Nominal GDP targeting

[1nvest]

Nominal GDP can easily be bolstered by simply opening migration floodgates. But that induces more congestion/waste/inefficiencies. GDP/capita is a better target. Look to increase UK GDP/capita from $46K to comparable to US $61K. Yes that would direct to fewer rather than more people, less congestion/waste, but also a lower nominal tax income/public spending budget. For the population however a relatively better lifestyle.

A UK's population of 40 million would be more efficient than if its population were doubled to 130 million. Same for the world, some suggest 4 billion is optimal, whilst we're likely to see it rise to 15 billion relatively quickly, inducing even more stresses from over-population.

[tjh290633]

From what I read elsewhere, this is Truss's preferred future tack for the UK Economy (assuming she gets the gig)

I've also read that she admires the central Bank of Japan's approach and she is determined to is reform (read split up) the BOE. I'm still working on what this could mean, but I thought I'd pop it up here in case anyone wants to comment

https://www.adamsmith.org/blog/money-ba ... or-dummies

As the BofE has been sitting on its bum while inflation rises way above its 2.5% target, it's not surprising that it is a target for reform. 0.25% increases when 1% might have been better. The base rate should never have fallen below about 2.5%. The pound would be a lot stronger had we had sensible interest rates.

TJH

[ursaminortaur]

Nominal GDP can easily be bolstered by simply opening migration floodgates. But that induces more congestion/waste/inefficiencies. GDP/capita is a better target. Look to increase UK GDP/capita from $46K to comparable to US $61K. Yes that would direct to fewer rather than more people, less congestion/waste, but also a lower nominal tax income/public spending budget. For the population however a relatively better lifestyle.

A UK's population of 40 million would be more efficient than if its population were doubled to 130 million. Same for the world, some suggest 4 billion is optimal, whilst we're likely to see it rise to 15 billion relatively quickly, inducing even more stresses from over-population.

I'm not sure where you get your 15 billion from - the latest projection has the world population peaking at 9.7 billion in 2064 and then falling back to 8.8 billion by 2100 and even the previous UN prediction was for it to peak at 11 billion in 2100 before starting to fall.
It seems unlikely that the world's population will get to 15 billion let alone get there quickly.

https://www.geographyrealm.com/study-forecasts-world-population-to-peak-in-2064/

If women’s rights continue to expand around the globe, the University of Washington report estimated that the global population would peak in 2064 at 9.7 billion before declining to 8.8 billion in 2100.


https://www.un.org/en/global-issues/population

The world’s population is expected to increase by 2 billion persons in the next 30 years, from 7.7 billion currently to 9.7 billion in 2050 and could peak at nearly 11 billion around 2100.

[dealtn]

From what I read elsewhere, this is Truss's preferred future tack for the UK Economy (assuming she gets the gig)

I've also read that she admires the central Bank of Japan's approach and she is determined to is reform (read split up) the BOE. I'm still working on what this could mean, but I thought I'd pop it up here in case anyone wants to comment

https://www.adamsmith.org/blog/money-ba ... or-dummies

As the BofE has been sitting on its bum while inflation rises way above its 2.5% target, it's not surprising that it is a target for reform. 0.25% increases when 1% might have been better. The base rate should never have fallen below about 2.5%. The pound would be a lot stronger had we had sensible interest rates.

TJH

Can you explain how 2.5% would have been sensible for the period from 2007 and the following decade, or for the period during Covid when most were concerned about a potential collapsing economy?

[tjh290633]

From what I read elsewhere, this is Truss's preferred future tack for the UK Economy (assuming she gets the gig)

I've also read that she admires the central Bank of Japan's approach and she is determined to is reform (read split up) the BOE. I'm still working on what this could mean, but I thought I'd pop it up here in case anyone wants to comment

https://www.adamsmith.org/blog/money-ba ... or-dummies

As the BofE has been sitting on its bum while inflation rises way above its 2.5% target, it's not surprising that it is a target for reform. 0.25% increases when 1% might have been better. The base rate should never have fallen below about 2.5%. The pound would be a lot stronger had we had sensible interest rates.

TJH

Can you explain how 2.5% would have been sensible for the period from 2007 and the following decade, or for the period during Covid when most were concerned about a potential collapsing economy?

A few ideas. Savings rate would have been far higher. QE would have been less attractive. Currency almost certainly stronger. Government borrowing would not have needed to be index linked.

