Comments on: S.O.S Save our savers http://johnredwoodsdiary.com/2008/12/03/sos-save-our-savers/ Incisive and topical campaigns and commentary on today's issues and tomorrow's problems Thu, 09 Feb 2012 18:18:37 +0000 hourly 1 By: james http://johnredwoodsdiary.com/2008/12/03/sos-save-our-savers/#comment-8764 james Wed, 03 Dec 2008 21:20:29 +0000 http://www.johnredwoodsdiary.com/?p=2282#comment-8764 Ending taxation on savings would be a fair move. Investments and savings are made from after tax income, money that has been taxed once already. Ending this double taxation would really encourage saving and give those of us saving for pensions a better range of options. In the short term though any government will have to plan tax rise, spending cuts or more likely both. Ending taxation on savings would be a fair move. Investments and savings are made from after tax income, money that has been taxed once already.

Ending this double taxation would really encourage saving and give those of us saving for pensions a better range of options.

In the short term though any government will have to plan tax rise, spending cuts or more likely both.

]]> By: Not an Economist http://johnredwoodsdiary.com/2008/12/03/sos-save-our-savers/#comment-8763 Not an Economist Wed, 03 Dec 2008 14:31:41 +0000 http://www.johnredwoodsdiary.com/?p=2282#comment-8763 On a related issue: It appears that at least one European leader DOESN'T agree with Brown that the way to deal with the current economic crisis is thru a fiscal stimulus reliant upon excessive levels of public sector debt. Angela Merkel seems to be having reservations, speaking out against tax cuts and a spending splurge. In the words of the Wall Street journal: "The root of the global financial and economic crisis is known to every Swabian housewife, Ms. Merkel said: “You can’t keep on living beyond your means.” A lack of thrift in advanced economies caused the crisis and can’t be its cure, she said." The link is here if anyone wants to read further: http://online.wsj.com/article/SB122816734631570097.html Maybe I am thick but I don't see how this squares with Mandy's/the BBC's portrayal of Brown as the political superhero/Moses figure who is leading the way for the rest of the world in how to deal with this crisis: Brown acts and the awe struck millions follow in his wake - much like lemmings as they follow each other over the edge of a cliff. Mandy's euloly of Brown I understand - he's a party hack and is economically illierate. But the BBC's? Surely some measure of objectivity is called for here? I appreciate my comment about Merkel is a mere debating point but surely this is worth throwing back in Mr Brown's face the next time he ridicules David, George and the Conservative party for being the only voice in the world counselling caution in the wake of Brown's stimulus package ...? As with climate change Labour are seeking to claim that there is no disagreement on the policy strategy they are attempting to follow. And in both instances they being a tad economical with the truth. On a related issue:

It appears that at least one European leader DOESN’T agree with Brown that the way to deal with the current economic crisis is thru a fiscal stimulus reliant upon excessive levels of public sector debt. Angela Merkel seems to be having reservations, speaking out against tax cuts and a spending splurge.

In the words of the Wall Street journal:

“The root of the global financial and economic crisis is known to every Swabian housewife, Ms. Merkel said: “You can’t keep on living beyond your means.” A lack of thrift in advanced economies caused the crisis and can’t be its cure, she said.”

The link is here if anyone wants to read further:

http://online.wsj.com/article/SB122816734631570097.html

Maybe I am thick but I don’t see how this squares with Mandy’s/the BBC’s portrayal of Brown as the political superhero/Moses figure who is leading the way for the rest of the world in how to deal with this crisis: Brown acts and the awe struck millions follow in his wake – much like lemmings as they follow each other over the edge of a cliff. Mandy’s euloly of Brown I understand – he’s a party hack and is economically illierate. But the BBC’s? Surely some measure of objectivity is called for here?

I appreciate my comment about Merkel is a mere debating point but surely this is worth throwing back in Mr Brown’s face the next time he ridicules David, George and the Conservative party for being the only voice in the world counselling caution in the wake of Brown’s stimulus package …? As with climate change Labour are seeking to claim that there is no disagreement on the policy strategy they are attempting to follow. And in both instances they being a tad economical with the truth.

]]> By: Nick http://johnredwoodsdiary.com/2008/12/03/sos-save-our-savers/#comment-8762 Nick Wed, 03 Dec 2008 13:22:03 +0000 http://www.johnredwoodsdiary.com/?p=2282#comment-8762 Why move to national savings when its pretty clear that they are going to print money and cause inflation? Why move to national savings when its pretty clear that they are going to print money and cause inflation?

]]> By: Nick http://johnredwoodsdiary.com/2008/12/03/sos-save-our-savers/#comment-8760 Nick Wed, 03 Dec 2008 11:45:45 +0000 http://www.johnredwoodsdiary.com/?p=2282#comment-8760 Secondly, where is the money for saving going to come from when the government is taking it in higher taxes, and running up huge debts on 'our behalf'? Nick Secondly, where is the money for saving going to come from when the government is taking it in higher taxes, and running up huge debts on ‘our behalf’?

Nick

]]> By: Nick http://johnredwoodsdiary.com/2008/12/03/sos-save-our-savers/#comment-8759 Nick Wed, 03 Dec 2008 11:45:02 +0000 http://www.johnredwoodsdiary.com/?p=2282#comment-8759 Why invest money with the government when their solution is going to be inflation? Nick Why invest money with the government when their solution is going to be inflation?

Nick

]]> By: Jason http://johnredwoodsdiary.com/2008/12/03/sos-save-our-savers/#comment-8761 Jason Wed, 03 Dec 2008 11:31:54 +0000 http://www.johnredwoodsdiary.com/?p=2282#comment-8761 Very good points...i would further like to ask whether the govt has provided a likely loss estimate for the bank assets the taxpayer has taken on their books. I understand it is common practice in the financial industry to undergo risk assessments (not that they worked) and some sort of collateral be held as position risk requirement. Banks have to do this by way of capital adequacy requirements of course. The taxpayer being the ultimate owner of these bank assets must have some idea of likely losses over the current cycle. For RBS alone, if what you say is correct - each 1% decline in assets leads to a £20 Bill loss (requirement for new funding). There is a common view that house prices have yet a long way to fall. What sort of erosion in % assets is expected and shouldn't the govt be preparing contingency for such an outcome. Indeed shouldn't this be taken into account in the governments potential borrowing requirement. Remember this is just one bank...what about Northern Rock et al. These figures seem essential to me and of course question the validity of any further spending by govt. Maybe i'm misunderstanding the situation. If i am right, the govt is acting rather like the reckless hedge funds they now despise. Reckless borrowing is as dangerous as reckless lending. Very good points…i would further like to ask whether the govt has provided a likely loss estimate for the bank assets the taxpayer has taken on their books. I understand it is common practice in the financial industry to undergo risk assessments (not that they worked) and some sort of collateral be held as position risk requirement. Banks have to do this by way of capital adequacy requirements of course. The taxpayer being the ultimate owner of these bank assets must have some idea of likely losses over the current cycle. For RBS alone, if what you say is correct – each 1% decline in assets leads to a £20 Bill loss (requirement for new funding). There is a common view that house prices have yet a long way to fall. What sort of erosion in % assets is expected and shouldn’t the govt be preparing contingency for such an outcome. Indeed shouldn’t this be taken into account in the governments potential borrowing requirement. Remember this is just one bank…what about Northern Rock et al. These figures seem essential to me and of course question the validity of any further spending by govt. Maybe i’m misunderstanding the situation. If i am right, the govt is acting rather like the reckless hedge funds they now despise. Reckless borrowing is as dangerous as reckless lending.

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