I might be missing something, here ....
I'm not really that much of a political animal, and I can't in any way claim to fully understand anything about politics or economics. The only thing that's got me looking, squinty-eyed, so closely at what's going on is my daughter who frequently goes off on one at what George Osborne and the rest of the blue-rinse brigade have been up to now.
But it seems to me that someone's lost the plot. I mean, it was my honest understanding that when a person has a job and pays his taxes and then spends the rest of his pennies on running his house and bits and bobs for himself and his family, it's quite a good thing for the economy. People working, earning, paying taxes, putting the rest of their available pennies back into the economy to keep it running smoothly - you know, like a well-oiled machine.
Right, got that bit.
But then comes the complicated bit. A VAT rise that makes everything more expensive to purchase. Even those items on which there is no VAT are more expensive because of the manufacturers or producers having to cover their extra expenses for those items which they have to use and which are eligible for VAT. Nothing escapes, does it? So, the working man has to figure those extra expenses into his budget. He doesn't have any more pennies to spend, so he looks at cutting back a little bit. He buys less; fair enough. The Govt gets more pennies anyway because he's paid more for what he's bought. It might be balanced out by him spending less as time goes on but, for now, it's not really that bad.
However, then comes his pay freeze. That's a different kettle of fish. Prices are steadily on the increase but his salary or wage isn't. Time to start tightening that belt, methinks... or, more importantly, he thinks.
And then comes the tragic bit. He works for the Council. Now he's not spending on bits and bobs anymore. He's spending only what he has to because he doesn't know if he's going to have a job in a month's time. The VAT rise is having less and less of a positive effect because he's buying less and less. He'll still have to cover his mortgage when he's booted, so he's not going to be spending more than he absolutely has to, is he? No, he's going to have to give himself as much time as possible to find alternative accommodation when he won't be able to cover his mortgage payments.
I'm not sure that it's all been thought through. People need work to pay their taxes and to give them an incentive to spend. That £75b might have been better placed to create work to get people to pay taxes and give them an incentive to spend, instead of giving it to those who may or may not loan it to those who may or may not be able to pay it back.
I did hint at the beginning of this tome that I'm not the most intelligent person when it comes to politics and the economy, but it does seem to me that sacking people en masse and raising VAT will remove the ability for people to pay their way in our society - exactly the opposite of what Cameron and Osborne say they are aiming for.
£75b of electronic pennies can create the work to create real wealth and growth. Have I got that right? Instead, we still have the problem with people not paying taxes (either because they are rich enough to afford a legal team to advise on how to legally avoid paying their taxes, or because they have been dumped on the slag heap and aren't getting the money in to pay their taxes) and we still have the problem of people worrying so much about their finances that they just aren't prepared to chance 'wasting' money on silly things like a new carpet (for example) then keeping it for that ever-approaching rainy day.
It gives me a headache trying to understand the reasoning behind creating a situation where jobs are taken from people and replaced by benefits which aren't enough to either pay tax on or spend with.
Please feel free to set me right. I must have it wrong, somewhere.
But it seems to me that someone's lost the plot. I mean, it was my honest understanding that when a person has a job and pays his taxes and then spends the rest of his pennies on running his house and bits and bobs for himself and his family, it's quite a good thing for the economy. People working, earning, paying taxes, putting the rest of their available pennies back into the economy to keep it running smoothly - you know, like a well-oiled machine.
Right, got that bit.
But then comes the complicated bit. A VAT rise that makes everything more expensive to purchase. Even those items on which there is no VAT are more expensive because of the manufacturers or producers having to cover their extra expenses for those items which they have to use and which are eligible for VAT. Nothing escapes, does it? So, the working man has to figure those extra expenses into his budget. He doesn't have any more pennies to spend, so he looks at cutting back a little bit. He buys less; fair enough. The Govt gets more pennies anyway because he's paid more for what he's bought. It might be balanced out by him spending less as time goes on but, for now, it's not really that bad.
However, then comes his pay freeze. That's a different kettle of fish. Prices are steadily on the increase but his salary or wage isn't. Time to start tightening that belt, methinks... or, more importantly, he thinks.
And then comes the tragic bit. He works for the Council. Now he's not spending on bits and bobs anymore. He's spending only what he has to because he doesn't know if he's going to have a job in a month's time. The VAT rise is having less and less of a positive effect because he's buying less and less. He'll still have to cover his mortgage when he's booted, so he's not going to be spending more than he absolutely has to, is he? No, he's going to have to give himself as much time as possible to find alternative accommodation when he won't be able to cover his mortgage payments.
I'm not sure that it's all been thought through. People need work to pay their taxes and to give them an incentive to spend. That £75b might have been better placed to create work to get people to pay taxes and give them an incentive to spend, instead of giving it to those who may or may not loan it to those who may or may not be able to pay it back.
I did hint at the beginning of this tome that I'm not the most intelligent person when it comes to politics and the economy, but it does seem to me that sacking people en masse and raising VAT will remove the ability for people to pay their way in our society - exactly the opposite of what Cameron and Osborne say they are aiming for.
It gives me a headache trying to understand the reasoning behind creating a situation where jobs are taken from people and replaced by benefits which aren't enough to either pay tax on or spend with.
Please feel free to set me right. I must have it wrong, somewhere.
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