politicalbetting.com » Blog Archive » How the papers are treating Sunak’s pandemic budget

IshmaelZ said:

Masks protect the wearer, not just other people

https://www.ucdavis.edu/coronavirus/news/your-mask-cuts-own-risk-65-percent/

blairf said:

the rishi package shows government at it's worst. if they wanted to pump (our) cash back into the economy just give everyone a couple of grand. trying to target it with what are essentially retail promotions (free house move! buy one burger get one free! 20% off hot food! employ-a-kid-get-one-free!) smacks of playing shop. the vastness of the fiscal hole scares me, and retail promotions don't work. they shift money around in time and category that is all.

moonshine said:

On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.

But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.

Something somewhere is clearly quite wrong with the media narrative on Cummings.

Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.

Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.

BannedinnParis said:

*he doesn't tolerate fools

eek said:

Cummings - who is probably too busy dealing with other stuff anyway..

Scott_xP said:

BannedinnParis said:

*he doesn't tolerate fools

He doesn't tolerate people who challenge him

He is quite happy with BoZo

moonshine said:

On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.

But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.

Something somewhere is clearly quite wrong with the media narrative on Cummings.

Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.

Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.

BannedinnParis said:

Scott_xP said:

BannedinnParis said:

*he doesn't tolerate fools

He doesn't tolerate people who challenge him

He is quite happy with BoZo

on the topic of fools, hi SCOTT

Foxy said:

moonshine said:

On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.

But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.

Something somewhere is clearly quite wrong with the media narrative on Cummings.

Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.

Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.

Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.

The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.

Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...

I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.

Foxy said:

moonshine said:

On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.

But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.

Something somewhere is clearly quite wrong with the media narrative on Cummings.

Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.

Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.

Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.

The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.

Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...

I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.

moonshine said:

On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.

But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.

Something somewhere is clearly quite wrong with the media narrative on Cummings.

Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.

Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.

Charles said:

Nigelb said:

Inmates’ lives don’t seem to matter in the US.

https://twitter.com/amymaxmen/status/1280844062384361473

https://twitter.com/amymaxmen/status/1280844063357485056

The second story could be a little harsh.

If they are medically vulnerable and there was an outbreak in the other jail maybe they thought they couldn’t wait to transfer them?

OldKingCole said:

moonshine said:

On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.

But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.

Something somewhere is clearly quite wrong with the media narrative on Cummings.

Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.

Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.

'Popular' policies are not necessarily the same as 'effective' ones. Filling up fast-food restaurants Mon-Wed in August might sound good, but AIUI, traditionally they are the quieter days, and, surely crucially, the days where eating out is more likely to affect one's working life.
I assume, of course, that when we see the small print, if I lunch at the local wine bar, the £10 off will still apply is I have a couples of glasses of wine with that lunch.

Not, of course, that I work these days. I was quite surprised that he didn't mention the triple lock. Or did he, and I missed it.

moonshine said:

Foxy said:

moonshine said:

On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.

But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.

Something somewhere is clearly quite wrong with the media narrative on Cummings.

Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.

Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.

Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.

The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.

Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...

I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.

I guess the question is, does it matter? Everyone everywhere is running huge deficits now. Everyone who can is debasing their fiat currency through money printing to monetise these deficits. And gilt prices evyerwhere are still sky high. At some point orthodoxy says this all feeds through to high inflation. But of what, goods or assets? If I were writing the full budget, I'd equalise capital gains tax with income tax ahead of asset price inflation, just in case gilt yields start spiking beyond the control of our highly interventionist central bank.

The factor largely overlooked through this crisis has been the extent of balance sheet restructuring. From large caps, to SMEs to households. Massive amounts of corporate debt have been refinanced at negative real interest rates and with longer durations. Bye bye debt cliff edge. SMEs have been given a lifeline with often unsuitable very high interest short term debt, refinanced with longer term state guaranteed facilities. As for households, they've been given mortgage holidays and low rates to refinance at, a furlough scheme an order of magnitude more generous than redundancy and in many cases, no reduction in disposable income (or even an increase given commuting costs) but highly reduced avenues to blow that disposable income.

Glass half full says there's no meaningful second wave and we're at the start of a roaring decade. Albeit with as many losers as winners (poor old Pret).

DecrepiterJohnL said:

Foxy said:

moonshine said:

On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.

But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.

Something somewhere is clearly quite wrong with the media narrative on Cummings.

Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.

Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.

Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.

The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.

Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...

I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.

Also, what would Cummings object to in Sunak's programme?

Public investment on a vast scale was in the 2019 Conservative manifesto even before the pandemic. As suggested here at the time, there would need to be a great deal of reverse ferreting from both Labour and Tory supporters once they read it. PB Tories busily condemning Labour's broadband plans might have been surprised to learn their party even proposed free, state-supplied broadband infrastructure!

Mexicanpete said:

moonshine said:

Foxy said:

moonshine said:

On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.

But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.

Something somewhere is clearly quite wrong with the media narrative on Cummings.

Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.

Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.

Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.

The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.

Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...

I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.

I guess the question is, does it matter? Everyone everywhere is running huge deficits now. Everyone who can is debasing their fiat currency through money printing to monetise these deficits. And gilt prices evyerwhere are still sky high. At some point orthodoxy says this all feeds through to high inflation. But of what, goods or assets? If I were writing the full budget, I'd equalise capital gains tax with income tax ahead of asset price inflation, just in case gilt yields start spiking beyond the control of our highly interventionist central bank.

The factor largely overlooked through this crisis has been the extent of balance sheet restructuring. From large caps, to SMEs to households. Massive amounts of corporate debt have been refinanced at negative real interest rates and with longer durations. Bye bye debt cliff edge. SMEs have been given a lifeline with often unsuitable very high interest short term debt, refinanced with longer term state guaranteed facilities. As for households, they've been given mortgage holidays and low rates to refinance at, a furlough scheme an order of magnitude more generous than redundancy and in many cases, no reduction in disposable income (or even an increase given commuting costs) but highly reduced avenues to blow that disposable income.

Glass half full says there's no meaningful second wave and we're at the start of a roaring decade. Albeit with as many losers as winners (poor old Pret).

But doesn't a rise in M3, which as you say tends to be inflationary also tend to lead to a hike in interest rates. As we are financing the pandemic by personal borrowing be that from HMRC deferments, which we might have to refinance by a bank loan in January, or from an extension to the mortgage, isn't that sub-optimal?

Philip_Thompson said:

eek said:

blairf said:

the rishi package shows government at it's worst. if they wanted to pump (our) cash back into the economy just give everyone a couple of grand. trying to target it with what are essentially retail promotions (free house move! buy one burger get one free! 20% off hot food! employ-a-kid-get-one-free!) smacks of playing shop. the vastness of the fiscal hole scares me, and retail promotions don't work. they shift money around in time and category that is all.

They shift money around in time and that's it.

Given that no one has to commute at the moment how many people are going to shift their entertainment budget to Monday - wednesday in August rather than Thursday to Sunday.

I can see the reason for the plan, but it instantly fell apart.

Personally I've not been going out for a meal and had no intentions to do so for a while to come but if I can have a half-priced, socially distanced, early week Nando's next month then I will do. I miss Nando's and so does my wife, we'd normally go once a month and haven't been since February.

Given social distancing requirements its not about shifting people from Thu-Sun to Mon-Wed instead, its about getting people who wouldn't have eaten out due to the crisis to start going out when its quiet.

DecrepiterJohnL said:

Philip_Thompson said:

The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.

Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).

What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".

Cutting VAT and similar issues on the struggling hospitality sectors will allow money to circulate more in those sectors - and allow businesses to cope with thicker margins on smaller volumes - thus saving the sector from a catastrophe and in the long-term the government will make more tax revenue despite temporarily lower taxes.

Essentially adjusting for the time value of money the peak of the Laffer Curve has temporarily moved far to the left of the graph and the government needs to respond accordingly.

Wasn't there an old song about the circulation of money? The lines "see the money flow, round the Barley Mow" float into my head but Google finds nothing.

On its importance, see this Labour Party video. Boris is a fan!
https://www.youtube.com/watch?v=_eJFb-r48Ys

Fysics_Teacher said:

Philip_Thompson said:

eek said:

blairf said:

the rishi package shows government at it's worst. if they wanted to pump (our) cash back into the economy just give everyone a couple of grand. trying to target it with what are essentially retail promotions (free house move! buy one burger get one free! 20% off hot food! employ-a-kid-get-one-free!) smacks of playing shop. the vastness of the fiscal hole scares me, and retail promotions don't work. they shift money around in time and category that is all.

They shift money around in time and that's it.

