Harringay, Haringey - So Good they Spelt it Twice!
The Fiscal Charter Media Fiasco
Professor Simon Wren-Lewis from Oxford University has a very good blog in which he writes about politics and macroeconomics. Just this week he wrote about the fiscal charter and the media here:
"Behind the gimmick of a charter is a real policy that will impact on everyone. This policy is the reason the government will make substantial cuts to tax credits for millions of poorer working people, making their already difficult lives substantially harder. George Osborne said as much in his budget speech . Would these people really think that this was of less interest than endless discussion of Labour embarrassment? Who are television news programmes made for: ordinary people who receive tax credits or a Westminster bubble obsessed with political process?"
Do read the full article, it's really good and the FT post links to his blog all the time. I'm just as shocked as he is that people think a government should be run like a household. Fiat money like the Sterling and Euro is literally loaned into existence, when the government pays off debts it destroys money.
Tags for Forum Posts: @sjwrenlewis, bbc, fiscal charter, mainlymacro
Replies to This Discussion
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Permalink Reply by Neil on
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Higher wages, lower taxes and the creation of lots of jobs is the solution to having millions of people stuck on tax credits which are paid for by tax payers to subsidise employers who pay low wages knowing the tax payer will top the wage up with tax credits.
Aldi and lots of other companies are now paying over the Minimum Wage taking many staff off tax credits. This is the right way to go! Keep going.
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Permalink Reply by Michael Anderson on
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I entirely agree that the best situation is that no one needs tax credits and that the creation of a real living wage is the way to do that. However, it looks like a number of conservative MPs in slightly more marginal constituencies are really feeling their seats getting rather less stable that they may have been a at the election. The woman who spoke so eloquently on Question Time hit the nail on the head really. She is self employed and so can of course only pay herself what she earns. A lot of people I would imagine are in her position, running tiny businesses that just about break even from their living rooms, sheds and garages. These micro business people are bread and butter conservative voters. I think George Osbourne has backed himself into a hugely embarrassing corner on this.
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Permalink Reply by John McMullan on
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No that's not the best situation. Tax credits were a way of making sure employers could not exploit employees, not just a supplement for their income. The profits from the economy have no other way of trickling down to those on low wages without some form of redistribution by the government. As it stands employers will now have a stronger hand when it comes to deciding how much money a family should have to live on - whereas previously they could only decide how much to pay someone for their labour.
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See my reply to Michael. It's all about whether you trust employers as a part of the economy to behave appropriately with the new powers being invested in them by the government. History tells us that they won't. In fact in the one period in Britain's history where there truly was a shortage of labour and wages went up sharply, the employers violently stamped it out (Peasant's Revolt after the Black Death). There is a reason you don't get rich earning a salary and that's that you're not allowed to. Profits are for employers only.
If, as the government would have us believe, this change is fiscally neutral, i.e. employers will pay in wages what they were paying in tax, then what's the catch? If you believe there isn't one then you're a sucker.
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