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Freezing Energy Prices

14 Jul

At the 2013 Labour Party conference, the flagship policy announcement by Ed Miliband was a 20 month freeze on energy prices.

Since then, we have had energy share price crashes, threats of blackouts and early price rises, energy companies saying it will destroy much needed investment in new capacity and so on. ┬áThere has been talk of Red Ed – Labour returning to it’s bad old ways.

All of these points need review but they all miss the real point.

We are up to our ears in debt, state handouts are completely out of control, we desperately need to encourage industry, unemployment is far too high especially for the young, we are under threat from terrorists, the NHS is struggling, the EU is a pain in the neck, immigration is at disaster levels, the Human Rights Act is in complete disrepute.

And what is the very best that Ed Miliband can come up with?

Freeze energy bills!

God preserve us from this man as our Prime Minister.

 

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Government borrowing is theft

26 May

Government borrowing is theft. It’s theft from our children. It’s a cynical plundering of the future.

Let’s imagine a business that can earn a 10% return on money it invests. It makes sense to borrow at 3% to invest more, getting a net 7%. It makes good sense.

But Governments don’t borrow for investment opportunities. They don’t get a return. They borrow because they run out of cash. They have promised too much in State handouts and purchases.

So they borrow. Future taxpayers can pay the bill!
In fact, they borrow so much that the future taxpayers are now our children!
They have borrowed so much that the interest payments almost match the tax receipts! The borrowings can be reduced but only by increasing taxes.
That’s not good for winning elections. So they borrow more instead.

The government is not reducing borrowing. It is just reducing the rate at which they are borrowing more!
They are merely reducing the rate at which they steal from our children!
They love spending other people’s money.

What can be done? Increasing tax is difficult when the country is on it’s knees – recession, unemployment.

In the steady state, Governments should live within their tax receipts.
To get there, reducing government outgoings is the only way – however hard it is.

Gordon Brown used to call his spending “Government Investment”. It was a cynical misuse of words to cover up his grand larceny on the future.