Given that no one has to commute at the moment how many people are going to shift their entertainment budget to Monday - wednesday in August rather than Thursday to Sunday.

I can see the reason for the plan, but it instantly fell apart.

Personally I've not been going out for a meal and had no intentions to do so for a while to come but if I can have a half-priced, socially distanced, early week Nando's next month then I will do. I miss Nando's and so does my wife, we'd normally go once a month and haven't been since February.

Given social distancing requirements its not about shifting people from Thu-Sun to Mon-Wed instead, its about getting people who wouldn't have eaten out due to the crisis to start going out when its quiet.

There is always Deliveroo: I had a meal from Nando’s yesterday via that route.

Fysics_Teacher said:

Philip_Thompson said:

eek said:

blairf said:

the rishi package shows government at it's worst. if they wanted to pump (our) cash back into the economy just give everyone a couple of grand. trying to target it with what are essentially retail promotions (free house move! buy one burger get one free! 20% off hot food! employ-a-kid-get-one-free!) smacks of playing shop. the vastness of the fiscal hole scares me, and retail promotions don't work. they shift money around in time and category that is all.

They shift money around in time and that's it.

Given that no one has to commute at the moment how many people are going to shift their entertainment budget to Monday - wednesday in August rather than Thursday to Sunday.

I can see the reason for the plan, but it instantly fell apart.

Personally I've not been going out for a meal and had no intentions to do so for a while to come but if I can have a half-priced, socially distanced, early week Nando's next month then I will do. I miss Nando's and so does my wife, we'd normally go once a month and haven't been since February.

Given social distancing requirements its not about shifting people from Thu-Sun to Mon-Wed instead, its about getting people who wouldn't have eaten out due to the crisis to start going out when its quiet.

There is always Deliveroo: I had a meal from Nando’s yesterday via that route.

Big_G_NorthWales said:

Mysticrose said:

"But what happens if this acts as the catalyst for more people to be affected by the virus? One thing is for sure Covid19 has not gone away and incentivising people to get into situations where they could be affected might not with hindsight prove to be smart."

Absolutely spot on.

If we take a global rather than myopic view of this, which a responsible Government is required to do, it is evident that serious spikes are occurring where people drop their guard. Look at Melbourne today which has just gone back into a 6-week total lockdown.

Coronavirus surges in the UK are a question of when not if.

The Government probably do know this and have decided to pull the wool over everyone's eyes. Beer, chips and ice-creams on the beach are more beneficial to the economy and so what if several thousands more people die?

Imagine a hundred Zeebrugge disasters and that's what this Government are dishing you up.

As a genuine question just what would you do and just how would you propose funding the enormous economic black hole in our economy and most other economies

It is undeniable that the only route out of this is by opening the economy and of course there are risks but we simply cannot keep the economy closed

The airlines are complaining they have had no help but the only feasable help for them is for travel to recommence no matter in a restricted way

There are no good options in any of this

rkrkrk said:

Philip_Thompson said:

The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.

Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).

Struggling individuals and businesses will spend what they get given because they're struggling. They're not going to cling onto cash, they have bills coming in and no space to save.

Wulfrun_Phil said:

It's usually best to wait for a few days before deciding whether a budget has been successful in political terms.

However, reality appears to be dawning more quickly than usual this morning. This time you don't need to pour in detail over the appendices to the Red Book to find that all is not as it seems. We already have a chorus of businesses in different sectors who have woken up to the fact that they've missed out from any meaningful further help and are shouting loudly about it. Labour needs to do no more than echo those complaints and wait for reality to bite in the form of sectoral unemployment leading to a more general loss of demand. The charge of insufficient targeting will be the Achilles heel of these measures.

Any Chancellor can spend £30bn. The question is whether they can do so effectively.

Philip_Thompson said:

DecrepiterJohnL said:

Philip_Thompson said:

The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.

Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).

What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".

Cutting VAT and similar issues on the struggling hospitality sectors will allow money to circulate more in those sectors - and allow businesses to cope with thicker margins on smaller volumes - thus saving the sector from a catastrophe and in the long-term the government will make more tax revenue despite temporarily lower taxes.

Essentially adjusting for the time value of money the peak of the Laffer Curve has temporarily moved far to the left of the graph and the government needs to respond accordingly.

Wasn't there an old song about the circulation of money? The lines "see the money flow, round the Barley Mow" float into my head but Google finds nothing.

