The poor subsidise the rich

[maninasuitcase]

According to the independent Institute for Fiscal Studies, a organisation lauded by the tories when in opposition, the poorest members of society will lose 5p in the pound more than the richest under the Condems emergency budget.

It was interesting that the chap wheeled out on Newsnight last night kept saying how the study was 'selective' (he said it about a dozen times) but he failed to deny the figures quoted were incorrect.

So much for Osbourne's hard but fair budget eh?

 

[Tangled up in Blue]

According to the independent Institute for Fiscal Studies, a organisation lauded by the tories when in opposition, the poorest members of society will lose 5p in the pound more than the richest under the Condems emergency budget.

It was interesting that the chap wheeled out on Newsnight last night kept saying how the study was 'selective' (he said it about a dozen times) but he failed to deny the figures quoted were incorrect.

So much for Osbourne's hard but fair budget eh?

Correct.There was a similar article in The Guardian yesterday making very much the same point.

 

[South Bank Hank]

So was the study selective or wasn't it?

 

[steveo]

the poorest members of society will lose 5p in the pound more than the richest under the Condems emergency budget.

So much for Osbourne's hard but fair budget eh?

Wev'e had this discussion before. Ignore percentages, how much more do the rich pay than the poor in actual monetary terms?

And without the rich what would the poor do? Who would they work for?

 

[osymandus]

According to the independent Institute for Fiscal Studies, a organisation lauded by the tories when in opposition, the poorest members of society will lose 5p in the pound more than the richest under the Condems emergency budget.

It was interesting that the chap wheeled out on Newsnight last night kept saying how the study was 'selective' (he said it about a dozen times) but he failed to deny the figures quoted were incorrect.

So much for Osbourne's hard but fair budget eh?

Figures can easily be accurate and selective . Both parties have agendas here . Sadly we know teh poorest and most vunerable would be hit . IF we actually had a more forward thinking policie makers rather then those adhering to party rules or lacking power to change , you could find more people classed as long time sick or disabled back in work . Which is what Nick Clegg was vaugley and rather sadly i suspect failing to find a small bit of hope from this mess.

We have Labour to blame for not refining or moderating the system Lib dems for not objecting more attempting to force the ratehr sterotypical Tories into falling back into their old ways (rather then having the senisble fiscal accountant , backed up by people who may know teh real affect on people rather then looking blindly just at figures).

The pigy in teh middle with this is the people caught between Economists and theroists who look burly at the figures and ideologically remote shot sighted Tories who place their views above what can and should be done .

The country needs accountants at the moment , but those who have worked with people not just their numbers.

 

[Yorkshire Blue]

The poor do not subsidise the rich.

Whether the rich should further subsidise the poor, or not subsidise them so much is another issue.

 

[osymandus]

The poor do not subsidise the rich.

Whether the rich should further subsidise the poor, or not subsidise them so much is another issue.

The poor can be said to be a foundation on which wealth is made.

 

[Neil_F]

The poor can be said to be a foundation on which wealth is made.

Not in this case. The IFS study shows that the emergency budget wasn't "progressive" because the biggest percentage fall in income applies to households with children but that aren't economically active.

This essentially comes down to real terms reductions in benefits. Under the terms of the IFS assessment the only way in which the budget could be considered progressive is if benefit payments were increased. To do so though would disincentivise employment, which is the only route out of poverty.

The study is also selective but it considers the budget in isolation and does not consider measures that come into force from April 2011 already on the statute book: namely the 50% rate and the restriction of tax relief for high earners. These are very progressive measures.

 

[Hotman]

The poor can be said to be a foundation on which wealth is made.

What a load of bollocks.

 

[Tangled up in Blue]

What a load of bollocks.

Wecome back to the fray, MC.
How about an argument, instead of merely an opinion? ;)
Otherwise you might have to strip yourself of that "influential" tag.:unsure:
"Sympathetic" seems a tad off too.:)

 

[steveo]

What a load of bollocks.

Fair point well made.

 

[Bob Cratchitt]

Not in this case. The IFS study shows that the emergency budget wasn't "progressive" because the biggest percentage fall in income applies to households with children but that aren't economically active.

As i am no financial expert I read a report that stated the biggest hit would be the Richest 10%, is that not true?

 

[osymandus]

What a load of bollocks.

Not really , the foundation of wealth in a consumer society is based on number of consumers , and their repetition of consumer choice.
Its also based on minimum wage structures in production countries to fund said consumer product manufacture.

If you declare that's bolloxs then please explain China

 

[osymandus]

As i am no financial expert I read a report that stated the biggest hit would be the Richest 10%, is that not true?

You've shown a graph with a theoretical projection for possible outcome for 4 years from now . How is that a fact when it hasn't happened yet ?

