With hindsight, maybe not, but with the information they had it is difficult to argue that- they've generally been slightly more conservative than the market predicted.
I doubt it - unless you think the independent members of the rate-setting board are government cronies (which I don't think there is any obkective evidence for).
Thom
Duty on "Road Fuel" is 50p (give or take a few 1/10th of a penny).
The nonsense here is that:
1) We pay VAT on fuel. 50p of the price you are paying is "road fuel duty (tax)", and you're paying 17.5% (yes, there is no lower 5% rate for "road fuel") on that. So, essentially you are paying tax on tax. Lovely stuff. 2) The tax is on 'road fuel' not petrol. If you could make a car which ran on tap water, you'd have to pay 50p of tax per litre of water you used in that vehicle. That's why they go after the guys who use chip-oil in their cars - they have not paid the 50p/l tax on it to use it in a road car.So, if fuel was free, you'd only have to pay 50p tax, and vat on that which comes to 58.75p
Quite honestly, the government should just have a flat tax on fuel and scrap the VAT. VAT on fuel means that when the international oil price goes up, the fuel price goes up more than it should - i'm sure Gordon Brown laughs all the way to the bank.
Aris
If he decided then to charge a flat rate of 58.5 p tax and scrap the VAT, would you stop whingeing?
I don't think Gordon spends a great deal of time laughing frankly. He's not in it for the profit. Would you prefer to see less public spending or more tax elsewhere? Give us your formula for a happy economy.
sorry!! ..58.75p
You're a darn good writer on economics - now I know where David Smith is moonlighting.
I do like David Smith. I once emailed him to whinge about something he wrote in his Sunday Times column and he was kind enough to write a personal reply, which was polite, patient and informative.
Anyway, I was on the London tube yesterday and noticed the "become a property millionaire" adverts. The writing was ... er ... "on the wall". In about 1999 you could get dot.com tips from taxi drivers, so it was said, and that chap WNICR - John something? - wrote his "Diary of a Day Trader" column in the Sunday Times. Wonder what happened to him ...
Perhaps the only way out (as another poster suggested) will be for Gordon to crank up the old printing presses to give this nation's mortgage holders (who are are also this nation's voters, by incredible coincidence) some relief from their stream of future debts. In which case the pound is surely heading south, leading to an inflationary cycle once more.
Or maybe it's time to become a day trader once more ... anyone up for that?
Prediction: Gordon Brown will shut down the MPC before his first general election as Prime Minister.
K
I wonder if economics writers get much comment on their stuff. I've had replies from a few of 'em.
Heh. I like it.
And there were sharetrading shows on TV. We seem to have propety shows up the wazoo these days. If it doesn't stop soon, there won't be time left to show the Olympics.
Ah yes. Didn't he pack it in having lost nearly half his money? They also downsized house to get the cash to trade, with a plan to buying back in from his winnings. I think a better way to finish would have been to have his wife write the final column on "Day Trading - Should He Have Quit His Day Job?"
Everyone, clearly including Bernanke and Greenspan with their "Helicopter money" paper, seems to think that this is the ideal solution to a debt deflation. If it were though, it'd have been applied successfully before now. Fiat money has been around since at least John Law's bubble. The Japanese tried twice to stop deflation by printing money, without success.
On the other hand, the Argentinians tried it and managed to turn a deflationary economy into a destroyed economy. The thing about a debt-deflation is that during the "revulsion" of debt, people move away from debt and assets towards cash. If you deny them currency as a safe haven by undermining that, then they'll move to precious metals or some other hard currency analogue, effectively destroying the national currency and massively compounding the problem. One of the good things about deflation is that left to run, it's self-stabilising, although obviously at massively lower prices for assets and perhaps substantially lower prices for goods, services and even wages. Somewhere though, there's a stable equilibrium. With hyperinflation, which is the likely result of printing money, you don't have that guarantee, and you risk massive disruption of the economy.
I'd rather have a Japanese economy for 15 years than the Argentinian one.
Certainly I think they'll be scapegoated but I think Gordon Brown won't ever be Prime Minister. If the shit really hits the fan before spring, I think Michael Howard will be Prime Minister.
FoFP
In the UK it's pretty unlikely, the silver lining of high tax levels, the pump price doesn't vary all that much.
This is true. It's also true that the UK economy is *much* less dependent on oil (in terms of consumption per $ of GNP) that it used to be. However, the price of oil affects more than just the cost of motoring. Oil is used for heating, power generation, and as a feedstock for any number of industrial processes.
In the long run, there's an awful lot of oil out there - but in the short run, a terrorist attack or political turmoil in Saudi Arabia could make the oil price spike considerably.
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