Best Of

Off topic, but possibly of general interest:

Some people will be annoyed by this good news:

Eighty-four years is a good, healthy life in America. How much progress has been made in reducing poverty over one person’s lifespan?

A lot, according to new research from Richard Burkhauser of the Civitas Institute and Kevin Corinth of the American Enterprise Institute. They have assembled the longest poverty data series that accounts for taxes, transfer payments and health insurance, stretching 84 years from 1939 to 2023.

It provides some astonishing good news. Over that entire time span, no matter what baseline they chose, the absolute poverty rate fell by at least three-quarters. When including the value of health insurance, poverty fell by up to 97 percent.

https://www.washingtonpost.com/opinions/2026/06/08/declaring-war-poverty-isnt-what-made-it-decline/
https://www.aei.org/research-products/working-paper/poverty-and-dependency-in-the-united-states-1939-2023/

Others will be surprised, but not me, since I am old enough (82) to have seen much of it with my own eyes.

What caused the decline? Mostly, economic growth.

Just back from Makerfield having spent nearly 5 hours there today. Canvassed in middle class part of Orrell and working class Platt Bridge. Impression more positive for Labour than during my first visit, even allowing for the fact that canvassing was selective. Every Labour promise spoken to with a PV had voted. Observed garden stake/poster count from about 10 miles travelled across the constituency: Labour 35, Reform 25, Restore 4, Green 1, quite different to the first visit when fewer were up but Reform winning 2-1, Reform don't appear to have added that many since 2 weeks ago whereas Labour have. Labour are no longer asking canvassers to find garden stake sites because they have literally run out, posters only now. Massive Labour volunteer turnout, couldn't find a parking space within 100 yards of campaign HQ (which itself has 40 parking spaces).

I think the "bond market" is used as a bogeyman.

Truss really upset the bond markets by her cavalier cutting of taxes with a complete rejection of the OBR or any expert opinion of the consequences. But that was very extreme.

If I were Starmer I would get Bowler, Permanent Secretary to the Treasury, and Rachel Reeves in a room and say to Bowler "We are going to provide an extra £20b for defence by borrowing it, a War Bond if you like. I want you to find the best way of doing and presenting this. I don't want any objections. Just do it. If you feel you can't, then I'm happy to accept your resignation."
And then to Rachel "Rachel I need your support on this. If not, then I'm happy to accept your resignation too."

The bond markets will accept higher borrowing during war, because the survival of the state is at risk, and if the state does not survive then none of the existing government debt gets repaid.

I don't think you can work that argument absent total war like WWI and WWII, simply by calling the extra debt war bonds.

Remember that the bond market has been very lenient in allowing Britain to borrow vast sums of money already to spend on whatever it likes. But it's done so because there's always be a plan to stop borrowing within x years, and so there's been confidence that the money can be repaid.

If your government finance plan involves borrowing so much that you can't even create a theoretical explanation of how you would close the deficit in five years then you shouldn't expect anyone to willingly lend you money, because they would have no confidence in being repaid.

That's not how it works.
There's never a plan to stop borrowing or repay all the debt. Any specific debt will repaid when it falls due by rolling it over and borrowing more. That is how businesses finance themselves.
The UK public debt is about equal to the UK's annual income (GDP). Households often have mortgages much in excess of 100% of their annual income.

It is what all the various fiscal rules have been about, and why British budget plans continue to include fictional increases in fuel duty in future years, so that the budget deficit can be shown to be reduced at the end of the budget plan.

I think your are missing deficit and debt. I did not claim that there's a plan for Britain to repay the debt, but there is a plan to close the deficit - and that's what creates the confidence to allow Britain to continue borrowing.

You said "But it's done so because there's always be a plan to stop borrowing within x years, and so there's been confidence that the money can be repaid."

I'm not confusing deficit and debt. It looks as if you are.

The current fiscal rules are that day-to-day government spending must be covered by tax revenues rather than by borrowing, but the government can borrow to fund long-term capital investments.
Some defence expenditure will be capital investment.

