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Owens88
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The Economy

Post by Owens88 »

From Twitter...
'France has redefined 'zero growth' as 'GDP stability'. Its all in the branding'

:)
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malcolmcooper
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Post by malcolmcooper »

Genius
Malcolm Cooper

I may disapprove of what you say, but I will defend to the death your right to say it.
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russell
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Post by russell »

With the Earth's limited resources perhaps it's time the god of growth was re-evaluated anyway :)

Russell.
Owens88
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Post by Owens88 »

Russell
I agree.

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martyn94
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Post by martyn94 »

Owens88 wrote:Russell
I agree.

John
So let's all work out how much our own income and wealth is derived from excessive growth (or any growth at all?) and give it all to Oxfam. It's not so much the selfishness I mind, as the defeatism.
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Post by Owens88 »

Of course any UK state pensioner is dependent on growth. That Ponzi scheme of taxation dressed up as National Insurance needs current inputs to pay for ever-growing outputs (pensioners).

However it is a fallacy to presume that any company must grow to be successful.
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martyn94
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Post by martyn94 »

Owens88 wrote:Of course any UK state pensioner is dependent on growth. That Ponzi scheme of taxation dressed up as National Insurance needs current inputs to pay for ever-growing outputs (pensioners).

However it is a fallacy to presume that any company must grow to be successful.
I don't understand why very straightforward choices about how to fund pensions should be expressed in this pejorative way: "ponzi scheme" "dressed up up as" XYZ. Any pension scheme involves claims derived from the past against income arising in the future. If it is a "funded" scheme, you surely have to hope in hell that the companies your fund has invested in will do well enough in future to give them the return they need to pay your outgoings. If they can succeed without growth, as you say, are they going to succeed enough to let you live off their back?

And it's essentially the same for "pay-as-you-go" schemes. If the economy thrives, the NICS flow in, if it doesn't they don't.

I think there is a certain duty on us older folk not to strike poses about any of this. The current state of UK politics seems to mean that the "senior" constituency gets about the easiest possible ride (we turn out to vote pretty reliably, and we tend to vote to the right). I have things to complain about if I chose (winter fuel allowance, anybody) but I will not be on the dole ever again.
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Post by Owens88 »

Sorry Martyn
I wasn't trying to start a row.

When I started paying into NI it was presented as separate from a tax, as though I was paying my wack into a fund for the future. It wasn't - it was a tax paying towards the current expenditure by the Govt. of the day.
Future payments to me are dependant on there being income to the fund at the time sufficient to pay us all. Is that not how a Ponzi scheme works?

My debate about 'growth' should perhaps be in another thread. Sorry.
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John
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martyn94
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Post by martyn94 »

Owens88 wrote:Sorry Martyn
I wasn't trying to start a row.
Is that not how a Ponzi scheme works?
In short, no. Google is your friend

https://en.m.wikipedia.org/wiki/Ponzi_scheme

If you thought that "National Insurance" was ever funded, then more fool you: it never claimed to be. There has never been, or has ever been claimed to have been, an "actuarial" relationship between what you pay in and what you get out. As you quite rightly say, your NI contributions effectively went into the pot. The corollary is that your NI benefits will come out of the pot. And it is a very big pot (whatever Mr Osborne's attempts to shrink it ) and the state has very powerful means to ensure that it is topped up to the necessary extent.

As I tried to explain, it is ultimately a non-issue whether there is a fund or not. If you want a future pension from the UK, you are relying on the future capacity of the UK economy to provide it. Whether through the performance of particular investments in a fund (which can and do go bust) or through the taxing power of the state (which could in principle fail, but it hasn't happened yet).

I very much wish that my NIRP, if I survive another year or so, might prove bigger than now seems likely. But for the sake of my own peace of mind, I try not to get het up about bollocks.
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Post by Santiago »

Owens88 wrote:Of course any UK state pensioner is dependent on growth. That Ponzi scheme of taxation dressed up as National Insurance needs current inputs to pay for ever-growing outputs (pensioners).

However it is a fallacy to presume that any company must grow to be successful.
These are quite profound comments. I'm beginning to believe that capitalism is an illusion, a sort of Ponzi-scheme or at least a house of cards that requires endless new investors to function.

At the heart of it is that most people, fund managers and pension managers choose shares not because of their yield (based of profitability) but on their resale value (based on capital growth).

And capital growth often results in lower profitability. Look at Tesco for example.

So we may think that private pensions are different from state pensions, which clearly depend on tax revenue and a government who honours its promises and those of previous governments. However, everything is based on younger people or new people in "emerging markets", handing over their earnings to the big scheme. In effect, capitalism is just one huge South Sea Bubble.
Domaine Treloar - Vineyard and Winery - www.domainetreloar.com - 04 68 95 02 29
Owens88
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Post by Owens88 »

Santiago wrote: I'm beginning to believe that capitalism is an illusion, a sort of Ponzi-scheme or at least a house of cards that requires endless new investors to function.

At the heart of it is that most people, fund managers and pension managers choose shares not because of their yield (based of profitability) but on their resale value (based on capital growth).

And capital growth often results in lower profitability. Look at Tesco for example...

.
Well put.
John
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martyn94
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Post by martyn94 »

Santiago wrote:
Owens88 wrote:Of course any UK state pensioner is dependent on growth. That Ponzi scheme of taxation dressed up as National Insurance needs current inputs to pay for ever-growing outputs (pensioners).

However it is a fallacy to presume that any company must grow to be successful.
These are quite profound comments. I'm beginning to believe that capitalism is an illusion, a sort of Ponzi-scheme or at least a house of cards that requires endless new investors to function.

At the heart of it is that most people, fund managers and pension managers choose shares not because of their yield (based of profitability) but on their resale value (based on capital growth).

And capital growth often results in lower profitability. Look at Tesco for example.

So we may think that private pensions are different from state pensions, which clearly depend on tax revenue and a government who honours its promises and those of previous governments. However, everything is based on younger people or new people in "emerging markets", handing over their earnings to the big scheme. In effect, capitalism is just one huge South Sea Bubble.
If this is profundity, God save me from superficiality.

Santiago could think about his own situation. I don't imagine it takes more "resources" to make a hectolitre of decent table wine than it used to take to make a hectolitre of gros rouge. But it certainly takes more skill, and effort, and time, and attention to telling people how good it is. And it also requires more (and more) people with the resources and the appetite to pay a decent price for decent wine. If Santiago succeeds in "adding value" in this way, and I hope he does, he will be committing the sin of "growth", and also the sin (if he thinks it is one: I'm not clear) of "capital gains".

But I'm stuffed if I know what makes it a Ponzi scheme. The point about Ponzi schemes is that no value is ever added.
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Post by Owens88 »

Martyn
You have articulated it perfectly.
One can add value without growth in volume
To go with the flow I would add
One can add profit without adding revenue.

The world does not need inexorable growth.

We are so close to forgetting the original point that I will withdraw from reference to Ponzi, and sorry once more.

John




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