Are those enough for you? The policy followed in retrospect was unsuccessful.

TJH

[dealtn]

From what I read elsewhere, this is Truss's preferred future tack for the UK Economy (assuming she gets the gig)

I've also read that she admires the central Bank of Japan's approach and she is determined to is reform (read split up) the BOE. I'm still working on what this could mean, but I thought I'd pop it up here in case anyone wants to comment

https://www.adamsmith.org/blog/money-ba ... or-dummies

As the BofE has been sitting on its bum while inflation rises way above its 2.5% target, it's not surprising that it is a target for reform. 0.25% increases when 1% might have been better. The base rate should never have fallen below about 2.5%. The pound would be a lot stronger had we had sensible interest rates.

TJH

Can you explain how 2.5% would have been sensible for the period from 2007 and the following decade, or for the period during Covid when most were concerned about a potential collapsing economy?

A few ideas. Savings rate would have been far higher. QE would have been less attractive. Currency almost certainly stronger. Government borrowing would not have needed to be index linked.

Are those enough for you? The policy followed in retrospect was unsuccessful.

TJH

So at the time of suboptimal demand and below target inflation you would be advocating increased savings with even lower consumption demand and a stronger currency to reduce exports and increase imports?

Can you link to a single economist or text book favouring such an approach?

[1nvest]

From what I read elsewhere, this is Truss's preferred future tack for the UK Economy (assuming she gets the gig)

I've also read that she admires the central Bank of Japan's approach and she is determined to is reform (read split up) the BOE. I'm still working on what this could mean, but I thought I'd pop it up here in case anyone wants to comment

https://www.adamsmith.org/blog/money-ba ... or-dummies

As the BofE has been sitting on its bum while inflation rises way above its 2.5% target, it's not surprising that it is a target for reform. 0.25% increases when 1% might have been better. The base rate should never have fallen below about 2.5%. The pound would be a lot stronger had we had sensible interest rates.

TJH

BoE/government are hardly likely to broadcast negative real policies, rather just engineer a 5 year broad hit along the lines of existing 10% inflation, 5% pay rises, -5% deflation. Nice of the public sector and others to swap out 5.2 weeks of paid holiday entitlement (10% inflation), for 2.6 weeks instead (5% pay rise).

Standard talk will probably be along the lines of ...

Oh its just a short term blip, maybe back to normal in a year or so.
A year later and oh, looks like it might be around for a little longer yet - but we expect a rebound next year.
A year later and oh, our predictions were wrong and its more deep veined that we thought. Meanwhile workers might have seen their 5.2 weeks/year paid leave go to zero or even negative 2.6 weeks/year.

Debt also deflated. Pound parity with the Euro and US$, and someone who bought Pounds at 70 pence for a each US$ has to pay 100 pence to get a US$ back, such that even UK debt paying over 5%/year for 5 years would have earnt a nominal 0%. Let alone being paid less than 5%, and let alone inflationary erosion.

That's the way of fiat currencies. A Pound used to buy 4 or 5 US$, but by the end of 2020's might not even buy a single US$

[tjh290633]

From what I read elsewhere, this is Truss's preferred future tack for the UK Economy (assuming she gets the gig)

I've also read that she admires the central Bank of Japan's approach and she is determined to is reform (read split up) the BOE. I'm still working on what this could mean, but I thought I'd pop it up here in case anyone wants to comment

https://www.adamsmith.org/blog/money-ba ... or-dummies

As the BofE has been sitting on its bum while inflation rises way above its 2.5% target, it's not surprising that it is a target for reform. 0.25% increases when 1% might have been better. The base rate should never have fallen below about 2.5%. The pound would be a lot stronger had we had sensible interest rates.

TJH

Can you explain how 2.5% would have been sensible for the period from 2007 and the following decade, or for the period during Covid when most were concerned about a potential collapsing economy?

A few ideas. Savings rate would have been far higher. QE would have been less attractive. Currency almost certainly stronger. Government borrowing would not have needed to be index linked.

Are those enough for you? The policy followed in retrospect was unsuccessful.

TJH

So at the time of suboptimal demand and below target inflation you would be advocating increased savings with even lower consumption demand and a stronger currency to reduce exports and increase imports?

Can you link to a single economist or text book favouring such an approach?

Of course not. You asked for my opinion, not a lecture on pseudo economics. As we know, economists can have varying views, and sometimes the minority of one is correct.

