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Post by Orac on Oct 16, 2023 21:27:44 GMT
Wealth doesn't cause inflation - in fact, almost (but not entirely) the converse is true. Inflation is a changing relationship between wealth and money - ie too little wealth being created for too much money being borrowed. Don't be daft. Inflation is caused by too much money in the market, doesn't matter whether its borrowed or earned. Money is money However, in terms of incentives it does matter. Inflation is caused by the relationship between money and wealth changing. You don't want to hit creating wealth because creating the wealth (in itself) is anti-inflationary |
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Post by zanygame on Oct 17, 2023 6:50:51 GMT
Don't be daft. Inflation is caused by too much money in the market, doesn't matter whether its borrowed or earned. or created - we have inflation because Mark Carney (and the Treasury) spent the last 13 years keeping interest rate at artificially low amounts and printing QE like there was no tomorrow. Well there is a tomorrow and it has arrived... of course Mark Carney has fucked off now saying it's nothing to do with him.. Possibly, but that just hid the fact that house prices were going up hand over fist. So why are only those with mortgages to be punished for that mistake? In any case, the question is how to reduce demand and cool inflation. You can take the money out of peoples pockets in two ways. 1, increase interest rates and give the money to the rich. 2, Increase tax and give the money to the government. 1, Punishes the poorer more 2, Punishes the richer more. And there you have it. |
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Post by Pacifico on Oct 17, 2023 7:25:39 GMT
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Post by zanygame on Oct 17, 2023 17:39:04 GMT
I didn't think it would be difficult to find a rich man saying tax wont work. The article is full of unfounded claims, such as that Fiscal policy is slow. Or that is just redistributes money from one sector of the economy to another. There is no reason it needs to do either. Smoke and mirrors. |
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Post by Pacifico on Oct 17, 2023 21:11:19 GMT
Zany - are you a supporter of Modern Monetary Theory?
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Post by zanygame on Oct 18, 2023 7:15:01 GMT
Zany - are you a supporter of Modern Monetary Theory? Not really. I think both growth and correct taxation are needed. But this is about how we control inflation. Which can also be done in two ways. Want to lower the amount of cash in the economy in a fair way, temporarily raise taxes and pay down public debt. That way we all share the load according to ability. But Oh no. The rich make the rules and guess what they think is best. Yep, those that need to borrow money should carry the load. Who'd have thought it. |
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Post by Orac on Oct 18, 2023 10:59:01 GMT
Zany - are you a supporter of Modern Monetary Theory? Want to lower the amount of cash in the economy in a fair way, temporarily raise taxes and pay down public debt. That way we all share the load according to ability. That isn't actually fair. You are 'punishing' everyone for a problem caused by the behavior of some. You send a weaker signal to stop the behavior and send entirely counter-productive signals. Defining the problem as 'people spending too much' or 'too much cash' is missing granularity. |
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Post by johnofgwent on Oct 18, 2023 15:44:37 GMT
Perhaps a better approach might be building houses (or rather apartments) to rent. who would you pay that rent to ? When houses were 3 x a graduate student’s income, the UK was awash with homes of all kinds owned by councils and development corporations avaikable to rent at prices controlled by a tribunal. |
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Post by zanygame on Oct 18, 2023 15:51:10 GMT
Want to lower the amount of cash in the economy in a fair way, temporarily raise taxes and pay down public debt. That way we all share the load according to ability. That isn't actually fair. You are 'punishing' everyone for a problem caused by the behavior of some. You send a weaker signal to stop the behavior and send entirely counter-productive signals. Defining the problem as 'people spending too much' or 'too much cash' is missing granularity. Oh really. Who's fault is it? |
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Post by Orac on Oct 18, 2023 16:15:03 GMT
That isn't actually fair. You are 'punishing' everyone for a problem caused by the behavior of some. You send a weaker signal to stop the behavior and send entirely counter-productive signals. Defining the problem as 'people spending too much' or 'too much cash' is missing granularity. Oh really. Who's fault is it? It's not a matter of fault. A price is incorrect and needs to change. |
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Post by Pacifico on Oct 18, 2023 17:01:59 GMT
Zany - are you a supporter of Modern Monetary Theory? Not really. I think both growth and correct taxation are needed. But this is about how we control inflation. Which can also be done in two ways. Want to lower the amount of cash in the economy in a fair way, temporarily raise taxes and pay down public debt. That way we all share the load according to ability. But Oh no. The rich make the rules and guess what they think is best. Yep, those that need to borrow money should carry the load. Who'd have thought it. So you think that artificially low interests rates are sustainable over the long term?. At some point you have to bring the economic back to some c]kind of reality - keeping interest rate sat zero at the same time as you inject massive amounts of QE into the system was never going to work long term. The base rate is still below inflation when for a healthy economy is should be around 2% above it. |
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Post by zanygame on Oct 18, 2023 18:00:01 GMT
Oh really. Who's fault is it? It's not a matter of fault. A price is incorrect and needs to change. You said "That isn't actually fair. You are 'punishing' everyone for a problem caused by the behavior of some. Simple enough question. Who are the some. And why are you making mortgage holders take the brunt. |
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Post by Orac on Oct 18, 2023 18:03:10 GMT
It's not a matter of fault. A price is incorrect and needs to change. You said "That isn't actually fair. You are 'punishing' everyone for a problem caused by the behavior of some. Simple enough question. Who are the some. And why are you making mortgage holders take the brunt. You used this terminology - That way we all share the load according to ability.I'm explaining why this approach is unfair. You spoke in terms of fairness and replied in kind. Nobody is being punished when a price is wrong and needs to correct. |
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Post by zanygame on Oct 18, 2023 18:34:29 GMT
Not really. I think both growth and correct taxation are needed. But this is about how we control inflation. Which can also be done in two ways. Want to lower the amount of cash in the economy in a fair way, temporarily raise taxes and pay down public debt. That way we all share the load according to ability. But Oh no. The rich make the rules and guess what they think is best. Yep, those that need to borrow money should carry the load. Who'd have thought it. So you think that artificially low interests rates are sustainable over the long term?. At some point you have to bring the economic back to some c]kind of reality - keeping interest rate sat zero at the same time as you inject massive amounts of QE into the system was never going to work long term. The base rate is still below inflation when for a healthy economy is should be around 2% above it. Well yes I think the way we lend money has changed a lot over the last few decades and no longer relies on savings. That said I don't think its got much to do with who you punish for inflation. Maybe a separate conversation. |
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Post by steppenwolf on Oct 19, 2023 6:25:00 GMT
Zany - are you a supporter of Modern Monetary Theory? Not really. I think both growth and correct taxation are needed. But this is about how we control inflation. Which can also be done in two ways. Want to lower the amount of cash in the economy in a fair way, temporarily raise taxes and pay down public debt. That way we all share the load according to ability. But Oh no. The rich make the rules and guess what they think is best. Yep, those that need to borrow money should carry the load. Who'd have thought it. Financially illiterate. The UK's interest rates are not solely determined by the BoE. We live in a global environment and we rely on borrowing so our interest rates are heavily affected by global rates - and global rates have gone up. And the huge borrowing that we now have loaded ourselves with is partly down to Gordon Brown's expansion of the state and reliance on PFIs and it's partly down to our lockdowns during the pandemic. Sunak borrowed an extra £400 billion to finance furlough. When you ask "who's (sic) fault it is" I'm not sure who you're thinking of but the people who are actually to blame are Brown and Sunak. |
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