Britain now officially in double-dip recession

Your daily reminder that the best way to incentivise poor people to behave better is to take money away from them, while rich people will only behave nicer if you give them tax breaks.
 
quantitative easing is such a crock of ****...

it just ruins our economy and everything gets inflated prices...

i guess we can expect to see our shopping bills rise even more then.....
 
scorza said:
You find it interesting that people would prefer to use economic theory to get us out of a economic crisis than relying to hysterical, meaningless slogans such as "living within our means"? Did you know that according to the IMF, the UK deficit would be 5.2% right now under Alistair Darling's spending plans from 2010. The actual deficit right now is 5.0%, so for all Osborne's hard man rhetoric all we have to show for two years of diminishing pay and rampant unemployment is a deficit reduction of 0.2%.

Good article on what should be done from a respected economist: http://www.newstatesman.com/blogs/economics/2012/05/recession-deniers-proved-wrong
Click to expand...

Except its incredibly simplistic view on economics. More government spending does not necessarily lead to economic growth. Consumers are cutting back and buying cheap imports over more expensive British made goods, at the same time Investment is down and Exports are decreasing(because of the problems our trade partners in the EU are facing). So at the moment there are far more leakages than injections in our economy so you would naturally expect the economy to shrink(as is seen by a double-dip recession). Rampant unemployment? I wouldn't class 8.2% as rampant, its abit high but you expect that in a recession, and its better than much of Europe.

The IMF are comparing a PREDICTION to what is happening in real-life, which is quite frankly laughable. Predictions are very rarely accurate because there are so many factors that you can't predict. What if the ratings agencies didn't believe in Labour and so downgraded the UK? The markets are so unpredictable that it is very difficult to realistically compare what has been with what might have been.

A VAT cut isn't going to have a massive difference, most businesses will probably not decrease prices so it will have little difference on the disposable income of the population. The National Insurance idea is quite good, I'll admit that. For that investment to be successful that money needs to flow around the economy, however with the large amount of leakages in the economy I fear it would just seep out of the economy and we would lose out.

Personally I believe we need to reduce corporation tax, it'll make the UK more appealing to firms, they inturn will create jobs, the income tax and VAT gained from those new jobs should easily pay for the loss of tax from reducing corporation tax.
 
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