The Truss mini budget

[fillyboy]

Oh Lordy! this'll be fun.
Andy and Gone find a way to explain how Lithium Liz was ahead of her time and misunderstood.

I think it was a brave budget, might have worked, might not. My only reservation is the tax cuts were too loaded toward the wealthy, tax threshold should have been raised to help low earners.
It was clear from the start that Truss is no leader, but the market reaction to the budget? makes no sense, powerful forces were at work here, IMF claiming UK would need a bailout despite having the 2nd lowest debt to gdp ratio in the G7, nonsense. There seems to be a consensus among world leaders that a few years of austerity and spending cuts are needed, they weren't going to allow Truss to break ranks.

What businesses want are: low barriers to trade across markets, great vocational education, high skills, flexible workforce, excellent infrastructure, good healthcare. Trusses plans included none of those things.

Do you think Rishi's plans will?, he seems a decent enough bloke, a pretty straight guy, but I suspect we're going to see some serious spending cuts, batten down the hatches and try not to fall ill is my advice.

 

[ajohn]

Your missing an important aspect gone. What has been more or less stagnant growth for too long a period. The other aspect is just how long it would take low corporation tax to have any significant effect. Eg Where did Musk build a Tesla giga factory - China. Where are a number of giga factories being built - Germany. British Volt - already insolvent. The other battery plant - little interest.

The enterprise zones. Nice idea but will any big boys take it on. SME's and others already here moving maybe.

Her other problem was new broom sweeping to soon and nuts to the treasury and the OBR, Also equal help for all irrespective all on borrowed money. That does help keep the GDP up but has well known problems

So the markets expect the usual cure for this sort of problem. Tried and tested and they get their money back.

She was going to reduce gov revenue - debt to maintain it. That includes things like inflation linked increases.

Sunak could do a number of things The only thing mentioned firmly is power subsidies end much sooner and they will be targetted to real need from there on if needed. He can choose to push problems out past the next election who ever is in. That leaves some areas as they are now,

Then take the other factors. High taxation levels probably mostly to pay off debt but I am pretty sure that some is going to cover increased support costs, The BofE report effectively states that is happening and then comes the NHS. Then being near or in a technical recession and that is forecast to continue for some years. Things growth wise world wide don't look too good. Truss say all will be ok but if it doesn't work out we would be in deep poo. There isn't any certainty at all that it would work out in a short enough period.

 

[Notch7]

but the market reaction to the budget

The market reacted because they went rogue: sacking the top civil servant and stopping OBR forecast.

 

[Notch7]

Do you think Rishi's plans will?, he seems a decent enough bloke, a pretty straight guy, but I suspect we're going to see some serious spending cuts

No, it won’t work.

Sunak had no choice after Trusses uncosted spending


There has been a massive shift from Labour to capital over the last decade, So we have stagnating wages whilst the wealthy have seen their assets grow a lot. There has to be a significant redistribution of wealth to address that.

 

[Deleted member 18243]

What businesses want are: low barriers to trade across markets, great vocational education, high skills, flexible workforce, excellent infrastructure, good healthcare. Trusses plans included none of those things.

Businesses do not want any barriers to be imposed by governments; the only thing businesses want from governments is promotion and protection. They get the very opposite on both counts from our govts. Businesses are treated as evil exploiters and polluters whilst at the same time used as cash cows for the parasite political classes and their electors.

 

[fillyboy]

No, it won’t work.

Sunak had no choice after Trusses uncosted spending


There has been a massive shift from Labour to capital over the last decade, So we have stagnating wages whilst the wealthy have seen their assets grow a lot. There has to be a significant redistribution of wealth to address that.

Sunak is doing exactly what he said he would even before Truss became leader. Wages have stagnated since the financial crash and following that the importing of cheap labour.

On the bright side, you've got what you wanted, Boris gone, Truss gone, UK falling into line with EU and USA austerity measures, massive spending cuts and higher taxation. The rich will become richer, and the poor will become considerably poorer.

You must be well chuffed.

 

[Odds]

Sunak is doing exactly what he said he would even before Truss became leader. Wages have stagnated since the financial crash and following that the importing of cheap labour.

On the bright side, you've got what you wanted, Boris gone, Truss gone, UK falling into line with EU and USA austerity measures, massive spending cuts and higher taxation. The rich will become richer, and the poor will become considerably poorer.

You must be well chuffed.

I was listening to a talking head on the BeeB who said that with unemployment being so low it would be helpful to have higher unemployment to help inflation come down? I did a double-take: how does that work?

 

[Notch7]

Wages have stagnated since the financial crash and following that the importing of cheap labour

FoM was not a major factor in wage stagnation.

the evidence shows it had very little if any impact on wages.


The major cause of wage stagnation is decades of Tory power, transferring wealth from Labour to capital….aided by QE.

but the right wing media have brainwashed you into blaming foreigners for their failures.

 

[Notch7]

The rich will become richer, and the poor will become considerably poorer

goodness me, you really believe that utter bolox about Truss “growing the pie”

Truss cut taxes for the rich and she was going to cut benefits for the poor - she was literally making the rich richer and the poor poorer overnight.

Truss was going to remove laws from unions, stopping workers get fair wages.


So don’t try and spread bullsh1t how Truss would been better for the poor.

 

[Notch7]

On the bright side, you've got what you wanted

No.

I want this corrupt government gone.

I dont want a govt that is owned by think tanks, billionaires, fossil fuel interests.
I don’t want a govt that gaslights the nation, lies and cheats
I don’t want a govt destroying democracy.
I don’t want this right wing populist govt.
I don’t want a govt still peddling Brexit bull.

 

[ajohn]

I was listening to a talking head on the BeeB who said that with unemployment being so low it would be helpful to have higher unemployment to help inflation come down? I did a double-take: how does that work?

It's an ancient theory. It depresses wage growth. The other aspect is that a country needs a certain amount of mobile labour. That means a certain level of unemployment.
When there is a shortage of labour in some field of employment companies have to bid for people. Eg recently HGV drivers. Wages rise to attract them -to get people to change job. Side effect on HGV will be more people training to become one. When there are enough wages will stagnate.

Actually the talking head has missed something. Employment levels have gone down and economically inactive levels have gone up. Those people aren't working either. The gov just mentions employment levels. The BofE considers both.

Another Truss problem. Sort out the supply side. What that means is have a lot of items to buy - too many so prices fall to get rid of them. Pipe dream. What the BofE does is restrict demand. That means prices have to fall to sell. They act when this can happen. Gas and electricity prices are completely out of this area. Covid will have caused some of this as it caused supply side problems so prices went up. Doing it is likely to hit profit so unemployment tends to go up. That in turn stagnates wages to some extent. A side effect anything rather than reduce profit.

Some numbers came out of the USA on this. Not an easy thing for us to check. They expect corporations to make around 12% profit. It's running a lot higher than that. That is a factor driving inflation up.

 

[Justin Passing]

I was listening to a talking head on the BeeB who said that with unemployment being so low it would be helpful to have higher unemployment to help inflation come down? I did a double-take: how does that work?

It used to be that you took the job at a pittance because if you didn't someone else would. The minimum wage pushes back, so at the bottom end it makes the goods expensive -> inflation

So now it's cheaper to use a load of fossil fuel to import the goods from abroad where pittances are still paid, so our farms go bust.

 

[ajohn]

So now it's cheaper to use a load of fossil fuel

Some one has cottoned on to LNG producing more CO2 than NG by pipe from source - I suspect people can figure out why, not just transport C02 burning oil left over from refining. Then the concern - countries get hooked on it.