TJH

[dealtn]

As the BofE has been sitting on its bum while inflation rises way above its 2.5% target, it's not surprising that it is a target for reform. 0.25% increases when 1% might have been better. The base rate should never have fallen below about 2.5%. The pound would be a lot stronger had we had sensible interest rates.

TJH

Can you explain how 2.5% would have been sensible for the period from 2007 and the following decade, or for the period during Covid when most were concerned about a potential collapsing economy?

A few ideas. Savings rate would have been far higher. QE would have been less attractive. Currency almost certainly stronger. Government borrowing would not have needed to be index linked.

Are those enough for you? The policy followed in retrospect was unsuccessful.

TJH

So at the time of suboptimal demand and below target inflation you would be advocating increased savings with even lower consumption demand and a stronger currency to reduce exports and increase imports?

Can you link to a single economist or text book favouring such an approach?

Of course not. You asked for my opinion, not a lecture on pseudo economics. As we know, economists can have varying views, and sometimes the minority of one is correct.

TJH

So you initially said they should never have been reduced below 2.5% but in the period I referred to when we had a deflationary recession in the economy you advocated a policy of reducing demand, then confirm no economist would take such an approach.

Your minority of one contrarian approach you think would convince the average reader as being "sensible". I suggest they are unlikely to agree.

[tjh290633]

So you initially said they should never have been reduced below 2.5% but in the period I referred to when we had a deflationary recession in the economy you advocated a policy of reducing demand, then confirm no economist would take such an approach.

Your minority of one contrarian approach you think would convince the average reader as being "sensible". I suggest they are unlikely to agree.

As we know, 365 economists can be wrong. Cutting interest rates to near zero removed the savings income of millions, which probably was the main reason for reducing demand.

I did not confirm that no economist would take such an approach. I merely stated my views. I am sure that others would support them.

TJH

[Newroad]

Evening, All.

My recollection was that Samuel Brittan (RIP) was one of the more vociferous advocates on nominal GDP targeting. He used to opine about it once in a while - a quick search found this like

https://www.ft.com/content/b3f5d09e-e8ba-11e2-aead-00144feabdc0

On whether it would be misleadingly affected by increasing population, I would note that Malthusians (food being one factor therein) have been wrong since the 18th century. The optimal population must (logically) be between the minimum viable human population and the maximum carrying capacity of the planet - the latter of which has consistently seemed to increase - through a pseudo-Malthusian lens at least.

In reality, if targeting nominal GDP and one wanted to additionally put a "per capita" slant on it (as has been suggested above) increasing or decreasing population targets would both be on the table IMO - there are pluses and minuses to each and you would have to project how it might net out in a given set of circumstances - which are likely to be geographic unit dependent.

I suspect targeting anything - inflation proxies, any form of nominal GDP etc - is subject to (the downside implied by) Goodhart's law. If you accept this, then I would argue one is also saying judgement (of when to switch to another target to avoid undesirable excesses) must at some level come into play.

Regards, Newroad

[dealtn]

Can you link to a single economist or text book favouring such an approach?

Of course not.

So you .... confirm no economist would take such an approach.

I did not confirm that no economist would take such an approach

[Nimrod103]

Can you explain how 2.5% would have been sensible for the period from 2007 and the following decade, or for the period during Covid when most were concerned about a potential collapsing economy?

A few ideas. Savings rate would have been far higher. QE would have been less attractive. Currency almost certainly stronger. Government borrowing would not have needed to be index linked.

Are those enough for you? The policy followed in retrospect was unsuccessful.

TJH

So at the time of suboptimal demand and below target inflation you would be advocating increased savings with even lower consumption demand and a stronger currency to reduce exports and increase imports?

Can you link to a single economist or text book favouring such an approach?

Of course not. You asked for my opinion, not a lecture on pseudo economics. As we know, economists can have varying views, and sometimes the minority of one is correct.

TJH

So you initially said they should never have been reduced below 2.5% but in the period I referred to when we had a deflationary recession in the economy you advocated a policy of reducing demand, then confirm no economist would take such an approach.

Your minority of one contrarian approach you think would convince the average reader as being "sensible". I suggest they are unlikely to agree.

