Will there be an economic tipping point?

GGizmo

GGizmo

GGizmo

Soldato
Joined
17 Jan 2016
Posts
8,899
Location
Valley of Jade
This is just based off my observations that prices of services seem to increase yearly these days, and peoples wages don't always increase to match it. This is evidenced that we have more people on benefits currently working than those not in work.

How many people have to end up on in-work benefits before the government can't afford to pay them? Then what happens? Some kind of economic crash?
 
This has always been cyclic, but current wage growth is highest for a decade at 3.2%, employment is still high. Some people will still be on in work benefits as wages are still topped up for larger families on moderate incomes. At one time, benefits were only paid to people out of work, in the last two decades, this has changed to include those in work.

I have lived and worked through recessions in the 70's, the 80's, the 90's and the 2000's so do not expect much to change, nothing cataclysmic to occur, been there before.
 
nkata said:
This has always been cyclic, but current wage growth is highest for a decade at 3.2%, employment is still high. Some people will still be on in work benefits as wages are still topped up for larger families on moderate incomes.

I have lived and worked through recessions in the 70's, the 80's, the 90's and the 2000's so do not expect much to change, nothing cataclysmic to occur, been there before.
Click to expand...
this is true except that all these decades have seen the continued expansion of debt.
 
Strictly speaking we can't afford the status quo. There's still a fiscal deficit, and over £1.8 trillion of debt. Large debt figures seem to be tolerated, as the expectation is always that economies will continue to grow, to make debt payback more viable. Continued economic expansion is not an iron law though- read about Japan's "lost decade".

Meanwhile, expenditure demands are increasing- look at health spending for example. Older populations, more treatments and sophistication of treatments, social care, mental health are all reasons.
 
BowdonUK said:
This is just based off my observations that prices of services seem to increase yearly these days, and peoples wages don't always increase to match it. This is evidenced that we have more people on benefits currently working than those not in work.

How many people have to end up on in-work benefits before the government can't afford to pay them? Then what happens? Some kind of economic crash?
Click to expand...

I'd refine that question from "before the government can't afford to pay them" to "before we stop paying them." Government pulls it off by two methods. One is from our taxes. Another is from growing national debt. So the questions are threefold:
  • How high a tax rate are we willing to pay, personally?
  • How high taxes on doing business are companies willing to pay?
  • How much further can we continue to draw on credit?
The last one is in theory endless so long as our economy stays growing. In practice, successive corrections are taken advantage of by creditors to buy up Britain's businesses, properties and services. Once that tips to far, the squeezing begins. This usually progresses until there's a revolution. If Corbyn gets in or someone similarly populist, expect debt to balloon. The answer to the middle one is "less each year". Manufacturing has moved abroad. Many forms of services have moved abroad. We as a country have very little leverage to stop the exodus save for an educated workforce. And that lead diminishes yearly. As to the first one? Well, there lies the biggest question.

You ask what happens next when benefits run dry. Well it wont be an economic crash directly, no. We've been tightening the purse strings on benefits for a while now. You just may not know many people on benefits or else you'd have heard the word Atos quite a lot over the last few years. So far, we've absorbed all that as a country, though the human cost has been quite real. We could go quite a bit further before we really hit civil unrest, imo. But that ultimately is where it leads. Followed by increasingly authoritarian government.

I'm mostly optimistic we can pull through and continue to grow the economy, but there'll be a readjustment which will be painful for many. Depends how things go for the next few years, though.
 
2020's recession will **** us.

The end.

/additionally, lovey-dubby headlines for the state of the economy are all trash, wage growth might finally be good, but the 1 hour/two week jobs mask a huge deficit of job worthiness. Unfortunately we're still well below pre-2008 levels and frankly i don't think we'll ever recover that. Especially if we decide to destroy our standing the world (our literally only pull factor).
 
StriderX said:
/additionally, lovey-dubby headlines for the state of the economy are all trash, wage growth might finally be good, but the 1 hour/two week jobs mask a huge deficit of job worthiness.
Click to expand...

StriderX arguing against unskilled immigration again! :rolleyes:
 
BowdonUK said:
.....before the government can't afford to pay them? Then what happens? Some kind of economic crash?
Click to expand...

Yes absolutely it's a universal inevitability. The current "maximum earth milkage" economy is indefinite, not infinite. There's a big difference between the two. We cant keep milking gold for the elite forever.

The problem arises if we choose to milk uncontrollably right to the last second, if we keep milking to the last second without any alternative system in place, the economic collapse will turn into a socioeconomic collapse, and a catastrophic one at that. Because no one will be prepared. There will be no mechanisms for general populace to survive without the current capitalist infrastructure. 65 million people will be angry and rioting, it will be anarchy.

