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Political Ramifications of Covid-19 Pandemic


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I don't know, I read somewhere yesterday, (and i know that's hardly the strongest source ever) that 49% of people in employment are now having (at least some of) their wages paid directly by the government at this point.

What wriggle room is there under the current economic paradigm to do anything other than raise taxes and cut costs to get out of that?

Genuine question that to our resident economists. 

If public sector employees are expecting a pay rise any time soon i think they are in for a shock, whether it's political suicide or not. 

Is it time for UBI? Time to link a similar UBI style payment system to citizenshIp? to get very real about the changes heading our way in the labour market? 

Oppression works of course, war generates profits and taxes of course. So if we're ok living at the top of the proverbial global pile at the expense of the health, lives and freedoms of those in poorer nations then WE could surely find a way out of this that preserves our way of life as it is or close to it.

I doubt it's the most pressing concern of those in downing street, or the white house or wherever and I fear the practical reality may be that we are thrust into the multi polar world that's been looming for some time, which from our perspective could preserve the status quo in some form for some time.

But if this whole episode doesn't highlight a need for a paradigm shift away from nation states, usuary, war and so on to a more cohesive one world structure then nothing ever will. 

Pandemics seem to care very little for the arbitrary lines we've created as a species. Whether we can learn to share a little more while basic needs of individuals aren't met however is an issue I can't see being resolved anytime soon. 

We've seen first-hand even in the so called developed nations how cheap and expendable human life really is, and that's not necessarily political, more the reality of human existance. What is it we as a collective want to value coming out of this though? 

As I said in similar vein about preserving the nhs, to quote Hillel the elder

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"If I am not for myself, who will be for me? And being for myself, what am 'I'? And if not now, when?"

 

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54 minutes ago, welnik said:

Please, elaborate, I'm very interested? 

I think the debate on how it is all paid for will be as fundamental as any other part of this crisis, so I’d expect it’s inevitable this thread will include arguments about it. When that happens I will join in !
 

But for the present I think it’s safe to say there’s plenty of money, and plenty of alternative credible economic theory, around. Not the least of which is known ( somewhat oddly, as it’s not new) ‘modern monetary theory’.

Whether we see the political or ideological will is another question. It’s usually easier to convince ordinary people to stump up.

 

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57 minutes ago, VILLAMARV said:

I don't know, I read somewhere yesterday, (and i know that's hardly the strongest source ever) that 49% of people in employment are now having (at least some of) their wages paid directly by the government at this point.

What wriggle room is there under the current economic paradigm to do anything other than raise taxes and cut costs to get out of that?

Genuine question that to our resident economists. 

 

 

There are alternatives.

And if those alternatives aren’t welcome, ( politically or ideologically )increased taxation done properly shouldn’t require the destruction of our infrastructure or of people’s livelihoods.

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3 hours ago, chrisp65 said:

I’d hope that this rumour being floated around that there will be a 2 year public pay freeze, is simply a tactic.

I suspect it's more likely that a blowhard has got on the internet (again).

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'How will it be paid for' is a simple question to answer, but it is also the wrong question to ask.

The actual mechanism of how it will be paid for is simple. It will be paid for out of bond auctions, and today's historically low interest rates make this a comparatively inexpensive experience, when compared to many other periods in history. Apparently the Chancellor has expressed a preference for a 'higher but stable' level of debt-GDP, and has indicated the Treasury will do 'whatever it takes', so there should be no reason to expect this money not to be forthcoming for the duration of the crisis. When it comes to eventually lowering that debt-GDP ration, it will probably be done through some combination of inflation and (eventual) tax rises, but people need to realise that as we come out of the health crisis, there will be an enormous economic crisis, which will require huge amounts of fiscal stimulus, so the spending is barely started yet.

But more to the point, the question itself is the wrong question to ask. If I say to my wife that I want a BMW, she can ask 'how can you afford it', because the alternative option of not buying a BMW is a real one. There is no alternative option of not having a global pandemic. The government's current solution is *the cheap one*, when the only alternative is simply allowing vast quantities of businesses to fail and much larger rates of unemployment, and/or suffering a collapse of the country's healthcare system. If Russia, for example, declared war on the country tomorrow, and somehow undetected 100,000 Red Army soldiers landed on the beaches, it would be absurd to question the idea of fighting with 'but how will we pay for it?'. Sometimes there just isn't another option.

Edited by HanoiVillan
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I read an interesting proposal ( was an opinion piece so carries no real weight as such)  , forgive any inaccuracies as I'm kinda working from memory  , but essentially it was proposing a one off pension fund grab , whereby £1,000 was taken from peoples pension pots 

Clearly this can become dangerous ground  , but the estimate was that it could loosely speaking give the government £32 bn in one easy grab  .. kinda pay later rather than raising taxes on everyone and hitting them in the now

Clearly you can go into more detail and means test and say pension pots under £xx are left alone  , pension pots over £xxx we take £2k ,£3k or whatever  ,if you are are 25 year old working person and your pension fund had £1k taken from it , it would be circa 33 to 40  years before you "paid" for it

As i say , it was just an opinion piece via flipboard so alas i can't locate it now

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27 minutes ago, VILLAMARV said:

How so? Genuinely baffled.