There was a recession in 2008-9, but deflation? I don't remember any, except in the price of houses which declined slightly, having increased almost exponentially in the previous few years. House price growth seems to me to be an important indicator of what is going on in the economy, yet since the advent of Bank of England independence under Brown, has been entirely ignored. That house prices have again been on a significant upward trend since 2013 (and has taken a real upwards kick in the last 2 years) suggests to me that interest rate policy has been dangerously far too lax. The result being the current inflation problem, which seems to be much more entrenched than a simple increase in gas prices would account for.

[dealtn]

There was a recession in 2008-9, but deflation? I don't remember any, except in the price of houses which declined slightly, having increased almost exponentially in the previous few years. House price growth seems to me to be an important indicator of what is going on in the economy, yet since the advent of Bank of England independence under Brown, has been entirely ignored. That house prices have again been on a significant upward trend since 2013 (and has taken a real upwards kick in the last 2 years) suggests to me that interest rate policy has been dangerously far too lax. The result being the current inflation problem, which seems to be much more entrenched than a simple increase in gas prices would account for.

I don't think we disagree particularly. I didn't say there was deflation, rather that the economy faced a deflationary drop in demand. The appropriate response was a cut in interest rates, and below 2.5% - a level considered sensible by another contributor to this debate. Were interest rates to have remained elevated, observable in some parallel universe perhaps, I think you would have seen that deflation that appears elusive. The absence of deflation is precisely because of the policy response. It worked.

Now that's not to argue since then interest rates have justifiably remained as low as they did. That's a separate argument. The "entrenched" nature of inflation you observe beyond the gas price "catalyst" may well be, at least in part, down to subsequent overly lax monetary policy.

[ursaminortaur]

That's the way of fiat currencies. A Pound used to buy 4 or 5 US$, but by the end of 2020's might not even buy a single US$

Much of that fall though happened under the Bretton woods system (1944 to 1971) when there were fixed exchange rates tied to the dollar which was itself tied to Gold ie devaluations forced on the pound when it wasn't a free floating fiat currency.

https://en.wikipedia.org/wiki/Bretton_Woods_system

The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The Bretton Woods system required countries to guarantee convertibility of their currencies into U.S. dollars to within 1% of fixed parity rates, with the dollar convertible to gold bullion for foreign governments and central banks at US$35 per troy ounce of fine gold (or 0.88867 gram fine gold per dollar).
.
.
.
On 15 August 1971, the United States terminated convertibility of the US dollar to gold, effectively bringing the Bretton Woods system to an end and rendering the dollar a fiat currency.[4] Shortly thereafter, many fixed currencies (such as the pound sterling) also became free-floating.[5] The Bretton Woods system was over by 1973.

https://www.exchangerates.org.uk/articles/1325/the-200-year-pound-to-dollar-exchange-rate-history-from-5-in-1800s-to-todays.html

Any hopes of a post-war recovery for the Sterling against the Dollar were dashed by Britain’s emergence from the war with an unprecedented level of debt, nearly 250% of the nation’s GDP with the US holding the majority.

Despite the soft-loan agreement between the UK and US in which the UK would repay a wartime $3.75B loan at 2% over fifty years, the Pound Sterling remained under intense pressure. Rumours abounded that the Sterling was heading for devaluation and on the business front the UK’s inability to rapidly switch from a wartime production footing to service the growing demand from consumer goods from British colonies saw foreign purchasers turn to the US and US Dollar.

In September of 1949, speculation became fact when at the time Chancellor of the Exchequer, Sir Stafford Cripps, announced a 30% devaluation for the Pound, reducing the Pound-to-Dollar rate from $4.03 to $2.80.

The following two decades were characterised by persistent balance of payment problems for the UK, leading to the Sterling crisis of 1964/65 when the UK was compelled to seek financial assistance from the Bank of International Settlement and International Monetary Fund (IMF).

Sterling’s role as a reserve currency rendered UK exports noncompetitive with a drop in export levels in turn leading to a manufacturing slowdown while the US economy boomed. A persistent ebb of reserve from Pounds to Dollars continued to pressure the Sterling.

By 1966/67, the Bank of England was covering persistent Sterling weakness by lines of credit extended from other central banks (i.e., swaps with the New York Federal Reserve) and the IMF. It wasn’t enough however and in 1967, Prime Minister Harold Wilson announced a 14.3% devaluation, reducing the Pound-to-Dollar rate from $2.80 to $2.40.

