Friday, October 9, 2009

The Economic Policy of the Next UK Government

At this moment in time, it appears that (barring any major blunders) the UK will elect Conservative government at the next election. Several readers have asked me to discuss Conservative economic policy, so this post is a response to those requests. Before starting, I should emphasise that I do not have any particular loyalty/affiliation/position which predisposes me to any of the contenders in the election. In particular, regular readers will be aware that I have a libertarian 'lite' point of view, and none of the UK political parties come close to such a perspective. I am therefore looking at policy from the point of view of which party has the least negative approach.

The problem in making the comparison is that any comparison with the Labour Party will flatter the party with which the comparison is made. It would be difficult to do much worse than the current government. In particular, as regular readers will know, there is the ongoing problem with current policy of printing money and fiscal incontinence in conjunction with previous fiscal profligacy. The debt in the UK is soaring, and the only thing propping up the issuance of debt is the Bank of England's purchase of gilts through the weasel worded quantitative easing (printing money).

It might be noted that the Conservative party were unwilling to challenge the fiscal profligacy in the past, with their formulation of 'sharing the proceeds of growth'. As such, their past policy was to follow Labour into a fiscal black hole, by promising to match and continue the policy of growth of government expenditure. It now seems that the Conservatives have accepted that the current levels of government expenditure are unsustainable, and are starting the process of adapting their policy according to this point of view. For the most part, I will be using the Conservative policy document on the economy (available for download from the Conservative website here) as this is a clearer statement of their intent than speeches or the opinions of commentators. It is written by David Cameron and George Osborne, and is therefore a good indicator of policy.

However, before examining the policy document, there is one piece of news that I find very encouraging. David Cameron, the Conservative leader, has spoken out against the current practice of printing money:
Without mentioning the central bank, Cameron told his party’s conference in Manchester that he opposed creating money, saying “sometime soon that will have to stop, because in the end, printing money leads to inflation.”
As a result, he has been subjected to criticism, in particular from David Blanchflower, who recently left the Bank of England Monetary Policy Committee:
David Blanchflower, who left the bank’s Monetary Policy Committee in May, said Cameron’s speech yesterday was “bizarre” and if put into practice may tip the U.K. into a “depression.” Shamik Dhar, a former Bank of England economist, said “at best this is wrong and at worst downright dangerous.”
Regular readers will know that I have been firmly against printing money from the outset of the policy, and I therefore see the discussion of an end of the policy as a very encouraging point. However, it is highly unlikely that the policy can continue up to the point of the next election, so this is a moot point. This is also a wider problem in the consideration of Conservative policy. Whilst they are currently offering policy considerations (as they must), it is not entirely clear what kind of economy they might inherit. For the moment, I will put this to one side, and look at their policy as if it might be implemented now.

The first section of their document is titled 'Fiscal Responsibility', which is an encouraging start, and they appear to be serious about the idea in principle. In particular, they are proposing the establishment of an independent oversight body, similar to the US Congressional Budget Office (CBO), which will report on the fiscal sustainability of government fiscal policy. As a statement of intent, this is a positive, and inclusion of private finance initiatives on the government balance sheet are all well and good. However, it might be noted that the US is still firmly on a path of fiscal profligacy despite the CBO. Also, whilst this is a positive, the UK already has independent oversight in the form of the Institute of Fiscal Studies, which is genuinely independent.

More worrying is that the remit of the organisation will be to look at fiscal policy and consider the sustainability of the policy 'adjusted for the cycle', and a proposal that there is 'a balanced current budget adjusted for the cycle'. It is in this statement that the major concern arises. Whilst the policy discusses the consideration of uncertain forecasts, it still allows for governments to borrow money based upon assumptions of some kind of knowledge of where the economy might be in the 'cycle'. It therefore ignores the fundamental solution to fiscal responsibility, which is that, barring disaster such as war, government should have no need to borrow.

After all, the government has a massive tax base, and should therefore be able to fund activity out of current income. In particular, if the government wishes to instigate a counter cyclical policy, it should save for a rainy day, a phrase that is included in the policy document. However, their policy implies that a government can save for a rainy day, and still borrow when the rainy day arrives. Why not simply save during the good times, and spend the saved money when the rainy day arrives? There is no need for government to borrow, except in times of war or disaster. It might be noted that, as a result of past borrowing, it will be a long, long time before a government is able to actually save money for a rainy day, as they will have a long period of paying down current debt.

