A non job is always a drain on the taxpayer and paying tax on the salary from the non job is hardly a real benefit to the taxpayer. The public sector is full of non jobs often paying above average salary. Cutting those non jobs and paying them benefit would be a saving to the taxpayer, it would also give incentives to get a real job. And to those of you who would ask for an example of a non job, here is one. There was a very nice young woman on Eggheads recently who worked for a local council and her job title was Choice Officer, or something like that, and what she did was 'work with families to help them decide which school to send their children to'. I realise that there may not be sufficient jobs to go around at the present time but I do not believe it is the governments responsibility to provide jobs, they should provide essential services and create the right environment for the private sector to flourish. In this believe I am most certainly NOT a pinko socialist.
Not an economist, but disagree. The cost of administration of benefits should fall, so ideally you redeploy displaced job centre etc staff to other roles needed in a new state operation, and the lower support from council tax and other benefits, plus that person cam spend and generate jobs in retail, services, more state jobs as they increase the need for people to collect and dispose of rubbish..etc etc a country of full employ,met, where the state does not distribute wealth rather encourages market forces to control, has to be a better way
A non job requires a taxpayer subsidy, cutting the non job doesn't take money away from the economy it leaves it in the hands of the taxpayer to spend or invest as they wish. The non job is a drain which might provide social benefit when the economy is doing well but with a £120 bn deficit I would suggest that we cannot afford it.
Any salary paid to anyone does not end with them. The recipient, apart from paying tax, spends the money on buying goods and services. And the recipients of that expenditure spend it in turn on more goods and services, and so on again and again. There is a multiplier effect which means the economy benefits by several times the original payment. Another consideration is the velocity of circulation - the benefit and usefulness of the money supply lies not merely in its existence but in its circulation, and the more rapidly it circulates the greater the effect. If you cut government expenditure by cutting salary payments to public servants, the negative multiplier effect and the slowing of velocity effect cause a 'vicious circle' which kills growth - just as it is doing in the UK now.
Absolutely, and that is true whether that salary is spent by the original recipient who earned it in a real job or it is redistributed to someone else in a non job to spend via taxation. In the same way that if governments spend money they don't have, which puts up borrowing and the cost of borrowing, that leads to increased interest payments and another 'vicious circle'. Pete, do you accept that there are non jobs at a time when the government spends about 1 billion pounds it doesn't have every three days ? And if so do you think those jobs are a price worth paying ?
Looking at the gas prices to consumers doubling in a couple of days when it gets cold and someone conveniently breaks a supply pipe in Belgium at the same time, and we only have enough for 36 hours; somehow I'm glad I use oil heating and have two wood burners.........
Of course there are many jobs which are for the moment unproductive. These are to be found inter alia in private companies, international corporations, utilities, charities, local authorities, the armed forces, and central government - and they arise for a variety of different reasons. There are new staff undergoing training but not yet ready to work productively. There are old staff soon to retire but working out their time. There are extra staff recruited in expectation of increased workload which has not yet materialised. There are surplus staff where workload has reduced but they have not yet been redeployed. There are useless individuals in process of being sacked. There are staff needlessly employed by incompetent managers. There are duplicate staff employed against the contingency that some colleagues might suddenly leave, or get killed. It is a simple fact that recruitment, retirement, workload fluctuations, incompetence, and the need to provide for the unexpected arise in every walk of life and in every working environment. Let me give a couple of examples of underemployed people in the public sector. Firemen spend a lot of time hanging around doing very little - but this is interspersed with unpredictable spells of very hard work when there is a fire. Royal Navy ships have larger crews than the necessary minimum, so that if they take casualties they can still operate.
Well, the Cyprus Govt have declared they will rob peoples' bank accounts....................I reckon if that move isn't challenged, it will set a precedent......... ............I can just imagine Osborne rubbing his hands with glee...."Oh goody gumdrops.......here's a way to reduce the deficit" AL
I have to disagree with this Pete when the non job is in the public sector. The tax is paid is just returning to the exchequer a % of money raised by borrowing/taxation in the first place to pay for the creation of the job. Any money the new employer spends is only what was either taken in tax from us or was borrowed. How about slashing some taxes so individuals get to choose what they spend their money on. We have the ludicrous situation where people on low incomes pay taxes and then get welfare payments. Reducing low income workers taxes could remove some of the collection cost and also the distribution costs of some welfare payments so two savings . Borrowing more money in our present situation seems to me to be like encouraging obese people to eat more lard to battle obesity! Generally speaking obese people should eat less and for countries, when money is tight, spend less.
Whilst controlling obesity is not easy, I suspect it is easier than economics. Taleb considers economics to be a pseudo science and the Nobel prize in it a farce. You can see his point: There are physical laws involved in the construction of bridges which ensure that they stay up. Physics and chemistry have come up with all sorts of findings and laws which can be turned to profit by engineers. Economics is another kettle of fish. There are conflicting opinions about the "laws" which essentially means there aren't any. There are surely mechanisms which can be employed, but they are not watertight and not precisely understood (in a scientific sense). This is surely why politicians scrabble about trying to find some equilibrium and quite often fail. If it was as simple as "borrow a huge chunk, kickstart the economy, pay it all back and scale down the debt" or "tighten belts, reduce government spending and all will be fine" we'd all be laughing. The sad truth is, there is no simple panacea. There may be a panacea, but it's not simple.
An example of which was the recent budget where it would seem Osborne has decided the recovery is dependent upon the housing market continuing its inflationary spiral. Sub-prime anyone ?
Economics are the same as Statistics.........You can manipulate them to prove an argument...... .....until someone else as 'equally qualified' comes along and disproves them. The length of time between those occurences dictates how many people are fooled or how wealthy you become. Statistics and Economics are the basic tools of the con-man.
Glid, I think you hit the nail on the head saying there is a panacea, but it`s not simple. It would help if politicians stopped their petty point scoring behaviour and actually explained what they have done and why, what they intend to do and why and perhaps trust us to understand. Continuous growth seems an unrealistic aim, perhaps we all need to realise we cant have everything just because we want it.
Indeed Glidd. Some clever economists study the variables in economic systems, discern definable relationships between some of them, and formulate theories. A theory is usually called a "cycle" or "curve" (meaning a curve on a graph) but rarely does an economist claim to have discovered a "law". The economists write papers, publish books, and persuade politicians that their theories have applicability in the real world. The theory seems to hold good for a number of years. Eventually circumstances change and the theory no longer seems to work so a new clever economist tries to discover a new theory. This is the way economics operates.
Fortunately, politicians (and others) have ideology and political dogma to fall back upon, which rescues them from uncertainty and dynamic decision-making.
Ideology and dogma certainly rescue you from uncertainty, but sadly not from deciding on the wrong policies.
Indeed, hence the dynamic decision-making I refer to. To spell it out, making decisions based upon current data and projections, rather than from a rulebook written way back whenever.
