Sunday, March 24, 2013
How Much Will The Climate Change Act Cost By 2050
The Climate Change Act 2008 has been called the most expensive piece of legislation the British Parliament has ever produced - according to the Government's own figures, will cost us up to £18 billion every year until 2050 ie £765 billion.
Peanuts.
Most of the cost is in foregone economic growth. Britain's long run economic growth has been about 2.5%. Currently it is zero, or less, depending on time scale.
So, assuming the long run 2.5 rate, by 2050 our economy would have grown 2.83 times by 2050.
With GDP now at £1,650 billion (& the same or actually marginally more in today's terms in 2008), that is £4,674 billion.
But we aren't achieving any growth and since the correlation between growth in electricity use and inn GDP is precise, we won't for the next 37 years.
So that means the cost in 2050 will be £3 trillion.
Correlated over 42 years the cost of the Climate Change Act comes to £38 trillion + the money the government spends - call it £39 trillion
########################
How much has it cost already. Well, if it were repealed tomorrow, all the parasitism ended, and we got back to the normal 2.5% growth we would still have wasted 5 years. That means GDP by 2050 would be £4,114 billion - a loss of £560 billion. Since this is also an example of geometric growth this still comes to about £7 trillion by then.
#########################
Now for the fun bits - suppose instead of being run by Luddites deliberately opposed to growth we were run by a progressive party able to achieve Chinese levels of growth ie (10%), starting now, by 2050 our GDP, in today's money, will be £56 trillion (comfortably exceeding current world GDP of $70 trillion - £47 bn).
If we had started back in 2008 it would have been £90 trillion.
Of course I have previously said that the Chinese are not doing everything right and that, since the historic record shows richer countries tend to grow faster, we should be able to exceed the Chinese growth rate if out government was really trying. Possibly by a lot. 23.8% would be £440 trillion - I do not remotely expect that but I do believe in maths and if anybody wants to try and disprove the maths I would be interested.
We have suffered fools, thieves, parasites and fascists to rule and impoverish us but we still have an almost unlimited potential to achieve anything we want.
Peanuts.
Most of the cost is in foregone economic growth. Britain's long run economic growth has been about 2.5%. Currently it is zero, or less, depending on time scale.
So, assuming the long run 2.5 rate, by 2050 our economy would have grown 2.83 times by 2050.
With GDP now at £1,650 billion (& the same or actually marginally more in today's terms in 2008), that is £4,674 billion.
But we aren't achieving any growth and since the correlation between growth in electricity use and inn GDP is precise, we won't for the next 37 years.
So that means the cost in 2050 will be £3 trillion.
Correlated over 42 years the cost of the Climate Change Act comes to £38 trillion + the money the government spends - call it £39 trillion
########################
How much has it cost already. Well, if it were repealed tomorrow, all the parasitism ended, and we got back to the normal 2.5% growth we would still have wasted 5 years. That means GDP by 2050 would be £4,114 billion - a loss of £560 billion. Since this is also an example of geometric growth this still comes to about £7 trillion by then.
#########################
Now for the fun bits - suppose instead of being run by Luddites deliberately opposed to growth we were run by a progressive party able to achieve Chinese levels of growth ie (10%), starting now, by 2050 our GDP, in today's money, will be £56 trillion (comfortably exceeding current world GDP of $70 trillion - £47 bn).
If we had started back in 2008 it would have been £90 trillion.
Of course I have previously said that the Chinese are not doing everything right and that, since the historic record shows richer countries tend to grow faster, we should be able to exceed the Chinese growth rate if out government was really trying. Possibly by a lot. 23.8% would be £440 trillion - I do not remotely expect that but I do believe in maths and if anybody wants to try and disprove the maths I would be interested.
We have suffered fools, thieves, parasites and fascists to rule and impoverish us but we still have an almost unlimited potential to achieve anything we want.
Labels: Cheap Energy, ecnomic growth, eco-fascism
Sunday, March 17, 2013
Government Spending, By Constituency, Shows Such Spending, Even If It Could Be Done For Free, Is Useless To The Economy
John Redwood's latest discusses the effect of increased government spending during the Labour years, in particular (ie Labour) constituenceies and contains a remark I have put into inverted commas and given my answer to.
“Why didn’t the large expenditure of money in the poorer areas lead them to catch up with the richer areas? Why did inequalities expand rather than contract? Why did London continue to outperform the areas attracting the most public spending?”
A very good question. If government spending produces real net growth, not just more real growth than would be achieved by cutting taxes commensurately BUT ANY REAL GROWTH AT ALL there should be measurable convergence between areas getting increased government spending and those not getting it. In fact there seems to be a slight divergence, suggesting excess government spending may even have a net negative effect on growth.
This does appear to me to be serious evidence that all the "stimulus" spending is not likely to have any positive effect on growth.
This does not mean that a stimulus of reducing taxes would not work. I think that to some extent it would but whether the gain would be worth the long term extra debt repayment is open to question.
Nor does it mean that all government spending - eg X-Prizes - could not produce growth, only that the sort of spending government currently chooses to do wouldn't.
Nor, on the other hand, does it alter the undisputed evidence that money spent on regulation not only doesn't help the economy but costs the economy 20 times more than it costs the government to do. This means that the net effect of government on the economy is negative, currently reducing the economy by a minimum of 50%, probably 75% of what it could be.
Nor, on the 3rd hand, does it mean society should never spend money on welfare. The argument for welfare is that we really ought to help those who cannot help themselves. It merely means that one cannot honestly support the welfare spending argumenmt with any claim that it will help the economy. In itself is likely to have no effect and by diverting these resources from the real economy is virtually certain to have a net negative effect.
“Why didn’t the large expenditure of money in the poorer areas lead them to catch up with the richer areas? Why did inequalities expand rather than contract? Why did London continue to outperform the areas attracting the most public spending?”
A very good question. If government spending produces real net growth, not just more real growth than would be achieved by cutting taxes commensurately BUT ANY REAL GROWTH AT ALL there should be measurable convergence between areas getting increased government spending and those not getting it. In fact there seems to be a slight divergence, suggesting excess government spending may even have a net negative effect on growth.
This does appear to me to be serious evidence that all the "stimulus" spending is not likely to have any positive effect on growth.
This does not mean that a stimulus of reducing taxes would not work. I think that to some extent it would but whether the gain would be worth the long term extra debt repayment is open to question.
Nor does it mean that all government spending - eg X-Prizes - could not produce growth, only that the sort of spending government currently chooses to do wouldn't.
Nor, on the other hand, does it alter the undisputed evidence that money spent on regulation not only doesn't help the economy but costs the economy 20 times more than it costs the government to do. This means that the net effect of government on the economy is negative, currently reducing the economy by a minimum of 50%, probably 75% of what it could be.
Nor, on the 3rd hand, does it mean society should never spend money on welfare. The argument for welfare is that we really ought to help those who cannot help themselves. It merely means that one cannot honestly support the welfare spending argumenmt with any claim that it will help the economy. In itself is likely to have no effect and by diverting these resources from the real economy is virtually certain to have a net negative effect.
Labels: British politics, ecnomic growth, economics
Sunday, March 10, 2013
Recession Is Deliberate Toralitarian Treason - We Can End It At Anmy Time
I was impressed by this summation from Newt Gingrich
during the past few years the American people have:
Developed desktop 3D-printers which can manufacture almost any object you can imagine within a few minutes. You can buy these devices for roughly the cost of a laptop and print out, in plastic, anything you can design on your computer, or any 3D models from an online library. You can then send away to a website like Shapeways to have the design printed in stainless steel, silver, or ceramic. People are only beginning to understand the enormous possibilities for industry, logistics, education, science and medicine. This video provides is a great short explanation.
Carried regenerative medicine to the point of growing people new organs using their own cells. In fact, we will be able to 3D-print new organs using live cells within the foreseeable future. In this video Dr. Anthony Atala of the Wake Forest Institute for Regenerative Medicine explains how they are growing replacement bladders in incubators using patients’ own cells.
Created intelligent, autonomous drones for civilian use. You might have heard of drone military aircraft (especially after Senator Rand Paul’s impressive filibuster this week) but soon civilians will have access to drones of all sizes as well. The potential for cargo shipping, transportation, public safety and more is extraordinary. This video of a University of Pennsylvania lab shows a whole swarm of personal drones.
