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Ask HN: What Is Happening in the UK?

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Re: Ask HN: What Is Happening in the UK?

#51

Post by tikkabhuna »

cbeach wrote: post #23
fnimick wrote: post #17

Earlier quoted context omitted.

> the wealthiest 1% are paying 28% of income tax receipts - and this percentage has increased over the last decade Without any information on how wealth inequality has increased, and the 1% have more income and assets now than they did last decade, this is misleading at best. If the top 1% are paying more taxes but are also making more money, this hardly seems unfair.

So you think 1% of people shouldering 28% of the cost of public services is fair?

Do you think inequality should increase or decrease?

If we keep current spending the same. We could reduce the % the top 1% bare by reducing inequality and by having the 99% earning and paying more tax.

Or we could reduce taxes for the 1% and reduce spending which would likely increase inequality.

Re: Ask HN: What Is Happening in the UK?

#53

Post by bigfudge »

Nextgrid wrote: post #21
cbeach wrote: post #3

The pound is low against the dollar, as is the Euro low against the dollar. The pound dropped in value a few days ago, but the price has recovered since then. The media chooses to focus on the drop rather than the recovery, because the drop coincided with a government announcement of some pro-growth economic policies that mainstream pundits disagree with. If you speak to people in the U.K. many would agree that payin…

The problem I see is that these tax cuts only really help those who don't need the help, all while the lower classes still can't pay their energy bills/rent/food. The issue is that most of the economy relies on people (including the lower classes) spending, which they aren't going to do if they already spent all their money on rent/bills. This in turn means businesses may go underwater if they aren't getting enough c…

Plus, even taking at face value the notion that tax cuts were to inject money into the economy and stimulate growth, giving money to poor people guarantees it’s spent in the economy immediately.

Re: Ask HN: What Is Happening in the UK?

#54

Post by rwmj »

cbeach wrote: post #23
fnimick wrote: post #17

Earlier quoted context omitted.

> the wealthiest 1% are paying 28% of income tax receipts - and this percentage has increased over the last decade Without any information on how wealth inequality has increased, and the 1% have more income and assets now than they did last decade, this is misleading at best. If the top 1% are paying more taxes but are also making more money, this hardly seems unfair.

So you think 1% of people shouldering 28% of the cost of public services is fair?

That only income tax, not all tax: https://fullfact.org/economy/do-top-1-earners-pay-28-tax-bur...

But yes I do think it's fair for the very richest to pay more tax, and I say that as someone who is a high earner who wants to see more equality.

Re: Ask HN: What Is Happening in the UK?

#55

Post by emptyfile »

Having austerity during low rates and fiscal expansion during high rates is a pretty bad idea.

However, if your currency is NOT the US dollar, then its a catastrophically bad idea.

In short: Truss and Kwarteng are intellectual lightweights whose economic ideas make for funny reading* but in reality are a recipe for disaster. Their line of delusional thinking can be traced directly to Brexit, when the UK lost their collective minds.

*https://en.wikipedia.org/wiki/Britannia_Unchained

Re: Ask HN: What Is Happening in the UK?

#56

Post by thewarrior »

tomxor wrote: post #36
thewarrior wrote: post #16

The UK imports large amounts of energy and other things essential to its prosperity. The UK has a current account deficit which means it does not have enough of the dollar to cover for its imports. It has solved this problem over the years by borrowing and becoming a haven for investment to cover up the shortfall. Now we have a bat shit government that says we need to lower taxes and borrow a boat load of money to ti…

> One way to stop this is to raise interest rates and pull pounds out of circulation but the government is terrified of popping the real estate bubble. I'm pretty sure i'm being naive here but... why? House ownership has become a huge problem for recent generations in the UK, I still haven't engaged with the market because it's so hard to get a foot in the door unless you have masses of disposable income. Popping the…

A housing crash would be destabilizing in its own right and it would hurt the rich Tories. So there’s no way they are letting it happen. They will fight it tooth and nail.

Re: Ask HN: What Is Happening in the UK?

#57

Post by bigfudge »

buf wrote: post #5
cbeach wrote: post #3

The pound is low against the dollar, as is the Euro low against the dollar. The pound dropped in value a few days ago, but the price has recovered since then. The media chooses to focus on the drop rather than the recovery, because the drop coincided with a government announcement of some pro-growth economic policies that mainstream pundits disagree with. If you speak to people in the U.K. many would agree that payin…

The pound was .87 ten days ago and it's .92 now, up from it's low of .93. It doesn't appear recovered to me.

Plus, the real damage is on value of gilts. Sterling is a secondary concern (although obv also inflationary)

Re: Ask HN: What Is Happening in the UK?

#58

Post by scrlk »

The Bank of England's announcement that they will restart QE (a.k.a. money printer goes brrr) on a "temporary basis" was driven off the back of UK pension funds facing massive margin calls due to the spike in gilt yields.

There's a good article in the Financial Times that explains the mechanics behind it ("LDI: the better mousetrap that almost broke the UK"): https://www.ft.com/content/f4a728a5-0179-48bd-b292-f48e30f86... (archive link: https://archive.ph/vRrGk)

tl;dr from the article:

"Well, the cruel irony is that pensions needed collateral for margin calls on leveraged trades hedging against big moves in . . . UK government bond yields.

So pensions sold bonds (among other things) to raise that cash, pushing yields up, making hedging trades even more expensive, and requiring even more collateral.

If the BoE hadn’t stepped in to arrest the declines, pensions may have defaulted on those contracts, which would have been very bad. That isn’t the same thing as going bust – it’s not like all the investments disappear overnight – but it does risk tying up the pension in a knotty legal fight over settling the default."

Re: Ask HN: What Is Happening in the UK?

#59

Post by mvc »

cbeach wrote: post #10
bscphil wrote: post #7

Earlier quoted context omitted.

> For that reason I chose to quit my job as a software team manager in an investment bank and instead went to work as a developer in a startup. > I decided there’s no point in working long hours in a responsible job helping other people advance their careers if I keep less than 40p of every pound I earn at that point. I may as well do less responsible work that I enjoy instead. This is an extremely funny takeaway in…

Oh yes, you're not wrong. Many people on the left see tax as an appropriate punishment for wealth. In their worldview, wealthy people are demonised and dehumanised. The left are convinced that wealthy people are parasitic on society. This leftwing ideology seems peculiar to me, having seen the data on who's funding public services, and who's benefiting from public services.

It's not a punishment for wealth.

Think of it like insurance of your status in the system. Your insurance premiums are proportional to the value of the stuff you want to protect. Presumably you own a house. A pension. Various other investments perhaps. All these become worthless if civil society fails and we go back to the Leviathan.

It is right that you should pay a higher premium for that type of insurance than those with no such wealth at stake.

Re: Ask HN: What Is Happening in the UK?

#60

Post by JohnCClarke »

cbeach wrote: post #3

The pound is low against the dollar, as is the Euro low against the dollar. The pound dropped in value a few days ago, but the price has recovered since then. The media chooses to focus on the drop rather than the recovery, because the drop coincided with a government announcement of some pro-growth economic policies that mainstream pundits disagree with. If you speak to people in the U.K. many would agree that payin…

Truss is borrowing £45B to pay for tax cuts this year. But like you ask any addict: "What are you going to do next year?"

The trickle-down maths looks "optimistic". Cutting £45B means that the economy needs to grow by £112.5B for the top rate 40% tax rate take to come out even. That is GDP growth of 4.5%. I.e. far in excess of what the economy has been capable of ever since 1997.

Talking of further tax cuts just pushes the assumed GDP growth further into fantasy land.

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