In todays news...

[slowsider]

Whichever way you swing it, in the uk the top 1% of earners contribute 30% of the country’s tax revenue.

From 30% of the country's income?

It would be a lot less than 30% of the countries income because they pay a higher rate of tax.

You're right, it's the top 2%

[Horse]

Whichever way you swing it, in the uk the top 1% of earners contribute 30% of the country’s tax revenue.

From 30% of the country's income?

It would be a lot less than 30% of the countries income because they pay a higher rate of tax.

Some people earn but don't pay much tax.

[Greenman]

Reaganomics (/reɪɡəˈnɒmɪks/; a portmanteau of Reagan and economics attributed to Paul Harvey),[1] or Reaganism, refers to the neoliberal[2][3][4] economic policies promoted by U.S. President Ronald Reagan during the 1980s. These policies are commonly associated with and characterized as supply-side economics, trickle-down economics, or "voodoo economics" by opponents,

Reggaenomics?

[demographic]

Washington post article with information from a 50 year study in 18 countries that shows how trickle down economics is fairly obvious shite. Don't let it stop the fairly obvious shlte though eh?
https://www.washingtonpost.com/business ... kle-down/

[Horse]

It’s ironic, says John McDonnell in The New Statesman. When I was Jeremy Corbyn’s shadow chancellor, the media ran “story after story” predicting that our expansionary economic plans would cause a run on the pound. I asked people in the City how to ensure that wouldn’t happen, and their response was always the same: “The markets do not like surprises.” Investors may not “like or agree with” your policies, I was told, but they want to know them in advance. That, as much as anything, was Kwasi Kwarteng’s big mistake last week. “There is a significant difference between pulling rabbits out of a hat and delivering a high-voltage electric shock.”

And today:

Summary
- Prime Minister Liz Truss tells Sunday with Laura Kuenssberg she stands by the measures announced on 23 September
- The PM says she did not discuss with her whole cabinet the controversial scrapping of the 45p top tax rate
- She accepts the government could have "laid the ground better" before setting out its plan to cut taxes

[Horse]

Sunday Times front page:

Kwarteng budget party with financiers who may have cashed in

20221002_095333.jpg (218.57 KiB) Viewed 308 times

'Gave insights about planned spending cuts'. Before telling the Cabinet or other MPs?

[Horse]

Told you.
They're properly going after him now to force him to resign, then they'll go after Truss.

So it's the BBCs's and paper's fault that Truss and Kwarteng didn't inform or consult?

[slowsider]

Sunday Times front page:

Kwarteng budget party with financiers who may have cashed in

20221002_095333.jpg

'Gave insights about planned spending cuts'. Before telling the Cabinet or other MPs?

Autocrats, Oligarchs, Useful Idiots, Peasants... an October revolution, comrades?

And made possible by 'taking back control'.

[Horse]

Sunday Times front page:

Kwarteng budget party with financiers who may have cashed in

20221002_095333.jpg

'Gave insights about planned spending cuts'. Before telling the Cabinet or other MPs?

https://www.bbc.co.uk/news/uk-63106939

The Conservative Party chairman has defended the chancellor after a report claimed he discussed confidential plans for the economy with financiers at a private champagne reception.

Jake Berry said Kwasi Kwarteng had not shared any insights at the party - which he was also at - held in the hours after his mini-budget last week.

[Horse]

Told you.
They're properly going after him now to force him to resign, then they'll go after Truss.

So it's the BBCs's and paper's fault that Truss and Kwarteng didn't inform or consult?

See above

Who to believe ... ? (Bearing in mind the Truss stuff was what she said this morning)

[irie]

A decade of loose money come home to roost.

The £895bn QE monster is really to blame for the market meltdown

Labour will accuse the Conservatives, but the underlying causes of this crisis are more complex

The UK has the second-lowest ratio of debt to GDP of the G7. Headline inflation, while elevated at 9.9p, is below the eurozone average.

On top of that, Britain isn’t in recession as feared. The economy grew 0.2pc during the three months to June, the Office for National Statistics reported on Friday, reversing the previous estimate of a 0.1pc contraction.

But despite the UK’s relative economic strength, we’ve had a week of headlines and bulletins telling of financial meltdown and economic Armageddon. Given the market gyrations of sterling – and long-term interest rates – such headlines aren’t wrong.