Section 2 of the document is also headed with an encouraging title, which in this case is 'Financial Responsibility'. However, within the document are many worrying ideas. Perhaps the most worrying aspect is that the policy sees a transfer of considerable responsibility to the Bank of England for financial stability. As I have pointed out in previous posts (e.g. here - a long post), the regulatory framework and monetary policy of central banks made a significant contribution to the financial crisis, and giving them more power appears to be a perverse solution to future financial stability.

One of the cornerstones of the policy is that the Bank of England will have responsibility for spotting market-wide risks. This sounds very appealing in light of the disaster that has overtaken the financial system, but assumes that the Bank of England can actually see the risks in advance. As I have endlessly pointed out in past posts, the Basel rules (the foundation of bank regulation) included provisions such as very low capital adequacy ratios for lending into OECD banks, and for lending to OECD governments. With regards to the former, the OECD banks were the ones that were found to be insolvent, and the non-OECD banks were the ones that came out of the crisis relatively unscathed. In other words, the understanding of risk in the financial system was 100% wrong. Furthermore, there are now question marks over the sustainability of OECD government debts, which are still treated as zero risk.

The question here is very simple. If the central banks and regulations based upon their view of risk were so wrong in the past, why on earth should they get it right in the future?

On a more positive note, the policy discusses giving the Bank of England new powers to deal with banks when they are failing. However, there is no mention of the real problem, which is the so called 'too big to fail banks'. I have largely argued against regulation, but do believe that regulation should deal with the problem of 'too big to fail' banks, and that means breaking up 'too big to fail' banks, and ensuring that no bank is of a scale that it might create a systemic risk. The one lesson of the financial crisis that cries out for new regulation is the one area that is ignored.

Instead of dealing with the underlying problem, the Conservative policy instead moves into the emotive area of 'Tackling Reckless Bonus Structures'. If the policy were to address the issue of 'too big to fail', there would be no need to tackle reckless bonus structures, as excessive risk by a bank would result in insolvency, and the insolvencies would act as a warning to other banks. The point here is that banks must be small enough such that governments feel no need to ever rescue them when they fail.

Another problem that is not addressed is the ongoing ability of banks to pay organisations to rate their standing and rate their products. Again, the Basel rules encouraged this practice by having the ratings provided by the bank paid ratings agencies used as the basis of capital adequacy. The simple solution is that financial institutions should not be allowed to pay any organisation to rate anything. Ratings should be paid for by the purchaser of the product, not the seller. In allowing the banks to pay for ratings, the development of a market for independent ratings is throttled. Again, with an encouragement of genuinely independent ratings agencies, there would be no need for regulatory interference in banking bonuses. Excessive risk would be punished by independent ratings.

Another policy outlined in the policy document is closely related to this problem. The Conservatives are proposing tighter regulation of consumer credit. Some of their proposals, such as greater provision of information, and a cooling off period for store credit cards are very good. However, they fail to tackle one of the central problems of the provision of financial information, which is that the providers of the information are often working on commission from the financial institutions. Once again, the financial institutions are paying for ratings of their products, and this should be made illegal.

Another problem they fail to tackle is the provision of so-called interest free credit. I describe this as so-called, as it is an impossibility. The only way that interest free credit might be offered is if the cost of the credit is loaded onto the selling price of the item. Under such circumstances cash buyers are subsidising the credit of others, and this is an encouragement of indebtedness. It is a fraud to describe any retail credit as interest free, as all credit has a cost (even if a cash rich retailer offers this, there is an opportunity cost). The same might be said of teaser rates, and a whole host of methods that encourage consumers into excessive debt through provision of distorted information and downright fraud (e.g. self-cert mortgages in the hands of commissioned advisers).

With regards to taxation, the picture is more encouraging. As I identified in a previous post, the taxation system is far too complicated at every level. The Conservative policy recognises this and proposes the establishment of an Office of Tax Simplification which will be tasked with the simplification of the whole tax system. Of particular note is that there will be significant oversight of the taxation system, including a commitment to preventing 'stealth' taxation. This is a worthy aim, and it just remains to be seen whether the new organisation can actually deliver on the ambition inherent in the office's name.

