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By how much should the Bank of England increase interest rates in a traditional monetarist economy

I just worry that 'lower taxation' in Truss' head means 'lower corporate taxation' not 'bigger personal allowances'.
 
I just worry that 'lower taxation' in Truss' head means 'lower corporate taxation' not 'bigger personal allowances'.
Yes, I think she has said as much. Bigger personal allowances would work for more people. Her target audience tough is a small group of people who have given Truss their support in exchange for a say in manipulating things their way

Truss is appealing to Business Leaders, while Sunak is losing that battle so is focussing on morals in economics. If only. The truth is that the moral case against borrowing is flawed because it is more than asking for a double payment. The “cost” of borrowing is met once by government issuance, to ask for our “children and grandchildren to pay off our debts” is to ask them to pay for something will have already been paid for.

That’s what I call immoral
 
I’ve always been an advocate of this, it’s a very simple way for lower earners to keep more of what they earn. In fairness, it was the lib dems who pushed this onto the Tory’s and they’ve stayed with it. Just look at the tax free personal allowance now compared with 2010. Increasing it further now would be a good policy IMHO.

The snag being for the poor who pay no income tax *now*, so get no personal change in their income. And they are generally the most poor, and hardest hit.
 
One thing that might help address the coming storm might be tax cuts. But rather than those proposed by Truss, raising the tax threshold to the average wage, or mean wage, which ever is higher, so that anyone earning less than £25,971, pays no income tax. That would put more money where it is needed and stimulate consumer spending which will stimulate the private sector.

Problem solved!
Moving the tax burden up is the way to go. But raising the IT threshold to average income would create the mother of all holes in the budget. How would it be financed?
 
Moving the tax burden up is the way to go. But raising the IT threshold to average income would create the mother of all holes in the budget. How would it be financed?

From where the money is issued.
 
The snag being for the poor who pay no income tax *now*, so get no personal change in their income. And they are generally the most poor, and hardest hit.
Yes, that is a serious flaw. What we need to go alongside raising the personal allowance is guaranteeing everyone who wants one, a well paid job
 
The hole in the budget will be financed from where the money is issued? Sorry, I don't understand.
Government issues currency, pay for it from there, the same way government spends money into existence every day. No functional need for a hole.
 
Government issues currency, pay for it from there, the same way government spends money into existence every day.
Doesn't sound like a solution, more a series of new problems. Do you remember the previous outcome of BoE getting excessively happy with the magic money printing press?
 
Sorry, you are correct, there is something wrong in there.
You can always PM me happy to have a chat, I've not got any axes to grind and I'm neutral in terms of taking any and all theories at face value. I do get the impression a lot of people accept the theory of how the economy works that favours their policy choices, whereas I prefer the ones that describe the reality, and then frame our policy choices around it. It might not give a better (theoretical) outcome than the most favourable theory suggests, but in practice it will lead to policies that actually work.
 
Doesn't sound like a solution, more a series of new problems. Do you remember happened the last time the BoE got excessively happy with the magic money printing press?

I find this very strange, on another thread you said that you had a contrary opinion to the observation that tax does not fund our government spending, you chose not to discuss your contrary opinion there, and we don’t want to revive that discussion here, but this thread is the perfect place for you to argue for the monetarist case that tax is functional in funding our government spending.
 
I find this very strange, on another thread you said that you had a contrary opinion to the observation that tax does not fund our government spending, you chose not to discuss your contrary opinion there, and we don’t want to revive that discussion here, but this thread is the perfect place for you to argue for the monetarist case that tax is functional in funding our government spending.
We live in sour times, but that doesn't ring a bell. A misunderstanding?

Do you remember what happened post 2008?
 
Doesn't ring a bell. A misunderstanding?
Yes, there p may have been a misunderstanding on another thread, To be clear on this thread I was referring to where you said, “sorry, I don’t understand” when I referred to where funding is created and the role of tax that follows from that observation

Do you remember what happened post 2008?[/QUOTE]
Yes, it was austerity imposed by a monetarist ideological choice that believes that funding comes from taxation

Also worth remembering that it was caused by a monetarist ideology choice that believes that funding comes from borrowing
 
Yes, that is a serious flaw. What we need to go alongside raising the personal allowance is guaranteeing everyone who wants one, a well paid job

Still doesn't fix it for relations who are 24/7 carers of a loved one, or simply unable to take a paid job for some reason out of their control.

In the end, a significant number of people need to be able to cope on 'benefits'. In some cases because the State has shrugged off helping them. e.g. the way the Tories have allowed social care to evaporate.
 
Didn't relaise that was the post that you meant. But true dat, as I didn't understand.


I find deflection very strange. Do you remember the outcome of BoE getting excessively happy with the magic money printing press post gfc/2008?
It is in not a deflection, you have not stated a position yet.

If it’s that the BoE caused a problem by printing money, then BoE did not print money after the GFC.
 


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