tag:blogger.com,1999:blog-2546602206734889307.post1948477571683579612..comments2024-03-18T11:12:51.114+00:00Comments on mainly macro: How Brexit will constrain a future Labour governmentMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger36125tag:blogger.com,1999:blog-2546602206734889307.post-51399165592739938592017-08-14T16:05:41.978+00:002017-08-14T16:05:41.978+00:00Inflation is regulated by taxation and interest ra...Inflation is regulated by taxation and interest rate policy, it goes without saying that if we expand the economy beyond our ability to produce goods and services....... due to shortages in labour or raw materials then hyperinflation will occur. Money though is not a problem and the Neo-Liberal theology that our country is like a house hold and must earn it before it spends is a totally false premise. Neither do we have to raise taxes in order to spend in the economy.<br /><br />Balance of payments are indeed a constraint on the economy but, there are ways in which we can reduce the need of imports by creating industries that serve the needs of people rather than relying on cheap imports of other countries finished goods. Most trained in engineering production understand that today's technology is used worldwide and there is no reason why we can't produce goods to the same standards as any other country in the world.<br /><br />The profit motive is now coming under the microscope as a problem, in that how much profit does private enterprise need, the answer of course is never enough, which of itself is destroying the very market place seeks to take advantage from.<br /><br />If we accept that people make up the economy as producers of goods and services, then we can say they are the creators of wealth. So without money to spend we can't sustain the economy. We have the money all we need now are politicians who work on behalf of people rather than the corporate sector.<br /><br /><br />Mervyn Hydehttps://www.blogger.com/profile/10509054505553883594noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-72201157175283984472017-08-10T09:43:36.718+00:002017-08-10T09:43:36.718+00:00I assume you're an MMTer. Inflation and the ba...I assume you're an MMTer. Inflation and the balance of payments are also constraints on growth, so it's not just a question of the economy's capacity and your willingness to stimulate it by printing money or whatever.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-17102805122306774972017-08-08T20:51:00.207+00:002017-08-08T20:51:00.207+00:00"undone by the government spending more on in..."undone by the government spending more on infrastructure: public investment is not some magic instrument that can get you any GDP you want.<br /><br />o economic theory that I know of suggests you can safely ignore the public finances outside of a recession.N In a world where monetary policy regulates demand (absent the lower bound) then a build up in government debt risks crowding out private capital, discouraging labour supply (because higher debt has to be serviced through higher taxes) and redistributing income between generations. This is why Labour’s fiscal credibility rule aims to balance current public spending outside of a recession. Every £billion lost to Brexit is a £billion that cannot be spent on public services, or has to be raised in taxes"<br /><br /><br />Isn't this the kind of Neo-liberal claptrap that we all have since the crash, come to ignore?<br /><br />We have a fiat money system.<br /><br />You talk of crowding out the private sector, do you mean borrowing from the private sector?<br /><br />You say that: "no economic theory that I know of suggests you can safely ignore the public finances outside of a recession".<br /><br />If we start by saying a government working with trade deficits of between £3-£4 billion a month, month in month out, is hardly a balanced economy.<br /><br />A government though with a fiat money system has no constraints where it has to rely on its own private sector to service government debt or expenditure.<br /><br />Alan Greenspan puts it this way:<br /><br />"That all of these claims on government are readily accepted reflects the fact that a government cannot become insolvent with respect to obligations in its own currency. A fiat money system, like the ones we have today, can produce such claims without limit".<br /><br />So essentially a government like our's can spend directly into the economy, whether to buy goods and services, invest in its infrastructure, create real jobs, pay for public services, or simply pay down its debts. The sole constraints are human and raw material resources not money as Neo-Liberals would have us believe. <br /><br /><br /><br /><br /><br /><br />Mervyn Hydehttps://www.blogger.com/profile/10509054505553883594noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-57736075585382233272017-08-08T03:42:58.228+00:002017-08-08T03:42:58.228+00:00"Does democracy mean being bound by a referen..."Does democracy mean being bound by a referendum that was called only to appease the hard right, decided by lies using a rigged electorate, and apparently made mandatory as a result of the words of a now departed Prime Minister?"<br /><br />Yup Prof, that is exactly what it means.<br />Only solution is to abolish all voting and accept rule by unelected master of the universe. That would be you - obviously. polidorisghosthttps://www.blogger.com/profile/15626159222410159386noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-4653658625830365962017-08-07T09:37:52.971+00:002017-08-07T09:37:52.971+00:00Venezuela is suffering balance of payments problem...Venezuela is suffering balance of payments problems due to a collapse in the oil price when it depends utterly on oil exports and doesn't have other industry. Since the USP didn't diversify, they have decided to blame their opponents and grab more power to try and survive. None of this resembles the Corbynistas, the UK isn't an oil-based economy and Corbyn isn't going to turn himself into a dictator.