Pioneered the development of a driverless car. In addition to autonomous aircraft, Americans might soon travel in cars controlled completely by artificial intelligence. Sebastian Thrun at Google leads a team that created a car which has driven hundreds of thousands of miles autonomously on California roads. The implications for safety and quality of life are incalculable. He explains the project in this video. This Audi already parks itself automatically.
Launched private spacecraft, without NASA. Sir Richard Branson and others have independently developed private spacecraft which are prepared to carry paying customers on suborbital flights and beyond. Last week, SpaceX became the first private company to resupply the International Space Station. Branson discusses Virgin Galactic in this video.
Made a high quality education available to everyone online, for free. Salman Khan, a former hedge fund analyst, has recorded thousands of hours of free lessons on everything from basic biology to calculus, in a project that started as a way to help his younger cousins catch up in school. Today, his ever-expanding collection of lessons is known as Khan Academy. They have been viewed more than 244 million times. In some schools, teachers now assign students to take the lessons at home and to do their homework in class — where the teacher can help kids if they get stumped. Salman Khan talks about project in this video.
Several of these developments may be at least as important as the computer revolution of the past two decades.
I would also add shale gas fraccing and the development of algae able to grow oil.
It coalesces well with my feeling that technology, being the foundation of progress, expanding faster than at any time in human history, means that we could achieve economic progress also faster than at any time in human history, if allowed. Particularly because the UK is surpassed in scientific citations per capita only by Switzerland (& Scotland surpasses the UK average).
Also worth pointing out that 2 of the 5, driverless cars and commercial space development, owe a lot to X-Prizes.
"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things"
The corollary being that a wealthy state can be reduced to poverty, or in the current state of 5% world growth, can be kept in minor recession until the lowest and most barbaric catch up, by politicians actively trying to do so - as present circumstances prove.
Alex Salmond knows that:
"“The skills, ingenuity, training and expertise of the human capital that you develop will determine the long-term prosperity of the economy, and indeed will determine the long-term prosperity of the world,”
Which means that his deliberate stifling of energy technology in Scotland is not the action of an ignorant fool but of somebody deliberately and treasonously trying to keep us in recession.
The same applies to David Cameron who has also unquestionably lied that he want's growth while absolutely refusing to do what he knows would achieve it.
Back in my 9% Growth Party days I opted for (you guessed it) around 9% growth. It could certainly have been achieved. I have shown how, in theory and with some luck, if each point on the programme could add 1% to growth (in some cases that is by far an underestimate) growth would be 24% a year. and it isn't even disputed by any of these parasites that according to all the science of economics, this is the case.
No wonder UKIP, despite still being censored by the state broadcaster, is now on 17% (63% of the Tory polling) even according to the Observer, and still rising and perhaps even more importantly 56% believe governemnt policies (almost indistinguishable from Labour ones) are harming the economy. The people have rimbeled the thieves and parasites and it is only reqyured for UKIP to close the deal and convince we not only coull (they all could) but would get the economy into world class growth.
during the past few years the American people have:
Developed desktop 3D-printers which can manufacture almost any object you can imagine within a few minutes. You can buy these devices for roughly the cost of a laptop and print out, in plastic, anything you can design on your computer, or any 3D models from an online library. You can then send away to a website like Shapeways to have the design printed in stainless steel, silver, or ceramic. People are only beginning to understand the enormous possibilities for industry, logistics, education, science and medicine. This video provides is a great short explanation.
Carried regenerative medicine to the point of growing people new organs using their own cells. In fact, we will be able to 3D-print new organs using live cells within the foreseeable future. In this video Dr. Anthony Atala of the Wake Forest Institute for Regenerative Medicine explains how they are growing replacement bladders in incubators using patients’ own cells.
Created intelligent, autonomous drones for civilian use. You might have heard of drone military aircraft (especially after Senator Rand Paul’s impressive filibuster this week) but soon civilians will have access to drones of all sizes as well. The potential for cargo shipping, transportation, public safety and more is extraordinary. This video of a University of Pennsylvania lab shows a whole swarm of personal drones.
Pioneered the development of a driverless car. In addition to autonomous aircraft, Americans might soon travel in cars controlled completely by artificial intelligence. Sebastian Thrun at Google leads a team that created a car which has driven hundreds of thousands of miles autonomously on California roads. The implications for safety and quality of life are incalculable. He explains the project in this video. This Audi already parks itself automatically.
Launched private spacecraft, without NASA. Sir Richard Branson and others have independently developed private spacecraft which are prepared to carry paying customers on suborbital flights and beyond. Last week, SpaceX became the first private company to resupply the International Space Station. Branson discusses Virgin Galactic in this video.
Made a high quality education available to everyone online, for free. Salman Khan, a former hedge fund analyst, has recorded thousands of hours of free lessons on everything from basic biology to calculus, in a project that started as a way to help his younger cousins catch up in school. Today, his ever-expanding collection of lessons is known as Khan Academy. They have been viewed more than 244 million times. In some schools, teachers now assign students to take the lessons at home and to do their homework in class — where the teacher can help kids if they get stumped. Salman Khan talks about project in this video.
Several of these developments may be at least as important as the computer revolution of the past two decades.
I would also add shale gas fraccing and the development of algae able to grow oil.
It coalesces well with my feeling that technology, being the foundation of progress, expanding faster than at any time in human history, means that we could achieve economic progress also faster than at any time in human history, if allowed. Particularly because the UK is surpassed in scientific citations per capita only by Switzerland (& Scotland surpasses the UK average).
Also worth pointing out that 2 of the 5, driverless cars and commercial space development, owe a lot to X-Prizes.
"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things"
The corollary being that a wealthy state can be reduced to poverty, or in the current state of 5% world growth, can be kept in minor recession until the lowest and most barbaric catch up, by politicians actively trying to do so - as present circumstances prove.
Alex Salmond knows that:
"“The skills, ingenuity, training and expertise of the human capital that you develop will determine the long-term prosperity of the economy, and indeed will determine the long-term prosperity of the world,”
Which means that his deliberate stifling of energy technology in Scotland is not the action of an ignorant fool but of somebody deliberately and treasonously trying to keep us in recession.
The same applies to David Cameron who has also unquestionably lied that he want's growth while absolutely refusing to do what he knows would achieve it.
Back in my 9% Growth Party days I opted for (you guessed it) around 9% growth. It could certainly have been achieved. I have shown how, in theory and with some luck, if each point on the programme could add 1% to growth (in some cases that is by far an underestimate) growth would be 24% a year. and it isn't even disputed by any of these parasites that according to all the science of economics, this is the case.
No wonder UKIP, despite still being censored by the state broadcaster, is now on 17% (63% of the Tory polling) even according to the Observer, and still rising and perhaps even more importantly 56% believe governemnt policies (almost indistinguishable from Labour ones) are harming the economy. The people have rimbeled the thieves and parasites and it is only reqyured for UKIP to close the deal and convince we not only coull (they all could) but would get the economy into world class growth.
Labels: British politics, ecnomic growth, Science/technology, UKIP, X-Prizes
Monday, February 25, 2013
Recessions: The Don't Do List
Enjoyed this article from the Von Mises Institute. The list speaks for itself.
"1. Prevent or delay liquidation
“Lend money to shaky businesses, call on banks to lend further, etc.” [Done. Tarp, auto bailouts, and the Fed’s mondustrial policy. See recently John B. Taylor in the Wall Street Journal: “The low rates also make it possible for banks to roll over rather than write off bad loans, locking up unproductive assets.”]
2. Inflate further
“Further inflation blocks the necessary fall in prices, thus delaying adjustment and prolonging depression. Further credit expansion creates more malinvestments, which, in their turn, will have to be liquidated in some later depression. A government ‘easy money’ policy prevents the market's return to the necessary higher interest rates.” [Done in spades.]
3. Keep wage rates up
“Artificial maintenance of wage rates in a depression insures permanent mass unemployment. Furthermore, in a deflation, when prices are falling, keeping the same rate of money wages means that real wage rates have been pushed higher. In the face of falling business demand, this greatly aggravates the unemployment problem.”
4. Keep prices up
“Keeping prices above their free-market levels will create unsalable surpluses, and prevent a return to prosperity.” [3 and 4 are both direct results of current Fed actions, including price inflation targets near 2%.]
