Trickle Down Economics Explained

[ajohn]

The bankers' pay cap thing, I can accept could have a very strong trickle-down effect by bringing a whole load of work/ers to the country.

Not the declared aim. Levelling up London mentioned - re attract business that has been lost to the US, and maybe get more.

The services side of things do show a trading surplus. I'd imagine a lot of that is banking etc related. It seems from a city man they pay 10% of our taxes. I can see that increasing but past that - pass. It seems to suggest that this type of service that isn't here needs to move here.

Trickle down and nuts - no the link isn't nuts and what has been changed so far really - top rate of income tax below the point needed according to theory. The enterprise zone idea is another aspect where various business costs will be reduced. That has been known to cause businesses to move within the same country. Or it can cause new ones to move in. Where are they and when?

Corporation tax hasn't been reduced. An intended increase is not going to be applied. One of the worries the market may have is just how much tax Sunak intended to raise. Obviously he was nuts.

The tax cut effect from a BBC page
The cut, which applies to annual earnings between £12,571 to £50,270, comes a year earlier than planned.
In a surprise move, the 45% highest tax band for people who earn over £150,000 a year has also been axed.

The reduction in income tax, along with the reversal of the National Insurance rise, will see higher earners save more money.
A person earning £20,000 a year will save £167, according to analysts at EY.
Meanwhile, an individual with an income of £40,000 will save £617 and person with earnings of £60,000 will save £969. A person on £100,000 will get an extra £1,469.

It will be interesting to see if the BofE does step in. Then all of the arguments will crop up. Some one posted some of them already.

 

[martygturner]

So far all the supposed savings that people will get have been negated by the increased inflationary pressure.. a person earning 20k will get the almighty sum of £167 back, whilst losing some £960 of spending power( inflation and interest rate increase to date ), ....that's before any cost pressure caused by a weakened pound and future interest rate rises.

 

[ajohn]

The BofE have announced that they don't see themselves acting until Nov as they want to increase the rate slowly.
Mortgage companies have reacted anyway. Risky times.

I'm reminded of an interview with several ex this and that. Osborne laughed when the independence of the BofE was mentioned

 

[wellyfish]

The BofE have announced that they don't see themselves acting until Nov as they want to increase the rate slowly.
Mortgage companies have reacted anyway. Risky times.

I'm reminded of an interview with several ex this and that. Osborne laughed when the independence of the BofE was mentioned

Osborne was right to laugh. BoE has as much independence as a toddler in a playpen.

 

[Notch7]

I personally wouldn't take advice from a Managing director's of a firm of <20 people. These comments are probably designed to drive "brand awareness".

Strawman.

All senior economists and financial experts are saying it’s a stupid plan.

basic economics is: when interests rates are low and falling: you borrow heavily to stimulate the economy ( exact opposite of what Tories did which was a period of austerity)

and basic economics 2 is: when interest rates are rising you throw away money and fund it borrowing massively.

 

[ajohn]

It seems that BofE and gov have said all will be clear in 8 weeks including OBR opinions. Sounds like the 8 might be 6. C4 has a politcal mole that tends to get correct info. He reckons there has been much talk between the 2. The idea being to reassure the various markets. GBP dropped a bit as soon as it was announced. Thoughts are is some GBP increase was down to the expectation of a rates rise.

The hidden part is an increase in loan interest rates as well, Not sure if true but seems to be levels Italy and Greece have to put up with.

Osborne was right to laugh

What Osborn said is that there is some resistance concerning not making changes they feel they have to make.

C4's economics man seems to think +1.5% in Nov.

Did you know Ed Miliband is an economics man who became a prof of politics? I was curious after he was interviewed.

 

[wellyfish]

It seems that BofE and gov have said all will be clear in 8 weeks including OBR opinions. Sounds like the 8 might be 6. C4 has a politcal mole that tends to get correct info. He reckons there has been much talk between the 2. The idea being to reassure the various markets. GBP dropped a bit as soon as it was announced. Thoughts are is some GBP increase was down to the expectation of a rates rise.

The hidden part is an increase in loan interest rates as well, Not sure if true but seems to be levels Italy and Greece have to put up with.


What Osborn said is that there is some resistance concerning not making changes they feel they have to make.

C4's economics man seems to think +1.5% in Nov.

Did you know Ed Miliband is an economics man who became a prof of politics? I was curious after he was interviewed.

The whole point of the exercise is to raise interest rates.

BoE isn't independent in any way.

The illusion of independence allows govt to set out a mini budget like they just have and point to BoE (who will raise rates and inflict pain) and say "it was them wot did it".

 

[Munroast]

 

[Bod ...]

Tax at diffrent rates should be on goods and services only.. that way we all pay our fair share.

 

[Vinty]

Wasn't trickle down economics a keystone policy of Maggie Thatcher.
How well did that work out.

 

[Notch7]

“Some of us have stables”

and how does that support your argument?

 

[Munroast]

“Some of us have stables”

and how does that support your argument?

my argument ?

i was taking the pish out of what must be the worst uk gov ever - this is just as country destroying as if Corbyn and Abbott were running the show.

 

[Munroast]

Wasn't trickle down economics a keystone policy of Maggie Thatcher.
How well did that work out.

Not really, Maggy had the north sea oil boom to fund her plans, and her plans were never ever as focused on the rich as what trussy and kwatang has come up with. We're heading towards a disparity of wealth that you get in some central african ecconomy.

I thing these two clowns are going to destroy britain.

 

[wellyfish]

Not really, Maggy had the north sea oil boom to fund her plans, and her plans were never ever as focused on the rich as what trussy and kwatang has come up with. We're heading towards a disparity of wealth that you get in some central african ecconomy.

I thing these two clowns are going to destroy britain.

Thatcher didn't need North Sea oil,or anything else to 'fund' her plans, she had the capacity of a currency issuing govt. She took the baton from Callaghan/Healey and established 40+ years of neoliberalism which guaranteed a wealth transfer we'd never seen before. This lot are continuing in that vein.

Trus & Kwarteng have a plan, they've laid it out here - The Growth Plan 2020 it's not for the benefit of the general public, nevertheless, it's a plan.

 

[gant]

They have a plan which means giving visas out that in turn will peg back wage rises in the red wall seats they won at the last election. Suicidal doesn't describe it.
It's as though they want to lose the next election.