I was using "repaid" in an informal sense - i.e. that the country is good for the money. But if the government lose the confidence of the bond market then they won't be able to roll over debt, and so existing debt won't be able to be repaid when it falls due. So it's relevant without it being a scenario where the total amount of debt is reduced.

The point being that we can only borrow if there is credibility over the country's solvency, and that means demonstrating that there are limits on our borrowing.

Truss showed how brittle that credibility was. Simply adding increases in defence spending to already high levels of borrowing isn't credible in my view.

I don't know why we're still using the Truss episode as the nadir of bond market instability when things now (afaik) are far worse. It is Reeves and Starmer who get the gold medal.

Because our borrowing costs have largely moved in the same direction as everyone else for the last 3 years, wherelse with Truss there was an enormous, idiosyncratic spike which we have never fully recovered from.

Yes it was a hairy 48 hours or so. Domino selling. Real panic. Not because any particular % of gdp borrowing number was breached. It was because of the cavalier way it was done. Rushed. No process. No narrative. No pitch-rolling. Complete amateur hour at the very top of government involving enormous sums of money. It spooked the markets bigtime.

I don't think this has even a whisper of plausibility as an explanation, but thanks for the effort.

The mistake people make, is thinking that the ‘mini-budget’ was the cause of the bond spike, rather than the massive energy bill subsidies announced a couple of days previously.

I actually meant to quote Eabal. I don't know how Kinabalu's little bit got in there.

Oh sorry. Missed this. Too late to edit my tart reply in response. Ah well. It happens.

However I'm not very happy about 'little bit'. It was a full fat paragraph.

Don't feel slighted, I am sure it was of average or above average size, and anyway, it's what you do with it that counts.

Do we know if Restore and Reform voters are fully fungible?

I'd say no. Perhaps they are partly fungible.

Ref UK have many tribes.

I do not see all the grumpy Labour and Conservative voters currently supporting going for Rupert's concentration camps, for example, or all of Reform's ethnic minority supporters.

I'd agree.

There used to be the 'joke', that "not all Reform voters were racist, but all racists voted Reform".

Clearly Farage has been very, very good at making people feel like they're not racist, despite spending his political life stoking fear of "others". However, all that hard word has helped create an environment where a lot more people don't care if they're seen as racists - and Restore have capitalised.

Exhibit A:

Rupert Lowe has posted leaflet showing how Restore define Reform to voters
- Scale of deportations: "millions must go" inc legal migrants
- Death Penalty
- Disagrees with Farage warning on "alienating the whole of Islam" [to tackle extremism] saying "Islamification" must end
- Jenrick + Zahawi

https://bsky.app/profile/sundersays.bsky.social/post/3mo64dqe6hc2s

Horrible, but very effectively done.

Rupert cetainly seems to have been effective in removing all dem brown folks from his assault on Makerfield.



https://x.com/Parody_PM/status/2065747066723147965?s=20

She's underneath the flapping Union Jack, standing in front of the tree. You have to expand the picture to see her.

I think that’s just shadow from the leaves

I think the "bond market" is used as a bogeyman.

Truss really upset the bond markets by her cavalier cutting of taxes with a complete rejection of the OBR or any expert opinion of the consequences. But that was very extreme.

If I were Starmer I would get Bowler, Permanent Secretary to the Treasury, and Rachel Reeves in a room and say to Bowler "We are going to provide an extra £20b for defence by borrowing it, a War Bond if you like. I want you to find the best way of doing and presenting this. I don't want any objections. Just do it. If you feel you can't, then I'm happy to accept your resignation."
And then to Rachel "Rachel I need your support on this. If not, then I'm happy to accept your resignation too."

The bond markets will accept higher borrowing during war, because the survival of the state is at risk, and if the state does not survive then none of the existing government debt gets repaid.

I don't think you can work that argument absent total war like WWI and WWII, simply by calling the extra debt war bonds.

Remember that the bond market has been very lenient in allowing Britain to borrow vast sums of money already to spend on whatever it likes. But it's done so because there's always be a plan to stop borrowing within x years, and so there's been confidence that the money can be repaid.

If your government finance plan involves borrowing so much that you can't even create a theoretical explanation of how you would close the deficit in five years then you shouldn't expect anyone to willingly lend you money, because they would have no confidence in being repaid.