5. Stimulate consumption and discourage saving
“We have seen that more saving and less consumption would speed recovery; more consumption and less saving aggravate the shortage of saved-capital even further. Government can encourage consumption by ‘food stamp plans’ and relief payments. It can discourage savings and investment by higher taxes, particularly on the wealthy and on corporations and estates. As a matter of fact, any increase of taxes and government spending will discourage saving and investment and stimulate consumption, since government spending is all consumption. Some of the private funds would have been saved and invested; all of the government funds are consumed. Any increase in the relative size of government in the economy, therefore, shifts the societal consumption-investment ratio in favor of consumption, and prolongs the depression.” [The federal government has expanded from a bloated 18–20% of the economy to 23–25% of the economy under the current administration. The Bush fiscal stimulus in 2008 and the majority of the 2009 Obama stimulus supported consumption relative to investment as did the ineffective recently repealed temporary payroll tax cut.]
6. Subsidise unemployment
“Any subsidisation of unemployment (via unemployment ‘insurance,’ relief, etc.) will prolong unemployment indefinitely, and delay the shift of workers to the fields where jobs are available.” [Does anything need added here?]
#5 here seems to be the entire Labour/LibDim policy and most of the current Tory policy. To be fair I think Iain Duncan Smith's welfare reforms are keeping the present government free of #6, which is probably most of the reason unemployment is actually falling despite the recession continuing.
Of course none of the Institute founders ever imagined a government so insane that it would actually deliberately force us into recession by cutting the energy supply.
"1. Prevent or delay liquidation
“Lend money to shaky businesses, call on banks to lend further, etc.” [Done. Tarp, auto bailouts, and the Fed’s mondustrial policy. See recently John B. Taylor in the Wall Street Journal: “The low rates also make it possible for banks to roll over rather than write off bad loans, locking up unproductive assets.”]
2. Inflate further
“Further inflation blocks the necessary fall in prices, thus delaying adjustment and prolonging depression. Further credit expansion creates more malinvestments, which, in their turn, will have to be liquidated in some later depression. A government ‘easy money’ policy prevents the market's return to the necessary higher interest rates.” [Done in spades.]
3. Keep wage rates up
“Artificial maintenance of wage rates in a depression insures permanent mass unemployment. Furthermore, in a deflation, when prices are falling, keeping the same rate of money wages means that real wage rates have been pushed higher. In the face of falling business demand, this greatly aggravates the unemployment problem.”
4. Keep prices up
“Keeping prices above their free-market levels will create unsalable surpluses, and prevent a return to prosperity.” [3 and 4 are both direct results of current Fed actions, including price inflation targets near 2%.]
5. Stimulate consumption and discourage saving
“We have seen that more saving and less consumption would speed recovery; more consumption and less saving aggravate the shortage of saved-capital even further. Government can encourage consumption by ‘food stamp plans’ and relief payments. It can discourage savings and investment by higher taxes, particularly on the wealthy and on corporations and estates. As a matter of fact, any increase of taxes and government spending will discourage saving and investment and stimulate consumption, since government spending is all consumption. Some of the private funds would have been saved and invested; all of the government funds are consumed. Any increase in the relative size of government in the economy, therefore, shifts the societal consumption-investment ratio in favor of consumption, and prolongs the depression.” [The federal government has expanded from a bloated 18–20% of the economy to 23–25% of the economy under the current administration. The Bush fiscal stimulus in 2008 and the majority of the 2009 Obama stimulus supported consumption relative to investment as did the ineffective recently repealed temporary payroll tax cut.]
6. Subsidise unemployment
“Any subsidisation of unemployment (via unemployment ‘insurance,’ relief, etc.) will prolong unemployment indefinitely, and delay the shift of workers to the fields where jobs are available.” [Does anything need added here?]
#5 here seems to be the entire Labour/LibDim policy and most of the current Tory policy. To be fair I think Iain Duncan Smith's welfare reforms are keeping the present government free of #6, which is probably most of the reason unemployment is actually falling despite the recession continuing.
Of course none of the Institute founders ever imagined a government so insane that it would actually deliberately force us into recession by cutting the energy supply.
Labels: British politics, ecnomic growth, economics
Friday, February 22, 2013
Driverless Cars Possible NOW
Via Next Big Future come this about the cost of retrofitting your car to dirverless driving. This is actually a British design but you wouldn't know it from opur media.
£5,000 Self Driving Car System Uses Off the Shelf Parts and can be added to any Regular Car
The Oxford University’s Mobile Robotics Group (MRG) RobotCar is a modified Nissan LEAF. Lasers and cameras are subtly mounted around the vehicle and taking up some of the boot space is a computer which performs all the calculations necessary to plan, control speed and avoid obstacles. Externally it's hard to tell this car apart from any other on the road. It is designed to take over driving while traveling on frequently used routes.
The MRG team sees an immediate future in production cars modified for autonomous driving only part of the time on frequently driven routes. They estimate that the cost of the system can be brought down from its current £5,000 ($7700) to only £100 (US$155).
Post production refitting of anything is far more expensive than doing it on the production line and computerisation follows Moore's Law on capcity cost, so the £100 addition per new car seems ambitious but feasible.
And the timescale is NOW.
Which means that the only thing that will stop it is government preventing it or requiring a man with a red flag to walk in front, as a previous British government did, making Britain a late developer in motor transport.
The potential effects of fully automated roads are almost beyond comprehension. What individual or industry will not finmd life considerably easier; how many deaths and injuries will be prevented; how many Mary Whitehouses will blame the deprevity of today's youth on it? And will we have it legalized before Zimbabwe?
==================== Driverless cars are just another major human expansion brought on by research done to win prizes. The canning industry (Naploeon's food preservation prize; plastics and film (celluloid), Australia, NZ & most of the Pacific (longitude prize), much of the aircraft industry etc. Just about the only thing on Earth that has more potential than driverless cars, shale gas, or nuclear power is government deciding to accept the principle that they should use the excess wealth created by inventors to fund X-Prizes.
£5,000 Self Driving Car System Uses Off the Shelf Parts and can be added to any Regular Car
The Oxford University’s Mobile Robotics Group (MRG) RobotCar is a modified Nissan LEAF. Lasers and cameras are subtly mounted around the vehicle and taking up some of the boot space is a computer which performs all the calculations necessary to plan, control speed and avoid obstacles. Externally it's hard to tell this car apart from any other on the road. It is designed to take over driving while traveling on frequently used routes.
The MRG team sees an immediate future in production cars modified for autonomous driving only part of the time on frequently driven routes. They estimate that the cost of the system can be brought down from its current £5,000 ($7700) to only £100 (US$155).
Post production refitting of anything is far more expensive than doing it on the production line and computerisation follows Moore's Law on capcity cost, so the £100 addition per new car seems ambitious but feasible.
And the timescale is NOW.
Which means that the only thing that will stop it is government preventing it or requiring a man with a red flag to walk in front, as a previous British government did, making Britain a late developer in motor transport.
The potential effects of fully automated roads are almost beyond comprehension. What individual or industry will not finmd life considerably easier; how many deaths and injuries will be prevented; how many Mary Whitehouses will blame the deprevity of today's youth on it? And will we have it legalized before Zimbabwe?
==================== Driverless cars are just another major human expansion brought on by research done to win prizes. The canning industry (Naploeon's food preservation prize; plastics and film (celluloid), Australia, NZ & most of the Pacific (longitude prize), much of the aircraft industry etc. Just about the only thing on Earth that has more potential than driverless cars, shale gas, or nuclear power is government deciding to accept the principle that they should use the excess wealth created by inventors to fund X-Prizes.
Labels: ecnomic growth, Science/technology, X-Prizes
Friday, September 21, 2012
Scottish Budget - SNP Lie Relentlessly
Dear Mr Swinney,
I note you described your budget yesterday as a "relentless pursuit of economic growth". In the same way First Minister Salmond previously said that the Scottish cabinet are spending every hour trying to grow the economy. If true this would inded be admirable. If half true - half admirable. And so on.
However, looking at what you have brought forth I can find no trace of truth in it whatsoever. Perhaps you could help firstly by saying what it actually does to promote growth - the nearest I can see is some increased housing subsidy which may, very slightly, offset the fact that 75% of housebuilding costs are government regulations. It should be obvious that if you actually wished housebuilding could be massively stimulated and truly affordable housing created simply by getting government out of the way, without the expense and waste your action involves.
