Please explain to me like I’m a 5 year old. How do we fix the economy?

[bushproblems]

The job market is shocking, the minimum wage rise has not pushed up the salaries in the next bracket, food is so expensive and working hard no longer feels like it provides the rewards it used to.

Im earning more than I have in my life, but I feel poorer than I did 10 years ago when I was just above minimum wage.

I get that employers have more costs so the profits of a company won’t trickle down like it did, but what, or who, can fix this?

Im feeling very despondent about the future for me and for the younger people in my family

I’m sure that more knowledgeable people will be along soon.

But, in my opinion, one of the biggest steps towards tackling this, is to tax wealth.

There is an interesting movement at the moment of high net worth individuals recommending more wealth tax.

The problem is there are opposing theories on how best to do it.

The UK's main problem is very low average productivity per head. We produce too little.

We have too many young people not in education, employment or training ( one million). Too many people working too few hours. Too many people in ill health on waiting lists.

We need to improve our education, make our childcare less expensive so parents can work more. Sort out the NHS waiting lists so people can recover & get back to work. Improve diet and lifestyle so we have less obesity.

That would be a start.

The big question is how do we pay for those changes.

Allow councils to set business rates and create development zones so local businesses can thrive (as NYC did in the 90s when they cut crime and slashed tourist tax to attract visitors). Invest in a massive program of government house building to create jobs, drive economic development and create affordable homes. Windfall tax on privatised industries like energy, reinvesting the taxes in economic development schemes. Tax breaks for British manufacturing firms And inward investment that comes with jobs.

Brexit has wiped a huge amount off the economy (stopped all free trade between Britain and Europe which has impacted lots of businesses as well as prices.) And lots of productive tax payers have left to go back to their home countries (e.g. Poland). We need to rebuild our economic relationship with Europe, rather than going after trade deals with USA etc.

So for those of you who know a thing or two about the economy etc, is it predicted that the way things are at the moment is going to be a long term trend or is there a light at the end of the tunnel?

Well, start by looking at history and what has worked and what hasn’t worked.

Massively cheaper energy, from nuclear and dropping net zero vanity policies (divert the money to high quality carbon removal overseas, which is often 10x times more effective).

Massively cheaper housing by deregulating planning and abolishing SDLT.

Better infrastructure, starting by cutting costs, often up to 5-10x more expensive like for like than peer countries. Buy 5 times as many modern railways, reservoirs, hospitals etc for the money instead.

Tax policy that encourages low-cost, high-income jobs to relocate here.

Start to even out housing benefits (and similar) across the country. To optimise for growth, allocate more space in our most productive cities to those who are most likely to be working in high-productivity roles.

Immigration policy that factors in the full lifetime fiscal cost/benefits of the policies. Basically: more positive-economic-value immigration and less negative-economic-value immigration. Probably requires increasing healthcare and social care wages not filling the gaps with immigration.

As and when we can afford it, start to lower tax rates to incentivise work and investment and entrepreneurialism.

Mandatory voting to try to reduce the structural over-weighting of people who don’t really have a stake in long-term growth vs those who do.

UK not looking good, because demographics. But all bets are off becuase of AI.

Simple. Reduce the disparity in wages. Pay the rich less and pay the poor more.

It really isn't fair that some people earn £25k a year, and others earn that in a week. Are they really 52 times better at their job than the other person? Are they really 52 times more deserving than someone else? 52 times more intelligent? Do they work 52 times harder, or 52 times as many hours? No.

@NewUserName2244 You could not be more wrong. People with wealth rarely just sit on it (or in it). They invest it. We have wealth invested in numerous companies and investments. This is where companies get the funds to grow. They issue shares and the wealthy buy them. This provides funds for growth. Taxation stops or curtails this activity. It also means people stop spending or, at worse, move abroad. We need wealth here to create a stronger economy because punishing the better off leads to less employment. You can see this in a basic form with hospitality. Taxing people leads to less discretionary spending.

So we need the economy to grow. We need companies to have bouyant market conditions. Then we need to supply them with funds for growth. This might mean they need R&D for new products or better marketing to get a better market share. This applies to services and commodities.

In some areas we struggle to compete and in some areas of work, productivity is low. The state services have low productivity. We have too many work age people doing nothing and too many on benefits. The NHs is not run by a single other country, yet many have better outcomes.

We have an expensive university system with millions living away from home to go to university. Parents pay up but in other countries this isn’t the system.

We have to stop over taxing business and individuals and reduce benefits and the size of the state.

Yeah cos killing the golden goose has always worked...

Our economy is much more affected by global events than anything our politicians do. Of course, sometimes, they do very very stupid things, but our biggest problems right now are down to COVID and the war in Ukraine.

We can all jabber on about how to tinker around the edges but unless there are no military wars, no trade wars, no natural disasters or something else we haven’t even thought of yet, tinkering around the edges is all we’re doing.

Pray for peace and plan for climate change.

Sack Rachel Reeves.

