The Lemon Fool

"Higher Taxes and Fewer Public Services – Why the UK Economy is FAILING":

https://www.youtube.com/watch?v=NML1Eg04oA8

It is all rather grim. It is difficult to see a turnaround happening, in the near future at least. The only positive comment that I can offer is that where there is life there is hope.

GeoffF100 wrote:"Higher Taxes and Fewer Public Services – Why the UK Economy is FAILING":

https://www.youtube.com/watch?v=NML1Eg04oA8

It is all rather grim. It is difficult to see a turnaround happening, in the near future at least. The only positive comment that I can offer is that where there is life there is hope.

Grim indeed, but a fair summary of the problems in the British Economy.

FD

funduffer wrote:a fair summary of the problems in the British Economy.

The question I always ask about articles like this, variations of which we see all the time, is how much metrics like productivity and GDP have to do with how rich individual British people are? Much of my net worth has come about via investing in property and shares - certainly more than I ever made going to work. And yet only the latter shows up in the kind of "official" stats cited in such articles.

In fact I am constantly struck with how much money there is sloshing around, not least every time I try and book a hotel or visit a restaurant. Could it be that UK GDP is low precisely because so many Brits are independently wealthy and so do not need to be "productive"?

It’s an interesting theory. But you only need constant growth, if you are constantly overspending and living on next years money. Which of course, we are, because successive governments have borrowed. Allegedly to fund growth, which they have reliably failed to achieve. Governments have never been very good at achieving growth. They spend money where it is politically expedient, not on the basis of economic need. Growth usually happens in spite of govt, not because of them.

It should be possible to live within your means, and not require growth at all. I mean, let’s be honest, we are already pretty wealthy as a nation. But that would require us (and especially govt) to alter the cut of our cloth quite substantially.

Gryff

Lootman wrote:... Could it be that UK GDP is low precisely because so many Brits are independently wealthy and so do not need to be "productive"?

I think the productivity problem is because we're over reliant on services like retail and hospitality and had decades of underinvestment.

Which means the UK economy suffers more than its peers with each economic shock - 2008 gfc, brexit, covid, Ukraine.

There's pockets of prosperity but UK as a whole is stagnating for last 15 years. There's not a magic solution to fix unfortunately. Several things could help but politically toxic - rejoining EU, hs2/3 to level up north of England, pro business pro growth govt policy over long period.

To get business investment we need stability, and we have had the opposite of that for the last 16 years. Our political system is not delivering stability. Try getting votes by telling people that life is tough and they have to put up with it, and perhaps things will be better in 20 years time.

GeoffF100 wrote:To get business investment we need stability, and we have had the opposite of that for the last 16 years. Our political system is not delivering stability. Try getting votes by telling people that life is tough and they have to put up with it, and perhaps things will be better in 20 years time.

Singapore calls itself a democracy and the same party has been in power since the 60's. They don't seem to have any problems attracting inward investment. That might be an extreme example, but you're right. Even investing into a pension is fraught with doubt as successful governments (Chancellors!) constantly tinker and tweak.

Lootman wrote:The question I always ask about articles like this, variations of which we see all the time, is how much metrics like productivity and GDP have to do with how rich individual British people are? Much of my net worth has come about via investing in property and shares - certainly more than I ever made going to work. And yet only the latter shows up in the kind of "official" stats cited in such articles.

In fact I am constantly struck with how much money there is sloshing around, not least every time I try and book a hotel or visit a restaurant. Could it be that UK GDP is low precisely because so many Brits are independently wealthy and so do not need to be "productive"?

It doesn't help that many people confuse income with wealth. Particularly Labour politicians and non-financial journalists. Since GDP is a (flawed) measure of income they like to trumpet increases when they (or their side) are in power, whilst treating falling GDP as economic arnageddon if they are not.

People spending wealth on stuff will show up in the GDP to some extent. But the historical activity that occurred to accrue that wealth won't be in the current GDP figures, only the past figures.

