Oh dearie me. 100 economists sign up for this?
This is not to argue that the deficit can be
ignored indefinitely. But if demand could be
restored and the employment rate increased, a
significant portion of the structural deficit would
disappear, leaving the rest to be financed through
a combination of controls on spending at the
right moment when the economy is growing
again and tax revenue increases.
Err, no. The structural deficit is, by definition, that part of the deficit that does not disappear when demand is restored and the employment rate increased. They are there talking about the cyclical deficit but calling it the structural one.
Pure ignorance of economics of course, as if the people writing it didn’t pay attention to their economics classes after the first few weeks. You know, that “of course neo-classical economics is all bullshit” thing?
Looks like our favourite retired accountant from Wandsworth did more than just advise on this document.
And given that error in the first few paragrpahs, how many of our “100 economists” actually read the plan before signing it?
This is fun:
It is now widely agreed that the £200 billion
programme of quantitative easing (QE1) launched
in March 2009 mostly benefitted the bankers.25
Hmm, footnote 25:
25 See for example R Murphy and C Hines, Green Quantitative Easing: Paying
for the Economy we Need, Finance for the Future, 2010.
So “widely agreed” now means one of the autohrs of this report referring to his own previous report, does it?
This is also fun:
the moment, the Jobseeker’s Allowance payment
for a single working age person under 25 is £53.45
and for a person over 25 it is £67.50. Research
by the Centre for Research in Social Policy at
Loughborough University shows that a single
working age person with no children requires
a weekly income of around £185 ‘to reach a
minimum acceptable standard of living, covering
essential requirements and allowing people to
participate in society’.28 It is clear that benefit
levels for working age single people fall far short
of what is required to alleviate poverty. Raising
the levels of Jobseeker’s Allowance and other
working-age benefits such as Employment and
Support Allowance so that they are at, or at least
much nearer to, the minimum income standard is
an essential prerequisite for the benefit system to
be effective at preventing poverty among people
searching for work.
We’re going to cut unemployment by subsidising unemployment more. Ignorance of the basic causality here seems to be an essential doesn’t it? If you subsidise something you get more of it.
Research by Landman Economics
Another writer of the report self-referencing his own work there.
Another economic boost could come from a
financial transactions tax.
Well, no. The EU actually says that an FTT would shrink the European economy by 1.7% or so. Not really an economy boosting measure that.
Research on the possible revenues from a
financial transactions tax published by Tax
Research LLP in 2010 suggested that total global
yields from a tax of one half of a basis point (one
200th of 1% or 0.005%) on spot and derivative
foreign exchange dealing would raise approximately
$33 billion annually, while a tax at a
similar rate on exchange-traded and over-thecounter
bond, gilt, derivative, swap and other
trades could yield approximately $118 billion
per year.30 Obviously these are global figures,
but the large volume of trades taking place in the
UK suggests that the UK’s share of this revenue
would be substantial.
Tax on spot FX is illegal in the EU which is why the EU version doesn’t include it. We’ve also another self-reference and even better, no one seems to have noticed that the FTT being proposed by the EU is for the money from the FTT to go to the EU. It would actually be a net loss to the UK Treasury as what we currently get from Stamp Duty would be redirected to the EU under this new FTT.
HM Revenue & Customs
say it is £42 billion – made up of £35 billion of
illegal tax evasion and £7 billion of unacceptable
tax avoidance. But the true figures are possibly
as much as £70 billion and £25 billion a year,
respectively, to which can be added £25 billion of
tax paid late.34
Self-referential Murphybollocks again.
The report as a whole just seems to be a collection of every bad idea that’s been floated by Compass, Murphy and the nef over the past few years. And they’re taking the fact that they had a bad idea a couple of years ago as proof that this is a widely accepted and wonderful idea now.