A more problematic area is the discussion of tax reduction. Whilst there may be arguments for and against any level of taxation, the discussion of tax reduction is a purely academic debate. In the current fiscal situation, it is unlikely that any reduction in the overall level of taxation might take place. As such, the discussion of tax reductions looks to be disingenuous. For example, they discuss a reduction in corporation taxes, but also propose a raft of so-called green taxes. In doing so, they will likely give with one hand, only to take away with another.

The instigation of the 'green' taxes also has potential to add to the complexity and cost of the management of taxation, thereby potentially undermining the stated aim of tax simplification. The real answer to the problem of taxation is genuine simplification, and I outline how this might be achieved in a post here (I have since come up with ideas as to how the proposed system could be streamlined, and will post on this at some time in the future).

The final section of the policy document again has an appealing title, which is 'A More Balanced Economy'. The analysis of the problem is very sound, as they identify that most of the 'growth' in the economy has been related to government, housing and retail/wholesale and related activities, and note that manufacturing has 'flatlined'. They do not however note that the 'growth' that these describe is actually resultant from borrowed money, so not real growth at all, but rather foregoing of future growth. It is the great myth of GDP growth, which does not represent real growth at all (see here for why).

As a solution to the unbalanced growth, they look at the essential infrastructure of the UK, including diverse policy areas such as education, welfare reform, and road building. As such, their proposals are that reform in the infrastructure will encourage improvements in the balance of the UK economy. This is a difficult proposal to evaluate without an evaluation of each individual policy and, even then, it would still be difficult to determine cause and effect in terms of the re-balancing of the economy.

One point that they do not discuss is the UK economy in terms of the world economy. In particular, there is no discussion of the mercantilism practices of countries such as China, which actively result in unfair competition in manufacturing, and also in the theft of intellectual property. Whilst the emerging economies will, in all cases, be tough competitors, the mercantilism policies utilised undermine the potential for re-balancing the UK economy. This is perhaps the single most important area of policy, how to deal with mercantilism, but it is not addressed in any form.

There is one area of the policy document that will actively work against the redevelopment of manufacturing, which is the implementation of so-called green policies. These appear throughout the entire policy document, and are largely focused on the issue of carbon dioxide emissions in relation to the idea of man made global warming. At this point, I should mention that I am a man made global warming skeptic, so you may wish to bear this in mind. However, even if believing that global warming is man made, there is a fundamental problem in the implementation of 'green' policy; it will fall hardest on manufacturers who are large energy users. These companies will be faced with increasing costs due to the green policies, and this will undermine their competitive position. This will result in outcomes that will work against the re-balancing towards manufacturing.

The reasons for these outcomes are very simple; not all countries are going to follow the same level of 'green' policy, and those that implement the strongest policy will provide competitive advantage to those that follow the weakest policy. In such a situation, all that will happen is that the carbon dioxide emissions will simply be displaced from the 'green' country to the competitors with less 'green' policy. In many cases, this will lead to higher emissions, with countries like China being less efficient in their energy utilisation. In other words, without binding standards across every country, 'green' policy will simply shift manufacturing overseas, and will likely increase overall output of carbon dioxide overall. Unless there are universal standards, this is simply a policy to encourage further declines in manufacturing.

In this analysis, I have outlined a broad brush view of the proposals of the economic policy of the Conservative Party. However, I have only covered a fraction of the detail, and have been selective in what I have examined. I would therefore suggest that you read their document in full, to see the many points and detail that I have not included. It should also be noted that some of the details have yet to be filled in by the Conservative Party.

With regards to my overall assessment, I view their approach as a positive in comparison with current policy, but that is an assessment that commences from a low benchmark. Overall, I see the policy as tinkering with the current system, with a few improvements here and there, and some profoundly negative policy, such as the 'green' elements of the policy. The most encouraging idea is the simplification of taxation, which is a long overdue reform, but I have reservations about whether this will not see new complications enacted in, for example, the implementation of 'green' policy.

Altogether, what is really lacking is a radical rethinking of the underlying principles of what government, and government institutions, are actually there for. I have discussed several reforms which address these fundamental issues (such as the post linked to earlier on taxation). I am not proposing that the posts that I have presented on reform are the only answers, or that they are the best answers, but in each post I have asked what the underlying purpose of the government is for the area under discussion.

