Happy Days Are Here Again In … La-La Land

Britain, Debt, Economy, Government, Inflation

Across the pond, U.K. Chancellor of the Exchequer George Osborne is singing from the Bush and Obama hymn sheet. A neo- Keynesian naturally, Osborne is intent on excessive spending as a model of economic growth. What better way than a housing bubble to bring about that brief burst of spending before the bust?

Tightening credit conditions and foreclosures signal to this man (counter-intuitively, of course) that it is time for the debt-laden borrower to borrow more money he can’t repay; that it is time for those who do not spend money they don’t have, to subsidize those who do.

It’s all good, promises Bloomberg.com:

Osborne yesterday pledged 3.5 billion pounds ($5.3 billion) to help buyers of new homes with loans of as much as 20 percent of the property’s value, broadening an existing program beyond first-time purchasers. He also announced a plan to guarantee as much as 130 billion pounds of new mortgages to fuel demand from purchasers with limited cash for a deposit.

At least the chancellor delivered a 2013 budget. At a glance, here are “the key points of Chancellor George Osborne’s Budget,” via BBC News (a doff of the hat to our friend in the UK):

FUEL, ALCOHOL AND CIGARETTES
September’s 3p fuel duty rise scrapped
April’s 3p rise in beer duty scrapped. Instead, beer duty to be cut by 1p
Annual inflation +2% rise in beer duty to be ended but “duty escalator” to remain in place for wine, cider and spirits
Cigarette duties unchanged – continuing to rise by inflation +5%

INCOME TAX
Limit at which people start paying tax to be raised to £10,000 in 2014 – a year earlier than planned

HOUSING
Shared equity schemes extended, with interest-free loans for homebuyers up to 20% of value of new-build properties
Bank guarantees to underpin £130bn of new mortgage lending for three years from 2014

STATE OF THE ECONOMY
Growth forecast for 2013 halved to 0.6% from 1.2% in December
Office for Budget Responsibility watchdog predicts UK will escape recession this year
Growth predicted to be 1.8% in 2014; 2.3% in 2015; 2.7% in 2016 and 2.8% in 2017.

BORROWING
Borrowing of £114bn this year, up from previous £108bn forecast
Borrowing set to fall to £108bn, £97bn and £87bn, £61bn and £42bn in subsequent years
Borrowing as share of GDP to fall from 7.4% in 2013-14 to 5% in 2015-16
Debt as a share of GDP to increase from 75.9% in 2012-13 to 85.6% in 2016-17

SPENDING AND PAY
Most government departments to see budgets cut by 1% in each of next two years
Schools and NHS will be protected
£11.5bn in further cuts earmarked in 2015-16 Spending Review, up from £10bn
1% cap on public sector pay extended to 2015-16 and limits on “progression” pay rises in the sector
Military to be exempt from “progression” pay limits.
Proceeds of Libor banking fines to be given to good military causes, including Combat Stress charity

JOBS
600,000 more jobs expected this year than at same time last year
Claimant count to fall by 60,000

TRANSPORT AND INFRASTRUCTURE
An extra £15bn for new road, rail and construction projects by 2020, starting with £3bn in 2015-16

HELP FOR BUSINESS
Corporation tax to be cut by 1% to 20% in 2015
New employment allowance to cut National Insurance bills cut by £2,000 for every firm
450,000 small firms will pay no employer National Insurance
Government procurement from small firms to rise fivefold
Tax relief for investment in social enterprises
Stamp duty axed on shares traded on growth markets like Aim.
Tax avoidance and evasion measures, including agreements with Isle of Man, Guernsey and Jersey, aimed at recouping £3bn in unpaid taxes

ENERGY AND THE ENVIRONMENT
Tax incentives for ultra low-emission cars
Pottery industry in Midlands to be exempt from climate change levy
Tax allowances for investment in shale gas

INFLATION
2% Bank of England inflation target to stay in place
Bank remit to be changed to focus on growth as well as inflation

PENSIONERS
Single flat-rate pension of £144 a week brought forward a year to 2016
Cap on social care costs confirmed

FAMILIES
20% tax relief on childcare up to £6,000 per child from 2015
£5,000 payments for those who lost money on Equitable Life policies bought before 1992. Extra money for those on low incomes

UPDATED: Thankful For BBC World News (Bang-Up Job On Same-Sex Marriage & More)

Bush, Family, Gender, Journalism, libertarianism, Media, Political Philosophy

Federalism, the right of individual states to decide, a case that should not have been brought before the Supreme Court of the United States for adjudication—these points of political philosophy should inform the American media’s reports on the case currently before the SCOTUS. They don’t! For such fleshed-out and nuanced reporting on California’s ban on same-sex nuptials, watch BBC World News.