The Bretton Woods system was abandoned in 1971, largely due to its inflexibility, thus ending the era of fixed exchange rates with currency crosses adopting the free-floating nature that persists today.

Carthew said, “In the early years… the UK was sucking in wealth from all its colonies, and this buoyed sterling. In some ways the weakening pound marked the shift as the US took up the mantle of the world's largest economy from Britain.”

He added, “For long periods, while the Government sought to control the exchange rate, sterling was overvalued and this would have hurt UK exporters and would have played a part in the collapse of the UK manufacturing industry."

[1nvest]

That's the way of fiat currencies. A Pound used to buy 4 or 5 US$, but by the end of 2020's might not even buy a single US$

Much of that fall though happened under the Bretton woods system (1944 to 1971) when there were fixed exchange rates tied to the dollar which was itself tied to Gold ie devaluations forced on the pound when it wasn't a free floating fiat currency.

https://en.wikipedia.org/wiki/Bretton_Woods_system

The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The Bretton Woods system required countries to guarantee convertibility of their currencies into U.S. dollars to within 1% of fixed parity rates, with the dollar convertible to gold bullion for foreign governments and central banks at US$35 per troy ounce of fine gold (or 0.88867 gram fine gold per dollar).
.
.
.
On 15 August 1971, the United States terminated convertibility of the US dollar to gold, effectively bringing the Bretton Woods system to an end and rendering the dollar a fiat currency.[4] Shortly thereafter, many fixed currencies (such as the pound sterling) also became free-floating.[5] The Bretton Woods system was over by 1973.

https://www.exchangerates.org.uk/articles/1325/the-200-year-pound-to-dollar-exchange-rate-history-from-5-in-1800s-to-todays.html

Any hopes of a post-war recovery for the Sterling against the Dollar were dashed by Britain’s emergence from the war with an unprecedented level of debt, nearly 250% of the nation’s GDP with the US holding the majority.

Despite the soft-loan agreement between the UK and US in which the UK would repay a wartime $3.75B loan at 2% over fifty years, the Pound Sterling remained under intense pressure. Rumours abounded that the Sterling was heading for devaluation and on the business front the UK’s inability to rapidly switch from a wartime production footing to service the growing demand from consumer goods from British colonies saw foreign purchasers turn to the US and US Dollar.

In September of 1949, speculation became fact when at the time Chancellor of the Exchequer, Sir Stafford Cripps, announced a 30% devaluation for the Pound, reducing the Pound-to-Dollar rate from $4.03 to $2.80.

The following two decades were characterised by persistent balance of payment problems for the UK, leading to the Sterling crisis of 1964/65 when the UK was compelled to seek financial assistance from the Bank of International Settlement and International Monetary Fund (IMF).

Sterling’s role as a reserve currency rendered UK exports noncompetitive with a drop in export levels in turn leading to a manufacturing slowdown while the US economy boomed. A persistent ebb of reserve from Pounds to Dollars continued to pressure the Sterling.

By 1966/67, the Bank of England was covering persistent Sterling weakness by lines of credit extended from other central banks (i.e., swaps with the New York Federal Reserve) and the IMF. It wasn’t enough however and in 1967, Prime Minister Harold Wilson announced a 14.3% devaluation, reducing the Pound-to-Dollar rate from $2.80 to $2.40.

The Bretton Woods system was abandoned in 1971, largely due to its inflexibility, thus ending the era of fixed exchange rates with currency crosses adopting the free-floating nature that persists today.

Carthew said, “In the early years… the UK was sucking in wealth from all its colonies, and this buoyed sterling. In some ways the weakening pound marked the shift as the US took up the mantle of the world's largest economy from Britain.”

He added, “For long periods, while the Government sought to control the exchange rate, sterling was overvalued and this would have hurt UK exporters and would have played a part in the collapse of the UK manufacturing industry."

For centuries prior to WW1 when gold/money were convertible, inflation broadly averaged 0%, 4% real bond (lending to the treasury) yields were like a stable/safe real rate of return, that one could plan around in a reliable manner. Since WW1 and bonds broadly just pace rising inflation (currency devaluation). Greater variability/uncertainties and where investors had to switch over to holding some stocks (speculate) for highly variable real rates of return - requiring much more needing to be accumulated for safety. We're now in a era where that is funding golden pensions for the public sector unmatched in the private sector and where public spending is ever increasingly straining the private sector being able to match the demand.

