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XKI Generation: The Recession Generation XKI Map Nation Color: Bottom Left XKI NS Join Year: 56 - Wednesday, 29 March 2006 Historical XKI Political Party: TIP - The Islands Party
Well that depends, I think the GFC is pretty much done, but recovery is another thing.
I guess this is pretty much what should be considered as a fact, concerning this topic. The crisis itself is over. We will not see a new breakdown in the near future. But as you said, recovery will take its time, but as far as I see it, we have missed the point for a fundamental change. After Lehman broke down and everyone was about to worry whether this crisis would beat the large one resulting from Black Friday, that was the point where - at least in German media - you could here the so-called "question on the system as a whole" on almost every street corner. The bottomline for some days was, that capitalism finally put itself to an end and that we have to change something. The worrying was, that there was talk about change all over the country, but nobody knew what to do. The logical result was, that after the first shock had diminished and one was sure, that one could tackle that crisis by using money from the state (better: the taxpayer's money) in order to save banks, large companies and whatsoever. Now, the economy slightly starts to recover, but we don't know yet, whether the state's encroachments will harm that recovery in one or two years. It is going to be one hard and long way out of this crisis, that's something I'm absolutely convinced of.
Nevertheless, it won't be the last crisis we have seen. As expressed above, we have missed the point for fundamental and revolutionary changes. They could not be made because the crisis was still not bad enough to ensure the majority of people that this is not going to work any longer. So this crisis might be over, but there is already the seed for the next one, which might hit us even harder. I do not wish this day to come...
Accelerator Generation (NS Year 118), The House of Ananke II Official of the Department of Education
XKI-Puppet Nation: Lettavia
Recruiting efforts: Nations contacted: ca. 2570 Confirmed recruits: 74
Post by New Dracora on Oct 4, 2009 20:36:00 GMT -5
In Australia we were fortunate enough to have a large budget surplus so when the GFC hit us we were fairly cashed up and well prepared.
It would appear that the Australian Government approach was some what different to the approach to other countries so I'll post it here and see what you guys think: Basically, other than a few investments in small prime loans in the housing market and what not, the government decided to hand out a $900 dollar check to everyone that submitted a tax return for that year.
tl;dr - every taxpayer in Australia was given $900 to do with as they wish.
There was a lot of talk that people would just pocket the cash and that the handout would be of little effect on the economy. However, boosted retail sales and lower debt defaults seem to indicate the reverse - that the handout worked just as it intended and provided a necessary buffer for the economy during the crisis.
That is a contrast to Germany. Here, we had seen years of Keynesian economy politics, deficit spending was something that different governments and parties had favoured over the years, partly as a key-element to tackle the effects of German Reunification and to build up the countries of the former GDR. But the important thing about Keynes and his theories is that they do not only include deficit spending in times of crisis but also higher taxes and a consolidation of the states' household in times of economic boom. Contracyclical economic policies include this as well, but that is something politicans like to forget about because the government which raises taxes and cuts subsidies will hardly be re-elected.
I would be critical about things like those that were done in Australia, because I would have just these objections against it. But if it really turns out like you tell us, then it looks like it worked. And in the end, it is important that the people and the economy recieves help which brings them through the crisis and has no bad longterm effects. If Austriala was able to afford that and it worked, then I will not say anything against it. I'm not that concerned in the complex playingfield of economic policies and the lesser I'm concerned with how things are in Australia when we're talking about the economy and GFC.
In Germany, we had other programmes like the so-called "Abwrackprämie", something that you would probably call a car-scrap bonus in English. So for a certain number of automobiles which were older than nine years, the goverment would pay 2500€ in case you scraped it and bought a new car. The idea was to help the automobile industry (which is one of Germany's major industries) through the crisis and to do something for the environment, too. In the end, it turned out that it was not quite as effective as it was meant to be. Not all people used the money to buy a ecological car, some used it for buying nice new over-powered SUVs, a lot of cars which were actually still functionable and which would have been good sellers as second-hand cars were scraped, the furniture industry bemoaned that people bought a new car instead of a new kitchen, the state put itself into higher debts and those people who bought a car now will not buy one the next years, so one just anticipated the consumption of the years to come. All in all, not a very clever (but a quite popular) thing to do.
Accelerator Generation (NS Year 118), The House of Ananke II Official of the Department of Education
XKI-Puppet Nation: Lettavia
Recruiting efforts: Nations contacted: ca. 2570 Confirmed recruits: 74
Post by Quast-Javert on Oct 10, 2009 15:59:20 GMT -5
I'm not sure that talking about this so-called 'Age of Capitalism' is what's needed, in all fairness. In all societies there is going to be some degree of Capitalist theory, it's just how it is implemented and to what degree that separates these social structures.
