Wipe out the UK's national debt in one go?

Discussion in 'Politics' started by Viking_UK, Sep 15, 2010.

  1. Viking_UK

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    Professor Greg Philo has proposed a radical way to clear the UK's national debt - with a on-off tax of 20% of their net worth levied against the richest 10% of the UK population. More details here:
    Glasgow Media Group

    It's a little naive, but I think the proposal has merits. OK, 20% is maybe a bit too much, but 10% would not be an unreasonable amount. I don't think it's fair to go all Robin Hood and make the richest people bail the country out. I'd say that most of us have contributed to the current state of the economy, so we should all do our bit. After all, they've worked for their money and have paid tax on it, but, as one (Tory) council chief said when being interviewed about it, a lot of the money the bankers were playing fast and loose with came from, and earned massive profits for those people at the top of the rich list. He thought the proposal was perfectly justifiable and looked on it as a form of windfall tax.

    As I say, I think it's a bit naive and simplistic, so how do you think the proposal could be improved to make it workable?
     
  2. jacko_9

    jacko_9 New Member

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    an interesting idea and more importantly this shows the gap between the richest and poorest. The recession has hit the poorest worst, the rich always float above it all still licking off the cream.

    This idea of course is not workable nor enforceable, the reason the UK 'had' a strong economy and the reason the pound is still strong is because we employ some of the best bankers, city workers, inventors and scientists in the world and they get the money.

    I am of the opinion that as we have only borrowed 50% of our GDP which is less than the majority of the G20 countries we shouldn't be cutting anything back, just not investing huge money in the new!!! EASY???? Obviously not!
     
  3. Jason

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    The idea as proposed is a political soap box and totally unworkable. Tell wealthy people that they will have a 20% tax on their wealth as at 1st April 2011 and you can be sure that wealth will vanish off shore on the 30th March. Do it as a retrospective tax (ie wealth at 1st April 2010) and you've crossed the line on retrospective tax and no business will ever trust the UK again. There are problems around valuing wealth (with the present soft property market how do you put a proper value on property?) There are also problems around the mechanics of liquidising wealth which is mostly held in shares, bonds and real estate. The volume coming to market would be very destructive - we're looking at stock market crash, sovereign debt crisis and property slump all rolled into one. It won't work

    Part of the answer is a credible plan to reduce the deficit, and in the view of the international markets we do (just) have this. The deficit deniers and the rhetoric coming from the TUC are speaking from economic illiteracy. We would all love the cuts to go away, be later, hit someone else - but the markets won't wash this. And we're in a silly position where the economically illiterate are putting forward a very comfortable argument which is going to get a lot of support. Support for correct action is going to be hard to maintain. Which is why a credible plan to reduce the deficit can only be part of the answer.

    So we do as well need the deus ex machina solution. There are several out there, all of which should be applied:
    * Sell off bank shares. This is what racked up much of the debt. We need to do it in a market where bank shares are booming which means that for our good we have to feather-bed the bankers. They have to be given everything they want and a bit more for good measure. We need the banks more than they need the UK - all the big ones are international and can trade from another jurisdiction if they want.
    * Sell off oil exploration rights in the North Atlantic - basically in the vivinity of Rockall.
    * Sell off oil exploration rights in the South Atlantic around the Falklands.
    * Increase the UK rebate from the EU (currently around £3bn) so that the UK's contribution is reduced to the level of France and Germany (the latter a bigger economy than the UK). Maggie Thatcher will lend Cameron her handbag.
    * accept higher levels of inflation than in previous years. This tends to erode debts (and our sovereign debt is denominated in sterling). It also gets wages down in real terms. Because sterling can depreciate we will be more competitive in international markets.
    * do bilateral deals with major markets. The big one we need to do a deal with in India - some form of preferential trading rights.
     
  4. dongalong

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    An even simpler idea has been described here:
    Debt free money - instead of borrowing money from the privately owned central banks the government can just order them to print the money and it can control the amount in circulation.
     
  5. HazelGod

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    I see someone skipped the chapter on the Weimar Republic in school.
     
  6. midlifebear

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    I also see that someone is unaware of what fans the flames of inflation.

    However, why not just turn the UK into a Chinese Colony? They seem to have no problem keeping Hong Kong and Kowloon thriving and productive.
     
  7. Jason

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    The truly frightening thing is that we in the UK were forced to print money, even if we posh it up with the term "quantitative easing". We're not into Weimar Republic style problems but we do have inflation coming through which is looking a bit worrying. Now some inflation will help us, but not too much, an the concern is that we may have to take steps to control inflation caused by quantitative easing (ie put base rates up) that will also impact on our prosperity. The legacy of 13 years of Labour is the worst position the UK economy has been in since 1815 - worse than two world wars and the Great Depression.
     
  8. Drifterwood

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    We could of course control Government spending, God forbid, to say 40% of GDP. How each goverment apportions where it comes from and where it is spent would largely be their manifesto platform.

    But I am just being silly of course, who ever heard of actually living within your means, when you can always look for someone else to pay for you.
     
  9. superbot

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    It's the middle classes who have had to burden most of the direct/indirect taxation over the last decade,It's time now to claw back the money from those who are living off welfare handouts.The last government identified the true cost of this burden (can't remember the figure) but did nothing about it for fear of losing votes.Me thinks David Cameron has the balls for it!!
     
  10. jacko_9

    jacko_9 New Member

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    The people living off the tax payers (the benefit cheats) theory is a vote winning one not a problem which will claw back huge amounts of debt. It will of course make a difference, as will not building the two new air craft carriers for the navy, selling Royal Mail (the biggest mistake in my opinion). UK needs to become efficient. No one likes cheats (i agree something must be done to stop people living off benefits) but it works at both ends, people who earn money in this country even if they do not have residency here must pay full tax, no taking the money offshore to become tax free, rich people earn enough, this is just greed.

    The middle class in every society take the burden because they are honest, they do not cheat the benefit system and don't have offshore accounts. It is about balance of costs not targetting a specific class group.

    Labour looked at the market of the time and spent what you should to build a better Britain. The country has vastly improved over the past 13 years. The economy happened because the banks were not regulated especially in the US, the US banking industry is the main culprit. I think you'll find the banks had such freedom because the Conservative Government of the 80/90's removed much of the rules to make it a free market because of the last recession. Could Labour have re-instated rules? Maybe but that's hindsight and as banks are international could Labour have pushed the banks away? It is an interesting idea and not one covered by the media?!
     
  11. superbot

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    It's strange tho' how the last SOCIALIST gov't were not so keen to go after the bankers (until shamed into) or those with offshore investments which legally allow people not to pay so much tax?! Maybe there was a reason for that?!!!
     
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