 

[Bob Cratchitt]

You've shown a graph with a theoretical projection for possible outcome for 4 years from now . How is that a fact when it hasn't happened yet ?

You mean this one

that appears in the report that people are spouting as facts on here? ;)


The full report is found here http://www.ifs.org.uk/pr/progressive_budget.pdf

 

[osymandus]

You mean this one

that appears in the report that people are spouting as facts on here? ;)


The full report is found here http://www.ifs.org.uk/pr/progressive_budget.pdf

Worrying isnt it :D . See this is my point , they have to take a average using a theoretical model which can be massaged by figures on either side , and then declare this will the rich are worse off or the poorer are worse off . So both sides are guessing and declaring as possible fact (as I would guess neither have used specific peoples / familes and access to their bank accounts and ahow they would be affected over a course of month ) using mathematical models to represent reality .

 

[Neil_F]

As i am no financial expert I read a report that stated the biggest hit would be the Richest 10%, is that not true?

Yes, when you include the 50% rate and the pension changes. The graph earlier in the thread includes these measures. That is why there is no point considering the emergency budget in isolation

 

[Neil_F]

Not really , the foundation of wealth in a consumer society is based on number of consumers , and their repetition of consumer choice.
Its also based on minimum wage structures in production countries to fund said consumer product manufacture.

If you declare that's bolloxs then please explain China

Income generation is based on being able to provide a product or service that the market wants and is willing to pay for. That is either contracting out your services as an employee or setting up a business trade to bring a produce or serve the market's need.

No one is forced to buy anything (broadly speaking).

The use of offshore labour to reduce cost base is a good thing for consumers because it reduces the price. It is also a good thing for the country the work is moved to as well. Yes, slave labour still exists and every effort should be made to stop it, but it the majority of what we are talking about is genuine employment. You also need to look at wage structures from a local perspective as well. The best method of doing so is using a purchasing power parity analysis method, whereby wage structures are assessed in local terms and with reference to local prices.

On China, the reason that it has achieved huge growth is mainly because it pegged its currency against the dollar to such a level that made its exports hugely competitive on price. It combined that with substantial infastructure investment and massive deregulation that made it an attractive place to setup a business. The fact that the labour was relatively cheap was not the main factor.

Of course, whilst it was good for China to peg its currency as it did, it had wider implications. It kept inflation artificially low across the world (industrialised nations sought to outsource and import, which reduced prices substantially in real terms). This meant that central banks were able to maintain aggressively low interest rates, which meant that banks, combined with government legislation requiring expansive lending policies, ended up lending more to compensate for falling margins - the rest we all know.

My basic point: the global economy is a bit more complicated than "evil rich people are exploiting the poor to make money!!!"

 

[Napster]

Income generation is based on being able to provide a product or service that the market wants and is willing to pay for. That is either contracting out your services as an employee or setting up a business trade to bring a produce or serve the market's need.

No one is forced to buy anything (broadly speaking).

The use of offshore labour to reduce cost base is a good thing for consumers because it reduces the price. It is also a good thing for the country the work is moved to as well. Yes, slave labour still exists and every effort should be made to stop it, but it the majority of what we are talking about is genuine employment. You also need to look at wage structures from a local perspective as well. The best method of doing so is using a purchasing power parity analysis method, whereby wage structures are assessed in local terms and with reference to local prices.

On China, the reason that it has achieved huge growth is mainly because it pegged its currency against the dollar to such a level that made its exports hugely competitive on price. It combined that with substantial infastructure investment and massive deregulation that made it an attractive place to setup a business. The fact that the labour was relatively cheap was not the main factor.

Of course, whilst it was good for China to peg its currency as it did, it had wider implications. It kept inflation artificially low across the world (industrialised nations sought to outsource and import, which reduced prices substantially in real terms). This meant that central banks were able to maintain aggressively low interest rates, which meant that banks, combined with government legislation requiring expansive lending policies, ended up lending more to compensate for falling margins - the rest we all know.

My basic point: the global economy is a bit more complicated than "evil rich people are exploiting the poor to make money!!!"

True enough, but a lot of global companies are starting to manufacture closer to home now, as logistics costs are increasing (viz. price of oil). GM now manufactures a lot in Alabama because of cheap labour and cheaper logistics costs.

 

[ibwiajwa]

On China, the reason that it has achieved huge growth is mainly because it pegged its currency against the dollar to such a level that made its exports hugely competitive on price. It combined that with substantial infastructure investment and massive deregulation that made it an attractive place to setup a business. The fact that the labour was relatively cheap was not the main factor.

You sound as though you know more about this than me and I am sure you are right in your basic premise. However, the fact that China (and India) do not support the poorer members of their community in the way that West (on the whole) does must help them massively in making the "substantial infastructure investment" of which you speak.