Yet much of the media analysis of the Government’s “mini-Budget”, and the reasons behind the plunging pound and spiking gilt yields, has been simplistic and misleading.

The “unfunded tax cuts” outlined by Chancellor Kwasi Kwarteng on 23 September have been widely blamed for driving sterling to an all-time low, while pushing up borrowing costs.

As mortgage providers have pulled new loans, analysts have warned of a housing bloodbath – with those looking to refinance home loans exposed to much higher, possibly unaffordable interest rates. This week of financial turmoil has left millions frightened and angry.

While Kwarteng’s statement sparked last week’s alarming debt repricing, it was by no means the underlying cause. There are far bigger forces at play.

Blaming the Tories is a straight-forward, compelling narrative – an off-the-shelf consensus, which Keir Starmer exploited at his party conference in Liverpool. The Government “crashed the pound”, the Labour leader declared – a conclusion almost no journalists sought to challenge.

But the reality is more complex and more worrying. For what we saw last week was just the beginning of a long-term shift away from over a decade of ultra-low interest rates and quantitative easing. We’ve indulged in ultra-loose monetary policy since the 2008/09 financial crisis – a necessary emergency measure, which ossified into a lifestyle choice. 

And now, the obvious excesses, dangers – and crass stupidity – of this policy, are coming home to roost.
Since that financial crisis, the Bank of England has created hundreds of billions of pounds of QE money, as have similarly aligned central banks, which have blown huge asset price bubbles in stocks, bonds and property. 
QE has helped governments borrow cheaply, while making the rich even richer – which is why, having begun as a £50 billion temporary measure to inject liquidity into bombed-out banks, it has morphed, thirteen years on, into an £895 billion monster.

The early tranches of QE stayed largely within the financial system – so didn’t cause serious inflation. But the Covid-era variant, funding furlough and an avalanche of business support loans, has fed directly into the real economy – helping to explain today’s inflation predicament.

This is an inconvenient truth that no-one wants to admit – certainly not the likes of the International Monetary Fund and central bankers who oversaw QE. Better to blame an incoming Tory government ­– one led by a politically vulnerable Prime Minister, with only lukewarm support from her own MPs.

Don’t get me wrong – there was much to criticise in this “mini-Budget”. To lower the top “additional” tax rate from 45pc to 40pc as the cost-of-living squeeze tightens was ill-judged. Announced on the eve of Labour’s party conference, the timing of this tax cut for the richest 2pc could not have been worse.

But the idea that this “unfunded cut crashed the pound” is preposterous. Yet that is now the accepted political narrative – that a greed-driven Tory policy collapsed sterling and sent 10-year gilt yield surging as fears swirled of government insolvency, sending higher borrowing costs rippling across the economy, damaging hard-working families and firms.

What I suspect happened is that global currency traders, understanding the top tax cut was politically tin-eared, could see ministers were in for a kicking. With the Government introducing a potentially expensive energy price cap, the moment seemed right to start shorting – that is, betting against – the pound, knowing the media would pile in.

When that happened on Asian markets on Monday, and we woke to a plunging currency, I was astonished that ministers fell silent – given the strength of the arguments on their side.

When George Osborne lowered the top rate from 50pc to 45pc in 2012, the Treasury reaped more, not less money from wealthy earners. For almost the entire New Labour-era, the top rate was 40pc. While ill-timed, this was hardly a radical move.

More fundamentally, the vast majority of the “mini-Budget” tax cuts were trailed, with Truss having campaigned on pledges to reverse ­­­­­Rishi Sunak’s 1.25pc national insurance increase and keep corporation tax at 19pc, scrapping the rise to 25pc. These two widely-expected moves accounted for £38bn of the £45bn of cuts confirmed by Kwarteng.

Would an additional £7bn of new tax reductions – including the changes to stamp duty and IR35 rules, as well as the lower top rate – threaten the UK’s solvency? I think not.

All major currencies have fallen against the dollar – not least as the Federal Reserve has implemented three 75 basis point interest rate rises in successive meetings to stamp out inflation. And at least part of the reason the pound was vulnerable was that the Bank of England, ignoring the Fed, raised UK rates just 50 basis points the day before the mini-budget, having mis-directed financial markets once again.

