Ramblings

Listend to Radio 4 today. First irritation was some teacher muppet claimg that school discipline amounted to child abuse.

Then a program about Somali pirates. Navy catches them gives them a medical check up and drops them off in Somalia. WTF.  It's not as if piracy is difficult to beat. Catch them , make them walk the plank and drop them off in the Indian Ocean. Or rope and drop them from a height. It's called summary justice. It's been done before very successfully.


Currently arguing over on Facebook in support of the Rally Against Debt. It's clarified my thoughts and today I joined the Libertarian Party. That's my beliefs so I've stopped worrying and paid up.

Debt - I'll share my thoughts with a smaller audience.

I posted this on Facebook this morning and thought I'd preserve it.

So back to debt.

Is the rate of rise or level of debt reasonable? Would stablizing or reducing debt be good or is rising debt better for British society? Is the national debt and deficit a danger to the UK in the light of the collapse of Greece, Ireland and Portugal? And what is the level of national debt?

Most of the comments here have been arguing based on the published figure of just under a trillion pounds. However, like the banks, government (all colours) have been keen on off balance sheet acccounting. It does not include PFI liabilities, pension liabilities, bank bailout, quantitive easing etc. These will all have to be paid for by current and future taxpayers.

Personally I find the level of government liabilities abhorant. The longer term issue is how many taxpayers will there be to pay for these liabilities. It seems to me that we are in the middle of a Ponzi scheme and explains the need for mass immigration and rise in the pension age, without more taxpayers than there would otherwise be then the national finances will crash.

So I conclude that those claiming that the level of debt is not a problem are missing a point. The argument is that the debt has been higher in the past and the nation was able to reduce it in better times. But this reduction occurred during a period of massive population growth with the consequent growth in the economy and tax base. The population is reducing in much of Europe and I think it is unreasonable to plan for a doubling in UK tax payers to handle the future debt.

NHS? Scrap it now!

A person at work was given an urgent appointment last Friday for some tests on Monday. Not a bad response.

They were promised a prescription for a medication that needs to be taken before the tests. OK so far. They rang the hospital today to chase the prescription and were told it was posted second class. Second class? WTF?  Apparantly everything has to be posted second class to save money.

So what happens if the prescription doesn't arrive in the morning?  Why they have to arrive earlier on Monday for another procedure to prepare them for the tests.

So the NHS has saved 10 pence. However it looks likely that the saving will cost many pounds in extra NHS treatment costs. And this makes sense to who???

UPDATE: The prescription arrived today. So that's OK then?  No. It can only be dispensed by the hospital :( A 35 mile round trip for said person who drove past the hospital this morning. Frustrating or what?

How much?

For good reason my wife refuses to allow me to go supermarket shopping with her.

As my good lady was away over the weekend I had to nip out for half a pound of butter. I found the butter and almost fell over £1.60 for half a pound? Last time I looked I thought 60p was too much.

It's little things like this that bring home the impact of inflation, 2% one year and 4% the next and it all adds up.

Inflation is a funny thing it affects different markets in different ways. My business is electronics which is a market where costs tend downwards over the years, at least in real terms. Meeting retail inflation is quite a shock.

What is money?

The rally against debt

http://www.facebook.com/event.php?eid=204678962884261

has me thinking about the meaning of money and debt.

What is money? Money is a medium of exchange to allow exchanges that were difficult or impossible by barter. Money in itself has no value, it only has value based on the widespread acceptance of money as representing a certain amount of goods or services.

As well as allowing a much improved exchange of goods and services over bartering money also allows transactions to be arranged across time. For example I may have a surplus of wheat from this years harvest. I can sell this for money and retain the value of the wheat surplus until I want to buy something else. Thus I can maintain the value of a perishable commodity until such time as I actually need that value.

Instead of keeping the money under the bed I can lend that value to someone else who needs the value now and be rewarded with interest payments to cover the risk of not being repaid.

Businesses make money by arbitrage. That is they make or buy a product and trade it with other people who feel the product is worth more to them than to the business. This is explained elegantly in The Rational Optimist by Matt Ridley.

For most people money is paid in exchange for their labour.  For working 40 hours a week you are paid £x.  Of course x varies, like any other commodity, depending on your value to your employer and the number of other suitable people available for the job.  The money you earn allows you to swap your skills as a baker or doctor for other peoples products (goods) or their skills (services).

Note who employs you, private or public sector, is, in an ideal world, actually irrelevant.