So Brits drawing upon wealth, particularly savings made during lockdown, means that we probably won't be in a recession this year.

Most years my CGT on its own is enough to pay the salary of a nurse. But as I don't work I am considered to be non-productive.

GDP is a very flawed measure, ignoring many types of productive activity whilst having huge problems in dealing with "free" Internet services (such as Twitter) and improving product quality.

When those that set the rules take seven months to elect a new party leader, only to then chuck them out days later; And waste hundreds of billions £££ by opening up easy theft by fraudsters and wastage (furlough paid only to some, not millions of others) ...etc. why would you opine that the economy would do anything else other than lag other better managed/governed competitors?

1nvest wrote:When those that set the rules take seven months to elect a new party leader, only to then chuck them out days later; And waste hundreds of billions £££ by opening up easy theft by fraudsters and wastage (furlough paid only to some, not millions of others) ...etc. why would you opine that the economy would do anything else other than lag other better managed/governed competitors?

Aye, change the record dude

GDP is a very flawed measure, ignoring many types of productive activity whilst having huge problems in dealing with "free" Internet services (such as Twitter) and improving product quality.

SO which country is going to be the first to break the mould and introduce a new measure? A 'happyness' index or something? I think if we get away for the endless pursuit of GDP growth (as Greta put it), then we'll probably all be a lot happier.

Tedx wrote:I think if we get away for the endless pursuit of GDP growth (as Greta put it), then we'll probably all be a lot happier.

We might also have a planet that's still fit for us to live on. Although that seems unlikely.

One reason our economy has done badly is that we shipped our manufacturing to Hong Kong, to Taiwan, and then to China. Or rather, the nebulous thing known as 'the consumer' did, by not caring where things are made so long as they're cheap.

China has had strong wage growth over the last decade and will inherit our problems of economic sclerosis while workers elsewhere, in countries that do not pay excessive wages and do not have excessive benefits so there is no need to work, take over the manufacturing mantle.

Just as well we still have the services sector, or at least as much as we can keep out of the grasp of Brussels, otherwise we would be in a right pickle.

V8

Tedx wrote:SO which country is going to be the first to break the mould and introduce a new measure? A 'happyness' index or something? I think if we get away for the endless pursuit of GDP growth (as Greta put it), then we'll probably all be a lot happier.

GDP/capita. GDP alone is all too easily increased by opening up migration floodgates, but that leads to congestion/inefficiencies that drag down GDP/capita. GDP/capita is more reflective of comfort/individual-wealth.

2020 GDP/capita was lower than pre financial crisis (2007), with that financial crisis, Covid and Brexit now history there are great upside potentials, at least once Sunak/Hunt have also become history.

88V8 wrote:We might also have a planet that's still fit for us to live on. Although that seems unlikely.

Just a accelerated ending of the ice age, that will induce more extreme/variable weather. Burning through billions of years of in the making oil/coal in just a century or two will naturally have released massive amounts of carbon back into the atmosphere. But equally we're on the brink of alternative low cost (natural) energies, wind, fusion, geotherm ...etc.

Whatever the UK does however is near irrelevant. IIRC its something like the equivalent of the entire UK population moving from China's farming/fields into cities every couple of years, such that even if we cut to zero emissions that would be negated by China alone relatively quickly.

On an island with a population of 3, they all fish and live well.
One gets old, needs care, so we are down to 1 fisherman.
Much less fish.
Focus on the fish.

An island with a population of 4, they all fish and live well.
Two get old at the same time and require 2 carers. Oh.
And the oldies vote.
Sorry boomers, but this one is on you.

W.

Wuffle wrote:On an island with a population of 3, they all fish and live well.
One gets old, needs care, so we are down to 1 fisherman.
Much less fish.
Focus on the fish.

An island with a population of 4, they all fish and live well.
Two get old at the same time and require 2 carers. Oh.
And the oldies vote.
Sorry boomers, but this one is on you.

W.

Chat GPT poems?