What is lacking in the conservative policy is this questioning. What are education, welfare policy, tax policy supposed to do, and how might they be achieved? Instead, the Conservative policy document commences with an assumption that, somehow, what is policy today is the starting point, rather than starting thinking from the principles of what policy in each area needs to finally achieve. It is policy built upon the legacy of what has gone before, rather than asking what the policy should deliver, and then proposing how that delivery might be achieved. It is the reason for the tinkering approach, rather than a root and branch examination built upon the underlying purpose in the policy.

As I have emphasised throughout the blog, the world is changing fast, and is becoming a far more competitive place. There are many good points in the UK system (from my point of view), such as the universal access to healthcare. In order to be able to afford such benefits, the rest of the system must be addressed, as well as how those benefits are delivered. I have, for example, linked to the post on tax reform. One of the aims of this reform is to free up huge amounts of potentially productive labour that is currently tied up in the complexity of managing the tax system. It is only if these root and branch reforms are made that the UK will be able to continue to afford to continue in the provision of state funded healthcare. I have also posted on reform of the health service, the provision of unemployment benefits, and education.

In a tougher world, these kind of deep rooted reforms, with likely better proposals than mine, are the only way that government might actually be able to afford to continue with the many benefits that the UK has formerly provided. In some respects, the Conservative policy is going in the right direction, but I suspect that, by the time they reach government, their policy will need to face up to a much harder reality, a reality imposed by a tougher world. The UK is not as wealthy as it still appears, and is still living on overseas borrowing. At some point, that borrowing must stop, and only radical reform will allow for the UK to continue with a good lifestyle when exposed to the real level of wealth in the economy. Quite simply, there will be no room for fat.

There remains in the Conservative policy a belief that the UK is wealthier than it actually is. They are confusing the living standard that has been supported by debt with the living standard that will be imposed when the debt stops. This is perhaps the reason for their timidity. It is this failure to face up to the underlying reality of the UK economy that really leaves me unconvinced. However, perhaps by the time they reach government the reality may be so plain, that they will indeed adapt? On this I can only speculate.

10 comments:

  1. Interesting analysis. I hope you wont mind if I offer some observations. These are not "party opinion" (I'm not of any significant rank where I could dictate such a thing) these are only personal thoughts.

    Why Governments Don't Save For A Rainy Day:

    If government "A" takes the very logical step of saving money while its pouring in so that when trouble comes knocking it can be easily dealt with - nobody thanks them.

    There is *never* enough money to do everything everybody thinks needs doing. So the question from the public is always: "Why has XXX authority got ten million in savings when the roads are so poor?" Or "Why has XXX council put money aside but XXX drug is not available to combat XXX horrific medical condition?"

    So then the opposition party says: "Elect us and we'll use this unspent money to do the things you demand!"

    The upshot is that any organisation is in a difficult position. Do the sensible thing and save and you'll get the other party elected, at which point they will get credit for all the good work they do spending the money you saved.

    I'm all in favour of saving in the good times. If you can explain your reasons properly, still maintain services with the balance of your funds, and put cash aside for darker days that is obviously sensible.

    But any council will tell you: there's just never enough money. I'll get to that in my conclusion.

    Why Go Green:

    You are correct, the whole climate change agenda is very controversial. I'm sceptical myself, though perhaps a little less than you seem to be.

    You're also correct that green initiatives will harm us in the short term versus competitor nations who don't bother with such things.

    The argument goes: everybody will have to go green eventually or the world will end. A head start in developing green tech will be an investment that will pay dividends when the less enthusiastic nations are forced to play catch up. Also, our current energy reliance puts us in a dangerous position for the future, when nations are competing for ever more scarce natural resources.

    My own take on this is more of a moral one: If the world doesn't end, making the air a little cleaner and the world a little greener wont be a disaster. If the world is in genuine danger then somebody has to show leadership. And if, despite all this, our efforts achieve nothing. I personally would rather stand in a wasteland and say: "We did all we could" than stand there and say: "Oops. Should have reined in the scepticism a little I guess."

    What Else:

    For me, the re-introduction of technical colleges, apprenticeships (real ones) and radical changes in the way education is controlled and funded were the highlights of the Conference.

    If we are going to have any chance against our Eastern rivals, knowledge, quality and skill will be the tools to use. I wont go into education heavily here, but I am very, very encouraged about the future if these plans can be built upon.

    Conclusion:
    What we heard, over and over again, at the conference were three key things. Localism (the devolution of power to the lowest sensible levels), personal responsibility (probably the most vital tenet of conservatism that there is) and Small State. I capitalise the last with good reason. Big state wastes so very much money. Control what government spends, put the money back into the hands of wealth-creators and into the clearing of debt, and we might have some chance to meet the high expectations of the public in regards to services.