Post by SovietPrussia on Oct 13, 2009 5:20:53 GMT -5
Before I start, I'm going to say I'll be jumping around a couple of issues which I think will need to be addressed for Britain to get out of the woods. I'm not going to speak much about other nations and their economic situations. I simply don't know wnough about the nature of those economies. And forgive me if this sounds like a Party Manifesto, I have the nasty habit of looking 30-40 years into my own future. I don't think much of this is particularly new. It just deserves to be said more directly. But the tl:dr is 'National interest and financial prudency. Realism with a capitalist flavour.'
We have to remember that there's no Professor Rob A. Bank's magic -ism formula to recovery or preventing another recession in the future. Large government spending on the New Deal and then the Second World War got America out of the Great Depression, but too much beurocracy with sucessive governments unwilling to deal with the power hungry trade unions asking for higher and higher wages is what caused Britain economic woes in the 70s. Privatisation and deregulation is what got the UK's economy back on its feet. Only a sensible pragmatic system free from wishful-thinking and ideology and a system based on reality and the facts available can work. What worked in the 30s was the problem in the 70s.
I know that what at least the British government needs to do to get out of this one. They need to take a good look at the public sector and get rid of any frankly unnecessary management positions. Bring VAT back to 17.5% and institute a local sales tax so local councils are better able to fund their own projects without needing to ask for as much investment from the central government. They need to find ways to balance the budget and run a surplus while harming frontline public services as little as possible. To use starvation and it's effects on the human body as an example, to stay alive you'll use up carbohydrate and fat reserves BEFORE going into the protein and before the body canabalises itself. To continue with this analogy, imagine you're in Switzerland sometime in February on a skiing holiday. It's only common sense to eat a large breakfast before going out into the cold. The same goes for public finance. If the government builds up a strategic reserve and tries to pay off its debts then when times are tough, the country has enough lying around to weather the storm. It can take the reduced tax revenues, the increasing burden of unemployment benefits.
Next, give more regulative power to the Bank of England. They have a better feel for what's going on than the government does. We'll come out with some sensible expert-approved balanced set of regulations.
Scrap tuition fees and step up student grants. Charging students these fees is saying those from less well off families 'Hey, you're working hard to add new skills to the labour pool and to get yourself out of poverty without unconditional government handouts while you're at it. We can't have that!' Tuition fees are a charge on self-betterment, on being responsible for your own destiny, and on making your country's workforce more competitive in the world.
Next, corporation tax. Provided the national finances are in order, dropping company taxes will give Britain the edge over its neighbours in the EU's Common Market. Simple.
Income tax. Well ideally, a flat rate for all over a certain income would be nice. No loopholes to exploit and the cost and complication of the paperwork would be slashed. However, I just don't see that as being a viable option or helpful to the national finances. What the government can do is, first of all raise the minimum taxable income. Don't take the incomes off the people who need them most. The ones who rent their flats and don't own much. Making the tax bracket slopes more gentle will discourage people from bothering to find loopholes since the jump is too negligable to be worth putting in the effort. Making sure the top income bracket is more or less the same if not lower than our immediate European neighbours is an excellent step.
Public services are something which will need more than economics to explain my views on. They are and will continue to be the largest burden on the budget, but a necessary one. First of all, for the people in government in charge of making sure the economy runs smoothly, it's a balance between economic efficiency and humanity. We could try the Stalinist 5-year plan model, but the human cost of another Holodomor would be too high. Anarcho-capitalism, or Capitalizm to us Nationstates players , would result in most of the country's working people starving anyway. The humanity side of it would involve a comprehensive state funded safety net. But what happens to the incentive to work? There are a lot of jobs no one really wants to do out there that need doing. If the state gives you everything you need but taxes you on doing that job, what do you gain? What I've just remembered is that most of the world operates in a mixed economy. The best of both worlds. The issue is where does one draw the very subjective line. There's little doubt that those actually unable to work should get financial support to lead a comfortable and dignified life. Those who work for it, great! The problem is, in markets there are winners and losers. And even the people who have the opportunity to work but refuse it deserve a level of dignity as human beings. Period. It was agreed after the Second World War in the Universal Decleration of Human Rights, a document containing many things we now take for granted. However, as I've said earlier, economic efficiency can't be ignored. Those who can afford it may wish to pay for private healthcare or education. I can't see why not. If someone doesn't want the long hospital waiting lists, they can go private and make the list shorter for everyone else. It means the NHS bills will be smaller, encourages innovation in a new market of well off people wanting medical attention quickly, provides jobs in the profitable private sector, will keep the NHS on its toes keeping itself as slick and efficient as possible, I could go on.
Well I've just realised I've spent just under 3 hours on this, better stop now. ;D