Get some one who has worked in bars or retail in the last five years in as an advisor.

Stop caps on borrowing for social housing building. It's costing more in temporary housing costs anyway.

Sack half of the NHS management in bullshit roles.

Tackle NHS maternity issues once and for all. It's costing the economy and the NHS huge amounts in unseen costs.

Tackle parents who don't pay maintenance and close loopholes on the self employed on this - make single parents less dependent on the state.

Have a very serious conversation about the continuous of the triple lock for all pensioners.

Pass the euthanasia bill quickly and without proper scrutiny to kill off expensive citizens quicker (I'm actually opposed to this idea but it would save us a lot of money)

Try to improve British supply chains from start to finish to avoid leaking money abroad.

Relocate parliament to the north whilst the ongoing restoration is ongoing. Seeing the outside of London might focus a few minds fairly quickly.

More opportunities in the army available to all - to work on discipline and training for young people who traditional education has failed for. They need to do something otherwise they end up in a predictable cycle - this means early intervention. This would save us a fucking fortune.

Better investment and breaks for renewal energy and batteries because it's making us vulnerable in a volatile market which will eventability only get worse as supplies dwindle. We need to stay ahead of the game on this or we will suffer a lot more economically in the future. Deadlines for ending stuff doesn't work without these breaks.

I disagree with this and I’m on min wage. I don’t for a minute think I should be on anywhere near as much as my vet friend, my mental health nurse friend and my solicitor friend. They’ve studied for years and I haven’t. Why should they be paid less because I didn’t study like I should have?

There is far too much tax. It affects everyone's disposable income, increases inflation, and is a detriment to businesses ability to offer higher salaries to their workforce. The increase in tax on small businesses is going to be a disaster.

Whenever someone suggests “tax the rich” and “tax wealth”

And then what?

Who do you tax next?

Taxing people more doesn’t “solve the economy”

Who would bother starting businesses with massive risk and accumulating wealth if there is no benefit? There are more countries than the UK - many of which are better places to start a business and accumulate wealth

We have a productivity problem. Not a distribution problem.

That the rich can pay is fantasy economics. Even if we took everything away from the richest in our society, it wouldn’t last long.

To be a rich country again, we all have to contribute. Adults need to be economically productive. They need to do useful work, full time.

To get this going we meed to encourage enterprise through the tax system, spending on education, investment in infrastructure.

To fund this we need to find savings in our expenditure. What can be cut back? How can we make our government bureaucracies cheaper? How can we deliver public services more efficiently?

Wages are overtaxed relative to wealth. This has reduced social mobility and what you inherit is more important than your education, what job you do, or how hard you work. Wealth is becoming more and more concentrated at the top. We need to tax wealth, but politicians tax income because it’s easier.

honestly I don’t know how I’d fix it - or even if it’s fixable at this point. I am beginning to think we should have a finite amount of wealth any individual can have. Having billionaires and trillionaires hoarding wealth whilst billions struggle to survive is insane.

Stop paying billions we do t have to

Tax wealth (a bit)
build houses so people can afford to live somewhere and then they can spend on other things.
support people to get jobs by supporting social prescription for mental health

Increase the real value of salaries. This incentivises higher rate taxpayers to work more rather than retiring early etc, and keeps people on lower salaries in work. People aren't lazy or bullshitting about mental health - you can only do a full-time gruelling job whilst living in a mouldy HMO for so long before you crash out and literally cannot keep going. If you treat workers like shit they break, and then productivity crashes. If people can spend more, then more business will stay in business, meaning more jobs. All those unemployed people who are supposedly fake-mental-health-whingers actually don't have enough vacancies to apply to.

Provide ample childcare which enables parents (overwhelmingly women) to be as economically productive as they wish. This also enables people to procreate, driving up the birth rate, which is important, because at the moment we have an enormous retired population to support and not enough jobs, or taxpayers, to furnish the pensions triple lock.

Get on top of rocket and feather pricing. Supermarkets have taken the absolute piss and because it's an easily monopolised sector (high barrier to entry) free market forces don't function effectively. Grocery prices need to be capped. Many basic items have doubled in price over the past five years and I don't believe those are essential price rises due to COVID/fuel costs/the war in Ukraine. Fucking spare me. They are taking the piss, and they are big, powerful lobbyists, but they need to be come down upon, hard.

Decentralise from London - I saw something about how the UK is the only developed (snort!) country which is seeing more, rather than less, concentration around one city. This drains the rest of the country - it's not that people in, say, the most deprived regional areas can't be fucked to get a job. There are very few jobs, and there are very few GPs, so if you're struggling to work because of ill health, you're completely fucked. I have lived in many such areas so I know this well. I'm currently living in an expensive hellhole which is desirable enough to be brimming with earnest doctors, and the difference in waiting times and the quality of healthcare is night and day.

I’d also implement a rule where nobody in a company can be paid more than 10x the salary of the lowest paid worker pro rata. Which would encourage bosses to increase wages at the bottom