    The United Kingdom is a place that many people love to live and work. It used to be MORE so. Concentrating on bringing the state back under control, reminding people of their responsibility to themselves and one another and giving them power over their own community and environment are (in my humble opinion) the building blocks of a wonderful place to call home. And that is what I call a strong form of competition against overseas rivals. Maybe the strongest.

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  2. The much vaunted service economy has been declared a failure, the West is now in a transition to an eco economy - tilting at windmills.

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  3. As I have endlessly pointed out in past posts, the Basel rules (the foundation of bank regulation) included provisions such as very low capital adequacy ratios for lending into OECD banks, and for lending to OECD governments.

    Neither investment banks nor hedge funds (essentially the shadow banking sector) were really subject to Basel rules, yet these were the sectors of the financial system where the crisis originated: thus it was the investment banks Bear Stearns and Lehman Brothers that first collapsed in 2008.
    Furthermore, even commercial banks could evade Basel by creating SIVs, which were not subject to Basel 1 and 2 capital regulations.

    See Root Cause Of The Economic Meltdown http://downwithtyranny.blogspot.com/2009/03/root-cause-of-economic-meltdown-our.html

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  4. It seems Steve Tierney and the other Tories have just not got it. De-industrialization needs more than technical colleges if it is to be reversed. There are enough skilled people around already. What the UK needs is some joining of the dots. Some incentives to build factories and make stuff in the UK are needed. A link between research and industry - like Fraunhofer, combined with some proper regional incentives - set up proper specializations by region - see Saxony as an example in Germany. (Saxony got Plastic Logic to build its only manufacturing site in Dresden. The ideas behind this came from Oxford I believe. Why Dresden? It seems to me because it was easier to do it there, higher sense of urgency, more aggressive timelines and probably more incentives and people who know how to do it.) Copy the Saxon approach and get the EU to reinstate development area status in Northern Britain from Birmingham to Shetlands. Suck in all the German & French companies that don't want to employ people in their own countries because it is too hard to fire them. And then get people back to work...
    Hutton is right:
    http://www.guardian.co.uk/commentisfree/2009/oct/11/will-hutton-david-cameron-conference

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  5. Its not just the Conservatives that are confused as to the true level of wealth in the UK. Most of the nation it seems is either ignorant of the truth, or wilfully disregarding it. When the hammer falls, a lot of people are going to be a) shocked and stunned, and b) then very angry with the people who have allowed such a decline in the nations wealth to occur.

    We are living in interesting (and very dangerous) times.

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  6. I'm quite happy that this piece has a more up beat feel to it, even though there still big grounds for pessimism. We hear a lot about China and developing nations like Brazil and that the UK is basically finished as an economic power. I'm getting quite fed up with this talk because we really are doing ourselves a disservice. This country is still a well of innovation, creativity and drive - it just needs to be channelled by a government with strong leadership and a strategic vision of the future. Many of our competitor countries lack these qualities and resort to underhand tactics to secure their benefits. They are also battling with internal strife and stuctural, socio-economic imbalances. We need a more optimistic, determined outlook if we are to succeed and we need parliamentary reform, urgently if we're going to build a government that is fit to lead the country through these difficult times. There will be opportunities to rebuild our industries, I just wish the VAT cut had been spent on R+D initiatives and not on wholesale price cuts. At some stage, countries like China will need to spend vast amounts upgrading their own infrastructure and lift millions out of poverty. If they don't open up the purse strings, civil unrest will destablise them - this will be our opportunity to trade into these new markets and replenish our reserves. I think of it as a basin of water sloshing about; currently the money is tilted over to the East, but it's of no value unless you can spend it, at which point it will flow back. Money, like water, will eventually find its own level. We're living in a global world now and national boundaries of wealth will become increasingly insignificant.

    Stu, Manchester

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  7. One thriving industry that we are about to see migrate from the UK:

    Oct. 13 (Bloomberg) -- Geneva? Zurich? Perhaps even Zug, Switzerland? Between deciding whether to be long or short of the dollar, or pondering whether we are in the middle of a bear rally or a new bull market, London’s hedge funds also need to decide which Swiss canton they want to move to.

