Kick Starting the Economy

Kick starting the economy

by Anthony Bright-Paul

It is clearly easy to kick start the economy, once we understand first principles. For the Government to work it needs income, just like any individual. And just like any individual it needs to live within its income.




Most individuals borrow money at one time or another, for example to buy a house or to buy a car. Any sensible individual will balance the repayment on a mortgage or a loan against their income. That is living within one’s means. If an individual is able also to save, that means he is rich, even if he saves £500 per annum or even if he makes £1,000,000 in excess of his everyday needs.

However central governments are inclined to borrow money, that is to say, to take on enormous mortgages that it is often beyond their ability to repay from income. And so they borrow more and more, adding to the National Debt, at a present rate of £2bn a week. This problem does not belong to the UK alone, but is a monster problem for the USA who are in fact in debt to China up their eyebrows. Why does not China call in the debt? For the ridiculous reason that their own economy would collapse if they did so.

Central governments are very fond of saying that individuals are living beyond their means.  This is a blatant and hideous lie. The vast majority of sensible people in the UK take every precaution to live within their means. It is one government after another of whatever complexion that uses our money to live and to spend in a totally disreputable way. They rely on the fact that people are lazy, and that we the people are easily bribed with our own money, which is extorted from all of us by taxation.

Now some taxation is necessary for the running of government, for the civil services and for the armed forces, for the defence of the realm.

 So the problem is this: what taxation is fair and equitable and leads to the increasing wealth of the nation and what taxation is clearly the opposite and leads to increasing poverty and misery and hardship for the whole population?

Let us look at a pie chart of government income.

In order to read this  pie chart easily one must start at the bottom of the list. These figures are taken from the years 2008-2009, and although not exactly up to date the figures will serve well enough to establish principles.

By far the largest part of the government’s income comes from Income Tax. Well, we all hate Income Tax, nevertheless it is probably the fairest. There is only so much food an individual can eat in a day. The graduated scale of Income Tax means that the very rich pay by far the heftiest slice, however much they wriggle and use accountants to reduce their tax burden.

National Insurance should pay for our hospitals, as long as central government does not raid these funds, and should also provide for old age pensions, provided that sucessive governments of whatever colour are not too greedy. Corporation tax is a tax also on profits, and that seems fair enough. As to Value Added it seems to me somewhat ridiculous to make products more expensive than they need be since government agencies also have to pay this tax. However the jury is out on that one.

Fifth up on the list is Fuel Duty at some 5%, bringing in some £26bn. This is a relatively small amount and can be added to the Petroleum Revenue Tax of  £1.7bn near the top of the list. So we can say that altogether that accounts for some 6% of the government income. But is it sensible and is it fair?

Clearly there are taxes that are on profit and excess profits, but taxing of fuel is a tax on the means of production. It is clearly not sensible at all. By making all means of transport more expensive the government may make an extra 6% income, but at the same time they are crippling the UK economy. So much is blindingly obvious.

By halving the tax on petroleum products all our industries would immediately benefit. All our food would be cheaper, immediately. All our rail fares, all our journeys by car, all the deliveries of a hundred and one items would be cheaper. The economy would receive an instant and huge boost. Effectively everybody’s income would go up and company profits would soar. Our exports would rocket, no matter whether we left the EU or not, as competitive prices would rule as they always have done.

If the government lost say 3% of their income in this way, surely they would gain a massive amount on company profits. Unemployment would fall as companies strove one after another to take advantage of cheaper prices of fuel, which affect everything. Hospital bills would fall. The totally idiotic and inefficient use of wind turbines for the production or the non-production of electricity would have to be axed.

So we establish a principle. Never allow taxes on the means of production. Let all taxes fall on surplus profits. Once this principle is established, profits would soar.

Clearly the aim of the present government to reduce expenditure and balance the books is correct in principle. Why then are we spending some £20bn a year to support a corrupt European civil service, and Commisioners who are acountable to nobody?

With that amount of money all taxes on fuel, the means of production could be cut, and Great Britain would be great once again.

