Saving is not productive apparently

Can you guess who this is?

The first, and most obvious of those alternative answers is one that I have long suggested. This is to suggest that collecting only a part of the £120 billion tax gap is a way to do this. Such solutions do not, admittedly, happen overnight but I have not a shadow of a doubt this option is available. Money that should be used in accordance with the will of government is not being so at present: the aim of this policy is to reverse that. At present some of that money lost will be saved – and so not be put to any productive use

Savings are not put to productive use. My word. We can therefore demolish the entire financial system can’t we? Since we don’t actually need anyone to put the savings of the nation to productive use any more?

This is interesting too:

The fact is, almost any investment can make 1% rate of return to cover the cost of government borrowing,

Really? Any investment can make 1%? So no investment project has ever, before financing costs, lost money then? Concorde? Pets.com?

22 thoughts on “Saving is not productive apparently”

  1. He has gone mad.

    Ragging on Ritchie is now akin to watching a mentally retarded child eating his crayons and laughing at it.

    I suppose the only justification is that his lunatic gibberings seem to be getting a higher profile nowadays.

  2. To echo GlenDorran (amongst others)

    He really is a shockingly awful writer – it can take about 4 attempts to get the kernel of what he is trying to say, and even then the typos and grammatical faux pas make it hard to discern at times.

    ‘This is not money that will, in that case, leave the UK economy: the whole purpose of this activity is to invest as much as possible of the money in this country, and for the long-term to make a return for us all.’

    So it looks like he’s reconciled with Ed Balls – ‘British jobs for British workers’ – or if, as is the case at the last count 50% of construction workers who will be so key to the Green New Deal, they don’t come from the UK, apparently their bank accounts will be frozen or any money being sent out of it to a non-UK jurisdiction blocked. I’d venture under European law this is most likely illegal but such niceties have never troubled him.

    ‘putting a person into work has the reverse effect: there is almost no cost to the state from creating such jobs because of the savings made, but the net effect on the economy is extraordinary because getting a person into a decently paid job as a massive economic boost in its own right because of the extra spending power they have, which more than makes up the difference each and every year of the (net) £2,000 cost of creating the employment for them. And that, in turn, then pays for the cost of the programme.’

    The man appears wholly ignorant of even basic economics – and seems to use North Korea as a paradigm. Honestly, it’s really hard to even view this as amusing now, especially since the demise of Murphy Richards and the ‘Justice for Taxes’ blog – I think it no exaggeration to say that franchise reform has to be on the agenda to prevent these kind of thoughts bribing their way to the forefront of the debate…

    Tim – to answer your final point. In his eyes the figures can (and indeed will need to be) manipulated to ensure that any investment project that is state sponsored gets more than a 1% return in the Courageous State. To further reinforce this advertising expenditure by anyone other then the state or ‘Civil Society’ (Ritchie and his mates) will be taxed at about 500% so getting an alternative message out there will be a challenge

  3. I wonder if he has a bundle of old out of date fivers in a tin under his bed, or something. It might explain his bizarre beliefs.

    Or he’s read Keynes, one or the other.

  4. So Much for Subtlety

    He really does just make stuff up on the fly doesn’t he?

    The fact is, almost any investment can make 1% rate of return to cover the cost of government borrowing

    Surely if he was remotely well informed as an economist he would see why this cannot be true. Savings and the demand for investment don’t always agree – people save for other reasons. But if there were a lot of investments out there that brought a higher than 1% return, interest rates would not be 1% for long, would they?

  5. Candidly, it’s very simple.

    Neoliberal banks sit on huge piles of physical notes and coins. Their vaults are full of the stuff.

    At the end of the year, once they have done their neoliberal tax avoidance, they fail to submit country-by-country accounts which would transparently show why I should get some of that cash in return for my transparently transparent Fair Tax Mark.

    The rent-seeking neoliberals then pass some of their rentier excess profits to its rent-seeking neoliberal bankers in under taxes bonuses.

    These neoliberal bankers then place the physical cash into overseas banks in secrecy jurisdictions to evade tax justice.

    And then the cycle begins again.

    Thus savings are not productive.

    Frankly you are a troll.

  6. Is the fee for the Fair Tax Mark tax deductible?

    Since the receipt into Ritchie’s hands appears not to be taxable, it would follow that the fee is not deductible.

    So I hope all the wallys who have coughed up the protection graft are completing their returns properly.

  7. GlenDorran

    Sheer genius – particularly the emphasis on ‘rent-seeking’, and mentions of ‘tax justice’ and the word ‘troll’ added at the end…

    BUT as Ian B said – it is lacking the typos and turgidity of the real thing.