    A new top income-tax rate of 50 percent, coupled with heavy-handed regulations planned by the European Union, are prompting the funds to quit the British capital for somewhere more sympathetic to their hypercompetitive brand of capitalism.

    That will have a greater impact on the global financial system than anyone yet appreciates. Sure, at the moment, it is just a few funds. But there are two larger forces at work. Hedge funds are a cluster industry: They like to be where all their competitors are. More significantly, while the hedge funds used to go where the investment bankers were, that will go into reverse in the next five years.

    If many of the hedge funds relocate to Switzerland, investment bankers will follow them. Switzerland will be the winner, and London’s loss may be permanent.

    Right now, it is only a handful of funds that are making the switch from London to Switzerland. Amplitude Capital LLP recently moved its head office from London to Switzerland. Brevan Howard Asset Management LLP recently said its offshore unit was considering opening an office in Geneva.

    Consulting firm Kinetic Partners LLP says it has helped 23 hedge-fund firms make the move from London to Switzerland in the past 18 months. There were 957 single-manager hedge funds in the U.K. at the end of 2008, according to EuroHedge figures.

    =====

    New Labour have decided to fight the election on Tory Toffs and soak the Rich. Bankers are all to blame for the "boom & bust". This is political treason and only condemns us to a relatively faster decline. I strongly believe Gordon Brown is a traitor to his country, when the last Labour government went down in the 70s they were honest with the public and faced up to the economic reality. Sadly, New Labour (New Traitors) are not a patch on those Gentleman.

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  8. Try this - seems to make sense.

    @ Guardian 14.10.2009
    http://www.guardian.co.uk/commentisfree/2009/oct/14/recession-jobs-growth-economic-policy?commentpage=1

    The comment thread provide the usual interest.

    Like this one - I could have written it.

    By someone posting as

    Sluijser 15 Oct 09, 8:50am

    Larry is completely right, but he could have dug a bit deeper.

    The government has been trying to paint this as a "normal" kind of recession, equally, the preceding growth period. Natural wobbles in a fundamentally sound economy, and stimulus being the sound Keynesian approach to dampen down these natural wobbles.

    In economic terms, that is one great big lie. Our economy is on a longterm downwards slide, because for the last 30 years we have been increasingly unable to compete with Asia, while at the same time in the name of free trade, we have stripped ourselves of all defenses economically. In addition, there is increasing tension in the world economy over dwindling natural resources, which hits the UK as well.

    It is really far more significant than people think that you now need two salaries to maintain a lifestyle that only needed one salary 40 years ago.

    For decades, governments have been trying to deal with this downward slide through asset sales, pension fund raids, credit abuse, turning the City in a de facto tax haven and now, the ultimate humiliation, printing money. Growth in GDP in this period was just a mirage, unsustainable without the credit tap. However, we have come to the end of that road.

    Jobless recovery, if that was all. It is far more stark than that. Unfortunately, there is now a choice between semi-autarky, or a deep slashing of wages, benefits, environmental protection, all the trappings of the welfare state. It is going to be upheaval and trauma on a massive scale.

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  9. I agree with Steve Tierney regarding the Green Policies and the need not only to set an example but mostly to implement policies that will bring long-term benefits. Manufacturing in England is almost impossible and the only way to have competitive prices is to have things done somewhere else (our own line of furniture is manufactured in China for obvious reasons, plus, with a currency so high as the English pound is, exporting “made in England” goods would be impossible. The competitiveness of the Chinese market is impossible to fight at the moment.)
    Yet I entirely disagree with the difficulties of saving funds, especially when one of the main issues may be what the public has to say (if governments really had that on the top of their minds the entire time, they would not incur in absolutely unnecessary expenses like sending more soldiers to the Middle East…). Loans come with interest, and these interest rates may sometimes be outrageous –depending on the desperation for the money-, I believe that people would prefer saving money than getting in debt (I think they already have enough with mortgages…)
    Regarding the issuing of money I believe there is NO questioning in the fact that it will lead to inflation which, for a country that guarantees social assistance in the way England does (which, looking at other countries I do believe is remarkable), will result in absolute devastation if the government wants to maintain these type of assistance.
    Now, I have to say, as you may have already noticed that I am no economy expert and a proof of that is–showing also how idealist I am- that I support interest free credit although I understand your very well explained consequences; it is just that I have always looked at any type of usury –even official- with disgust.

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  10. Uk debt is going up by£700k a minute google it on sun today

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