To digress, unfortunately many people are unemployable because the value of their work to an employer is less than the minimum wage, currently £5.93 per hour. They are therefore priced out of the market.

We now come to the necessary? evil of taxation.  Simply put you work 40 hours a week but in fact with income tax and NI about 12 hours is deemed to be for the government not for your benefit.  It is worse for higher rate tax payers where the government arbitrarily decide that you work 20 or even 24 hours a week for them and not for yourself. It is even worse than that in practice and if you work more hours you must also do an increased number of them for the Government.

Now to debt. Debt is simply the sum of borrowed value. You may borrow value when you are young to buy a house and repay it over your working life as you receive value for your work.  The government also borrows money and similarly repays from their claimed share of your future work.

In principle, it seems to me, that money and debt is that simple. So what are the problems?  I see two.

Firstly the amount of my work that the Government claims belongs to them. Personally I feel that the services the Government provides are not of adequate value for the amount of my work time they demand I pay for said services.

Secondly the debt the Government has, is and plans to incur can not be repaid by the work of those who supposedly benefit from the services directly or indirectly. Services and "investment" is happening now which will never benefit the future generations who will inevitably be paying the interest on the debt from their working hours. I very much doubt if any government will actually repay the debt itself.

If voting changed anything...

 The debate over the alternative vote, and more generally PR, seems to me to be an attempt by the unelectable to get a toe into the public trough.

Firstly AV is smoke and mirrors. Let's take 3 candidates, Jill get 38% of the vote, John 33% and Jade 29%.  Jade's votes are reallocated to give either Jill or John over 50% of the vote which is meant to make them more representative.  Of course it doesn't because they only got 38% and 33% of the vote and the rest is a fudge.

If AV or PR does anything it leads to more coalition government where you vote for a set of policies which are then junked in a coalition agreement, if one can be reached.  Belgium has been trying to form a government for nearly 300 days. Or Germany where the Free Democrats, the third party in elections, have been part of the Government for more time than either of the larger parties.

However that is not to say we do not need a reform of the political system. The reform we need will give us, the public, control of politics. I favour direct democracy where we have real power over government.  For example x thousand voters should be able to put a referendum question on the ballot paper. California is a good example of public initiatives and I have favoured this since proposition 13 in the mid 70s.

California also allows recall elections where the public can remove an elected politician from office, Arnie being a recent beneficiary of this.

In an ideal world we should try and move to a Swiss style democracy where the electorate have much more control of the Government.

Wikipedia explains this well:


By calling a federal referendum a group of citizens may challenge a law that has been passed by Parliament, if they can gather 50,000 signatures against the law within 100 days. If so, a national vote is scheduled where voters decide by a simple majority whether to accept or reject the law. Eight cantons together can also call a referendum on a federal law.


Similarly, the federal constitutional initiative allows citizens to put a constitutional amendment to a national vote, if they can get 100,000 voters to sign the proposed amendment within 18 months. Parliament can supplement the proposed amendment with a counter-proposal, with voters having to indicate a preference on the ballot in case both proposals are accepted. 

http://en.wikipedia.org/wiki/Switzerland#Direct_democracy


However the world is not ideal. Would direct democracy work in Britain where vast swathes of voters in the northern wastelands survive on the public teat? Or where ethnic ghettos operate corrupt politics more akin to third world countries?

HMRC, you are joking aren't you?

Received in the post this morning a letter from HMRC chasing money:

"We are sure you appreciate the link between companies paying their taxes promptly and the allocation of money to public services from which we all benefit."

Appreciate?

ap·pre·ci·ate

verb, -at·ed, -at·ing.

1.

to be grateful or thankful for: They appreciated histhoughtfulness.

–verb (used with object)

2.

to value or regard highly; place a high estimate on: toappreciate good wine.

3.

to be fully conscious of; be aware of; detect: to appreciatethe dangers of a situation.

Am I grateful? Er, No.

Do I value or regard highly? That's another no.

Am I fully conscious of? I'm afraid so. It is because I am aware that I object.

I wonder which public services they think I think are a benefit?  There are not many.

And how many are value for money? Even fewer.

Let's be clear I agree with some services being paid for out of taxes. I have a big problem with the state providing the services.  (Almost) all services should be provided by anyone other than the state.

For example I agree with state funded education. I object to schools being run by the state. The state should give an education voucher for each child, value dependant on age, to be cashed in at the school of OUR choice.