UK's conservative government doing everything it can to crash the UK's and the world's economy (2 Viewers)

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    coldseat

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    Holy hell Batman! Talk about screwing your own country over. Same thing would happen here if Republicans held both the congress and the presidency.

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    LondonCNN Business —
    The UK government’s decision to implement the biggest tax cuts in 50 years while borrowing tens of billions of dollars to subsidize soaring energy costs this winter is a massive gamble that’s sent shockwaves through financial markets.

    Since Friday, when finance minister Kwasi Kwarteng formally announced the plans, the British pound has plunged 5% against the US dollar, bringing its total losses so far this year to an eye-popping 21%. The euro, for comparison, is down about 15% against the dollar during the same period.

    The turmoil doesn’t end there. Investors have raced to dump UK government bonds as they worry about the extra £72 billion ($77 billion) in borrowing due before April. The yield on 5-year debt, which moves opposite prices, has jumped from about 3.6% to more than 4.4% over the past two trading sessions — an astronomical jump in a corner of the financial universe that typically logs movements in tiny fractions of a percent.
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    Meanwhile, having left the E.U., and having never been a member of the euro zone, Britain is in the opposite position. The new Conservative government led by Prime Minister Liz Truss faces almost no constraints. She was expected to be bold. She is turning out to be bonkers.

    The first sign came with her response to soaring natural gas prices. To protect low-income Britons from a choice between heating and eating, Truss had to deliver subsidies. But she opted for a monstrously expensive remedy, trampling her party’s reputation for budgetary prudence. The Truss subsidies are due to last for fully two years. They are especially generous to the rich. By the U.K. government’s own estimates, they will cost more than $60 billion in the next six months, a whopping 4.7 percent of GDP over the period. Because of their design, they will end up costing even more if natural gas prices experience another upward hit.

    But that was just the rehearsal. On Friday, in a Reaganesque bid for higher growth, the Truss team announced a ruinous package of unfunded tax cuts. It did this despite the obvious danger that the stimulus would add to inflation, which is at 9.9 percent and expected to rise. It did this despite the impact on Britain’s national debt, which is forecast to hit 90 percent of gross domestic product in 2024-2025, up from 75 percent before the pandemic. And it did this without allowing the government’s Office of Budget Responsibility to model the impact of its giveaways.

    Not surprisingly, financial markets panicked. Interest rates on two-year government bonds hit 4 percent, up from 0.4 percent a year ago, adding to the government’s prospective debt burden. The pound fell 3.4 percent against the dollar by day-end Friday, its steepest drop in two years. Over the weekend, finance minister Kwasi Kwarteng signaled that he might cut taxes some more. The pound promptly fell a further 4.7 percent when Asian markets opened Monday, sinking briefly to its lowest level since the system of floating currencies began in 1971. The pound then rallied on the hope that the Bank of England would step in to stabilize it. When the bank said it would not hold an emergency meeting, the currency headed down again.

    Why did the Bank of England disappoint the traders? It has only a modest stockpile of foreign currency reserves, so it cannot prop up the pound by stepping in to buy a ton of it. Its only option is an emergency interest rate hike, on top of the 0.5 percent it delivered last week. This would help the pound, and by dampening import prices it would mildly restrain inflation. But higher interest rates would drive the economy into a ditch and raise the cost of servicing the national debt. Given the Truss team’s reckless bent, it might lash out against the central bank and undermine its independence.

    When the Brexit referendum damaged Britain’s access to its key export market, an economic penalty was inevitable. But this is the first time that being in the currency union has looked more attractive than being outside it. The European Central Bank is in a far stronger crisis-fighting position than the Bank of England.

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    I wonder when voters in this country and every other country learn that conservatives do no know the special sauce that makes the economy better. There policies are disasters when applied without constraints, as proven by the UK prime minister this past week. So bad she had to do a complete 180. The Republicans economic plans (or lack there of) for this country are no better, yet many people in this country will vote for them because of "the economy".

