Economy Home Truths

[Magschoice]

Just read this article:

Former Chancellor Lord Hammond has said the government & the prime minister must risk unpopularity and tell "some difficult home truths" about the state of the economy.

“That (cost wise) it has been the equivalent of fighting a war. The effects of which are going to be with us for a very long time”

“There will continue to be a rise in unemployment post pandemic, which is already at the highest level it has been since 2015.”

The government are 2 trillion in debt. I fear massive job losses and spending cuts. I do think the housing market will hold up though, to a certain extent

What are everyone’s thoughts?

The shit is about to hit the fan!!!

I think we are well and truly up shit creek

Yet some of the lockdown fanatics on here believe we can keep borrowing billions per month to pay for furlough and keep everything shut until we've cured death.

The resulting economic mess and lack of funding to the NHS in years to come will be a bigger issue than Covid has been

@Jo99996 but if you say that (and the fact the resulting poverty is likely to kill way more than this virus ever had the capacity to do), you will be accused on here of being a granny killer!

@crazycatlady83. I'm already taking cover!!

Those who've been "protected" financially during covid are going to have to pay towards the debt.

For far too long, the tax burden has been concentrated on "average" workers, middle England, etc., with increases to NIC (workers only), introduction of workplace pension deductions (workers only), student loan repayments (mostly younger workers), claw back of child benefits when income over £50k (mostly affecting working age adults). I think pensioners need to brace themselves for being asked to contribute more as on similar income levels, they're having a lot less deducted than workers on the same income.

I suspect we need to be ready to say goodbye to a lot of public services.

Schools will get less funding/more backdoor privatisation. Ditto the NHS, huge waiting times and people forced into private, NHS Dentistry (whats left of it) gone or severly reduced. Other stuff like local council services will be massivly run down or charge for use, like dumps, bin tax. Street lights off permanently etc.

Say good bye to subsidised transport, more bus routes gone and lots of railways closed.

Pay per mile tax on cars and road in even worse states, higher fuel duty and extra tax on electric etc

They will have to increase taxes, corporations hit, VAT could go up, massive budget cuts

Or alternatively they could just go on with printing money "quantitative easing"

Hyperinflation, anyone?

It would be foolish to tax anyone more before we have had a strong recovery. It needs to be treated like a war, paid off over many, many years.
The elephant in the room needs to be addressed- how long do we all expect to live and who is going to pay for it, that includes healthcare and social care. No point taxing rich pensioners now who could just move to another country, if they wanted to, especially those on high final salary pension schemes. I do not want to be kept alive if I have Type 2 diabetes and then dementia like my great grandmother well into my 90s following 3 heart attacks (she died in another country but her care cost the government there something like 800,000 GB - she didn’t actually enjoy this in her lucid moments, it was clear). I would like the law to catch up with this kind of situation and let people themselves decide way in advance.

The budget will make for interesting reading

I dont think the upcoming budget will deal with it, its too soon.

It'll be later on, probably next year and it'll make the Tory/Lib Dem austriety look like a spending spree.

@Jo99996 I think you’re right that many things will disappear which we have previously taken for granted.

I expect that in future people will look back on the late 20th/early 21st century as an unusual time when the state could afford to carry ordinary people. Universal healthcare and state pensions have to be drastically cut.

Time for the public to adjust to a new reality I fear.

@Jo99996...I also agree with your more recent comment, above. Yes I think the coming austerity will be something people never expected.

Why will we have to pay it back immediately? Why can't it be done over decades? And if so will that be still as severe? Or is there more to it than just borrowing?

@StealthPolarBear we live in a short term world now politically.

Look at the pointscoring was done over the debt when the banks needed bailouts. They'll want to start "reducing the defecit" ASAP ahead of the next election, should one ever be allowed to happen.

We've been told for years th ere is no money, no magic money trees. Then covid hit and somehow the cash was found, thankfully.
We have a crisis just as big that needs investment, and that will return over future decades. So why can't we find money to invest in childrens futures?

Thank you, x post

@Jo99996

Yet some of the lockdown fanatics on here believe we can keep borrowing billions per month to pay for furlough and keep everything shut until we've cured death.

The resulting economic mess and lack of funding to the NHS in years to come will be a bigger issue than Covid has been

The ones at home on a full wage say that and I am at home working but people need to work now !

Need to crack down on tax avoidance/evasion.

Sort out corporation tax - too many big companies paying insignificant amounts.

Hammond states explicitly in that article that it will be paid back over decades. Drastic austerity measures in order to pay back the deficit more rapidly than that would be hugely counterproductive, especially in a time of negative real interest rates.

@StealthPolarBear You say in your list above that when covid hit, ‘cash was found’. It wasn’t. It was borrowed from our future selves, and it is shortly going to be demanded from us.

@StealthPolarBear I think I misunderstood - you are making the point that we need a money-finding approach to restore children’s futures? I agree but have little faith that children will be a priority unfortunately.

Oh, joy ...

My MIL (76) is happy to report that she has £230,000 in the bank. She doesn’t need it - has a healthy pension, owns her own home. ‘Likes to know it’s there.’

Why is this ok when the economy is fucked?