That's not how it works.
There's never a plan to stop borrowing or repay all the debt. Any specific debt will repaid when it falls due by rolling it over and borrowing more. That is how businesses finance themselves.
The UK public debt is about equal to the UK's annual income (GDP). Households often have mortgages much in excess of 100% of their annual income.

It is what all the various fiscal rules have been about, and why British budget plans continue to include fictional increases in fuel duty in future years, so that the budget deficit can be shown to be reduced at the end of the budget plan.

I think your are missing deficit and debt. I did not claim that there's a plan for Britain to repay the debt, but there is a plan to close the deficit - and that's what creates the confidence to allow Britain to continue borrowing.

You said "But it's done so because there's always be a plan to stop borrowing within x years, and so there's been confidence that the money can be repaid."

I'm not confusing deficit and debt. It looks as if you are.

The current fiscal rules are that day-to-day government spending must be covered by tax revenues rather than by borrowing, but the government can borrow to fund long-term capital investments.
Some defence expenditure will be capital investment.

I was using "repaid" in an informal sense - i.e. that the country is good for the money. But if the government lose the confidence of the bond market then they won't be able to roll over debt, and so existing debt won't be able to be repaid when it falls due. So it's relevant without it being a scenario where the total amount of debt is reduced.

The point being that we can only borrow if there is credibility over the country's solvency, and that means demonstrating that there are limits on our borrowing.

Truss showed how brittle that credibility was. Simply adding increases in defence spending to already high levels of borrowing isn't credible in my view.

I don't know why we're still using the Truss episode as the nadir of bond market instability when things now (afaik) are far worse. It is Reeves and Starmer who get the gold medal.

Because our borrowing costs have largely moved in the same direction as everyone else for the last 3 years, wherelse with Truss there was an enormous, idiosyncratic spike which we have never fully recovered from.

Yes it was a hairy 48 hours or so. Domino selling. Real panic. Not because any particular % of gdp borrowing number was breached. It was because of the cavalier way it was done. Rushed. No process. No narrative. No pitch-rolling. Complete amateur hour at the very top of government involving enormous sums of money. It spooked the markets bigtime.

I don't think this has even a whisper of plausibility as an explanation, but thanks for the effort.

The mistake people make, is thinking that the ‘mini-budget’ was the cause of the bond spike, rather than the massive energy bill subsidies announced a couple of days previously.

I actually meant to quote Eabal. I don't know how Kinabalu's little bit got in there.

Oh sorry. Missed this. Too late to edit my tart reply in response. Ah well. It happens.

However I'm not very happy about 'little bit'. It was a full fat paragraph.

Do we know if Restore and Reform voters are fully fungible?

I'd say no. Perhaps they are partly fungible.

Ref UK have many tribes.

I do not see all the grumpy Labour and Conservative voters currently supporting going for Rupert's concentration camps, for example, or all of Reform's ethnic minority supporters.

I'd agree.

There used to be the 'joke', that "not all Reform voters were racist, but all racists voted Reform".

Clearly Farage has been very, very good at making people feel like they're not racist, despite spending his political life stoking fear of "others". However, all that hard word has helped create an environment where a lot more people don't care if they're seen as racists - and Restore have capitalised.

Exhibit A:

Rupert Lowe has posted leaflet showing how Restore define Reform to voters
- Scale of deportations: "millions must go" inc legal migrants
- Death Penalty
- Disagrees with Farage warning on "alienating the whole of Islam" [to tackle extremism] saying "Islamification" must end
- Jenrick + Zahawi

https://bsky.app/profile/sundersays.bsky.social/post/3mo64dqe6hc2s

Horrible, but very effectively done.

Rupert cetainly seems to have been effective in removing all dem brown folks from his assault on Makerfield.



https://x.com/Parody_PM/status/2065747066723147965?s=20

Where's Wa'alyiah?

Do we know if Restore and Reform voters are fully fungible?

I'd say no. Perhaps they are partly fungible.

Ref UK have many tribes.

I do not see all the grumpy Labour and Conservative voters currently supporting going for Rupert's concentration camps, for example, or all of Reform's ethnic minority supporters.

