So, economic stimulus
Nov. 25th, 2008 10:41 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
fivemackVAT has gone down by 2.5% as of 1 December, which means the fancy camera I want to buy could conceivably cost 15 quid less in the New Year than it does now. Of course, fancy cameras being made mostly of microchips, it's likely to cost fifteen quid less anyway thanks to process optimisation in the silicon foundries of Taiwan, but hopefully these are cumulative.
But the purpose of an economic stimulus can't just be to move lumps of consumption around by a few months; I don't think that even in the current climate it's necessary to run a big sale in November purely so that you have the cash to pay the salaries for your shop workers in December.
So Alistair Darling's job is to make Britons more profligate than they are now for the next two years (despite the financial mess being, as far as I can see, a function of a decade of unbalanced profligacy) and more frugal than they are now for at least four years to follow. I don't see how subtle tweaks to the tax system can do this; indeed, I don't know if it can be done. Interest rates are the obvious instrument, but profligacy and frugality are functions of upbringing and circumstance in that order; after-tax interest rates on straight savings accounts are now below the rate of inflation, but this has meant that I grumble slightly, keep most of my money in just-as-insured short-term bonds, and devote slightly more to the stock market where there's a possibility of higher returns.
What government policy would make you go out and spend more in February?
But the purpose of an economic stimulus can't just be to move lumps of consumption around by a few months; I don't think that even in the current climate it's necessary to run a big sale in November purely so that you have the cash to pay the salaries for your shop workers in December.
So Alistair Darling's job is to make Britons more profligate than they are now for the next two years (despite the financial mess being, as far as I can see, a function of a decade of unbalanced profligacy) and more frugal than they are now for at least four years to follow. I don't see how subtle tweaks to the tax system can do this; indeed, I don't know if it can be done. Interest rates are the obvious instrument, but profligacy and frugality are functions of upbringing and circumstance in that order; after-tax interest rates on straight savings accounts are now below the rate of inflation, but this has meant that I grumble slightly, keep most of my money in just-as-insured short-term bonds, and devote slightly more to the stock market where there's a possibility of higher returns.
What government policy would make you go out and spend more in February?
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no subject
Date: 2008-11-27 10:17 am (UTC)Thanks for the indirect compliment! I guess what I was saying in my original comment was: this is what I want government policy to be, but it probably wouldn't make me spend more unless they made shopping a nicer experience. So I was completely failing to answer your original question.
I guess my point really is that at the moment, existing legislation does very little to stop businesses messing up the planet and treating people like crap. The only tool at the consumer's disposal is boycott, which is incredibly ineffective. But even if I'm not actively boycotting a company, I hate spending generally because it's (literally) buying into a system that's about hate and destruction.
If legislation forced companies to take responsibility for their impact on human beings and the planet, I'd feel as if buying things was actually a positive action sometimes.
Also, if we got a Green New Deal, my energy supplier would be burning sunshine instead of coal and I'd happily turn the heating up, bask in the warmth and pay for the privilege.