Copyright 2012 by Anthony Bright-Paul

 

PS1 The UK Budget Deficit

by Anthony Bright-Paul

The public debt increases or decreases as a result of the annual budget deficit or surplus. The British Government budget deficit or surplus is the cash difference between government receipts and spending, ignoring intra-governmental transfers. The British Government debt is rising due to a gap between revenue and expenditure. Total government revenue in the fiscal year 2011/12 is projected to be £589 billion, whereas total expenditure is estimated at £710 billion. Therefore the total deficit, which must be financed by borrowing, is £121 billion. This represents borrowing of a little over £2 billion per week. (from Wikipedia)

It needs only a little persistence in searching on the web to find out the true and absolutely terrifying picture of our public finances. Imagine if an individual earned £589 in one month and spent £710 they would soon be up the creek or in a debtors prison. But what does our profligate government do? They borrow ever more and more. Remember that the Conservatives gained a majority at the last election specifically on the promise that they would cut the Budget Deficit. But what has happened? The Budget Deficit has increased. The amount of interest that we are paying has increased. If the Government were a private person they would soon be in court. Their actions show a high-handed and profligate disregard of the wishes of the British people. How do they get away with it? Largely because simple facts are obscured from the masses by means of a lot of arcane financial gobbledegook.

Let us look at one simple salient fact. Income for 2011/2012 is estimated at £589bn. Expenditure is is estimated at £710bn, a shortfall of £121bn.

From this we can see that this Conservative government has signally failed, dragged down no doubt by their supposed coalition allies, the Lib-Dems. It is only when we see these two figures juxtaposed that we can see clearly that our supposed rulers clearly have not got a clue how to get out of the mess. So let us look at a pie chart of expenditure.

What this pie chart does not show is that we are spending some £20bn a year to support a huge bureaucracy in Brussels. This is absolutely needless expenditure. In no way do our exports depend upon cosying up to our European neigbours. There is only one thing upon which trade depends and that is price value.

How is it that almost  any article that one can buy in the shops here or in the States is now made in China?  Why is it that entrepreneurs look for quotations from China and the Far East? The answer is simple. Energy. The cost of energy is low in China and the cost of manpower likewise. It is an unbeatable combination, that any but a moron can understand.

So what can the UK government do in order to stop us free-falling into financial suicide?  Clearly the government needs to cut costs yet at the same time it needs to increase its tax revenues. It seems an impossible task.

Assuredly the answer lies in that one word ‘Energy’. How can our manufacturing base grow? Answer: with low energy costs. How can our businessess grow? Answer: with low energy costs.

The Bank of England may reduce the Bank Rate, but that hurts all the millions who have saved throughout their working lives. The Bank may print money and call it quantitative easing. But any fool knows that that is a road to disaster. That devalues everything.

So what can the government cut? And in what way can they legitimately stimulate the economy? (For surely quanitative easing is an illegitimate and foolish way.)

The first thing that is necessary is to cut the absurd subsidies  to the Solar Panel and Wind Turbine industries. These provide totally unreliable sources of electrical power at enormous cost. They are stupid in the extreme. Only people who are green could follow such a foolish course – and I am using ‘green’ in the sense that it was once used – to mean ‘naïve.’ Mr Cameron boasts that his is the greenest government ever. If he means hopelessly naïve then surely he is right. But the fact is that he Cameron has reneged on his word. He has promised a referendum on Europe and he has backed out on his promises.

What do the people want? First of all they want jobs that pay, not mickey mouse jobs or courses invented by the government. Companies want finance, but what lender will lend when the return is zilch? The people want above all to be free from the tyranny of Europe. They are fed up with paying some £53m every single day, that is some £20bn a year to support a bureaucracy that is  rotten to the core. Please Mr Cameron don’t waste your time sitting at the  top table with these rogues, who are only intent on humiliating you and humiliating England in the process.

The very first step is to leave Europe. This is what UKIP stands for and that is what some 80 MPs stand for, who should by rights, if they had one whit of courage, be in the United Kingdom Indepence Party. For that independence from Brussels is what some 80 MPs strive for, mostly from the so-called Conservative Party and a few from Labour. How is it that the Lib-Dems are unable to smell the stinking corruption of the Eurocrats? Or have they one and all been bought?