BBC News’ Washington correspondent Jonny Dymond does a bang up job of not only answering every What, Where, When, Why and How journalists are obliged to address in a lede—but of providing a substantial level of abstraction and analysis, after discharging his duties as a correspondent.

All this without a hint of opinion. From his American counterparts expect the furrowed brow, the tsk-tsk, the clucking, the pouting and the noggin nodding—all to convey that the idiot anchor is on the side of the angels at all times, on all issues.

That’s when America’s news men and women aren’t openly opining.

I’m thankful for the much-maligned broadcaster. In general, BBC World News is a refuge from the anti-intellectualism and plain piss-poor news reportage you find on CNN, Fox News, Fox Business, MSNBC, and most other American cable and news networks.

UPDATE: Ideally, government should divorce itself from the nuptial business, heterosexual and homosexual. Ideally, religious institutions ought to act as the ministers of marriage. If marriage were thus privatized, conservatives would have to accept that some liberal churches and synagogues (the mullahs would resist) would wed homosexuals.

GOP Beating The Tom-Tom For Tribalism

Feminism, Justice, Law, Multiculturalism, Politics, Republicans

The Republican National Committee’s makeover manifesto reminds me of the questions posed to butcher Jodi Arias by her jurors: wordy and worthless.

The “The full 100-page Growth and Opportunity Project report from the RNC” has 219 prescriptions, many of these beating the tom-tom for party directed tribalism.

From the Table of contents:

Growth & Opportunity Project

Table of contents
1

Introduction

Messaging
1. Some People Say, “Republicans Don’t Care”
S
2. America Looks Different
3. The Way Forward

Demographic Partners
1. Growth and Opportunity Inclusion Council
A
2. Hispanics
3. Asian and Pacific Islander Americans
A
4. African Americans
5. Women
6. Youth
…

TECHNOLOGY AND DATA

ASIAN AMERICANS

WOMEN

VOTE BY MAIL/EARLY VOTING/ABSENTEE VOTING

AFRICAN AMERICANS

YOUNG VOTERS

HISPANICS

VETERANS

[SNIP]

Blah, blah, blah.
More of this banality here.

In case you wondered, jurors asked Miss Jodi some 200 voyeuristic questions. Shades of the deliberations in the Casey Anthony case. The clever quorum on Casey’s case decided that, “If it wasn’t uploaded on YouTube you must acquit.”

US Already Inflicts ‘Deposit Taxes In Disguise’

Business, Debt, Democracy, Economy, Federal Reserve Bank, Inflation

“Savers Pay for Spenders,” our March 19 BAB post on Cyprus, asked:

WHY is state-sanctioned theft from Cypriot savers any different to your paycheck being docked for statutory payroll tax deductions?
WHY is state-sanctioned theft from Cypriot savers any different in principle to the statutory theft called the income tax; and, in particular, from the progressive income tax, where the rich (“savers”) are penalized for the sins of the rest?
As to taxes on assets: Property taxes, taxes on investments—why are these seizures of private property any different in principle to the lunge on Cypriot savings accounts the bankers and bureaucrats of Europe have made?
You’d think the US doesn’t tax assets. It does. And how are the taxes above different in principle from a bank deposit levy?

Today comes the news, (via Forbes), that Cyprus and its puppet masters have agreed that, “the Popular Bank of Cyprus (Laiki Bank) will wind down” [presumably this is journo babble for “close”].

Laiki Bank deposits above 100,000 euros—which aren’t protected by EU law—will be frozen and used to pay for the deal. The frozen accounts are expected to yield 4.2 billion euros ($5.5 billion), and account holders will see an estimated 30% to 40% haircut on assets. Far greater than the original 9.9% levy.

“Haircut” is yet more journo mumbo-jumbo. The correct word is “theft.” Large-scale robbery of private property.

Financier Peter Schiff completes the thought expressed in this post’s lede, above—and shared by every clear thinking libertarian. This is all a formality—a more in-your-face lunge for private property :

…isn’t inflation, which allows governments to pay off debt through the creation of new money that transfers purchasing power from savers to borrowers, just a deposit tax in disguise? (Read more about Japan’s plan to do just that). British citizens of all means have been living with such a three percent stealth tax for the past three years, and it is expected to stay that high for at least two more years. Yet a one-time tax of 6.75% in Cyprus is seen as the ultimate act of betrayal?
Many are lamenting that Cyprus’ membership in the EU prevents it from devaluing its own currency to get out of the jam. How would such a course be morally superior? Taking actual losses on deposits is no different than taking losses through devaluation and inflation. Both result in the loss of purchasing power. Asking for a depositor haircut at least deals with the problem honestly and immediately. Although it’s not quite as honest, devaluation can also be effective.