On its importance, see this Labour Party video. Boris is a fan!
https://www.youtube.com/watch?v=_eJFb-r48Ys

Except that austerity did work. The UK grew faster than Europe for the decade the Tories were in Downing Street and it is thanks to austerity that the roof was fixed while the sun was shining before this crisis. It is thanks to austerity we went into this crisis with debt falling (not rising) and it is thanks to austerity we went into this crisis with the deficit under control. It is thanks to austerity we can now afford to spend money countercyclically.

Labour used to believe in Keynesian economics. What changed?

Floater said:

Texas hospitalisations for Covid - June 15 was 2326 - now 9610

CarlottaVance said:

https://twitter.com/rosschawkins/status/1281125120245891072?s=20

Mexicanpete said:

Not if you are mortgaged up to the hilt and interest rates rise to 15%. During the Major Government my mortgage IIRC was for a while at around 18%.

Add general inflation to that and we have a heady cocktail of serious debt to deal with.

Part of me thinks Johnson is a lucky politician and the normal economic rules don't apply to him and we can all carry on as normal without consequence. Is that wishful thinking?

Mexicanpete said:

Philip_Thompson said:

Mexicanpete said:

Philip_Thompson said:

Mexicanpete said:

moonshine said:

Foxy said:

moonshine said:

On topic, an intriguing facet of all this. Since becoming Chancellor, Sunak has quickly established himself as one of the most popular politicians in the country.

But Javid told us he resigned as Chancellor because "no self-respecting minister would accept" the interference from No 10's aides. Chiefly Dominic Cummings.

Something somewhere is clearly quite wrong with the media narrative on Cummings.

Either Cummings is not in fact an unelected dictator running every element of government business, because Sunak has taken a firm grip of the Treasury and is running it brilliantly (or at least in a very popular way), despite the "unacceptable" interference from Cummings.

Or... Cummings is in fact in complete control and Sunak is a puppet. But that's ok because Cummings himself is coming up with very popular policies and is not the inept monster made out by the chattering classes but someone the public should cherish.

Javid resigned over his SPADS having to answer to Cummings. To lose a second CofE would look very bad, so Sunaks SPADS may get nominal control by Cummings, but in practice very little.

The other thing is that Cummings agenda is unusual for a UK right winger. It is Cultural and organisational, not economic. He hates the Civil Service in all its forms, and wants to smash what he sees as the Blob. Brexit too is driven by culture war, not economics. Cummings is not bothered by economics, or whether the countries debts are sustainable.

Both Cummings and Sunak have one thing in common. Both were wealthy from the start, but then married into very wealthy families. Neither has ever had to go short personally and never will, as such culturally they are very happy spending money, as there has always been an inexhaustible supply. We will see if that is true of the Treasury...

I think that the real finance implications take a year to hit. The July 31 tax payments have been deferred, and the income tax due on Jan 31 is 11 months of normal income. Corporation tax is also paid 9 months after fin year finishes. Tax reciepts will appear to be OK for some time yet, but will fall off a cliff in 2021, while spending remains very high. We are at the running in the air stage of a Wile E Coyote cartoon.

I guess the question is, does it matter? Everyone everywhere is running huge deficits now. Everyone who can is debasing their fiat currency through money printing to monetise these deficits. And gilt prices evyerwhere are still sky high. At some point orthodoxy says this all feeds through to high inflation. But of what, goods or assets? If I were writing the full budget, I'd equalise capital gains tax with income tax ahead of asset price inflation, just in case gilt yields start spiking beyond the control of our highly interventionist central bank.

The factor largely overlooked through this crisis has been the extent of balance sheet restructuring. From large caps, to SMEs to households. Massive amounts of corporate debt have been refinanced at negative real interest rates and with longer durations. Bye bye debt cliff edge. SMEs have been given a lifeline with often unsuitable very high interest short term debt, refinanced with longer term state guaranteed facilities. As for households, they've been given mortgage holidays and low rates to refinance at, a furlough scheme an order of magnitude more generous than redundancy and in many cases, no reduction in disposable income (or even an increase given commuting costs) but highly reduced avenues to blow that disposable income.

Glass half full says there's no meaningful second wave and we're at the start of a roaring decade. Albeit with as many losers as winners (poor old Pret).