The world economy, outside the EU, is growing at 6% annually. You know perfectly well that we could achieve at least the average any time your party wished it simply by not getting in the way and letting the market work. So your remarks about "relentless pursuit of growth", which, together with Mr Salmond's, we must accept as representing the level of honesty to which the SNP aspire, are not only, provably, wholly untrue but the complete and absolute opposite of the truth.
We both know, and John Mason MSP has recently publicly admitted that the SNP are relentlessly idealogically committed to opposing any policy that would tend to make Scotland less like North Korea than South Korea. You are also intelligent enough to know that this is incompatible with any slightest attempt to end the recession.
You also know that "In modern times the main driver of economic growth has been, and continues to be, energy" because neither you nor anybody else disputed it when Jim Mather, who for some unknown reason was in your totalitarian party, showed it. You thus know, with absolute certainty, that your policy of making electricity from the most expensive, unreliable and restricted source is a driver for recession.
Indeed the only policy slightly towards growth that the SNP support is unrestricted immigration and resettlement of the Highlands with 3rd world immigrants. A limited amount of immigration by the technically qualified or wealthy certainly assists growth. However evidence that unlimited immigration, which obviously self selects the unqualified, provides growth is lacking and it clearly cannot provide per capita growth. Thus the sole policy of yours conceivably aimed at growth would deliberately reduce Scots average living standards.
We both know perfectly well that we could be out of recession within weeks if you followed the economic policies of UKIP. Indeed even faster if you followed the economic programme I previously sent you and with which you found not one single thing you could dispute.
You are perfectly entitled to your "socialist" idealogical hatred of the various ways out of recession. You are entitled, like the Greens, to be opposed to growth, but they, at least sometimes, honestly admit it.
You are not entitled to lie, continuously and deliberately to the Scottish people. I must ask you either to point out where I have been factually inaccurate in this assessment or to confirm that no SNP representative will ever, in any circumstances, make the claim to be, "relentlessly" or even on balance, committed to growth. And to confirm which other statements by the SNP, if any, can ever be treated as in any way truthful.
I await your early reply.
Neil Craig
-----------------------------
In researching this I found the Holyrood record to recently have been redesigned to hide what our masters have been saying in Parliament rather than making it visible.
Salmond's remark about the cabinet spending every hour seeking growth was in last week's broadcast First Minister's questions but is not, at least not easily, available to the public. To rest whether this is deliberate I put Jim Mather's remark quoted into the Parliament's search system which assured me no such remark had been made. As I linked that remark from They Work For You that is clearly a lie.
You will see that the TWFY site explains
"Due to changes made to the official Scottish Parliament website at the start of 2011, our parser that used to fetch their web pages and convert them into more structured information has stopped working. We’re afraid we cannot give a timescale as to when we will be able to cover the Scottish Parliament again. Sorry for any inconvenience caused."
I have to assume this is entirely deliberate and a sign that our "totalitarian" SNP rulers are making sure that they do not work for us at all.
I note you described your budget yesterday as a "relentless pursuit of economic growth". In the same way First Minister Salmond previously said that the Scottish cabinet are spending every hour trying to grow the economy. If true this would inded be admirable. If half true - half admirable. And so on.
However, looking at what you have brought forth I can find no trace of truth in it whatsoever. Perhaps you could help firstly by saying what it actually does to promote growth - the nearest I can see is some increased housing subsidy which may, very slightly, offset the fact that 75% of housebuilding costs are government regulations. It should be obvious that if you actually wished housebuilding could be massively stimulated and truly affordable housing created simply by getting government out of the way, without the expense and waste your action involves.
The world economy, outside the EU, is growing at 6% annually. You know perfectly well that we could achieve at least the average any time your party wished it simply by not getting in the way and letting the market work. So your remarks about "relentless pursuit of growth", which, together with Mr Salmond's, we must accept as representing the level of honesty to which the SNP aspire, are not only, provably, wholly untrue but the complete and absolute opposite of the truth.
We both know, and John Mason MSP has recently publicly admitted that the SNP are relentlessly idealogically committed to opposing any policy that would tend to make Scotland less like North Korea than South Korea. You are also intelligent enough to know that this is incompatible with any slightest attempt to end the recession.
You also know that "In modern times the main driver of economic growth has been, and continues to be, energy" because neither you nor anybody else disputed it when Jim Mather, who for some unknown reason was in your totalitarian party, showed it. You thus know, with absolute certainty, that your policy of making electricity from the most expensive, unreliable and restricted source is a driver for recession.
Indeed the only policy slightly towards growth that the SNP support is unrestricted immigration and resettlement of the Highlands with 3rd world immigrants. A limited amount of immigration by the technically qualified or wealthy certainly assists growth. However evidence that unlimited immigration, which obviously self selects the unqualified, provides growth is lacking and it clearly cannot provide per capita growth. Thus the sole policy of yours conceivably aimed at growth would deliberately reduce Scots average living standards.
We both know perfectly well that we could be out of recession within weeks if you followed the economic policies of UKIP. Indeed even faster if you followed the economic programme I previously sent you and with which you found not one single thing you could dispute.
You are perfectly entitled to your "socialist" idealogical hatred of the various ways out of recession. You are entitled, like the Greens, to be opposed to growth, but they, at least sometimes, honestly admit it.
You are not entitled to lie, continuously and deliberately to the Scottish people. I must ask you either to point out where I have been factually inaccurate in this assessment or to confirm that no SNP representative will ever, in any circumstances, make the claim to be, "relentlessly" or even on balance, committed to growth. And to confirm which other statements by the SNP, if any, can ever be treated as in any way truthful.
I await your early reply.
Neil Craig
-----------------------------
In researching this I found the Holyrood record to recently have been redesigned to hide what our masters have been saying in Parliament rather than making it visible.
Salmond's remark about the cabinet spending every hour seeking growth was in last week's broadcast First Minister's questions but is not, at least not easily, available to the public. To rest whether this is deliberate I put Jim Mather's remark quoted into the Parliament's search system which assured me no such remark had been made. As I linked that remark from They Work For You that is clearly a lie.
You will see that the TWFY site explains
"Due to changes made to the official Scottish Parliament website at the start of 2011, our parser that used to fetch their web pages and convert them into more structured information has stopped working. We’re afraid we cannot give a timescale as to when we will be able to cover the Scottish Parliament again. Sorry for any inconvenience caused."
I have to assume this is entirely deliberate and a sign that our "totalitarian" SNP rulers are making sure that they do not work for us at all.
Labels: ecnomic growth, Rise of modern fascism, Scottish politics
Sunday, August 12, 2012
With Ryan Chosen The US Election Is Actually Going To Be About Something Important - A Something the British MSM Censor Any Debate On
Romney has chosen Paul Ryan as his running mate.Thus we have a very serious, economically competent team which says a lot about how Romney intends to rule.
Romney himself is a man who became a billionaire through taking over failing companies and either setting them up as success or asset stripping, or both. This is capitalism at its toughest but also its best. The ultimate difference between free and government control is that when a free enterprise institution fails to make a profit it goes bust and is dealt with as Romney did, whereas when a government department fails to achieve its targets it calls for and gets a bigger budget to try again.
Ryan's many claim to fame is running the Senate Budget committee, which he has done in a way that shows he is strongly committed to fiscal sanity. He opposes the catastrophic warming fraud and even opposes allowing the government EPA to ban fire. He has an "all of the above attitude to energy - supporting more shale gas extraction, oil drilling and nuclear power. On space development he has never said anything of interest, which is not inherently a bad place to start.
Like Romney he appears to be so squeaky clean it hurts.
Since most of Obama's previous campaigns have been based on leaking sealed court reports on his opponents divorces and Obama is clearly unable to run on a record of any sort of success it is probably important to be bulletproof to smears. Obama having nothing else to offer.
All of that looks like and intelligent campaign, on the issues, at least on the Republican side. There is a very clear divide between the parties on issues - free market V government control of everything; fiscal prudence V endless stimuli; honesty V catastrophic warming scares; small government V big government; growing energy production in the free market V declining in a controlled one.
So far media coverage here has been muted since they don't know how to report what he actually stands for since it is so outwith allowed discussion in out media. |These are the sort of policies that will get the US out of recession very quickly & which are also endorsed by UKIP - which causes problems far a British establishment which censor any attempt to discuss them.
