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Outlook for the economy in 2010 and beyond

Discussion in 'Speaker's Corner' started by dirtydog, Jan 3, 2010.

  1. rypt

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    How do you grow when there is no oil, and no viable alternative to replace it?

    How does a person get to work, how does a coal power station get it's coal, how does a company ship it's goods?
     
  2. Dolph

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    I think the issues will be the risk of future taxes, and the scope of the existing one (eg how easy/difficult is it to avoid) will determine how many companies leave.

    The real question is do we want to lose that source of income to the UK?
     
  3. muon

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    It's not an opinion. It's based on currently known ideas. These ideas are the current understanding of reality.

    How can it fly in the face of reality.

    Let's say there are no viable alternatives, which is obviously wrong.

    Then if we are terrible at predicting oil will eventually run out, then we will go back to using horse and carriage. This means are predictions must have been terribly off (which they won't be). Like I said, there will be a massive crash if predictions are off.

    However, a smooth transition is the stable path. This path of usage, consumption, prices and interest rate is the only rational path. Only uncertainty prevents the market from achieving this perfectly.

    You really do have to read the J Stiglitz paper I posted previously in this thread. Even if you ignore the model, it is a peer reviewed paper and versions of this model are taught in economics degrees everywhere in the world. It has stood the test of time. Basic arguments like made in this thread have been thought of, and are actually explained already in this model.
     
    Last edited: Jan 4, 2010
  4. dirtydog

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    We can't afford to lose it can we. I think the monetary and banking system are fundamentally flawed and unsustainable in the long term, but be that as it may, it's the system we've got and as things stand, the UK needs those banks here or we'll have a gaping hole in our GDP which would be disastrous.
     
  5. Rich_L

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    The government isn't that stupid, although that said if the opinion polls were in favour enough, the Cameron/Osborne combo might be populist enough to go along with it, it would be in line with the NuTories performance so far on financial matters anyway.
     
    Last edited: Jan 4, 2010
  6. rypt

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    If the EU introduced this measure together, and introduced a few other measures then no it cannot be done from anywhere.

    For instance, consider if the following rules were introduced:
    1) An investment "company" can only invest in a market where it pays tax on the said investments. SO if you invest in say RBS, who are on the LSE, then you must pay taxes for this investment (and any profits from it) in the UK.

    2) If you want to have a commercial presence in the EU of over "xxx bn" then the EU operation must be listed on an EU stock exchange

    and so on
     
  7. Dolph

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    This is the problem with having a governmental system based on a fallacy...
     
  8. dirtydog

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    Never, ever underestimate people's potential for stupidity, especially politicians...
     
  9. Dolph

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    Wow, just when I thought Labour had the monopoly on crippling an economy 101...
     
  10. daz

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    Perhaps not, but "new blood" will be seriously diminished in London with the new headline 50% rate of income tax. Even though most bankers probably wouldn't pay it on their basic, it's a headline rate and when you're comparing offers from New York or London, you're going to be thinking about it. London was beginning to challenge New York's position as de facto financial capital of the world - if the government could have held fast against raising income taxes to 50% (as opposed to 45%, which i think has a psychological effect more than financial) and bonus taxes), then I think longer term, it would be better for the city. (de-capitalised!)
     
  11. rypt

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    The EU are a big enough market and player as a whole to be able to do that though
     
  12. Rich_L

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    Indeed - thankfully the government took the right decisions it seems this time - I suppose under your mythical expertocracy we'd still be waiting now for 'clear evidence' to be produced before acting, while the financial system came crashing down around us. ;)

    Mm fair point on the 50% tax. I do wonder sometimes though how many people look at gross, rather than net salary. It's like calculating whether you can afford to live somewhere based on your salary and not taking into account the cost of living in that location - if the companies are still making decent profits for example, you would perhaps expect them to increase gross salary to compensate for the increased tax contributions to maintain a competitive 'take-home'.
     
    Last edited: Jan 4, 2010
  13. Dolph

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    Protectionism in a global economy is always going to fail, no matter how big you think you are...
     
  14. daz

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    Just "invent" rules and regulations for the sake of it so that the US, middle-east, India, China, Japan et al are far superior environments for businesses to operate in.... fantastic. :cool:
     
  15. Dolph

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    Actually, there is more than enough evidence and precedent to act on the economic matters. Of course, we wouldn't have been ****ing money up the wall in the boom, which would have helped massively.
     
  16. dirtydog

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    Indeed and I expect despite the higher rate, overall tax take would be lower which is what past experience in the UK teaches us. A lesson apparently lost on Brown and Darling.
     
  17. rypt

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    It is not protectionism though, we are not imposing extra tariffs on imports and so on, all we are saying is that to do large quantities of business within the EU you need to have a financial presence within the EU, in the form of paying taxes on earnings derived from the EU within the EU, and having the EU branch as a separate corporate entity listed within the EU stock exchanges.

    Companies are already often listen on multiple stock exchanges, all this does is force for EU operations to be listed within the EU for a sufficiently large company.
     
  18. Dolph

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    So in effect you wish to tax doing business in the EU? That's even worse than protectionism...
     
  19. dirtydog

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    Even if that were legal under world trade law, how would it not simply force more companies overseas?
     
  20. scorza

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    Don't worry, I read yesterday that Ken Clarke wants to put up VAT, a regressive tax which hits the poor harder, so the bankers will be ok and can keep their bonuses in future.

    The real question is do we still want to be the world's financial capital when being so has cost us so much. The City of London has become a millstone around every Briton's neck, I for one won't be sad if all the banks bog off to Switzerland - let the Swiss cope with the worst effects of the next recession. Who knows, perhaps Britain's brightest graduates might choose to do something useful instead of following the money in banking.