Aaaaand Yes! He misses the point!

It was almost inevitable that the right-wing think tanks would start clamouring for austerity by delivering attacks on the most vulnerable in society as soon as they felt the coronavirus made it possible to do so, and the process has now started.

The Guardian reports this morning that:

The coalition government policy that led to state pensions rising quicker than wages should be scrapped as part of an “intergenerational reciprocation” for the costs of battling Covid-19, a thinktank has said.

The Social Market Foundation (SMF) proposes that the massive economic cost of the emergency measures deployed to manage the pandemic must be shared fairly between old and young, and that some of the huge anticipated government deficit could be funded by abandoning the so-called triple lock guarantee on state pension rises.

The economic logic underpinning this demand is entirely flawed.

It assumes that there the coronavirus crisis must be paid for, when all that is missing is credit at present, as I have explained.

It assumes that payment must come from across society when many have nothing more that they can contribute.

GDP is down by perhaps 25%. That means production is down by perhaps 25%. That also means that consumption must fall by 25%. Because production equals consumption – that’s part of our GDP definition.

Someone, somewhere, must reduce their consumption. It isn’t all just about the pieces of paper we use to ration consumption, it’s not all about money. If less is being produced then some must consume less.

OK, who?

11 thoughts on “Aaaaand Yes! He misses the point!”

  1. Well I thinks it’s clear where a lot of consumption has disappeared. The leisure, sports and entertainment industries have more or less ceased to exist overnight.
    My pub and restaurant expenditure has dropped to the point where I’m almost better off financially being on furlough!

  2. Perhaps a payable Fair Tax Mark for individuals could be introduced that we could all apply for. That would give us all something to spend additional money on?

    Every little helps?

  3. Pension credit protects those worst off among the pensioners so austerity will only hit them if HMG abandons or severely scales back pension credit rather than if it abandons the triple lock.
    Currently the lockdown is hitting anyone on more than £30k who is furloughed or self-employed and *shareholders*. Millions and millions (literally – Lloyds Bank alone has 2.4m small shareholders and the other companies who have been strongarmed into cancelling dividends have millions more with modest overlap as we are talking about demutualised Building Societies: Halifax, Woolwich, Abbey National, Bradford & Bingley … and demutualised insurers e.g Norwich Union) of small shareholders are taking a significant hit. Add in all those with pensions or annuities fixed in money terms which are going to be clobbered by the inevitable inflation (hundreds of £billions extra chasing 25% less production). The private sector pensioner is taking/about to take a thrashing, while the public sector gold-plated inflation-proofed pension is untouched.

  4. I get the state pension, and the triple lock means about sweet FA. The interest on my deposits in the bank is – you guessed it – sweet FA. I still work, and in the lockdown I’ve lost £2k in fees. Tell me Tim, when have I every been £2k better off because I’ve been able to buy Chinese tat like Christmas crackers somewhat cheaper than the UK manufactured ones I had in my childhood? (and saved £2k).

    I’d like it if the West told the Chinks they can whistle for the debt they hold – it’s now written off as valueless.

    And it’s about time they started eating Quorn, that’ll teach the slitty-eyed bat-munching fuckers what real food is!

  5. “It assumes that there the coronavirus crisis must be paid for,”

    What, is he arguing that the saints who work for the NHS shouldn’t be paid???? That’s…. heresy! Burn the Heretic!!!

  6. I love this idea that the only thing we get from China is “tat”. The Left have sold the idea that we consume witlessly really well.

    In fact China produces those rare earth that make our phones and medical equipment work. They produce steel for our cars etc. The make our clothes.

    The amount of “tat” we buy from China is trivial, and much of that is in the eye of the snob. I liked cheap toys for my kids, and I don’t need no Tristram to tell me I should buy much more expensive ones because mine were “tat”. (We bought an awesome $500 play house from a Chinese outfit. Is that “tat”?)

    You will be *far* poorer Witchie.

  7. Left don’t care about Brits in Austerity, RoPs more important

    Police Threaten Reporter over reporting on a Protected group TL;DY

    Funny, I thought they’d all decided they wanted people to report guideline-breakers..?
    I wonder why they suddenly decided they don’t?

    WY Plod haven’t had latest update:

    China have replaced RoPs as top of victim tree?

    New Rule: Virus Shaming | Real Time with Bill Maher (HBO)
    In his editorial New Rule, Bill argues that China should be held responsible for allowing the conditions that scientists have long warned could lead to a pandemic

    Sargon reacts – imo nails many Left hypocrisy from victim tree, facsisim to animal rights and exposes Left publicly wanting Bill, Boris etc to die From CV19

    Yet Left insist they are the kind, tolerant nice people no matter how frequently mask slips and truth exposed

  8. ‘… the massive economic cost of the emergency measures deployed to manage the pandemic must be shared fairly between old and young,’

    I think use of ‘to manage’ there is meant to amuse rather than describe.

    Since this entire headless chicken race is aimed at delaying departure of some in God’s waiting room, and about a virus that has little or no effect on anyone healthy under 70, the whole massive debt should ‘fairly’ be dumped on the elderly… no? ,

  9. John B

    I’m not convinced that the elderly have been the ones calling for this lock down. From my own anecdote, the elderly would appear to be the ones less calling for this economy destroying compulsory lock down than those who are younger. The elderly can mostly make their own decisions and self-isolate anyway, as many are not so economically active. That’s part of the peculiarity…

  10. @PF

    A lot of elderly accept death inevitable and if they catch CV19 and die, so be it

    I’m not elderly, but feel same – maybe because I’m a biker & risk-taker

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