On space development it looks like we are going to have to rely on Newt Gingrich cutting a deal whereby NASA's budget is to a large extent put into an X-Prize fund. That should not be difficult. Newt made a decent run for the nomination and giving him leadership of NASA would get him both enthusiastically supportive and out of the way. Newt has never asked for more money than NASA gets - just that it be used for prizes - and this suits the free market philosophy of both Romney and Ryan
-----------------------
As an example of the censorship of any debate in Britain on what are going to be the main issues in the US election see this BBC report of the Bank of England chief wittering about his "deep sympathy" for the people of Britain whom he helped has put into recession and his inability to suggest any way out.
"Unfortunately there is no easy remedy" he says knowing this to be a lie. He knows we could be out of recession in days if he and the other corrupt parasites wanted it.
2 clear signs that what we are experiencing is not a true recession but that in fact we are in the boom phase of an economy that is in underlying technological decline.
1 - Employment is rising not falling while per capita productivity is falling. This just does not happen in a true recession - then employers shake out all the labour they can. This is consistent only with labour becoming a larger component of production as technological inputs, primarily electricity, become less. Less of it being produced and more expensively. Technologically we are in steep decline, purely because government prevents it. In the meantime print and spend (quantitative easing) is being used to produce a bigger bubble, but not a bubble growing quite as fast as the technological decline.
2 - Though all the state media keep pushing the line that much of the recession is due to the Euro problem because we do 40% of our trade with them. But if this were a factor we would be getting a far larger push from the fact that the rest of the world, providing 60% is growing far faster than the EU is declining (6%). This is proven by the fact that our trade balance with the EU is getting marginally better while with the rest of the world it is getting worse. That can only mean that we are being marginally less restricted by Luddism than the \EU average but that the rest of the world is becoming more competitive because it isn't in the hands of the ecofascists.
Romney himself is a man who became a billionaire through taking over failing companies and either setting them up as success or asset stripping, or both. This is capitalism at its toughest but also its best. The ultimate difference between free and government control is that when a free enterprise institution fails to make a profit it goes bust and is dealt with as Romney did, whereas when a government department fails to achieve its targets it calls for and gets a bigger budget to try again.
Ryan's many claim to fame is running the Senate Budget committee, which he has done in a way that shows he is strongly committed to fiscal sanity. He opposes the catastrophic warming fraud and even opposes allowing the government EPA to ban fire. He has an "all of the above attitude to energy - supporting more shale gas extraction, oil drilling and nuclear power. On space development he has never said anything of interest, which is not inherently a bad place to start.
Like Romney he appears to be so squeaky clean it hurts.
Since most of Obama's previous campaigns have been based on leaking sealed court reports on his opponents divorces and Obama is clearly unable to run on a record of any sort of success it is probably important to be bulletproof to smears. Obama having nothing else to offer.
All of that looks like and intelligent campaign, on the issues, at least on the Republican side. There is a very clear divide between the parties on issues - free market V government control of everything; fiscal prudence V endless stimuli; honesty V catastrophic warming scares; small government V big government; growing energy production in the free market V declining in a controlled one.
So far media coverage here has been muted since they don't know how to report what he actually stands for since it is so outwith allowed discussion in out media. |These are the sort of policies that will get the US out of recession very quickly & which are also endorsed by UKIP - which causes problems far a British establishment which censor any attempt to discuss them.
On space development it looks like we are going to have to rely on Newt Gingrich cutting a deal whereby NASA's budget is to a large extent put into an X-Prize fund. That should not be difficult. Newt made a decent run for the nomination and giving him leadership of NASA would get him both enthusiastically supportive and out of the way. Newt has never asked for more money than NASA gets - just that it be used for prizes - and this suits the free market philosophy of both Romney and Ryan
-----------------------
As an example of the censorship of any debate in Britain on what are going to be the main issues in the US election see this BBC report of the Bank of England chief wittering about his "deep sympathy" for the people of Britain whom he helped has put into recession and his inability to suggest any way out.
"Unfortunately there is no easy remedy" he says knowing this to be a lie. He knows we could be out of recession in days if he and the other corrupt parasites wanted it.
2 clear signs that what we are experiencing is not a true recession but that in fact we are in the boom phase of an economy that is in underlying technological decline.
1 - Employment is rising not falling while per capita productivity is falling. This just does not happen in a true recession - then employers shake out all the labour they can. This is consistent only with labour becoming a larger component of production as technological inputs, primarily electricity, become less. Less of it being produced and more expensively. Technologically we are in steep decline, purely because government prevents it. In the meantime print and spend (quantitative easing) is being used to produce a bigger bubble, but not a bubble growing quite as fast as the technological decline.
2 - Though all the state media keep pushing the line that much of the recession is due to the Euro problem because we do 40% of our trade with them. But if this were a factor we would be getting a far larger push from the fact that the rest of the world, providing 60% is growing far faster than the EU is declining (6%). This is proven by the fact that our trade balance with the EU is getting marginally better while with the rest of the world it is getting worse. That can only mean that we are being marginally less restricted by Luddism than the \EU average but that the rest of the world is becoming more competitive because it isn't in the hands of the ecofascists.
Labels: ecnomic growth, election, International politics
Saturday, July 28, 2012
Space Links
America's first woman in space, Sally Ride, from the shuttle era dies.Not hust the first generation astronauts going now.
---------------------
Viking found life on Mars - more
---------------------
SpaceX will make a share offering in 2013 I think he will do very well indeed.
------------------------
Elon Musk interview
"Question: What missions will you be doing in 10 years?
Musk: Our goal is to revolutionize space transport. So we'll be doing every kind of space transport, except for suborbital. We'll launch satellites of all shapes and sizes, servicing the space station with cargo and crew, and then the long term objective is to develop a space transport system that will enable humanity to become a multi-planet species.
------------------------
Spaceport Sweden
-----------------------
Virginia gives tax break to attract space industry
The Virginia General Assembly is soon to consider a bill that will allow an income tax deduction of up to $8,000 (£5,100) for burials in space, WTVR reports.
------------------------
Nuclear Thermal Rockets Since there is no contact between the reactor and air this does not, except in the event of catastrophic failure, release radioactivity to the atmosphere. Even catastrophe would only mean "it is highly unlikely that a reactor's fuel elements would be spread over a wide area. They are composed of very strong materials, either carbon composites or carbides, and normally coated with zirconium hydride. The solid core NTR fuel itself is conventionally a small percentage of U-235 buried well inside an extremely strong carbon or carbide mixture. Unless the physically small reactors have been run for an extended period, the radioactivity of these elements is quite low and would pose a minimal hazard."
-------------------------
Reaction Engines Ltd a UK company whose new engine is "a breakthrough in aerospace technology that is now allowing the development of engines that will propel aircraft at speeds of up to five times the speed of sound or directly into Earth orbit."
----------------------
The Register with a tough but fair assessment of what our space industry really is & what government actively isn't doing about it.
----------------------
Infinite growth on a finite planet - easy peasy Tim Worstall explains why growth is a function of technology not of mineral resources and that there is thus no limitation on this planet. This is what Julian Simon long said and it is certainly true. Not a space article but the obvious corollary is that in an infinite universe our growth capability is infinity squared - can't be bad unless you're against human progress.
Which unfortunately so many parasites are.
---------------------
Viking found life on Mars - more
---------------------
SpaceX will make a share offering in 2013 I think he will do very well indeed.
------------------------
Elon Musk interview
"Question: What missions will you be doing in 10 years?
Musk: Our goal is to revolutionize space transport. So we'll be doing every kind of space transport, except for suborbital. We'll launch satellites of all shapes and sizes, servicing the space station with cargo and crew, and then the long term objective is to develop a space transport system that will enable humanity to become a multi-planet species.
------------------------
Spaceport Sweden
-----------------------
Virginia gives tax break to attract space industry
The Virginia General Assembly is soon to consider a bill that will allow an income tax deduction of up to $8,000 (£5,100) for burials in space, WTVR reports.
------------------------
Nuclear Thermal Rockets Since there is no contact between the reactor and air this does not, except in the event of catastrophic failure, release radioactivity to the atmosphere. Even catastrophe would only mean "it is highly unlikely that a reactor's fuel elements would be spread over a wide area. They are composed of very strong materials, either carbon composites or carbides, and normally coated with zirconium hydride. The solid core NTR fuel itself is conventionally a small percentage of U-235 buried well inside an extremely strong carbon or carbide mixture. Unless the physically small reactors have been run for an extended period, the radioactivity of these elements is quite low and would pose a minimal hazard."
