, work longer hours because we can spend less time on housework.

  55. @ Richard
    The original old age pension was introduced by Asquith – I think it was 10 shillings a week for over-70s. Lloyd George just copied the Friendly Societies

  56. @Liberal Yank

    “I should note it would be stupid to not spend the money.”

    I wouldn’t use the word “spend”, but I get where you are coming from. I reckon we’re both thinking “invest”, which would I agree with – so long as it was “invest” in a true sense of the word.

    However, when describing what the UK government does with it, I used the word “spunk”, which I’d say is pretty accurate!

  57. @Richard

    You know, I’ve long wondered if they just paid out the full whack near the beginning, buggering it up from the start, rather than basing it on the contributions so it had time to build up and keep up with the withdrawals.

  58. Cynic,

    > The number of gormless fuckers cruising down the motorway middle lane at 50-something tells me the problem is more with allowing people on the roads who don’t know what they are doing.

    Well, you have a point. Ignoring the unfortunate trade-off between allowing fuckwits on the road and the hit to the general economy if we ban them all, and also ignoring the fact that traffic calming isn’t for motorways, I agree: get them off the road. So how do we do that? We can look out for them using police cars and traffic cameras and identify them and revoke their licence and no doubt have legal battles with some of them. That costs money. It might be more expensive than road design; it might not. It’s not obviously a saving.

    Modern road design and traffic management has come on leaps and bounds and is an absolutely fascinating subject. The experts now study things like the ways different shapes of bends cause drivers to look in certain directions. Done right, it can make roads safer and better for everyone. Yet most of our local councils appear to be using virtually none of this expertise and just instituting crappy one-way systems instead. Because they’re blowing the money on other shit. I’d love to see roads done properly, but I’m not convinced it would be cheap. But I’m fine with that if the budgets are separated and the public have a say: if people get to choose how expensive it is, I’m fine with them choosing for it to be expensive.

    (In NI, we have virtually no three-lane roads. Those fuckers who hog the middle lane? Over here, they hog the fast lane.)

  59. BiCR,

    > Northern Ireland Office
    > Scotland Office
    > Wales Office

    God, yeah: why do we still have these post-devolution? We now have a whole parliament of our own. We don’t need a special section in Whitehall as well.

    > Forestry Commission

    Founded to make sure we had enough trees to build enough ships to fight Napoleon. Talk about mission creep.

    > Obviously any and all arts spending will be immediately zeroed out

    The great Paul Draper once said something like (and I wish this interview was online, ’cause it was great, but it isn’t, so I’m going from memory): “In the Twentieth Century, classical music has had public money poured into it, and what has it achieved? Not much, in my opinion. Popular music has been entirely shaped by supply and demand, and what has it achieved? The greatest body of creative work since the War.” And this is from the guy who wrote Taxloss: hardly right-wing.

    > The BBC will be abolished

    No need. Just abolish the licence fee. Both Sky and the BBC have commissioned independent studies into this, and both concluded that the BBC would make more money if it switched to subscription. That’s the real atrocity of the TV licence: the BBC don’t even need it, and they know they don’t need it, but they’re hooked on the power of sending people to prison.

  60. Amusing, Sq2, that you’re an enthusiast for knowledge based traffic management yet have problems with middle lane road hogs.
    Traffic flows optimise when relative speeds of vehicles have the minimum differential. Given that motorway inside lanes will always have large & slow commercial vehicles, hogging both outside lanes at a speed in the 50/60 mph range would, when the road is approaching its carrying capacity, ensure the maximum pass-through of vehicles in the shortest time. Or to put it another way, it’s the assoles who insist on blasting down the fast lane cause congestion.

  61. BiS,

    I am actually aware of the difference between driving in the middle lane because you’re overtaking and driving in the middle lane because you absolutely refuse ever to change lanes no matter what.

    > Given that motorway inside lanes will always have large & slow commercial vehicles

    No, not always.

    > when the road is approaching its carrying capacity

    Where did you get this idea that cloggers only drive in the middle lane when the road is approaching its carrying capacity? They do it all the time. They do it at three in the morning. They do it on deserted stretches through the Scottish borders. It’s a psychosis.

