Funding the Future

It the government wants growth it should be taxing wealth

Rachel Reeves says she wants growth. If so, she should tax wealth, because the wealthy save much of what they earn, meaning that they don’t spend it, and so reduce growth. If that same income was redistributed to those on low incomes who will spend it then growth would follow. It really is almost that easy to increase growth.

Whatever else is claimed about it, crypto is not a currency

Cryptocurrencies are nothing of that sort because almost none are ever used to facilitate trade – for which they are wholly unsuited because of their uncertain values. They might just be highly volatile assets. But they might best be seen as mechanisms to undermine the state.

It’s time to bring the Bank of England back under government control

It’s claimed that the Bank of England is independent of the government. Almost certainly that’s a complete sham. But it’s one that’s been used to impose policy against the best interests of people in this country. This pretence has to end, and the government has to be accountable for all our economic policy.

Businesses are no more efficient than the people who work in them

It’s often claimed that business is efficient in a way government never can be. If that was true many fewer would fail. The reality is that both are only as good as the people who work for them – and their skill sets are likely to be remarkably similar.

Have high interest rates created the risk of a crash?

Economics says high interest rates should deflate share prices. But that’s not been true since 2021, because the real world does not work the way economics says it does. Instead, high interest rates have led to high share valuations. And now all that could change.

The far-right in thew USA are trying to deny its tax authority the funding it needs to operate

Far-right politicians hate government, or so they say. For decades they tried to deny it revenue by operating from offshore. Now they’re trying to deny funding to onshore tax authorities. In both cases the aim is the same: they want to undermine the state by denying it the funding it needs. #uk #money #economic #politics #bank #government #tax

Google is a monopolist

The trouble with monopolies has been known for well over a century. They can abuse their power to extract excess profits. Google has now been ruled to be a monopoly doing just that. Suppose that this ruling was extended to all monopolies and the power of the big corporation was shattered? What could happen then? #uk #money #economic #politics #bank #government #google #monopoly

Government finances are not like those of any household

Politicians keep claiming that the government must run its affairs just like a household. Absolutely nothing could be further from the truth, or more harmful for our economy.

Will falling stock markets lead to a recession?

Around the world stock market values are falling as widespread selling of shares take place. Irrational investors are dumping shares they only recently drove to record high valuations. Is this a timely adjustment, or the sign of a recession to come? It’s hard to tell – but the signs aren’t good, especially for a new government that says it is dependent on growth.

You cannot cut your way to growth

Although Rachel Reeves seems to think otherwise, it’s a simple economic truth that no government can create growth by cutting its spending. That’s because without exception the government’s spending is someone else’s income, and so by cutting its own spending a government always reduces the income in its economy.