-------------------------
Reaction Engines Ltd a UK company whose new engine is "a breakthrough in aerospace technology that is now allowing the development of engines that will propel aircraft at speeds of up to five times the speed of sound or directly into Earth orbit."
----------------------
The Register with a tough but fair assessment of what our space industry really is & what government actively isn't doing about it.
----------------------
Infinite growth on a finite planet - easy peasy Tim Worstall explains why growth is a function of technology not of mineral resources and that there is thus no limitation on this planet. This is what Julian Simon long said and it is certainly true. Not a space article but the obvious corollary is that in an infinite universe our growth capability is infinity squared - can't be bad unless you're against human progress.
Which unfortunately so many parasites are.
Labels: ecnomic growth, links, space
Wednesday, April 25, 2012
We Are officially In Recession - Caused Entirely Deliberately By the LabNatConDems
Figures just out this morning show a 0.2% cut in GDP. Since we also had a drop 3 months ago that puts us in official recession, again.
More important is the fact that over the last few years we have never had any growth that wasn't within the margin of error of the figures.
While the world economy continues, year after year, growing at 5% & the bits outside the EU/US at 7% we keep bobbing along the bottom, sinking ever deeper into an economic backwater.
The Treasury is spinning
The Treasury’s excuse is that the EU is heading into recession and it accounts for 40% of our exports, holding us back. Failing to mention that the rest of the world is growing at about 6% (excluding the US at 7%) and thus pushing us forward. Of course this seems not entirely compatible with 2 generations of politicos telling us how beneficial it is to be in the EU.
The fact is undeniable and indeed undenied – that we could be out of recession and into fast growth within days if the political class wished it & that every numerate politician knows this.
See my 28 point programme out of recession which, in various forms, has been around since we first went into recession. This has been seen by all the party leaders and there is no attempt to dispute, in any way whatsoever, that it will work. It fits well, particularly on the big items, with UKIP's programme Since the rest of the world is in fast growth with just a fraction of the programme it obviously would work.
Which is why it is obviously impossible for any politicians who are not personally wholly and completely corrupt to claim that they are trying to get out of recession - like Cameron and Clegg and any loyal members of the parties they rode in on.
More important is the fact that over the last few years we have never had any growth that wasn't within the margin of error of the figures.
While the world economy continues, year after year, growing at 5% & the bits outside the EU/US at 7% we keep bobbing along the bottom, sinking ever deeper into an economic backwater.
The Treasury is spinning
In defence, the Treasury will point to the bigger picture. The eurozone crisis has sapped confidence, deterring businesses from investing and costing growth and jobs.
The Treasury’s excuse is that the EU is heading into recession and it accounts for 40% of our exports, holding us back. Failing to mention that the rest of the world is growing at about 6% (excluding the US at 7%) and thus pushing us forward. Of course this seems not entirely compatible with 2 generations of politicos telling us how beneficial it is to be in the EU.
The fact is undeniable and indeed undenied – that we could be out of recession and into fast growth within days if the political class wished it & that every numerate politician knows this.
See my 28 point programme out of recession which, in various forms, has been around since we first went into recession. This has been seen by all the party leaders and there is no attempt to dispute, in any way whatsoever, that it will work. It fits well, particularly on the big items, with UKIP's programme Since the rest of the world is in fast growth with just a fraction of the programme it obviously would work.
Which is why it is obviously impossible for any politicians who are not personally wholly and completely corrupt to claim that they are trying to get out of recession - like Cameron and Clegg and any loyal members of the parties they rode in on.
Labels: British politics, ecnomic growth, UKIP
Sunday, January 23, 2011
WE CAN COPY CHINA'S ECONOMIC GROWTH AND BETTER IT
This is a response to an article on the Adam Smith Instithttp://en.wikipedia.org/wiki/Exogenous_growth_model#Empirical_evidenceute saying we cannot match them.
The article is primarily a restatement of the theory that theory that standards of living in different countries must converge. History shows the opposite. Even wikipedia acknowledges "Since the 1950s, the opposite empirical result has been observed on average" and anybody who knows history over the last 2 centuries can see that while wealthy countries today can be over 100 times better off than the poorest this was not the case then. This is supported in China's case by the fact that their growth is an average, with the fastest Guandong, growing at nearly 20%which is also already wealthiest growing at nearly 20% and the more backward inland provinces stagnant.
The evidence then is that we could be growing faster than China if we were to be making as much effort as them.
The error is shown particularly in the last paragraph which details our alleged problem
Pretending that our problems are not self inflicted is the first step to solving them. I regret that the ASI seems intent on not even taking that first step.
The article is primarily a restatement of the theory that theory that standards of living in different countries must converge. History shows the opposite. Even wikipedia acknowledges "Since the 1950s, the opposite empirical result has been observed on average" and anybody who knows history over the last 2 centuries can see that while wealthy countries today can be over 100 times better off than the poorest this was not the case then. This is supported in China's case by the fact that their growth is an average, with the fastest Guandong, growing at nearly 20%which is also already wealthiest growing at nearly 20% and the more backward inland provinces stagnant.
The evidence then is that we could be growing faster than China if we were to be making as much effort as them.
The error is shown particularly in the last paragraph which details our alleged problem
try to develop a better way of tilling your field, and that will give you a productivity boost. But it’s an uncertain process and much slower than just adding tractors. This is essentially where we are in the West – we’ve maxed out the amount of capital we can add, so growth now comes from innovation in business and technology.In fact precisely that option is open to us. Genetic modification of plants is entirely practical and is increasing yields - in China but not in Europe where such new technology is banned. The same applies to electricity production where China is building coal & nuclear plants while we subsidise windmills, at at least 4 times the cost. That, alone, is why China now has more electrical capacity than the entire EU. However we do still have the technological edge in trained engineers and could start producing inexpensive nuclear power any time government would let us far more easily than China can. Despite the fact that China is still a heavily regulated bureaucracy they are out pacing us not because that is the law of nature but because they are adopting modern technology and we are adopting Luddism.
Pretending that our problems are not self inflicted is the first step to solving them. I regret that the ASI seems intent on not even taking that first step.
Labels: ecnomic growth, eco-fascism, International politics
Friday, March 26, 2010
HUMAN ACHIEVEMENT HOUR
Via Mr Euginides & Dizzy together with a plea that instead of celebrating Earth Hour (last year they called it Earth Day) by switching off all your lights (8.30pm on Saturday 27th March) we should celebrate Human Achievement Hour by keeping them on. My suspicion is that most people will do the latter & only the most useless & pretentious parts of government will do the former which seems appropriate. eg Zimbabwean children will hold a candlelit picnic & the WWF fakecharity are pushing it.
This orbital picture shows, in a way 1,000 words couldn't do, what is wrong with pure socialism & indeed Luddite "environmentalism". One may argue correctly that less pure socialism/Luddism we have in Britain is less destructive but that is an argument only that it is less horrible not that it is in any way good.
There is a close relationship between electricity use & GNP with the developed world averaging just under $4 of GNP per kWh, China doing $2.45, Britain $6.3 & those significantly above being undeveloped, artificially increasing wealth by having oil, or so failing that electricity & the rule of law doesn't go beyond the capital city, or all 3.
There are a noisy minority who would do this in Britain if they could, though they have less organising ability than Kim. This extremely silly letter published in the Morning Star inviting us all to prove our socialist purity by supporting North Korea in the World cup. To be fair it was followed by a reply saying otherwise but to continue being fair that was followed by a further reply saying that "many reactionaries would take comfort" from the 1st reply.
My previous poll on the desired size of government showed that while there is a normal curve centering around about 17% of GNP being government spending there was a another small bump at +90% who clearly can never be even close to placated by anything acceptable to the overwhelming bulk of us (& of whom I am ungenerous enough to suspect none live out of anything but the public purse). Placating the Luddite parasites need not be done & by doing so we have just been paying Danegeld, since, as my post yesterday showed, the parasites will tell any lie to build a poorer nation if it will pay them.