As years of bubblenomics start to unwind, rates are rising and financial markets are retrenching, causing the “safe haven” dollar to surge. Central banks in Indonesia and Japan are now defending their currencies. The Bank of Korea is hoovering up huge chunks of Seoul’s sovereign debt.

For now, the Bank of England’s intervention on Wednesday – buying gilts to rein in borrowing costs – seems to have worked. By Friday, the pound was back where it was pre-statement, the 10-year yield having retreated from over 4.5pc to around 4.0pc.

But the City and Wall Street moneymen, having loaded pension schemes with billions of pounds of debt, yet again have the upper hand – effectively forcing the UK authorities to restart the QE asset-boosting machine. This cannot end well.

“Tory tax cuts”. It’s such an easy and convenient scapegoat. The truth is we’re in for a sustained period of painful adjustment – one which our political and media class must urgently start to explain.

[Pirahna]

Liam Halligan

Never heard of him so I googled. His qualifications are sound but there's something in his background that niggles:

In 1994 he moved to Moscow where he shared a flat with Dominic Cummings.

https://en.m.wikipedia.org/wiki/Liam_Halligan

[irie]

Liam Halligan

Never heard of him so I googled. His qualifications are sound but there's something in his background that niggles:

In 1994 he moved to Moscow where he shared a flat with Dominic Cummings.

https://en.m.wikipedia.org/wiki/Liam_Halligan

If you believe that the fact that Halligan shared a flat with Cummings over a quarter of a century ago somehow invalidates what he has said in the above piece then that's really scraping the barrel far beyond the point of credibility into the realm of stupidity.

[Pirahna]

Liam Halligan

Never heard of him so I googled. His qualifications are sound but there's something in his background that niggles:

In 1994 he moved to Moscow where he shared a flat with Dominic Cummings.

https://en.m.wikipedia.org/wiki/Liam_Halligan

If you believe that the fact that Halligan shared a flat with Cummings over a quarter of a century ago somehow invalidates what he has said in the above piece then that's really scraping the barrel far beyond the point of credibility into the realm of stupidity.

Probably. I could have said "massive Tory says it's not the fault of the Tories".

[cheb]

Talking of Cummings, how soon before Boris Johnson gets trotted back out as a wise elder statesman? Cummings, Blair, Bercow and Brown have all had a go

[demographic]

Talking of Cummings, how soon before Boris Johnson gets trotted back out as a wise elder statesman? Cummings, Blair, Bercow and Brown have all had a go

Think he's trying to get into that position already isn't he?

[JackyJoll]

Liam Halligan

Never heard of him so I googled. His qualifications are sound but there's something in his background that niggles:

In 1994 he moved to Moscow where he shared a flat with Dominic Cummings.

https://en.m.wikipedia.org/wiki/Liam_Halligan

If you believe that the fact that Halligan shared a flat with Cummings over a quarter of a century ago somehow invalidates what he has said in the above piece then that's really scraping the barrel far beyond the point of credibility into the realm of stupidity.

Fed-up neighbours reported frantic bumming noises through the thin Soviet era walls.

[irie]

Never heard of him so I googled. His qualifications are sound but there's something in his background that niggles:

In 1994 he moved to Moscow where he shared a flat with Dominic Cummings.

https://en.m.wikipedia.org/wiki/Liam_Halligan

If you believe that the fact that Halligan shared a flat with Cummings over a quarter of a century ago somehow invalidates what he has said in the above piece then that's really scraping the barrel far beyond the point of credibility into the realm of stupidity.

Fed-up neighbours reported frantic bumming noises through the thin Soviet era walls.

That was Piranha with Mandelson being noisy in their cubicle.

[JackyJoll]

If you believe that the fact that Halligan shared a flat with Cummings over a quarter of a century ago somehow invalidates what he has said in the above piece then that's really scraping the barrel far beyond the point of credibility into the realm of stupidity.

Fed-up neighbours reported frantic bumming noises through the thin Soviet era walls.

That was Piranha with Mandelson being noisy in their cubicle.

Dinsdale!

[Pirahna]

Dinsdale!

Back in the 90's I was sorting out a Hotmail address, Doug and Dinsdale were taken, hence the misspelling of Piranha.