There is one way out of our dilemmma and that way out can be spelled in one word. Energy. Our rulers in their wisdom or in the complete lack of it do everything they can to make Energy more expensive. Our industries need the best possible deal in power, in electricity. Everything depends on electricity in manufacturing. We abdicate our manufacturing base by taxing the means of production. That is madness. Our transporters need cheap gasoline, petrol and diesel. Our planes need cheaper aviation fuel. Our railways need cheaper diesel to transport our workers to their work-places. But what does one Chancellor after another do? They pile on the agony, taxing the means of production.

The taxes on petroleum products account for a mere 5% of the budget. If the taxes on petroleum products were simply halved this would be more than made up by the financial gains of leaving Europe. But just imagine the other benefits. If petrol is now some 134 pence per litre, it could easily be 60p a litre, and diesel a corresponding figure. For remember that some 80% of the price of petrol is taxation! Just that reduction alone would kick-start the economy. We would at one strike be the most competitive country in Europe.

How would our manufacturers fare? How would our supermarkets and the food industry fare? How would all businesses and office workers fare? At one stroke business would be on the high road to making extra profits. Unemployment would fall as businessses seek out new talent.

And what would happen for government? Their tax income would soar also, as England once more took a lead in manufacturing and exports. And why would our exports soar? For the obvious reason that they are not crippled by the hypocritical governments who are supposed to be helping them. If exports and company profits soared so would the intake for the Treasury.

This Conservative government, this Coalition, like their Labour forbears, are leading the whole country to perdition, having no idea what to do. Yet even a child can understand that if you spend miles more than you earn, if you then borrow and have to pay an extra £2bn in borrowing costs, that is disaster. This Coalition has proved itself to be completely useless. We need to cut expenditure, but at the same time increase profits. The fact is that it can be done and the solution is staring us in the face. Everything should be done to make Energy cheap and this will release the incredible energy of the British people. With cheap energy from shale gas and dare I say it, coal, we could once again be a world leader – why, we could even export to China and we could revive our trading links with Canada, New Zealand and Australia.

We are living above our means, is what the politicians declare. Not so! The vast majority of English people have been cutting costs, have been shopping wisely, precisely in order to live carefuly within their means. It is central government that is profligate with our money. Central government has no money except what is extorted in taxation from us. It is our money that they, the politicians, so reckelessly spend. It is time for a change, it is time for a government that heeds the wishes of the people of the United Kingdom.

Copyright 2012 Anthony Bright-Paul

PS2 The Truth of the Matter

Tell me honestly, did you realise that the difference between what the Government takes in taxation and the amount that it spends is some £121 billion pounds sterling?

The intake is estimated at £589bn and the expenditure is £710bn, hence the shortfall of £121 billion.

Of course, this Coalition government is committed to cutting the National Debt, reducing this deficit. That is why the nation voted for Mr Cameron, who without an absolute majority joined up with the Lib-Dems. If we are to believe everything we read, the problem was inherited from Labour, as during their tenure of office under Mr Gordon Brown as Chancellor, (he, who always boasting of his prudence), the Labour government spent our money as if there was no tomorrow.  

So how has Mr Cameron and his Chancellor progressed in the last couple of years of austerity?  Has our National Debt been reduced? Not on your Nellie! In fact we are having to pay some £30bn a year to finance this huge debt, and – wait for it – we are adding some £2bn every week to finance the shortfall.

So Mr Tim Yeo asks whether Mr Cameron is a man or a mouse, a singularly inappropriate question coming from a Carbon-free fanatic such as Mr Yeo.  The answer is that he is neither a man nor a mouse – he is, by the standard that he himself has set, a complete and utter failure!  He came to power to reduce our indebtedness and all that has happened is that it is increasing at the rate of £2 billion every single week. It is not for me to call him a failure – it is what he proclaims himself.

So Cameron declares that it is not so easy to reduce the deficit; that he is not a mouse but will do everything he can to stimulate the economy. What on earth does he mean? Surely he is not going to follow Mr Ed Balls or Alistair Darling and spend more and more of our money to get things moving?

Here is that pie chart of government expenditure. It is fairly obscure, but that Debt Interest of £30bn hits one in the eye.

So the question is this – why has Mr Cameron and his Chancellor so singularly failed?