Labels: ecnomic growth, Fixing the economy, Government parasitism
Friday, March 12, 2010
WHAT LABOUR'S BUDGET SHOULD SAY IF THEY WANT TO WIN
This isn't exactly original. I detailed a year & a half ago how to get not merely out of recession but into world class growth a year & a half ago & nobody, least of all no politician, has disputed that it would work. Nor have they done anything. This was & is my 16 point plan:
1 - Cut the size of government spending - I would go for a no new hires rule & price freeze in the government, probably excluding new doctors & a few other proven front line requirements - this should be about a 5% real reduction year on year. Also completely prune particular departments described later. 5% of the budget is £30 billion so including both actions over a couple of years that is probably about £100 billion. Mark Wadsworth comes up with a similar figure from different directions. This doesn't itself increase the economy, indeed cutting the non-productive £100 billion would cut the economy by £100 billion (ie 7%) but gives us money which can be used with a real multiplier effect & long term growth benefits.
2 - Cut corporation tax to Irish levels - cost about £30 billion & this is the main bit of what got Ireland's growth up from 2% to 7%.
3 - Lets go overboard & cut business rates too - about £20 billion at half the effect.
4 - Gut the Health & Safety Exec - if it saves the work of 4 million workers that is 14% of the economy.
5 - Allow the free market to build as many nuclear plants as the market needs, starting tomorrow. There are arguments for & against the government paying for & owning it but lets keep it simple & at zero cost.
6 - Improve transport - better roads, particularly motorway junctions, allowing airports to expand & the road tunnels project. Cost a few billion. Improving transport infrastructure is one of the things where government expenditure actually works.
7 - Adult job training. Hire retiring plumbers, electricians etc etc to do evening classes in some of the schools empty in the evenings. Adult, particularly male, technical education is the part of education which shows real worthwhile payoff in productivity.
8 - Automate the rail system & introduce lightweight vehicles based on road vehicle technology. My guess is this would be about £10 billion annually but once it is done rail costs go way down & capacity way up.
9 - Quit the EU. The Bruges Group have said the EU costs us £55 billion in direct costs. The EU's Enterprise Commissioner says the regulations alone cost £405 billion - ie £67 billion to us.
10 - Allow almost unrestricted housebuilding & encourage modular methods. This should let them cost about 1/4 the present price. Housebuilding is pretty much the biggest industry in any country & that would give us an enormous boost.
11 - End most of the sort of "environmental" regulations which have stopped Trump investing his £1 billion here for 3 years. This alone has cost the Exchequer £360 billion (£12% a year).
12 - This has already been done, albeit accidentally & need not be extended - Letting the £ drop is a major stimulus to the productive sector though exports. It worked in Major's time too - also accidentally.
13 - An X-Prize foundation & a free market regime on Ascension Island as a British Space base. So long as the Foundation is guaranteed an increasing amount of money at approx 5% above the rate of growth & able to offer prizes based on what the fund will be in future it can offer multiples of the current cost & in turn the gain to the economy will be multiples of that figure. Of course if nobody wins such prizes it has zero cost - that being the worst case scenario. I would suggest £1 billion a year as starting payment which would certainly put us at the top of the space & high technology trees attracting many times that level of investment & even more importantly, many of the world's best brains.
14 - I see that though we have saved £155 billion plus we have only spent about £70 billion. Put the rest into cutting taxes (28p off income tax or equivalent!). I would also support raising alcohol taxes since it discourages something socially damaging whereas most tax discourages productive stuff. It wouldn't take many years of excise duty rising faster than a Chinese style growth rate to pay for all the size of government here.
- These are a bit of a flyer not to be done till we know the economy is recovering:
15 - Build some floating islands, probably around Ascension island, probably about £1 billion each.
16 - Make a purchase guarantee for a factory to mass produce turnkey operation nuclear reactors in Britain, for use here & around the world. If it can be done with a new design & much smaller & hence less economic reactors it can be done for normal 1 gw ones. Invite the best designer, probably Ariva or Westinghouse (which used to be British owned but the government forced British nuclear to sell it off). We guarantee that if they can make a production line turning out one, turnkey operation reactor, a day we will purchase the first 2 years supply at cost if they can't sell them abroad. Assuming £350 million (70% of the current minimum price) a shot that puts us on line for a £255 billion liability & I am working on the assumption that, since there is currently a backlog they would actually sell. That is a bet but a reasonable one & if it works we would lead ourselves & the rest of the world to unequalled prosperity & end up with the sort of role in building the world's electrical power that the US has exercised for decades in world aircraft production.
- I think it would be conservative to say that most of the above individually, excluding #1, would increase growth by more than 2%. It would be optimistic to assume they would all work cumulatively but but even so that would be pretty good.
------------------
We live in an era when the policies of all 3 parties are close to indistinguishable, are not motivated by any ideology & are subject to change at any time. With the exception of #9 - quitting the EU - none of them breach the policies of the officially pro-business, pro-nuclear Labour party. Even on that one Labour have been on the quitting side of the policy dance more recently than the Tories & we know Brown refused Blair's offer to let him take over on condition of joining the Euro so clearly Brown is at least dubious of EU membership.
The current Labour position is that they have to keep borrowing £500 million a day to fuel growth. The problems with that are that the money is currently going to finance day to day state spending rather than investment & that so long as it is not actually invested in achieving real growth the time when it simply becomes impossible to persuade anybody to lend to us looms fast.
Using the existing deficit as I suggest would allow Labour to do an end run round the Conservative's fiscal prudence. If we could achieve 10% growth, like China, India etc, we could certainly afford our current deficit of 12.5% of GNP knowing that it could be paid off - people we are borrowing from would know the same.
I think a budget run on this basis would, along with their promise on electoral reform, leave the Conservatives dead in the water, guarantee a Labour win & much more importantly (assuming the promises made were kept since this budget is only a set of promises for after the election) guarantee great prosperity for the British people.
Obviously the Conservatives or LibDems could do the same, though without the platform of holding the Chancellorship, or the record establised doing so.
On the other hand this learned magazine proposes what is currently the official economic policy of the US & UK governments.
1 - Cut the size of government spending - I would go for a no new hires rule & price freeze in the government, probably excluding new doctors & a few other proven front line requirements - this should be about a 5% real reduction year on year. Also completely prune particular departments described later. 5% of the budget is £30 billion so including both actions over a couple of years that is probably about £100 billion. Mark Wadsworth comes up with a similar figure from different directions. This doesn't itself increase the economy, indeed cutting the non-productive £100 billion would cut the economy by £100 billion (ie 7%) but gives us money which can be used with a real multiplier effect & long term growth benefits.
2 - Cut corporation tax to Irish levels - cost about £30 billion & this is the main bit of what got Ireland's growth up from 2% to 7%.
3 - Lets go overboard & cut business rates too - about £20 billion at half the effect.
4 - Gut the Health & Safety Exec - if it saves the work of 4 million workers that is 14% of the economy.
5 - Allow the free market to build as many nuclear plants as the market needs, starting tomorrow. There are arguments for & against the government paying for & owning it but lets keep it simple & at zero cost.
6 - Improve transport - better roads, particularly motorway junctions, allowing airports to expand & the road tunnels project. Cost a few billion. Improving transport infrastructure is one of the things where government expenditure actually works.
7 - Adult job training. Hire retiring plumbers, electricians etc etc to do evening classes in some of the schools empty in the evenings. Adult, particularly male, technical education is the part of education which shows real worthwhile payoff in productivity.
8 - Automate the rail system & introduce lightweight vehicles based on road vehicle technology. My guess is this would be about £10 billion annually but once it is done rail costs go way down & capacity way up.
9 - Quit the EU. The Bruges Group have said the EU costs us £55 billion in direct costs. The EU's Enterprise Commissioner says the regulations alone cost £405 billion - ie £67 billion to us.
10 - Allow almost unrestricted housebuilding & encourage modular methods. This should let them cost about 1/4 the present price. Housebuilding is pretty much the biggest industry in any country & that would give us an enormous boost.
11 - End most of the sort of "environmental" regulations which have stopped Trump investing his £1 billion here for 3 years. This alone has cost the Exchequer £360 billion (£12% a year).
12 - This has already been done, albeit accidentally & need not be extended - Letting the £ drop is a major stimulus to the productive sector though exports. It worked in Major's time too - also accidentally.
13 - An X-Prize foundation & a free market regime on Ascension Island as a British Space base. So long as the Foundation is guaranteed an increasing amount of money at approx 5% above the rate of growth & able to offer prizes based on what the fund will be in future it can offer multiples of the current cost & in turn the gain to the economy will be multiples of that figure. Of course if nobody wins such prizes it has zero cost - that being the worst case scenario. I would suggest £1 billion a year as starting payment which would certainly put us at the top of the space & high technology trees attracting many times that level of investment & even more importantly, many of the world's best brains.
