The ONE trilleon pound drop! (28)

Sums it all up really. Well put.

There's actually a rationale behind that statement.

We live on a planet with finite resourses. We are currently comsuming those resourses at an unsustainable rate. Growth mearly exacerbates the problem. Historical references to a plague of locusts, leaving the land stripped. Could equally be applied to mankind.

Owner of The Croppery Dungeon and Breakfast. Organises The St Leonards munch.

I completely agree. However I don't think it can be done within a fractional reserve banking system from my (somewhat limited) understanding.

Japan is not stable, and so can't exist as a good reference point on "how to do it".

And all men kill the thing they love, By all let this be heard, Some do it with a bitter look, Some with a flattering word, The coward does it with a kiss, The brave man with a sword!

I haven't noticed any paticular problem with getting Japanese goods over here. They're economy has maintained a stability that is the envy of many, despite nature and last years tsunami. Yes they have a big debt, doesn't appear to have had that many dire consequencies for the last twenty years though.

Owner of The Croppery Dungeon and Breakfast. Organises The St Leonards munch.

The problem isn't actually the level of debt. It's the markets doubt of our ability to pay. This in turn is based on the structure of our economy. Our economy is fundamentally imbalanced. It's so imbalanced that we're ridiculously uncompetitive compared to other economies. This isn't because our lifestyles demand higher labour costs. This is the direct result of pursuing radical neoliberal economic policy over the last 30 odd years.

Simply put the neoliberal economic policy decisions saw a shift in power and control over critical monetary financial planning from a long term democratic collective based model, to a short term private capital model. This was the result of governments feeling powerless in the face of globalised capital movements. However, in an effort to appease and court globalised capital. We have seen a gradual restructuring of our society, economy, tax system and the resulting erosion in security of our very culture and individual lifestyles. This restructuring has resulted in our entire economy being organised to make capital investment the most powerful, unregulated, profitable and least taxed economic activity possible.

I have no issue with capital investment being rewarding. Investment is necessary in any economy. Taking successful risks should be rewarded. It's how innovation and progress occurs. Organisations and individuals should have the freedom necessary for this to happen. However, under neoliberal economic policy, this isn't what happens by and large with capital. This is primarily to do with one key difference between classical progressive economic philosophy and neoliberal economic philosophy: The very definition of a free market.

The definition of a free market in neoliberal terms, I'm sure you're all familiar with: A market free of government regulation and control. This is theoretically supposed to free individuals from bureaucracy and 'red tape' in order to spur progress and thus growth. I'm sure you've heard the rhetoric from the political right. It's also supposed to release the markets to reach a state of 'equilibrium'. This in theory delivers the most competitive price point in any market. Delivering the best outcomes for all. There is of course some truth in this viewpoint: Governments have the power to reduce efficiency and stifle innovation, and generally skew market outcomes. Often not in their own or our best interests. Every convincing argument has a kernel of truth.

Now, contrast this with the classical progressive definition: a free market is one free of unearned income. Ostensibly, an economy free of rentiers. Unearned income being income earned through interest and capital gains. Let's use an example to illustrate. Investor A buys up a common good, let's say they buy a 51% share in a gas company, o, let's say British gas. This company operates in a market where demand is essentially guaranteed and they can essentially create a price point that delivers the maximum profit at the least cost. They have few competitors to challenge their prices and extract gas from previously collectively owned land. This market is essentially free of risk. They are providing a common good at massive profit. The investor takes the share of profits which are taxed at 15%. This income is unearned. It's unearned as the gas company is profiting from a monopoly over a common good and a monopoly over infrastructure and a de facto monopoly within the market. They have essentially taxed the wider economy through an inflated market position, based on the very nature of the market they operate in. This is a massive drain on our wider economy and productive businesses within it. This is the very opposite of what capital investment should deliver within an economy: growth. Other examples of such private capital investment in public goods include transport, water, sewage, electricity, oil, healthcare assets, telecoms and land in general.

There is a reason that up until the 80's most of the common goods and services within society were state owned. They needed long term investment and development, plus they are markets by their nature that result in monopolies over common goods. When privatised and ran for the goal of profit, they result in a stifling toll booth effect on the wider economy. This stifles wider economic innovation, efficiency, productivity and thus competitiveness.

You may be forgiven for thinking that I'm advocating state ownership of these goods and services. I'm not. That in itself creates a whole host of other problems. I also don't advocate classical progressive economics in its extreme either. Some interest earned is of benefit to the wider economy and is needed as incentive for capital investment and economic growth.

What I'm advocating is to re-balance the economy away from a stifling rentier haven economy towards a dynamic, productive and internationally competitive economy.

To do this government should seek to return to long term economic financial planning. The markets by their nature invest in the least risk, highest short term reward sectors of our economy. Governments should seek through the tax system to make sure that unearned income is taxed at least as high as earned income, but even higher for markets that are based on common goods/services. This tax should be reinvested long term in our economy to boost infrastructure, research, and increase competitiveness of potentially productive areas.

Under neoliberal economic policy, the government makes no call about what's good for our economy and what's bad for our economy long term. Under neoliberal economics, profit is profit and therefore growth. However, I think a distinction should be made between earned and unearned income based on classical progressive economic philosophy and the tax and spending of government adjusted accordingly. After all, making money for the sake of making money isn't our ultimate goal here. Our goal is to raise the standard of living for everyone. That's not possible when you don't make a distinction and judgement between what's productive and adds value to our economy, and what has the opposite effect.

As it stands, the population as a whole is allowing certain sectors of our economy to reduce our living standards and essentially tax us to subsidise unearned income.

That's the largest travesty about how our economy is structured. The conservatives complaining about and reforming welfare are going after the wrong scroungers.

Let's televise and broadcast the raping of kings.

Their debt has grown year on year. If (ie when) someone stops lending to them they're fucked. Even if no one pulls the plug, their proportion of GDP paying the interest bill will eventually kill them. You can't call something that's in a state of flux like that 'stable'.

http://en.wikipedia.org/wiki/Government_debt

This supports what I was saying, you can't aim at a sustainable (ie zero growth) economy in a fractional reserve loan system - something by definition must break sooner or later, either credit facility, interest rates, or both.

And all men kill the thing they love, By all let this be heard, Some do it with a bitter look, Some with a flattering word, The coward does it with a kiss, The brave man with a sword!

But there is a dark secret,If you are on the back streets of Tokyo at night,you will see them.Former company men,too proud to take any hand out.They live in cardboard boxs like the homeless in the west end of london.This is the darkside of japan's economic failure.If we are not careful we could have something similar here but on a bigger scale.

http://empressm7.uboot.com/ http://www.socialkink.com/empressmartine Vampire, pro/lifestyle ts dom/switch.Ageplay mummy/aunty/AB,medical play,domestic,energy, outdoor specialist."Who you calling"@?!;:$£<&#931;#"!" "Did you just call me a "@€$££!?"!

Edited 26 Jan 12, 9:43 PM by Empress_Martine

got to find it first though

I think you should go away and do some reading about the Japanese Economy.

True. No part of trying to be like Japan is ever going to work for anybody who is not Japan. And it's not just because of the tentacle porn. Whole different culture when it comes to money, the state, corporations and atomic mutant dinosaurs.

The object of persecution is persecution. The object of torture is torture. The object of power is power.