The answer surely is fairly simple – because he has committed himself to being green. He boasts that his will be the greenest government ever, and that is much the same as declaring that it will be the most economically naïve government that there has ever been.

While our attention has been diverted for a few weeks with the Olympics – a blessed relief for Cameron – the truth of the matter is that financially as a country we are bleeding to death, while everyone keeps schtmm! Don’t broadcast the fact that the government has to borrow £2bn every week and we are sliding down a slippery slope.

And yet the cuts that the government needs to make are glaringly obvious. We are

at present running two civil services, one that is English and over which we English have some control, and the other is Euopean that is running wild. This wild beast is costing us some £53million a week, which is some £20bn a year. That would do for starters. It is totally idiotic that we should continue to belong to a club, that would bleed us dry, that hates the City and derides our leaders, including Cameron. What benefit do we get from belonging to this club? None at all. Why then are some so keen on belonging to it, so keen to be at endless conferences? The answer is shocking – because so many have been bought. I guess that Rompuy and Senor Barroso must be sniggering up their sleeves to see a Prime Minister, who can so easily be gulled.

At one stroke this headlong slide could be stopped, without producing any unemployment within our own civil service. For the trouble with axing jobs within our own ranks is that we may reduce phoney jobs only to throw more people on to the dole. That is admittedly a difficult problem. But it is not a difficult problem to free us from the burden of a completely useless and inimical bureaucracy. Why make cuts to our Armed Forces, why make cuts to the Police, why even cut the Civil Service, when at one stroke we could cut the enormous burden of the European bureaucracy?

What next? Clearly the next step must be to free ourselves from the shackles of the Climate Change Act! This commits the government to subsidising such uneconomic monsters as Solar Panels and Wind Turbines. The one thing that Great Britain needs in order to kick-start the economy is the cheapest energy possible. Do you think that the Germans do not realise that?  While openly espousing Wind Turbines, the Germans have quickly realised that they are betting on the wrong horse. Secretly, without any fanfare, they have returned to coal.

Here are a few quotes from Kelvin Kemm’s essay, with a link for the entirety is at the end.

In mid-August, Germany opened a new 2200MW coal-fired power station near Cologne, and virtually not a word has been said about it. This dearth of reporting is even more surprising when one considers that Germany has said building new coal plants is necessary because electricity produced by wind and solar has turned out to be unaffordably expensive and unreliable.

In a deteriorating economic situation, Germany’s new environment minister, Peter Altmaier, who is as politically close to Chancellor Angela Merkel as it gets, has underlined time and again the importance of not further harming Europe’s – and Germany’s – economy by increasing the cost of electricity.

He is also worried that his country could become dependent on foreign imports of electricity, the mainstay of its industrial sector. To avoid that risk, Altmaier has given the green light to build twenty-three new coal-fired plants, which are currently under construction.

http://www.tech-know-group.com/essays/Kelvin_Kemm_Germany_new_renewable_energy_policy.pdf

The Germans are not fools. They have recognized that the so-called sustainable energies from wind and sun are not sustainable at all. Their economy needs cheap power and so does ours. In the meantime Russia goes ahead with ‘fracking’ for shale gas, and is competing with the USA in this department while our government is dragging its feet. And yet at one blow it could stimulate the economy by shutting down all subsides to Wind Turbines and Solar Panels. Unfortunately this might prove a blow to the Prime Minister’s father-in-law, who is reputed to be earning some £350,000 per annum just by allowing the Government to put these wretched useless Wind Turbines on his land.

 He is not alone. Everywhere landowners have been bribed with our money, repeat our money, to have wind turbines on their land, even though it is clear they can never, never, provide the base load needed for the grid.  In addition, ordinary simple house owners have been sucked into this fraud, encouraged to have solar panels on their roofs, as these are subsidized by the government. Let us be real – these good neighbours are being bribed, and I have one next door, have been bribed with our money. The government is spending our money on useless turbines and solar panels, knowing full well that they are inefficient, produce very little electricity and are mightily expensive.