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-47499254161854331822017-08-07T09:34:07.057+00:002017-08-07T09:34:07.057+00:00Germany as the champion exporter has an electorate...Germany as the champion exporter has an electorate which feels the EU makes it prosper, and when they want to blame foreigners they do it by a different route than anti-immigration: instead they accuse the Greeks and other southern Europeans of stealing.<br /><br />Denmark is Mr Social Democracy so presumably working ppl there are less discontented and eager for a win by kicking out the immigrants to try and get a pay rise.<br /><br />Immigration isn't popular with working class ppl in southern Ireland but since the Single Market in 1992 is credited with letting Ireland catch up economically, and it knows it's a small country, the public fears leaving the EU or even the euro, even though the euro gave them 15% unemployment.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-14642738538873311322017-08-06T20:24:07.861+00:002017-08-06T20:24:07.861+00:00Climate change is complete conjecture. But some co...Climate change is complete conjecture. But some conjectures are based on pretty solid evidence, and the prediction that Brexit will reduce UK GDP by a large amount is one of those.Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-17341920572303775062017-08-06T20:22:16.827+00:002017-08-06T20:22:16.827+00:00Anon at 6:37. I must admit I missed the 'force...Anon at 6:37. I must admit I missed the 'forced' bit when I read it, and my presumption is to avoid censoring comments - I think I've only done it once or twice. Luckily comments of this kind are very unusual on this blog.Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-77305704069606714812017-08-06T20:18:18.446+00:002017-08-06T20:18:18.446+00:00These are interesting issues - discussed in the ma...These are interesting issues - discussed in the mainstream literature as well - which I hope to discuss at some point. But the problem of servicing much higher debt through taxes remains. Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-22742214093193797502017-08-06T17:57:28.781+00:002017-08-06T17:57:28.781+00:00I think the author is referring to evidence which ...I think the author is referring to evidence which shows that immigrants add more in revenue than they take in public services. Lower immigration therefore means less funds for public services. In the OBR recent report on fiscal risks, the low immigration scenario led to around £30bn more public debt by 2021.Stampshttps://www.blogger.com/profile/09241335224421242618noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-28592656970073196562017-08-06T16:46:25.767+00:002017-08-06T16:46:25.767+00:00ILF garbage.ILF garbage.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-22041624482252601112017-08-06T10:04:06.885+00:002017-08-06T10:04:06.885+00:00It does seem as though Norway got to their present...It does seem as though Norway got to their present arrangement because in the referendum the population chose not to join the EU and so the political leadership effectively ignored the content of this, while respecting it as a technicality, and paid up for the access that they understood would be beneficial to their constituents (even the one who voted not to join).<br /><br />I believe they are still a democracy, so far at least.Adam Phttps://www.blogger.com/profile/16316584837610367439noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-26432493413028309182017-08-06T08:27:35.467+00:002017-08-06T08:27:35.467+00:00I voted Leave wanting to remain in the Single Mark...I voted Leave wanting to remain in the Single Market. Quite a lot of Leave campaigners left it as an option to be decided by the government - you just have to look for mentions of 'Switzerland' by Andrea Leadsom, Nigel Farage ( yes really ), Brexit - The Movie, Dan Hannan, The Adam Smith Institute, Boris Johnson, and many others in their efforts to persuade us that voting their way was a good thing to do.<br />And yet there are still an illiberal group of people who insist that everyone knew that a Leave vote was a vote to also Leave the Single Market, who think they are being entirely consistent.<br />Ending free movement is not mandated by the result of the referendum. It is an option that government can take, leave or defer.Andrew Careyhttps://www.blogger.com/profile/08442714147160589939noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-91510812818318854682017-08-05T17:37:27.239+00:002017-08-05T17:37:27.239+00:00Reduced immigration won't lead to more British...Reduced immigration won't lead to more British women having babies! That is certainly an absurd idea. Moreover, immigrants tend to be available for work on entry. Babies take 18 years to grow first.Daniel Sheppardhttps://wakelet.com/@Danielnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-78116235781302051042017-08-05T13:37:08.593+00:002017-08-05T13:37:08.593+00:00I was going to comment on various points in the ar...I was going to comment on various points in the article, but now I see that a fascist who fantasises about forced pregnancies to increase the British birth rate is welcome to comment here. So I'll just go away now and try to forget I was ever here.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-63303057546725169852017-08-05T13:20:15.141+00:002017-08-05T13:20:15.141+00:00As ever you simply assume that the dynamic effects...As ever you simply assume that the dynamic effects of Brexit over a long period will be negative and this will therefore have knock on effects for the rest of economic policy, especially for a party that wants to spend more from the public purse.