    > Traffic flows optimise when relative speeds of vehicles have the minimum differential.

    To some extent, yes, but by far the biggest optimiser of traffic flows is to have every road user obeying a common set of rules. Just because we can take it for granted that everyone drives on the same side of the road, doesn’t mean you should discount its influence.

    > you’re an enthusiast for knowledge based traffic management yet have problems with middle lane road hogs.

    But cloggers aren’t following any traffic management system; they are going against extant traffic management. I have no problem with roads designed to optimise traffic flow by, for instance, having bans on lane-changing for certain stretches or at certain times. I am also confident that, under such a system, some people would fuck it up by refusing to follow the rules. I would then complain about those wankers instead. Cloggers aren’t on some sort of mission to improve the nation’s traffic. They’re just obstinate wankers who refuse to follow the rules.

  62. Another one for your C19th countries is Greece. Fought itself free of the Ottoman Empire 1821-32. Norway just misses the century with its independence from Sweden in 1905 but you could say Finland’s born in 1800’s.& Denmark also separates from Sweden in 1814.
    It’s usually simpler & shorter to compile a list of countries that DID exist pre 1800

  63. Whoops! Wrong thread.

    But a chance to ask SQ2. What exactly is your problem with someone doing 50mph in the center lane at three in the morning in the Scottish borders? Do you have problems in inserting your car between them & the center reservation? Do you need glasses?
    And I would imagine I seriously piss you off. Like a lot of others, I habitually cruise at a little below the speed limit in the center lane. Cruise control’s a wonderful thing when you’re putting a thousand kilometers or two behind you in a day. But that’s in Europe, of course. UK side I delight in doing the same. And pulling into the fast lane to overtake slower traffic. If you run into the back of me at 90, that’s your problem. Size & weight of the thing I drive, I probably won’t notice.

  64. > What exactly is your problem with someone doing 50mph in the center lane at three in the morning in the Scottish borders?

    Nothing. My problem is with the people who do 50mph in the centre lane at three in the morning in the Scottish borders because they also stick to the centre lane at all other times and locations, no matter what, no matter how much danger they are causing to other road users.

    > Cruise control’s a wonderful thing when you’re putting a thousand kilometers or two behind you in a day. But that’s in Europe, of course.

    I drive to Bavaria and back every year, using cruise control. I also somehow manage to change lanes while I’m doing it. It’s not difficult.

    In fact, try clogging in Germany and see how long you survive. In my experience, neither the French nor the Germans clog. The Southern Irish don’t either (except when they cross the border and drive in the North, puzzlingly). It’s a British thing. Maybe the Spanish do it too. Wouldn’t surprise me: Spanish driving is shit.

  65. Here we agree. The Spanish shouldn’t be trusted with a vehicle doesn’t have a leg at each corner*.
    But you’re welcome to blast down the fast lane on the French autoroutes. If you get camered or exit the peage in under the minimum interval the fines can be eyewatering.

    *Actually, the Spanish seem to have much the same driving capabilities as the Brits. regarding the speed limit as a minimum rather than a maximum etc. And the obsession with being in front of you. Even if it means passing you at the slip road they intend exiting down. A little judicious use of the throttle & they find they can’t get across the front of you before they hit the big green arrow. Hugely entertaining.

  66. S2

    “In my experience, neither the French nor the Germans clog.”

    My experience too.

    The Germans are generally better drivers than the British. Complemented also by no speed limits on various autobahn sections meaning that there is more of a culture of getting out of the overtaking lanes when you’re done.

    The French, perhaps partly thanks to tolls on their autoroutes, have a stronger mentality of extra lanes being for overtaking (ie, culture is still closer to that of driving on normal roads).

  67. Cynic,

    I prefer to not use the word invest in conjunction with government retirement plans. Someone will always want to ‘invest’ the funds in projects that directly benefit themselves. Then again, at the micro level, I view investing as consumption anyway. After all when I purchase an investment I am spending the money on a product designed to give me a benefit. I blame the American tendency to bastardize English for having to make the clarification anyway.

