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Originally Posted by RizzyKing
Wouldn't be the same economists that were once praising him for his policy because it would stop the uk getting downgraded. Being honest i am a bit sick and tired of econoimists who say one thing one week and something totally different the next when things appear to change. So easy to be an expert when you only have to think short term or week by week bit harder though when you have to plan years ahead.
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The problem with economics is that it is dynamic. In order to attempt to manage something which is made up of multiple variable inputs, only averages of all the often changing inputs, which happen every millisecond can be used. The longer the average the greater the room for error.
Chancellors have for many years been using relatively short term trends to organise fiscal policy often five years into the future. We are reaping the results of the grossly incorrect use of the averaging tool whereby Brown expected the good times to roll way beyond the normal cycle and borrowed against a rising graph line which nose dived off a cliff.
The other problem with economics is that from all the multiple factors, the selective use of what is good can be trumpeted whilst counterbalancing bad ignored. Common practice with politicians who invariably have a social agenda and cherry pick what suits the agenda.
I read the article putting forward their ideas and in theory I can see where they are coming from but it is all based on a false premise. They want a transactional tax on all financial transactions passing through the city of London. That is dubbed the Tobin tax and if the experience of Sweden is anything to go by it will kill the city of London stone dead with those trillions of money flow heading abroad. Sweden actually lost shed loads of money in taxes when they tried it and had to stop the Tax in order to get the other taxes lost to return. They were net losers big time and had to scrap Tobin to get back Capital Gains Tax.
We already have a stamp duty tax on paper transactions on shares and a comparable one on electronic transactions. A move beyond those taxes would be counter productive and as we are a clearer of transactions second only to the USA, it would be devastating. Those taxes are either global or not at all because electronically a transaction competed in milliseconds can be done anywhere in the world and they will be done where the host country is most tax friendly.
Within the fast changing dynamics of global economics the Eurozone crisis saw the can kicked down the road last week and the markets applauded the avoidance of immediate crisis with an almighty push skywards. The major indices have been plodding up the hill from three weeks before the outcome of the meeting with exhilaration at any news which although bad is not dire. It is called "climbing a wall of worry" but realistically everybody and their dog knows the the waffle and arm twisting in Europe solves nothing at all but at least sovereign debt CDS didn't get triggered which could have called time on the busted "fiat" system. The patient lives on and the life support systems are are in place but postponement is not cure.
The ongoing crop of problems swirling around the globe have exposed the underlying problems of globalisation coupled with politically inspired agendas particularly in Europe where strong and weak have a massive disparity in earnings but not aspirations. Until the financial elite and mega corporations work out how to re-organise their priorities it is best to do absolutely nothing to become insular and thereby anti competitive unless a willingness to be marginilised into third world country status is desired.
When a group of academics et al come up with anti competitive ideas it is obvious that although they may have impeccable credentials in some areas of economics they are obviously myopic when viewing the big picture. It works well if you are an island unto your self but not when you are a hub in a global network.