It is interesting to read the real deal of Lady Thatcher. Contrary to what some may think she did not cut overall expenditure, which actually increased marginally during her eleven years, but she did cut the deficit. She did reduce the National Debt. That is what Cameron and his Chancellor are supposed to be doing. But they are fiddling while Rome burns. Can one really imagine that by speeding up Planning Applications, the economy will suddenly roar ahead?

Of course not! So what needs to be cut? Firstly we must be cut free from Europe, and secondly we must rescind the Climate Change Act, and eliminate the post of Minister for Climate Change. How can a Minister or a Ministry have any effect whatsoever on World Climate? Only people with very poor intellects have fallen for that one. Thirdly, if he wishes to stimulate the economy, he must cut the Taxes on petroleum products by half. The loss of 2.5% to the Treasury would be more than offset by the tremendous benefits to British Industry. Combined with using the most economic fuels for industry, which is for electrical power, this would give an enormous boost to the entire population. No longer would Iain Duncan Smith have to urge people back to work and to stop skiving. When industry roars unemployment automatically falls. Even the problems of immigration would fall into perspective, as England would be looking for talent wherever. Old age pensioners would have more money. Food prices would fall as transport costs fell. Everything that is delivered by road and rail would be cheaper, but companies would make more profits. As salaries for middle England on PAYE rose, so would the takings of the Exchequer. The manufacturing base would expand automatically. No longer would foreign companies have to be bribed by special concessions to take up residence in the UK. Fuel and electricity that are cheaper would be sufficient incentive to attract foreign capital and foreign industries.

There is only one political party that is committed to leaving the EU immediately, and that is UKIP. Cameron is presiding over the death of the Conservative Party, as he progressively alienates the masses. Proposals to build on the Green Belt, even considerations of a Third runway at Heathrow, all alienate more and more people. But do they really want to return to Labour with its stealth taxes, which brought about this enormous deficit?

It is time for something new.

Anthony Bright-Paul,
September 05, 2012

 


Comments

  1. J.A. says

    So would the government and media compete with individuals that have potential to change the economic climate and introduce beneficial production as work employment the british commonwealth should know better but cant help themselves through the power of suggestion just look at the media papers it is to dominate all alternative theories using multinational advertising methods they harness a mystery theory and use it for themselves as for the chart it might be better to discuss that with a appropriate political movement or a socialist organization for the common good of a nation i would like to view some more of your economic devolpment plan all the best world.

  2. j.a. says

    Only the reason Iam doing this because it fitz because article presenter if this is a better option as presented there would be a lot of people intrested is supporting a scheme like that hypothosis, If it works, so people instead of sitting on the fence if economy and world mystery has anything to do rally lobby the board of directors here on this site for a fair reward for the viewers productive abilities when tasks are set try to complete in a national manner which would develop communities to a more complete understanding of expenditure.

  3. Mike H. says

    In the US vs. UK our system of taxes and hence services are different. Kick starting our US economy and cutting taxes would require a different approach than in the UK. In the US we could do a simple thing as US citizens deciding to make 60% their purchase by buying American made goods.
    Taxes are easily cut at the local level by citizens rearrange the structure of providing vital services. That is ending the Union service monopoly i.e more volunteer or paid call firefighters, reserve police officers who get paid for filling in all overtime work positions, local constables who are part of the community.

    A major revision of taking back control of our lives away from the STATE would be that any crime committed is committed against the individual not the STATE. That allows for an orderly process of investigation and arrest involving the victim. 100’s of Billions if not Trillions of Dollars would be saved in lost dollars from White Collar crimes, such as the recent banking problems. Felonies and misdemeanor crimes would require true dollar restitution. Of course the legal judicial system would then function for the people rather than the ruling elite and their rules.

    Think of the effect on the economy this would have in cutting costs and putting money back into the hands of the people.

    Now this is true economic restructuring. And yes I do believe in a National Health Program for the US just not the UK model. I believe individual responsibility plus access to health services is the ticket. Once again like my model for Kick Starting the Economy it means people not being the people of the Sheepley.

    Of course like I side Americans have a different structure and mind set than the UK so cutting government costs, improving the economy and maximizing the services of government to the US public would take a different a better approach than in the UK.

    In other words it is the people who can make the change not the government and not by the traditional model of how things are done.

    Mike H.

Leave a Reply

Your email address will not be published. Required fields are marked *