I'd agree.

There used to be the 'joke', that "not all Reform voters were racist, but all racists voted Reform".

Clearly Farage has been very, very good at making people feel like they're not racist, despite spending his political life stoking fear of "others". However, all that hard word has helped create an environment where a lot more people don't care if they're seen as racists - and Restore have capitalised.

Exhibit A:

Rupert Lowe has posted leaflet showing how Restore define Reform to voters
- Scale of deportations: "millions must go" inc legal migrants
- Death Penalty
- Disagrees with Farage warning on "alienating the whole of Islam" [to tackle extremism] saying "Islamification" must end
- Jenrick + Zahawi

https://bsky.app/profile/sundersays.bsky.social/post/3mo64dqe6hc2s

Horrible, but very effectively done.

Rupert cetainly seems to have been effective in removing all dem brown folks from his assault on Makerfield.



https://x.com/Parody_PM/status/2065747066723147965?s=20

She's underneath the flapping Union Jack, standing in front of the tree. You have to expand the picture to see her.

Hopefully there's not another one behind the cameraman tied up to a bonfire.

I think the "bond market" is used as a bogeyman.

Truss really upset the bond markets by her cavalier cutting of taxes with a complete rejection of the OBR or any expert opinion of the consequences. But that was very extreme.

If I were Starmer I would get Bowler, Permanent Secretary to the Treasury, and Rachel Reeves in a room and say to Bowler "We are going to provide an extra £20b for defence by borrowing it, a War Bond if you like. I want you to find the best way of doing and presenting this. I don't want any objections. Just do it. If you feel you can't, then I'm happy to accept your resignation."
And then to Rachel "Rachel I need your support on this. If not, then I'm happy to accept your resignation too."

The bond markets will accept higher borrowing during war, because the survival of the state is at risk, and if the state does not survive then none of the existing government debt gets repaid.

I don't think you can work that argument absent total war like WWI and WWII, simply by calling the extra debt war bonds.

Remember that the bond market has been very lenient in allowing Britain to borrow vast sums of money already to spend on whatever it likes. But it's done so because there's always be a plan to stop borrowing within x years, and so there's been confidence that the money can be repaid.

If your government finance plan involves borrowing so much that you can't even create a theoretical explanation of how you would close the deficit in five years then you shouldn't expect anyone to willingly lend you money, because they would have no confidence in being repaid.

What’s the current cost to the UK of the Ukraine war, both in terms of military support (in actual money, not made-up military accounting), and in benefits to Ukranian refugees and host families in the UK?

Because that is money that no longer needs to be spent once we’ve put Putin back in his box, and should be able to be taken into account by the bond markets.

The total figure given by the government is £21.8bn since February 2022.

https://www.gov.uk/government/publications/uk-support-to-ukraine-factsheet/uk-support-to-ukraine-factsheet

But I don't think that includes the spending on Ukrainian refugees in the UK, and it probably overstates the military support (if equipment provided from stocks was valued at its replacement cost).

It's a pretty small sum of money compared to the increase in defence spending that Britain has signed up to, so it doesn't affect them necessity of having to choose between some mix of spending cuts and tax increases if Britain intends to fulfil that commitment.

That's about £5.5 billion a year which is the equivalent of around 9 % of the current defence budget. Not really a small sum of money.

Incredible value for money though given it's actually being used to destroy our primary adversary's army and economy. £60 billion on defence doesn't even get us an operating attack sub; you'd be mad to send more money that way instead of Ukraine.

That's a completely circular argument though, given that we decided Russia was 'our' number 1 adversary, pretty much because they were the USA's number 1 adversary.

That made sense for the USA - Russia was a hostile nuclear power, sitting on a lot of energy, and funding regimes opposed to US interests. It always made rather less sense for the UK and Europe. Yes Russia is an authoritarian state with a particularly nasty line in brutality, and yes they are a threat to their neighbours, but they are not alone there, and I don't think that under normal circumstances (ie when we are not in a proxy war) they're even close to being the UK's top security threat.