If we slowly and gradually stop milking money and funnelling it all to capitalist elites, then the economic collapse may be bearable and society may not have to collapse in tandem with the economy, we will have to switch to a more primitive way of life however.
 
BowdonUK said:
my observations that prices of services seem to increase yearly these days
Click to expand...

Yep. This is what happens when the real money is being syphoned away and the people have to keep on generating more cash to prop up the same old companies.

Take a look at my internet. In september 2016 my bill increased by £3.49, in september 2017 it increased by 3.99, therefore in 2018 it could increase by up to £4.49.

That's a £12 per month increase in 3 years, for every single customer. Lets say the customer base is 10 million, that's £120,000,000 being milked, per month, just to keep up with inflation LOL, and that's not even considering the £20-50 pm they get anyway. Yet I bet the elite's treasure chests aren't seeing any drop. LOL hilarious I honestly cannot believe this stuff is happening and people buy it.
 
There has to be high inflation to devalue the national debt (about 85% of GDP now).
It'll continue until the national debt is around 40% of GDP, which is generally considered sustainable.
This is how they tax you without actually creating a new tax or increasing existing taxes - which would be unpopular.
 
V F said:
70s, 80s and 90s weren't world recessions.
Click to expand...
Err, not sure what makes you think this, there were various significant crises in each of those decades,

My point is that growth has to a large extent been achieved by more debt.
 
billysielu said:
There has to be high inflation to devalue the national debt (about 85% of GDP now).
It'll continue until the national debt is around 40% of GDP, which is generally considered sustainable.
This is how they tax you without actually creating a new tax or increasing existing taxes - which would be unpopular.
Click to expand...

I've occasionally wondered if some aren't planning for a controlled collapse of existing systems through the promotion of global currencies that countries and the very wealthy can move to using to value their property, and then let national currencies fail.

It would certainly explain a lot!
 
billysielu said:
There has to be high inflation to devalue the national debt (about 85% of GDP now).
It'll continue until the national debt is around 40% of GDP, which is generally considered sustainable.
This is how they tax you without actually creating a new tax or increasing existing taxes - which would be unpopular.
Click to expand...

Since when? Most countries in the world arent under 40%. Only a lot of tiny ones are. Even the EU has a "target" for its members of 60%.

Which economists have proved its 40%? Because if they are right almost 80% of the countries in the world are ******!
 
Greebo said:
Since when? Most countries in the world arent under 40%. Only a lot of tiny ones are. Even the EU has a "target" for its members of 60%.
Which economists have proved its 40%? Because if they are right almost 80% of the countries in the world are ******!
Click to expand...
More stable countries can get away with a little more, but yes most countries do have too high debt-to-gdp, it's a global problem.
 
Greebo said:
Since when? Most countries in the world arent under 40%. Only a lot of tiny ones are. Even the EU has a "target" for its members of 60%.

Which economists have proved its 40%? Because if they are right almost 80% of the countries in the world are ******!
Click to expand...

Nobody has or ever could "prove" that the limit is 40%. And indeed a hard figure for such a complex set of interactions doesn't make sense. But they may well be referring to the IMF guidance which is 40% should be the limit on GDP to Debt for developing and emerging economies. For developed countries, they recommend no higher than 60%.

I'm in no way saying these limits are ideal though. The 60% figure for the EU was mainly settled on because that was around the mean of the original member states actual debt! They didn't want to set standards they couldn't meet but that doesn't mean lower isn't better. And 80% of the countries in the world being ****** is, it must be said, not evidence it isn't so!
 
We need to liquidate private wealth and get it flowing back into the economy. We don't need higher taxes if the asset rich stop being cautious and stop pocketing.

Austerity just encourages them to play safe.
I feel sick for saying it but, I think Gordon Brown probably had a more balanced view than most and realised the same.
 
Teh_Next said:
We need to liquidate private wealth and get it flowing back into the economy. We don't need higher taxes if the asset rich stop being cautious and stop pocketing.
Click to expand...

When you try to make everyone equally rich and end up making everyone equally poor.
 
Teh_Next said:
We need to liquidate private wealth and get it flowing back into the economy. We don't need higher taxes if the asset rich stop being cautious and stop pocketing.

Austerity just encourages them to play safe.
I feel sick for saying it but, I think Gordon Brown probably had a more balanced view than most and realised the same.
Click to expand...

What? Squinty McMental AKA The Phantom Nokia Flinger had a balanced view? Was that while he sold off part of our gold reserve at bargain basement prices?
 
You must log in or register to reply here.
Back
Top Bottom