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    Birmingham, EnglandCNN —
    Despite only having been in the job a month, British Prime Minister Liz Truss must make the speech of her life on Wednesday if she’s to get her nascent premiership back on track.

    Her government was forced to make a screeching U-turn on Monday over a proposal to cut the top rate of UK income tax, a move seen as insensitively helping the rich at the same time as Britons are living through the worst cost-of-living crisis for decades.

    It was clear on Sunday night, even as Truss addressed a private reception at her Conservative Party’s annual conference in Birmingham, that the tax cut simply didn’t have enough support from her own Members of Parliament. That meant her finance minister’s mini-budget, which also included measures to help people pay energy bills, was very unlikely to survive a vote in the House of Commons.

    Dissent is rarely on display so soon after a new leader takes over a political party. But at this private event on Sunday night, organized by the influential website ConservativeHome, CNN saw several prominent Conservatives – including cabinet ministers – gossiping and rolling their eyes as Truss spoke to a packed room, defending the tax cut that was just hours away from being axed.
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    Reading more about this in light of Truss resigning;

    They announced the biggest tax cuts for 50 years, lifted the cap on bankers’ bonuses, and abolished the top rate of income tax. At the same time, they made the incredibly expensive promise to guarantee the price of household energy costs for two years.

    The market response to Truss and Kwarteng’s economic plans was immediate and cataclysmic. The pound dropped to its lowest ever level against the dollar and government bond yields shot up by historic rises, creating a crisis in the mortgage market not seen since the financial crisis of 2008. Within three days, the turmoil had become so serious that the Bank of England was forced to take emergency action to stop what the central bank’s deputy governor called a “full-scale liquidation event” of pension funds triggered by Truss’ policies.
     
    The conservatives in this county would do the same thing here. But instead of guaranteeing household price of energy cost for 2 years, they will just give more government money to the oil and gas industry via subsidies.
     
    Last edited:
    I wonder when voters in this country and every other country learn that conservatives do no know the special sauce that makes the economy better. There policies are disasters when applied without constraints, as proven by the UK prime minister this past week. So bad she had to do a complete 180. The Republicans economic plans (or lack there of) for this country are no better, yet many people in this country will vote for them because of "the economy".

    =================
    Birmingham, EnglandCNN —
    Despite only having been in the job a month, British Prime Minister Liz Truss must make the speech of her life on Wednesday if she’s to get her nascent premiership back on track.

    Her government was forced to make a screeching U-turn on Monday over a proposal to cut the top rate of UK income tax, a move seen as insensitively helping the rich at the same time as Britons are living through the worst cost-of-living crisis for decades.

    It was clear on Sunday night, even as Truss addressed a private reception at her Conservative Party’s annual conference in Birmingham, that the tax cut simply didn’t have enough support from her own Members of Parliament. That meant her finance minister’s mini-budget, which also included measures to help people pay energy bills, was very unlikely to survive a vote in the House of Commons.

    Dissent is rarely on display so soon after a new leader takes over a political party. But at this private event on Sunday night, organized by the influential website ConservativeHome, CNN saw several prominent Conservatives – including cabinet ministers – gossiping and rolling their eyes as Truss spoke to a packed room, defending the tax cut that was just hours away from being axed.
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    If Trump runs again I'll be voting for him largely because of the economy.
     
    If Trump runs again I'll be voting for him largely because of the economy.
    So lying about an election result and stirring up a mob that attacked Congress aren’t disqualifying? Or stealing classified documents and again lying about them? Or overcharging the Secret Service to stay on his properties?

    His economy wasn’t really that good. I don’t think he did anything for it honestly.
     
    Pick up where he left off, but without a pandemic gumming things up.


    That doesn't answer my question. Where he left off wasn't and good economic situation and I wasn't asking you for campaign propaganda.

    Let me be more specific:

    1.) How would he curb inflation?

    2.) How would he prevent the much talked about future recession?

