Absolutely, but ultimately, in order to achieve that end, we need to stop voting for the bad actors and their bad ideology. And in order to do that, we need to recognise the ideology that dictates the bad outcomes . While we vote for the ideology that cuts to public services are necessary to off set government spending, we will continue to be dominated by these bad actors
But I don't think anyone suggests that as a market reaction is obviously just that, a real time reaction. It might turn out that the market has missed some subtleties or there may be some new, or previously misunderstood effects here but broadly speaking this budget looks like it will be bad for the UK economy and the markets are just reflecting that. I.e. the markets are not saying the budget is definitely wrong, or that it is completely wrong only that on balance and in the aggregate it is very likely wrong in significant part and the risk of bad things happening has increased.
Also don't forget most of this was already priced in as it has been expected for some time. So a better question is, I think, what are they reacting to? I think the answer is probably the unexpected scale of the tax cuts and the scrapping of the 45% band. I.e. the market is not saying this is definitely bad, but rather that the bits we already expected to be bad were done on a significantly larger scale than we had been expecting. To paraphrase a guitar term "Louder is more bad"
Although of course the market reaction is decisive in that it has actually just happened and there are real world effects that materially affect our nation's wealth.
Reducing the debt mean reducing public spending, which is where our problems have started. There is some merit in linking spending to productivity but GDP is not the best measure of productivity. Better to limit spending to need and available resources
It feels like we're mostly on the same page (I was going to ask you why you thought the markets reacted as they did). Can we agree that:But I don't think anyone suggests that as a market reaction is obviously just that, a real time reaction. It might turn out that the market has missed some subtleties or there may be some new, or previously misunderstood effects here but broadly speaking this budget looks like it will be bad for the UK economy and the markets are just reflecting that. I.e. the markets are not saying the budget is definitely wrong, or that it is completely wrong only that on balance and in the aggregate it is very likely wrong in significant part and the risk of bad things happening has increased.
Also don't forget most of this was already priced in as it has been expected for some time. So a better question is, I think, what are they reacting to? I think the answer is probably the unexpected scale of the tax cuts and the scrapping of the 45% band. I.e. the market is not saying this is definitely bad, but rather that the bits we already expected to be bad were done on a significantly larger scale than we had been expecting. To paraphrase a guitar term "Louder is more bad"
Although of course the market reaction is decisive in that it has actually just happened and there are real world effects that materially affect our nation's wealth.
I think your last paragraph is crucial, in that the requirements of the market, even where they are irrational, can not only override policies that are democratically supported (taxing the rich is popular), but can implement policies that are not. PE has been running a series of articles showing how those who benefit from lower tax have funded Trusses leadership campaign and now benefit hugely from economic policy changes that have no democratic mandate.
Bang goes my proposed Verbier Festival trip next year.
Excellent.