  68. BiS,

    > But you’re welcome to blast down the fast lane on the French autoroutes. If you get camered or exit the peage in under the minimum interval the fines can be eyewatering.

    Considering a couple of the runs I’ve done through France and never been fined for, the minimum interval for the peage must be seriously bloody small.

    > the obsession with being in front of you.

    See, this is part of the clogging mentality, in my experience. You can talk all you like about traffic flow, but the fact is that the likelihood of clogging is proportional to how expensive and shiny a car is, because it’s driven by someone who feels the slow lane is insulting to their mojo.

    PF,

    > The Germans are generally better drivers than the British.

    Can’t agree with that. Used to be impressed by their autobahn driving, but have now spent too much time pootling around German towns to think much of them. Things German drivers can’t do: reverse into a space, reverse at all, parallel park, figure out who to give way to in a supermarket car park doing 10kph. And then you realise that the people doing 200kph on the autobahns and the people freezing up because they can’t figure out how to cope with some piddling maneouvre in a car park are the same people. Why assume they have great reaction times at high speed when they have shit reactions at low speed?

    The German autobahn death toll supports my position here.

    > The French, perhaps partly thanks to tolls on their autoroutes, have a stronger mentality of extra lanes being for overtaking

    Yeah, the French are good drivers, as long as you stay away from Paris. I love driving on the autoroutes. And the Corsicans are brilliant — probably because Corsican roads quickly kill anyone who drives stupidly.

    Any Belgian who attempts to enter a vehicle should be shot.

  69. @BIS “Even if it means passing you at the slip road they intend exiting down. A little judicious use of the throttle & they find they can’t get across the front of you before they hit the big green arrow. Hugely entertaining.”

    So you’d rather force a driver to choose between aborting a manoeuvre, or crashing, than have your manhood insulted by being overtaken, or you just do it for kicks, not quite sure which.

    I don’t know whether that meets the legal test for dangerous driving, but IT IS dangerous driving.

  70. @Liberal Yank

    Fair point. Privatise the lot then. A lot of it just goes into bonds here too anyway, so it isn’t like the government doesn’t have some control on the payout.

    I’d realty love to see public sector pensions run that way, so those guys would actually have some skin in the economic game.

  71. Getting the daft twats off the road? The driving test ought to be keeping the really clueless folks off in the first place. Anecdotal, but the guys I schooled with who passed first time, most if not all of them had a write-off in the first year. Something wrong there.

    Driving down the middle lane in the early hours, fine, I’ve done it (70mph 3-lane A-road, where very occasionally you get a suicidal nutter wobbling on a pushbike in the left lane). But I’d get over on the left if I saw headlights catching up in my mirror. It’s the dim bastards with no awareness of the road around them that wind me up.

    The other handy thing about the left lane on the motorway is it puts distance, and often some metal n’ meat shields, between you and some daft twat crashing through the central reservation from the opposite flow.

    As for motorways approaching their carrying capacity, they are already rolling out that Smart Motorway thing with the variable speed limits and temporary use of the hard shoulder. Although it does cheese me off when they randomly (it appears) bugger about with the speed limit when the road is just fine. So yes, then I’m fine with someone tootling along at 50 or 60 in whatever lane.

  72. Oh I definitely do it for kicks, Ian. Having someone pass about 6 inches in front of your bonnet whilst they’re heavily breaking goes stale very quickly. I’m hopeful of sending one straight into a concrete flyover support. At least that’d be one fewer on the road.
    But it’s probably pointless. The default position of the dago driver is he wants it to be in front of you.

  73. Cynic,

    The privatization I want to avoid is government tax money being used to pick winners and losers on Wall St. UBI and any type of decent healthcare system make a good enough safety floor.

  74. S2

    Germans

    I guess various experiences are different? Not so much reaction times, but discipline and road sense in my experiences. However, I defer to your knowledge of “locality and supermarkets”.

    btw, I expect the autobahn death toll to be higher, if average speeds are higher, assuming everything else is identical (as in a crash at 150 mph versus the same principle crash at 50 mph). And yes, there are those who would suggest 10mph…

    Belgians

    Having spent some years traversing Benelux, NE France & the Ruhr, and way too much time in and around Brussels, I agree 100% (lovely people, don’t get me wrong).