    3.) How would he keep the unemployment rate low and at the same time address worker shortages given his hatred of immigration?
     
    Do you understand economics and the mechanisms that drive it, or just what you are spoon fed?
    It appears you don’t understand either.

    and, of course, neither does Trump.
     
    That doesn't answer my question. Where he left off wasn't and good economic situation and I wasn't asking you for campaign propaganda.

    Let me be more specific:

    1.) How would he curb inflation?

    2.) How would he prevent the much talked about future recession?

    3.) How would he keep the unemployment rate low and at the same time address worker shortages given his hatred of immigration?
    You asked what Trump will do with the economy and I gave you a list of his accomplishments, some of which helped boost the economy. The understanding is that he can do it better than any democrat, hence, he is the man for the job.

    Now, explain what your man is doing for the economy right now, as that is the real question.
     
    So lying about an election result and stirring up a mob that attacked Congress aren’t disqualifying?
    Trump is innocent, so none of that is relevant.
    Or stealing classified documents and again lying about them? Or overcharging the Secret Service to stay on his properties?
    Again, not guilty. All declassified.
    His economy wasn’t really that good. I don’t think he did anything for it honestly.
    It was better than Biden's.

    So tell me, what is Biden doing to mop this mess up?
     
    Trump is innocent, so none of that is relevant.

    Again, not guilty. All declassified.

    It was better than Biden's.

    So tell me, what is Biden doing to mop this mess up?
    Your first statement is your opinion, thus meaningless.

    Your second statement is a flat out lie.

    Your third statement is agitprop. Obama started the improvement. Trump did nothing to impede the improvement and, more importantly, nothing to increase the improvement. He lacks the brains.

    You have no idea what to do. Neither does Trump. If I were Biden I would impose a windfall profit tax for starters.
     
    Your first statement is your opinion, thus meaningless.

    Your second statement is a flat out lie.
    Produce a guilty verdict and prison sentencing and I'll concede the point.
    Your third statement is agitprop. Obama started the improvement. Trump did nothing to impede the improvement and, more importantly, nothing to increase the improvement. He lacks the brains.
    Obama was a race hustler and little more than that. I'd put 8 years of Trump up against 8 years of Obama, anytime, and that discussion will be possible in 2028.
    You have no idea what to do. Neither does Trump. If I were Biden I would impose a windfall profit tax for starters.
    Sorry, you empower the Private Sector and let them dig us out. We can't afford to let a bunch of failed business government people steer us out of this mess.
     
    Produce a guilty verdict and prison sentencing and I'll concede the point.

    Obama was a race hustler and little more than that. I'd put 8 years of Trump up against 8 years of Obama, anytime, and that discussion will be possible in 2028.

    Sorry, you empower the Private Sector and let them dig us out. We can't afford to let a bunch of failed business government people steer us out of this mess.
    No point to concede. There is a process to declassify. Trump did not engage in the process. He proceeded to slow-walk returning documents. It is true that he hasn’t been charged…yet.

    A racer hustler…how wonderful. And one can deduce from said statement that you are racist but let’s mush on. Obama took office during the largest collapse since the Great Depression. It is true that he didn’t do enough. But then Republicans, known for being idiots and blocking everything they could under the order of Yertle the Turtle, didn’t have a clue what to do while trying to thwart Obama.

    The purpose of the private sector is to do precisely what they are doing which is maximizing profit for themselves and socializing risk. As for failed business people? Irony is lost on you.
     
    That doesn't answer my question. Where he left off wasn't and good economic situation and I wasn't asking you for campaign propaganda.

    Let me be more specific:

    1.) How would he curb inflation?

    2.) How would he prevent the much talked about future recession?

    3.) How would he keep the unemployment rate low and at the same time address worker shortages given his hatred of immigration?


    He'll dip into the ol' playbook of giving massive tax cuts to the ultra wealthy and multi-billion-dollar companies! (not saying that will work, because it never does)
     

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