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Sunday, March 29, 2009

Horrifying budget

Fraser Nelson in the Spectator:

To comprehend the scale of the sickening task awaiting George Osborne if he becomes chancellor, consider the following. If he were to raise VAT to 25 per cent, double corporation tax, close the Foreign Office, cancel all international aid, disband the army and the police, release all prisoners, close every school and abolish unemployment benefit he would still be unable to close the gulf between what the UK government spends and what it raises in taxes.

Where does all the money go? How can we get out of this in one piece?


sobers said...

We don't, we let inflation steal the savings of the prudent to reduce the value of the debt of the profligate.

We also have to raise taxes on everyone, as we have socialised the debts of the banks, which again means the prudent pay extra tax to bail out the imprudent.

If you have any cash, invest it in something that can withstand inflation; if you have a private pension you are screwed because not only is the market down, and will take years to recover its losses, but if you are due to retire soon your annuity will be less. And you can't get the money out of the pension to reinvest it in an anti-inflationary way. All the hard work people have put into their savings and pension plans will be stolen to pay for the house price bubble, and all the plasma TVs, foreign holidays and second cars the indebted bought.

If you had retired in 1970, by 1980 your pension would have been reduced to 27% of its original purchasing power by inflation (RPI index 1970 = 632, 1980 = 2282). That is what we face over the coming decade(s).

dearieme said...

If he were to ....

Raise VAT to 25 per cent: bearable

Double corporation tax: bonkers

Close the Foreign Office: please

Cancel all international aid: OK

Disband the army: ends Toni wars

Release all prisoners: hang 'em

Close every school: see above

Abolish unemployment benefit: no need for it if there's jobs aplenty for hangmen.