  8. In fairness, he does say “almost” any investment, and I would tend to agree with that. Provided mentally retarded children that eat crayons aren’t allowed anywhere near said investment,

  9. @John Miller – I suspect that the amounts paid for the FTM are a tax deduction. There doesn’t always have to be a match in tax treatment. Sponsorship of your local boy scout football team for example would be allowable but not taxable.

    With 10 companies having been awarded the mark that’s a penetration of the market of around 0.00034%

    so, like, wow, who’d be a company that didn’t have the mark?

    I’m hoping the mark dies some time next year and look forward to Murphy’s blustering explanation of why it’s all a neoliberal plot.

    Either that or I’ll set up a rival organisation which allows companies to ‘self-assess’ that they are ‘Fair Share’ taxpayers for a tenner fee which gets them a certificate and their name added to a list of ‘fair share’ taxpyers. I’m working on the rigorous application process which at the moment consists of:

    1) Does your company pay its fair share of tax Y/N.

    Anyone circling ‘N’ just won’t get on the list.

  10. AndyC,
    Slightly off topic but it reminds me of a story in the news several years ago about a dispute with a builder. The key point being that the builder in question had a silver badge from some accrediting agent.
    So the news program gets hold of the guy running the agency and asks him for his view. He agrees that it’s a problem as he hands out silver badges to anyone that gives him twenty-five quid, but he has a solution, a new gold badge. And how will that be different? Inquires the reporter. It’s fifty quid! replies the agent.
    Perhaps you could include ‘more than fair’ to the options?

  11. “The fact is, almost any investment can make 1% rate of return to cover the cost of government borrowing,”

    I don’t think he’s being Courageous enough here. If we can make 1% this year then with a little effort we can make 2% next year.

    And if we can double the return over one year then we can do it again the following year to 4%. And the year after that to 8%.

    All it requires is a little courage, some sacrifice and using my new accounting method which I came up with all on my own and teacher didn’t help and now all the big boys and girls at the grown-up accountancy places are amazed at and I got. Gold star and it’s the best thing ever.

    And then we had ice cream and I saw a horse and it was good.

  12. @GlenDorran

    Just imagine the 8% return on the £120bn a year if the tax gap were closed, which would happen if only the government employed more members of the PCS.

    This is true and only those with their head in the sand who hadn’t won a special award would deny it.

  13. “there is almost no cost to the state from creating such jobs because of the savings made, but the net effect on the economy is extraordinary because getting a person into a decently paid job as a massive economic boost in its own right because of the extra spending power they have, which more than makes up the difference each and every year of the (net) £2,000 cost of creating the employment for them.”

    OK, I can believe that creating a non job might only cost the State £2,000 net, after it takes back tax and NI and stops paying benefits (although it wouldn’t be a very well paid job).

    But if the net cost of the job is only £2,000, then the extra spending power of the newly employed person is also only £2,000, after paying tax and NI and losing benefits. So there isn’t going to be any “massive economic boost”

    He can’t have it both ways. He can create a non job at a low cost that doesn’t really pay much more, after tax, than benefits, or he can put real spending power into people’s pockets, but that costs real money. You can’t magic real spending power from nothing.

  14. Richard

    He’s (to be blunt) not intelligent enough to understand an argument based on psychology and refuses to differentiate between different types of poor people or even speculate on causes of poverty or responsibility for it.

    It’s Black and white. These people don’t have enough money and it’s the mark of ‘the Courageous State’ that they are assisted through the mechanism of tax justice.

    If you truly think ‘he can;t have it both ways’ you haven’t been reading his output. He can have it ANY WAY HE WANTS because he knows more than 150 years plus of economic thought.

  15. No Ironman on this feed yet but anyone looking at the original post needs to take notice of this, from one of Murphy’s most infamous acolytes, Ivan Horrocks.

    ‘I agree that this is the (an?) elephant in the room, Richard, but it has two sides to it, and what you highlight is only one. Zoe Williams identified the other yesterday in a superb piece of analysis/comment on Bennett’s “brain-fade” incident ‘

    This is referred to in Tim’s ‘Umm, what’ post from yesterday – one does fear for the Uk’s future if these guys get anywhere near power….

  16. “Really? Any investment can make 1%? So no investment project has ever, before financing costs, lost money then? Concorde? Pets.com?”
    You are being misled by the accounting lackeys of the neo-liberal scum (who have conned HMRC into stating that no corporation tax is due from companies that report a loss). All companies make a hidden profit – but some hide it by reporting costs greater than revenue – and when those hidden profits are included in the tax base, alongside those unethically excluded because they are taxable in some overseas country, then we can collect the £120bn that would close most of the gap between what Gordon Brown collected and spent.
    [If anyone points out that Brown’s budget deficit was far more than £120 bn I shall denounce him as a neo-liberal troll.]

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