Even for USA, knocking out Russia was pretty much a stepping stone on the way to knocking out China, who have always been the bigger threat. Now we've expended a vast amount of cash in the effort to oust Mad Vlad, we're far weaker in the face of China, and anyone else who wants to take us down. Just because we have self-id'd Russia as the big enemy, it doesn't mean the other enemies are going to play along.

Not circular at all - unlike you I do think Russia is our enemy and therefore smashing them via our Ukrainian allies is great stuff.

You can think they're the main threat if you wish to, the issue comes with thinking they're the only threat - or that the others are insignificant. Russia is (especially these days) acting as China's proxy. It seems unwise to say the least to blow all the resources on the monkey whilst leaving the organ-grinder untroubled.

So Ukraine is currently hammering China's proxy? Nice!

I think the "bond market" is used as a bogeyman.

Truss really upset the bond markets by her cavalier cutting of taxes with a complete rejection of the OBR or any expert opinion of the consequences. But that was very extreme.

If I were Starmer I would get Bowler, Permanent Secretary to the Treasury, and Rachel Reeves in a room and say to Bowler "We are going to provide an extra £20b for defence by borrowing it, a War Bond if you like. I want you to find the best way of doing and presenting this. I don't want any objections. Just do it. If you feel you can't, then I'm happy to accept your resignation."
And then to Rachel "Rachel I need your support on this. If not, then I'm happy to accept your resignation too."

The bond markets will accept higher borrowing during war, because the survival of the state is at risk, and if the state does not survive then none of the existing government debt gets repaid.

I don't think you can work that argument absent total war like WWI and WWII, simply by calling the extra debt war bonds.

Remember that the bond market has been very lenient in allowing Britain to borrow vast sums of money already to spend on whatever it likes. But it's done so because there's always be a plan to stop borrowing within x years, and so there's been confidence that the money can be repaid.

If your government finance plan involves borrowing so much that you can't even create a theoretical explanation of how you would close the deficit in five years then you shouldn't expect anyone to willingly lend you money, because they would have no confidence in being repaid.

That's not how it works.
There's never a plan to stop borrowing or repay all the debt. Any specific debt will repaid when it falls due by rolling it over and borrowing more. That is how businesses finance themselves.
The UK public debt is about equal to the UK's annual income (GDP). Households often have mortgages much in excess of 100% of their annual income.

It is what all the various fiscal rules have been about, and why British budget plans continue to include fictional increases in fuel duty in future years, so that the budget deficit can be shown to be reduced at the end of the budget plan.

I think your are missing deficit and debt. I did not claim that there's a plan for Britain to repay the debt, but there is a plan to close the deficit - and that's what creates the confidence to allow Britain to continue borrowing.

You said "But it's done so because there's always be a plan to stop borrowing within x years, and so there's been confidence that the money can be repaid."

I'm not confusing deficit and debt. It looks as if you are.

The current fiscal rules are that day-to-day government spending must be covered by tax revenues rather than by borrowing, but the government can borrow to fund long-term capital investments.
Some defence expenditure will be capital investment.

I was using "repaid" in an informal sense - i.e. that the country is good for the money. But if the government lose the confidence of the bond market then they won't be able to roll over debt, and so existing debt won't be able to be repaid when it falls due. So it's relevant without it being a scenario where the total amount of debt is reduced.

The point being that we can only borrow if there is credibility over the country's solvency, and that means demonstrating that there are limits on our borrowing.

Truss showed how brittle that credibility was. Simply adding increases in defence spending to already high levels of borrowing isn't credible in my view.

I don't know why we're still using the Truss episode as the nadir of bond market instability when things now (afaik) are far worse. It is Reeves and Starmer who get the gold medal.

I lost a quarter of the value of one of my pensions, on supposedly low risk investments, thanks to Liz Truss.

I don't feel warm and fuzzy towards her.

Nobody is asking you to feel warm and fuzzy.
, just to stay vaguely in touch with the facts.

The facts are that Liz Truss willfully did a stupid thing, which had bad consequences. Why should anyone afford her the benefit of the tiniest doubt? She deserves every bit of blame in her direction, and to the extent she involved the Conservative Party in her shenanigans, so do they.