Nominal Gilts nowadays might when interest rates were 4% see a £100 face value Gilt being sold by the treasury allocated a 4% yield, such that they sell for £100. £100 cost, £4 interest ... but that gets deflated over time by inflation. 20 years later still paying £4 interest and the investor gets back their £100 maturity capital, but where 2%/year inflation has eroded both that capital value and interest down by 33% each. Lending to someone who can set interest rates, induce inflation (print/spend money to its benefit, devaluing all other notes in circulation), change the rules, change taxation rates, combined with the natural deflation is a big push-away. However pension funds are legally obligated to buy them (paramount to a private sector pension fund raid). Yet still the public sector demands even more. In all such extreme past cases the result was a flight of capital and I wouldn't be surprised to see such a flight in the next decade or two.

Truss seems to think that going Japanese, have the Bank of England buy up all of the Gilts that the Treasury issues is the way-to-go (where as of present the BoE returns all interest payments against those Gilts back to the Treasury). That's more of a can-kick however, facilitating the ever rising Public sector demands, further squashing down of the private sector. The UK's parliamentary system is a massive cost/liability/failure. Increasingly a joke, but far from a funny one.

A common (public and private sector) £10K/year state pension, £250K individual private pension funds (perhaps funded by downsizing house/home value), 25x yearly spending (10K/year that bolsters total pension to a disposable £20K/year), safe/stable 4% real (30 year SWR) treasury yields - would commonly be enough for most, and at much lower cost than the present system where those with £1M pension funds are still in a very risk position. But that ain't-goin-happen, as ever the Parliamentary system wont vote for its replacement, and the 650 kings/queens are in it for themselves, just managing crises of their own making that more often proves to be very costly for others.

The solutions are there, but there's no inclination by those that set the rules to change them. They like the career parliamentary £80K/year base wage job that with benefits can have their family members equally earning as much, and the golden inflation linked large pensions that provides.

Sunak showed his real colours when they opted to export Covid into care homes, BJ thought that great and started a clap-for-NHS weekly round, whilst staff and clients in care homes suffered immensely, often didn't even have access to PPE, and only after complaints was the clap-for-NHS extended to include a pin-badge for social care workers. Herd immunity was a very fortunate roll of the dice in Covids case, herd immunity was unknown when that dice was rolled and could have been 10% or less of the population surviving. 'Fortunately' that gameplay only cost the UK 160,000 lives that I suspect BJ/Sunak consider to be very trivial/good, only a relatively small nominal GDP hit compared to what it might have been had the dice not rolled a six.

[Dod101]

[
For centuries prior to WW1 when gold/money were convertible, inflation broadly averaged 0%, 4% real bond (lending to the treasury) yields were like a stable/safe real rate of return, that one could plan around in a reliable manner. Since WW1 and bonds broadly just pace rising inflation (currency devaluation). Greater variability/uncertainties and where investors had to switch over to holding some stocks (speculate) for highly variable real rates of return - requiring much more needing to be accumulated for safety. We're now in a era where that is funding golden pensions for the public sector unmatched in the private sector and where public spending is ever increasingly straining the private sector being able to match the demand.

Nominal Gilts nowadays might when interest rates were 4% see a £100 face value Gilt being sold by the treasury allocated a 4% yield, such that they sell for £100. £100 cost, £4 interest ... but that gets deflated over time by inflation. 20 years later still paying £4 interest and the investor gets back their £100 maturity capital, but where 2%/year inflation has eroded both that capital value and interest down by 33% each. Lending to someone who can set interest rates, induce inflation (print/spend money to its benefit, devaluing all other notes in circulation), change the rules, change taxation rates, combined with the natural deflation is a big push-away. However pension funds are legally obligated to buy them (paramount to a private sector pension fund raid). Yet still the public sector demands even more. In all such extreme past cases the result was a flight of capital and I wouldn't be surprised to see such a flight in the next decade or two.

Truss seems to think that going Japanese, have the Bank of England buy up all of the Gilts that the Treasury issues is the way-to-go (where as of present the BoE returns all interest payments against those Gilts back to the Treasury). That's more of a can-kick however, facilitating the ever rising Public sector demands, further squashing down of the private sector. The UK's parliamentary system is a massive cost/liability/failure. Increasingly a joke, but far from a funny one.