    Outside of that, don’t forget the Portuguese.

    “I love driving on the autoroutes.” Yep, they’re empty (one advantage of tolls).

  75. “btw, I expect the autobahn death toll to be higher, if average speeds are higher, assuming everything else is identical (as in a crash at 150 mph versus the same principle crash at 50 mph)”
    The important word in that statement is average.
    There’s no particular reason to expect higher death tolls simply due to higher speeds. The combination of modern, major road design & modern vehicle design make even very high speed crashes survivable. It’s differential speeds that matter. There will always vehicles doing 50mph, for one reason or another, & impacting one at 150mph is the same as impacting a stationary object at a hundred.

    And a morsel of anecdata. The last few years I’ve done a lot of driving on the French autoroutes The Belgian border to the Spanish border on a regular basis. And it’s not all peage. The amount of major accidents I’ve encountered & the traffic holdups due to them have been trivial. I can probably recall every one of them. When I had to regrettably relocate to the UK for a period I was obliged to use some of the motorway net around London. It’s hard to recall any trip didn’t involve hold-ups due to serious accidents. Yet there’s no reason to believe British roads are designed worse than French ones. And congestion, of itself, shouldn’t cause accidents. Quite the opposite. On congested roads you’d expect less speed differentials between vehicles.

  76. PF,

    > I expect the autobahn death toll to be higher, if average speeds are higher, assuming everything else is identical

    Everything else isn’t. The Germans don’t believe in stopping distance. The guys driving at 150mph tailgate so chronically that five of them can overtake you in a second — that is not an exaggeration. I regularly have people get so close that I can’t even see their front grill in the mirror — at around 90mph. That’s completely usual in Germany.

    To be fair, the government started cracking down on it four or five years ago, and the fines and automatic points on the licences have had a deterrent effect and made a big improvement. Which is not surprising, given the number of penalties handed out: they turned the new tailgating-detection system on and handed out (IIRC) about 200,000 fines in the first week.

    BiS,

    > It’s differential speeds that matter. There will always vehicles doing 50mph, for one reason or another, & impacting one at 150mph is the same as impacting a stationary object at a hundred.

    Yes, and it also makes changing lanes a nightmare, especially on the two-lane autobahns, of which there are way too many. Overtaking a lorry doing 60mph by pulling into a lane full of people doing 100mph who refuse ever to give way or brake is tough.

    When we switched from the autobahns to the autoroutes for most of our journey a few years back, we reckon the peages were paid for by the decrease in petrol used, even though it’s the same distance. Constant braking and accelerating in Germany — plus loads of abysmally designed roadworks and regular jams.

  77. Strange, SQ2, that you’re now advocating my center lane fast cruise mode you’re supposedly against. If you’re going to use both outside lanes as overtaking lanes then you’re inevitably going to get a lot of lane changing. And a lot of high speed traffic in that center lane encountering much slower moving traffic pulling out to overtake. Recipe for tail shunts.
    The key to safe driving is mostly predictability. It’s the unexpected causes the accident. Why people hammering down the fast lane at 20mph over the limit piss me off. Eventually they run into the back of someone didn’t expect them. They make their journey faster at the expense of making my journey slower when the mess has to be scraped off the road.

  78. > Strange, SQ2, that you’re now advocating my center lane fast cruise mode you’re supposedly against.

    Strange that you’re so obsessed with this that you’re apparently hallucinating my comments now. Where have I advocated centre-lane clogging, exactly?

    I do like your phrase “fast cruise mode”, though, to describe snarling up traffic by ignoring it. Imaginative.

  79. “your phrase “fast cruise mode”, though, to describe snarling up traffic by ignoring it. Imaginative.”
    At something like 10% of the legal speed limit, HtF is someone “snarling up traffic”? On a UK motorway you’ve a whole fast lane to do your legal 7mph. Or are you one of these people believe speed limits apply to everyone else?

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