But doesn't a rise in M3, which as you say tends to be inflationary also tend to lead to a hike in interest rates. As we are financing the pandemic by personal borrowing be that from HMRC deferments, which we might have to refinance by a bank loan in January, or from an extension to the mortgage, isn't that sub-optimal?

Ceteris paribus the country is facing massive deflation.

A boost in inflation right now is a good thing, not a bad thing.

Not if you are mortgaged up to the hilt and interest rates rise to 15%. During the Major Government my mortgage IIRC was for a while at around 18%.

Add general inflation to that and we have a heady cocktail of serious debt to deal with.

Part of me thinks Johnson is a lucky politician and the normal economic rules don't apply to him and we can all carry on as normal without consequence. Is that wishful thinking?

We aren't facing 15% interest or 4% inflation rates. We are facing 0.25% interest rates and deflation.

We need to get inflation away from deflation and back up to betweeen 2-3%.

You don't know that. The more money is pumped into the economy the higher the inflation. There are already some supply issues from imported and domestically produced material.

You might be right, but a consumer debt lead recovery can be problematic.

Theuniondivvie said:

Philip_Thompson said:

CarlottaVance said:

OldKingCole said:

isam said:

Ranvir Singh and Ben Shepherd just interviewed the Shadow Chancellor on GMB. So much better than the pompous, gotcha seeking technique of Piers Morgan

Chancellor had something of a car crash on his BBC interview this morning.

Did OK on R4 - what tripped him up on the TV?

He was a Tory.

That'd be enough for some people.

I didn't watch it

Never let it be said that PB Tories are overly dependent on evidence for their persecution complexes.

alex_ said:

Whilst not wanting to underplay the risk, it seems to me that a lot of people seem to be operating under the belief that you can catch COVID simply by being in the same room and/or in close proximity to other people. As opposed to other infected people. In some parts of the country right now the actual odds of finding yourself within “dangerous” proximity of an infected person, let alone catching COVID off them, let alone developing symptoms are pretty small. Let alone if you operate sensible personal precautions.

It’s not like going into a pub is comparable with spending all night mingling on a crowded nightclub dance floor.

Mexicanpete said:

Jonathan said:

Sunak needs to work on his radio technique. His ‘not answering the question’ skill is a bit rough around the edges.

He's still a rookie, by the time he ousts Boris in a bloodless coup in the Autumn, he will be as evasive as the rest of them.

CarlottaVance said:

https://twitter.com/rosschawkins/status/1281125120245891072?s=20

Theuniondivvie said:

Philip_Thompson said:

CarlottaVance said:

OldKingCole said:

isam said:

Ranvir Singh and Ben Shepherd just interviewed the Shadow Chancellor on GMB. So much better than the pompous, gotcha seeking technique of Piers Morgan

Chancellor had something of a car crash on his BBC interview this morning.

Did OK on R4 - what tripped him up on the TV?

He was a Tory.

That'd be enough for some people.

I didn't watch it

Never let it be said that PB Tories are overly dependent on evidence for their persecution complexes.

Theuniondivvie said:

Philip_Thompson said:

CarlottaVance said:

OldKingCole said:

isam said:

Ranvir Singh and Ben Shepherd just interviewed the Shadow Chancellor on GMB. So much better than the pompous, gotcha seeking technique of Piers Morgan

Chancellor had something of a car crash on his BBC interview this morning.

Did OK on R4 - what tripped him up on the TV?

He was a Tory.

That'd be enough for some people.

I didn't watch it

Never let it be said that PB Tories are overly dependent on evidence for their persecution complexes.

Philip_Thompson said:

The thing that some people clearly understand about economics and others clearly don't is that it is circulation that matters.

Giving money to struggling businesses/individuals does absolutely nothing for the macro economy whatsoever as they cling on to that cash (and then continue to struggle if they're not getting anything circulated back to them).

What is needed is to get money circulating again. That is why I have been calling for a VAT cut here for months. And I've been laughed at here saying we need tax cuts with replies like "yeah and I'd like a supermodel".

Nigelb said:

Charles said:

Nigelb said:

Inmates’ lives don’t seem to matter in the US.

https://twitter.com/amymaxmen/status/1280844062384361473

https://twitter.com/amymaxmen/status/1280844063357485056

The second story could be a little harsh.

If they are medically vulnerable and there was an outbreak in the other jail maybe they thought they couldn’t wait to transfer them?

So why weren’t they tested ?

And what about the numerous medically vulnerable in the prison to which they were transferred ?