The title of the article may seem rather obvious. However there is good reason for it at this reflective time of year as we watch the banking industry refuse to lend to business at a level which will promote the growth of previous yearsÂ in the real economy and many are left wondering if increasing private sector tax revenues can possibly fill the hole left by Britain's ever expanding debt.
Squeezing business to pay for waste is an economic model doomed from the outset and that is what we face today. Unless we remove the shackles of tax from business and wealth generation in whatever form it may take and write off small business debt incurred by interest on loans, we are going to sink underneath the waves of debt lashing at our shores.
Talking the economy down is one thing but giving false hope when there is clearly little is just as irresponsible. Especially if expectations for businesses still seem to be based on pre-banking crisis type data but without the credit supply to reinforce the business model.
Couple this with not just an increase is VAT but also a clampdown on tax (and poor record keeping by HMRC) with exorbitant fines faced by small and medium sized businesses to maintain the public sector through taxation and it's no surprise that the incentive to succeed in wealth generation is left flat as a pancake.
The separate penalties for corporation tax, capital gains tax, income tax and VAT are a headache for the small business person and sole trader who must juggle this book keeping without, in many cases, the assistance which larger businesses get through being able to afford to employ someone solely to keep the books properly.
Most small businesses are only able to focus on the immediate problem of trying to remain solvent in these difficult times, good book keeping may not be the priority until it becomes too late and there is a knock on the door from HMRC.
On the subject of tax there is the increase in VAT which should see businesses squeezed even further by the tax man to yet again maintain "public services" or rather to prop up public waste and until this problem is addressed properly there will always be a drag on the UK economy.
But is it any wonder when the nation's finances are in such dire straits? Not when you consider that 77% of workers in Wales for example are funded by the public sector!
This is not sustainable.
So what about industry? Well, with such heavy focus on the construction industry for growth, which has been assisted by low interest rates and held up house prices, any raise in interest rates (of which we have had many recent warnings) will decimate any future growth within the one sector that has kept Britain in "growth".
Then there is the service sector and in particular the banking industry, which chooses to squeeze those indebted to it yet hand outs massive bonuses with the full backing of the law.
Let us not forget that up to 40% of mortgage holders may default this year, so will the lenders choose to take a non aggressive stance when it comes to debt and repossession? After all it is those they evict that have kept them in a job in the first place through the bailing out of banks.
The banks themselves are reported to be facing another wave of bailouts and considering the first wave was illegal and undemocratic in the first place we can only sit and pine over the Icelandic initiative where the country's finances are almost repaired.
So it would seem that the entire system is geared up against business with no politician brave enough to give us an alternative economic framework.
There is hope but only if we can default.
The reset button needs to be pressed, there is no other option. The next generation will not and should not pay for the mistakes of a few who continue to enjoy their privileges and are supported by the word of law written and influenced by themselves.
Pressing the reset button means the permanent writing off of just about all debt, sovereign and individual. A 'debt jubilee'. But if the reset button is pressed there is a real danger that the prudent will lose out. For every debtor paying interest there is an investor or saver receiving interest (with finance institutions in the middle of course). So they should be rewarded proportionately to the wealth write-offs and those who profit at the expense of the majority should be penalized proportionately.
This is called fairness, which is an alien concept to anyone who wants to maintain the current crumbling system at any cost (to others).
Tags: British Economy, Comment, economic growth, News, tax
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[…] This post was mentioned on Twitter by Michael Searles. Michael Searles said: British economic hopes rest squarely on business prosperity http://bit.ly/ex05fr […]
Sovereign default, yes, like Iceland but in the future, no sovereign debt. If it can't be raised in taxes don't spent it.
Debt jubilee, no.
Can a debt based money system work in a world where default is allowed? That paper in your pocket is only paper. I promise to pay the bearer on demand can be revoked. The ones and zeros in the computers are just binary bwollocks.
bloomin eck you got that comment dead on new year Phil…..
"Can a debt based money system work in a world where default is allowed?"………nope….but that's the point…..
Yeah. The bells were still chiming.
Grimm New Year. [ That's a personal reflection not a wish to those reading ]
Posting here and watching Alison Moyet on Jools Holland's Hootenanny were the highlights.
I've never done anything stronger than alcohol so I'm not sure that I get Syd. Nice bass track though…
superb bass line my grim friend….there is always time for something stronger…..
Just cracked my ninth can of Stella and put on side 3 of The Wall…………………
It's on my list of stuff to listen to on the night I die but tonight it's just for fun.
The Final Cut should be last; "We were all equal in the end" but I love Amused to Death and have to hear KAOS again.
okay, just a little pin prick.
Just posted this on HPC but its still the coolest thing going Phil http://www.youtube.com/watch?v=Er_3gq-Zshc
This is for you mate…..The good ole boys on backing vocals are beyond words and Sinead is breathtaking……good ole Roger….the best live performance of all time bar none…..
if there are tickets left for The Wall waters is touring we should hook up and do it…..
actually check out the guy in white on backing vox on the final chorus…..sings his as its the last day of his life…..
The Line " Mother's going to keep baby healthy and clean" he almost gives his last breath for them…………gets the tears going…..
Just watched skinhead et al. WOW!
She was made for stuff like that.
[re white suit] Why wouldn't you deliver it like it's the pinnacle of your life?
The greatest shame is that Roger's voice has gone, that's why others get to participate.
I can't think of anyone I'd rather watch The Wall with than you…………..
yeah I always love his tone and the marriage of his tone and lyric…..BUT…he is meticulous in his choice for replacement singer…….Simon Cowell could never even understand that level of musical appropriateness….I find his performances with lower vocal participation lack nothing
Well lets see if the tickets are available bro….email you tomorrow
The show must go on!
He might know what sells but anyone who thinks that's the point should be lined up against the wall. Give me the chance, I'll squeeze the trigger, slowly and deliberately.
oops. 10 down.
…………………isn't this where…..
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