<br /><br />The fact is that no-one knows what the dynamic effects will be over time. Frankly I'm inclined to agree with you that this will be a difficult process which will have a negative economic impact for some considerable time, but whether it will do so permanently is a matter of complete conjecture. If the long term impact of a hard Brexit was more or less neutral then your point would not be valid and you cannot say with any degree of certainty that it will not be neutral. You seem to assume what you are required to demonstrate. Your analysis cannot capture the full range of dynamic effects that will occur during this process of change and there is no reason to suppose that they will be all one way.Robert Joneshttps://www.blogger.com/profile/03593742130088640939noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-49297626230955231992017-08-05T12:09:21.923+00:002017-08-05T12:09:21.923+00:00Well, ask an Icelander whether they think the heal...Well, ask an Icelander whether they think the health system is better now than before the crisis, and they’ll tell you that there is less care available, because many doctors emigrated and there were sharp cuts in expenditure, and you have to pay much more for health than before.<br />More generally, Iceland defaulted on a large part of its foreign debt - the consequences of that on their reputation and future economic performance may not have fully played out. Yes, there has been strong economic growth recently, but it is not sustainable - much of it is due to tourism which has expanded 6-fold, with dire consequences for the environment and the housing market. Many people in Iceland can no longer afford to rent flats - the costs have been driven up so much.<br />And for those Brexiteers who rail against free movement, Iceland is in Schengen…and they have to accept all internal market legislation without having a say.Alannoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-37748162402351519632017-08-05T07:16:50.110+00:002017-08-05T07:16:50.110+00:00But the crucial point seems to me that government ...But the crucial point seems to me that government debt increasing creates savings of the same amount as an integral part of the process of creating government debt. They are indivisible sides of the same coin. Am I really wrong about that?stonehttps://www.blogger.com/profile/07670385074640188296noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-23938460637314550732017-08-05T07:13:08.593+00:002017-08-05T07:13:08.593+00:00I'm still really struggling with this. If less...I'm still really struggling with this. If less GDP means less employment of people designing luxury watches or exotic financial instruments, then that means more people available to train as teachers and doctors. Japan has very very low immigration and yet has no shortage of doctors and teachers.stonehttps://www.blogger.com/profile/07670385074640188296noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-72810285004530831632017-08-05T07:11:33.082+00:002017-08-05T07:11:33.082+00:00Immigrants per 1000 inhabitants in EU28: the UK st...Immigrants per 1000 inhabitants in EU28: the UK stands 12th in the league, which is topped by Luxembourg. <br />If countries like Germany, Denmark and Ireland cope with higher levels of immigration than the UK, why has it caused such problems in this country that we need to leave the EU to solve them? Pendragonhttps://www.blogger.com/profile/14601150248986844828noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-44418917996204130002017-08-05T00:05:00.411+00:002017-08-05T00:05:00.411+00:00Assuming that brexit does result in a deterioratio...Assuming that brexit does result in a deterioration of productivity, wage growth, GDP,and the public finances, would't that actually underscore the macro-economic need for a fiscal expansion that could not just be confined to public investment, given time profile? Why would interest rates then rise allowing escape from the ZLB, given they are set by the BoE, rather than the level of the public deficit? <br /><br /><br /> Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-68027770327625711752017-08-04T20:40:52.015+00:002017-08-04T20:40:52.015+00:00What I find galling is the inconsistency, the asym...What I find galling is the inconsistency, the asymmetry of it. EU citizens like yours truly who have lived here for a long time didn't get to vote. Fair enough: we declined to seal our commitment to this country in naturalisation. But Brits who have lived in the EU for more than 15 years also didn't get to vote, even though they are both British citizens and profoundly affected by this decision. So what determines whether you can vote: citizenship, or length of settlement? The answer is a bit of both, rigged so that all those most likely to vote Remain were excluded from the vote.Anonymoushttps://www.blogger.com/profile/11978229988713658551noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-64671345085371612322017-08-04T18:40:10.563+00:002017-08-04T18:40:10.563+00:00This comment has been removed by the author.jerred seiysllhttps://www.blogger.com/profile/17375770046164311780noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-34246508922811301522017-08-04T16:49:19.084+00:002017-08-04T16:49:19.084+00:00https://fullfact.org/europe/who-can-vote-eu-refere...https://fullfact.org/europe/who-can-vote-eu-referendum/ Excluding EU citizens who had been here for 15 years and 16+17 year olds obviously favoured Leave.Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-39666102866082515732017-08-04T16:17:24.532+00:002017-08-04T16:17:24.532+00:00Its an overlapping generations model. Suppose all ...Its an overlapping generations model. Suppose all savings are for retirement. If government debt increasing does not increase savings by same amount, saving for private capital gets squeezed out.Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.com