A common (public and private sector) £10K/year state pension, £250K individual private pension funds (perhaps funded by downsizing house/home value), 25x yearly spending (10K/year that bolsters total pension to a disposable £20K/year), safe/stable 4% real (30 year SWR) treasury yields - would commonly be enough for most, and at much lower cost than the present system where those with £1M pension funds are still in a very risk position. But that ain't-goin-happen, as ever the Parliamentary system wont vote for its replacement, and the 650 kings/queens are in it for themselves, just managing crises of their own making that more often proves to be very costly for others.

The solutions are there, but there's no inclination by those that set the rules to change them. They like the career parliamentary £80K/year base wage job that with benefits can have their family members equally earning as much, and the golden inflation linked large pensions that provides.

Sunak showed his real colours when they opted to export Covid into care homes, BJ thought that great and started a clap-for-NHS weekly round, whilst staff and clients in care homes suffered immensely, often didn't even have access to PPE, and only after complaints was the clap-for-NHS extended to include a pin-badge for social care workers. Herd immunity was a very fortunate roll of the dice in Covids case, herd immunity was unknown when that dice was rolled and could have been 10% or less of the population surviving. 'Fortunately' that gameplay only cost the UK 160,000 lives that I suspect BJ/Sunak consider to be very trivial/good, only a relatively small nominal GDP hit compared to what it might have been had the dice not rolled a six.

It is a shame that some of those highly opinionated people who post of 'the solution' on these Boards were not in Government. Covid, exchange rates, GDP and so on would be solved in a week or two.

Dod

[1nvest]

It is a shame that some of those highly opinionated people who post of 'the solution' on these Boards were not in Government. Covid, exchange rates, GDP and so on would be solved in a week or two.

Dod

You're of course perfectly entitled to opine that UK preparedness for a virological situation of 'wing it' along with economic policies of yo-yo (Lab/Con) to be good/appropriate, the realities of those however are a steady progressive relative decline as there are better alternatives. Parliamentary waste/incompetence could be resolved in a week or two, but is a paradox in that Parliament wont vote for that, as that involves removal of the dead wood that Parliament is. So the UK will continue to chug along the un-demographic induced decline slope, where just 20% of the population voted for the government in power, or just a small fractional percentage of the population get to decide who the next PM should be.

[Dod101]

It is a shame that some of those highly opinionated people who post of 'the solution' on these Boards were not in Government. Covid, exchange rates, GDP and so on would be solved in a week or two.

Dod

You're of course perfectly entitled to opine that UK preparedness for a virological situation of 'wing it' along with economic policies of yo-yo (Lab/Con) to be good/appropriate, the realities of those however are a steady progressive relative decline as there are better alternatives. Parliamentary waste/incompetence could be resolved in a week or two, but is a paradox in that Parliament wont vote for that, as that involves removal of the dead wood that Parliament is. So the UK will continue to chug along the un-demographic induced decline slope, where just 20% of the population voted for the government in power, or just a small fractional percentage of the population get to decide who the next PM should be.

The democratic right of the people indirectly decided how a Prime Minister would be chosen. They decided that they wanted a Conservative Government and I do not think that party has ever made a secret of how a replacement PM would be chosen if required. That is all that is happening now. As has been said many times, the people never vote for a Prime Minister. That appointment with any party is for that party to decide. End of.

Dod

[1nvest]

It is a shame that some of those highly opinionated people who post of 'the solution' on these Boards were not in Government. Covid, exchange rates, GDP and so on would be solved in a week or two.

Dod

You're of course perfectly entitled to opine that UK preparedness for a virological situation of 'wing it' along with economic policies of yo-yo (Lab/Con) to be good/appropriate, the realities of those however are a steady progressive relative decline as there are better alternatives. Parliamentary waste/incompetence could be resolved in a week or two, but is a paradox in that Parliament wont vote for that, as that involves removal of the dead wood that Parliament is. So the UK will continue to chug along the un-demographic induced decline slope, where just 20% of the population voted for the government in power, or just a small fractional percentage of the population get to decide who the next PM should be.

The democratic right of the people indirectly decided how a Prime Minister would be chosen. They decided that they wanted a Conservative Government and I do not think that party has ever made a secret of how a replacement PM would be chosen if required. That is all that is happening now. As has been said many times, the people never vote for a Prime Minister. That appointment with any party is for that party to decide. End of.

Dod

Generally around only 20% of the population voted for the government in office. A minority. 80% didn't vote for it. But that works for some. End of.