Has Reeves sent the UK economy into a death spin?

Tuesday-Wednesday blog

Was Reeves the best Labour had?

Many people are probably being reduced to a state of despair that someone of Rachel ‘the economist’ Reeves’ modest-to-non-existent talents could have become our country’s Chancellor. But remember that Reeves’s predecessor as Shadow Chancellor was the even more/less (delete as appropriate) talented gargoyle-headed Annelise ‘Dobbin’ Dobbs

I suggest this points to a problem with today’s politicians. When most seem to be relatives of existing politicians, their close chums, local councillors or assorted party apparatchiks who have never had a proper job in their lives, it’s rather difficult to find appropriate candidates to fill the great offices of state. After all, what experience or special abilities did Mastermind flop ‘David ‘lamebrain’ Lammy have to mark him out as the most suitable person to be Foreign Secretary?

I rest my case.

Rachel’s Cycle of Economic Doom?

Before the election, Labour promised us they would have a ‘laser-like focus on economic growth’. So how is that going?

That brings us to Rachel Reeves’s budget from hell – a budget more designed to punish anyone who didn’t vote Labour while showering gold on Labour supporters than on actually improving the country’s economy.

To fill her supposed �22bn black hole in the countrys finances, Reeves has planned to increase taxes by �40bn or �45bn or something like that. There’s at least one not minor problem with this: Reeves has already spent or committed to spending the �40bn+ which she expects to get:

• �10bn in increased public-sector salaries
• �22bn for the useless failing inefficient ‘envy of the world’ NHS
• �22bn for Ed ‘Mad’ Miliband’s crazy planet-saving Heath Robinson schemes
• �11bn to be given to the world’s most corrupt countries to save them from non-existent anthropogenic climate change

However, despite having already committed or spent the �40bn+ Reeves hasn’t actually got it yet and will never get it. There are two main reasons she’ll never get her hands on the �40bn+:

Changing behaviours: imposing new taxes and increasing existing ones changes people’s behaviour as they try to lower their tax liabilities. For example, people planning to sell assets might delay doing this for 5 years in the hope that Labour will lose the next election. Or else the tax grab has been so badly planned that it might even end up reducing tax paid – for example, after Labour cancelled the Winter Fuel Payment (WFP) for 10 million pensioners, several hundred thousand, who previously didn’t claim Pension Credit, might decide to do so to keep their WFP and entitle them to several other costly benefits. And the 20% VAT attack on fee-paying schools may permit some schools to reclaim VAT paid on any capital spending done during the last ten years, but also may cause some to close and may end up causing many parents to send thousands more pupils from fee-paying schools to state schools.

Pushing the economy into recession: Perhaps the greatest danger of Reeves’s budget from hell is that it will probably push the economy into recession as firms stop hiring and even start firing workers. In addition, many care homes will either have to increase their prices possibly pushing some local authorities into bankruptcy or even close thus dumping ever more vulnerable elderly onto the collapsing social care system. And with the economy in recession, the Government’s tax take will inevitably fall.

Another promise to be broken?

So, we have a bunch of ideology-obsessed, capitalism-hating, socialist, intellectual inadequates in government who have promised to spend or even have already spent a massive amount of our money on pointless things like the parasitic public sector and climate change nonsense while not being able to raise that money.

At her recent meeting with the toothless CBI, Chancellor Reeves promised that her ‘tax and tax and spend and spend’ budget from hell would be the last of its kind and that she wouldn’t keep coming back for more and more and more of our money. Hopefully readers now know it’s one of life’s few certainties that everything a politician says they won’t do, they will actually do.

As she fails to raise her �40bn+ to fund her spending plans, Reeves will have to tax even more. That will push the country further into recession further reducing the Government’s tax take. This reduction of tax take will then force the Government to increase taxes yet again further pushing the economy into recession and so on as we enter a Circle of Economic Doom: more taxes = more recession = reduced tax take = more taxes = more recession = reduced tax take = more taxes and so on forever until the country is bankrupt.

Of course, the obvious solution is to reduce public spending: cut 500,00 civil servants; cut public-sector pensions; stop all subsidies for intermittent, expensive and largely useless renewable energy; cut overseas aid to the world’s most corrupt, basket-case countries; intern all illegal migrants in penal colonies till they agree to return to their countries of origin; cut the number of MPs from 650 to 300 at most; change the House of Lords from over 800 often corrupt lifetime spongers to a 100-person senate elected by proportional representation and much more like this.

But Labour will never cut its beloved public sector so it seems we are destined for Reeves’s Cycle of Economic Doom.

A cheerful thought on this cold winter’s morning?