OK, let me qualify that.

If the suggestion was put forward by someone that earns less than public sector workers and has been relied on equally as heavily. If that person wanted to use the money to divert in to infrastructure and rebuild a different society with more communal principles and objectives. That could be an interesting model to debate.

If it’s suggested by someone that earns a more comfortable living, doing a less important job. Then its pompous, arrogant and selfish.

For instance. An MP should only suggest the bin men and play specialists get a pay freeze after all the banker bonuses and MP perks have been thoroughly rinsed.

How about, we give the public sector the next 5 years of city profits, and we give everyone in Canary Wharf a nice badge that says ‘special’.

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40 minutes ago, tonyh29 said:

I read an interesting proposal ( was an opinion piece so carries no real weight as such)  , forgive any inaccuracies as I'm kinda working from memory  , but essentially it was proposing a one off pension fund grab , whereby £1,000 was taken from peoples pension pots 

Clearly this can become dangerous ground  , but the estimate was that it could loosely speaking give the government £32 bn in one easy grab  .. kinda pay later rather than raising taxes on everyone and hitting them in the now

Clearly you can go into more detail and means test and say pension pots under £xx are left alone  , pension pots over £xxx we take £2k ,£3k or whatever  ,if you are are 25 year old working person and your pension fund had £1k taken from it , it would be circa 33 to 40  years before you "paid" for it

As i say , it was just an opinion piece via flipboard so alas i can't locate it now

Australia has let people raid their superannuation funds (self funded pension) if they need money. It’s a bit of a killer though if you have to do it. The stock market has taken a hit so you’re cashing out at a bad time and if you are young it will hurt you massively when it comes to retirement age, having  missed out on all those years of growth and compound interest. 

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45 minutes ago, chrisp65 said:

OK, let me qualify that.

If the suggestion was put forward by someone that earns less than public sector workers and has been relied on equally as heavily. If that person wanted to use the money to divert in to infrastructure and rebuild a different society with more communal principles and objectives. That could be an interesting model to debate.

If it’s suggested by someone that earns a more comfortable living, doing a less important job. Then its pompous, arrogant and selfish.

For instance. An MP should only suggest the bin men and play specialists get a pay freeze after all the banker bonuses and MP perks have been thoroughly rinsed.

How about, we give the public sector the next 5 years of city profits, and we give everyone in Canary Wharf a nice badge that says ‘special’.

Cool, so ****wits like me can still have a go at guessing what might happen then. 

Phew. 😀

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1 minute ago, LondonLax said:

Australia has let people raid their superannuation funds (self funded pension) if they need money. It’s a bit of a killer though if you have to do it. The stock market has taken a hit so you’re cashing out at a bad time and if you are young it will hurt you massively when it comes to retirement age, having  missed out on all those years of growth and compound interest. 

yeah I can see that not being a good thing , sounds similar to what Osborne proposed whereby people could raid their  defined contribution pension savings , albeit you had to be over 55   ...which was soon scrapped I believe ?

 

but if it was "just " £1k for most people their funds would have time to recover  ...

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20 minutes ago, LondonLax said:

Australia has let people raid their superannuation funds (self funded pension) if they need money. It’s a bit of a killer though if you have to do it. The stock market has taken a hit so you’re cashing out at a bad time and if you are young it will hurt you massively when it comes to retirement age, having  missed out on all those years of growth and compound interest. 

Do you know any details. I have one of those - a super, I mean, but I'm never going to be able to take it, as I don't live there (I worked there and paid taxes there). I'd love to get my 5000 dollars or whatever in my mits.

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43 minutes ago, blandy said:

Do you know any details. I have one of those - a super, I mean, but I'm never going to be able to take it, as I don't live there (I worked there and paid taxes there). I'd love to get my 5000 dollars or whatever in my mits.

You’d have to look into it. Your super is your money though, it is part of your salary package paid into a special bank account and managed by a fund manager (i.e. it’s not like the U.K. national insurance scheme paid by the government, it has nothing to do with the taxes you paid). You would be able to log onto your super account and watch what it’s doing over the years. I would be very surprised if you were not able to access it at retirement age. 

Edit: The ATO website says you need to be a resident and recently lost your job to access it early. 

Edited by LondonLax
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Raiding private pensions would be the single easiest way for the government to sow distrust in pension schemes and ensure we have a pensions crisis affecting several generations.

It's taken a lot of work to get people finally saving in to them through the workplace pensions initiative. There's no clearer way of undoing that work and stopping people from contributing towards their retirement.

 

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Cut cut cut

I hadn't even looked at the news yet and here it is already.

A 10 billion pound black hole and 20% in cuts is the solution. Just for once can't the headline be "Billionaires fear 20% wealth tax to pay for saving their lives and businesses".

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Councils in England fear they will have to make budget cuts of 20% and face a social care funding shortfall of £3.5bn due to the coronavirus pandemic.

Labour claims local authorities are facing a £10bn black hole as they encounter spiralling costs while revenue streams such as parking charges dry up amid the lockdown.

Cuts of up to 21% could be needed to balance the books, according to the analysis by Labour, seen by the Guardian. They could see a shortfall of up to £3.5bn across the local government social care sector, with 225,000 adult social care places put at risk within this financial year, it says.

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