14 - I see that though we have saved £155 billion plus we have only spent about £70 billion. Put the rest into cutting taxes (28p off income tax or equivalent!). I would also support raising alcohol taxes since it discourages something socially damaging whereas most tax discourages productive stuff. It wouldn't take many years of excise duty rising faster than a Chinese style growth rate to pay for all the size of government here.
- These are a bit of a flyer not to be done till we know the economy is recovering:
15 - Build some floating islands, probably around Ascension island, probably about £1 billion each.
16 - Make a purchase guarantee for a factory to mass produce turnkey operation nuclear reactors in Britain, for use here & around the world. If it can be done with a new design & much smaller & hence less economic reactors it can be done for normal 1 gw ones. Invite the best designer, probably Ariva or Westinghouse (which used to be British owned but the government forced British nuclear to sell it off). We guarantee that if they can make a production line turning out one, turnkey operation reactor, a day we will purchase the first 2 years supply at cost if they can't sell them abroad. Assuming £350 million (70% of the current minimum price) a shot that puts us on line for a £255 billion liability & I am working on the assumption that, since there is currently a backlog they would actually sell. That is a bet but a reasonable one & if it works we would lead ourselves & the rest of the world to unequalled prosperity & end up with the sort of role in building the world's electrical power that the US has exercised for decades in world aircraft production.
- I think it would be conservative to say that most of the above individually, excluding #1, would increase growth by more than 2%. It would be optimistic to assume they would all work cumulatively but but even so that would be pretty good.
------------------
We live in an era when the policies of all 3 parties are close to indistinguishable, are not motivated by any ideology & are subject to change at any time. With the exception of #9 - quitting the EU - none of them breach the policies of the officially pro-business, pro-nuclear Labour party. Even on that one Labour have been on the quitting side of the policy dance more recently than the Tories & we know Brown refused Blair's offer to let him take over on condition of joining the Euro so clearly Brown is at least dubious of EU membership.
The current Labour position is that they have to keep borrowing £500 million a day to fuel growth. The problems with that are that the money is currently going to finance day to day state spending rather than investment & that so long as it is not actually invested in achieving real growth the time when it simply becomes impossible to persuade anybody to lend to us looms fast.
Using the existing deficit as I suggest would allow Labour to do an end run round the Conservative's fiscal prudence. If we could achieve 10% growth, like China, India etc, we could certainly afford our current deficit of 12.5% of GNP knowing that it could be paid off - people we are borrowing from would know the same.
I think a budget run on this basis would, along with their promise on electoral reform, leave the Conservatives dead in the water, guarantee a Labour win & much more importantly (assuming the promises made were kept since this budget is only a set of promises for after the election) guarantee great prosperity for the British people.
Obviously the Conservatives or LibDems could do the same, though without the platform of holding the Chancellorship, or the record establised doing so.
On the other hand this learned magazine proposes what is currently the official economic policy of the US & UK governments.
Labels: British politics, ecnomic growth, Fixing the economy
Wednesday, March 10, 2010
WHEN GOVERNMENT'S SHARE OF THE ECONOMY WAS 6%
This is part of an article on New Zealand's adoption of free market reforms but this particular line jumped out at me.
In Britain at the moment government spending is just over 50% of GNP (60% in Scotland) though 1/4 of that is money raised by borrowing rather than tax. It strikes me that a society that can borrow 12.5% of GNP in a period of flatlined growth would have no difficulty whatsoever in borrowing 6% fairly permanently if our growth matched China's. That, somewhat improbably, means we could do with no taxation at all! Actually if we raise about £20 bn (1.5% of GNP) on bandwidth licencing & other sorts of rental assets that can only easily be done by government & there is a continuing increase in money supply to keep prices at a constant rate zero taxes become not unreasonable.
HT to Jerry Pournelle
If we assume technology has been growing at an exponential rate, as all the evidence shows, this increase in state parasitism accounts for the fact that real rates in wealth increase are not expanding exponentially.
++++++++++++++++B+rad DeLong'+s estimate of historical+ +wo+rld growth:+
Year/ Population millions /GDP per person/ annual growth
5000 BC / 5 / 130 /--
1000 BC / 50 / 160 / 0.21%
1 AD / 170 / 135 / 0.20%
1000 AD / 265 / 165 / 0.14%
1500 AD / 425 / 175 / 0.24%
1800 AD / 900 / 250 / 0.71%
1900 AD / 1625 / 850 / 4.3%
1950 AD / 2515 / 2030 / 5.17%
1975 AD / 4080 /4640 / 10.38%
2000 AD / 6120 / 8175 / 7.4%
This is a my pocket calculator working of the growth rates & is higher than normally believed though the trend is the same. I assume the difference is in the amount of growth worldwide soaked up by increasing population. There is a clear correlation between the rate of rise slowing & then declining & the post 1930 increase in government. There may even be a correlation between the post 1500 rate of growth & the end of feudalism & governments being under the rule of first centralising monarchies & then the rule of law rather than local aristocrats/warlords but that is more speculative.
If we look back through history, growth in government has been a modern phenomenon. Beginning in the 1850s and lasting until the 1920s or ’30s, the government’s share of GDP in most of the world’s industrialized economies was about six percent. From that period onwards—and particularly since the 1950s—we’ve seen a massive explosion in government share of GDP, in some places as much as 35-45 percent. (In the case of Sweden, of course, it reached 65 percent,What has been done clearly can be done & therefore such levels are achievable. I personally would be happy with 15% but that may just be because I am a child of this age.
In Britain at the moment government spending is just over 50% of GNP (60% in Scotland) though 1/4 of that is money raised by borrowing rather than tax. It strikes me that a society that can borrow 12.5% of GNP in a period of flatlined growth would have no difficulty whatsoever in borrowing 6% fairly permanently if our growth matched China's. That, somewhat improbably, means we could do with no taxation at all! Actually if we raise about £20 bn (1.5% of GNP) on bandwidth licencing & other sorts of rental assets that can only easily be done by government & there is a continuing increase in money supply to keep prices at a constant rate zero taxes become not unreasonable.
HT to Jerry Pournelle
If we assume technology has been growing at an exponential rate, as all the evidence shows, this increase in state parasitism accounts for the fact that real rates in wealth increase are not expanding exponentially.
++++++++++++++++B+rad DeLong'+s estimate of historical+ +wo+rld growth:+
Year/ Population millions /GDP per person/ annual growth
5000 BC / 5 / 130 /--
1000 BC / 50 / 160 / 0.21%
1 AD / 170 / 135 / 0.20%
1000 AD / 265 / 165 / 0.14%
1500 AD / 425 / 175 / 0.24%
1800 AD / 900 / 250 / 0.71%
1900 AD / 1625 / 850 / 4.3%
1950 AD / 2515 / 2030 / 5.17%
1975 AD / 4080 /4640 / 10.38%
2000 AD / 6120 / 8175 / 7.4%
This is a my pocket calculator working of the growth rates & is higher than normally believed though the trend is the same. I assume the difference is in the amount of growth worldwide soaked up by increasing population. There is a clear correlation between the rate of rise slowing & then declining & the post 1930 increase in government. There may even be a correlation between the post 1500 rate of growth & the end of feudalism & governments being under the rule of first centralising monarchies & then the rule of law rather than local aristocrats/warlords but that is more speculative.
Labels: ecnomic growth, Fixing the economy, Government parasitism
Wednesday, February 17, 2010
IRISH TIGER'S RECESSION - BACK TO 128% OF UK INCOME
I have held up Ireland as an example of successful economic growth, having averaged 7% a year from 1990 to the start of the present recession. Now their "bubble" has burst & it is widely thought of, not least by the Irish themselves, as having been a mirage. This letter appeared on Jerry Pournelle's site & I wish to give my opinion.:
#####################
The early stages of the Irish Celtic Tiger boom were certainly built on export growth. At the height of the boom Ireland was the largest exporter of software in the world (India was second). Intel, Dell, HP, Google, Microsoft, Apple and PayPal, amongst others, all had significant presences here and still do, with the exception of Dell.
However a funny thing happened on the back of all the export growth. Wages went up and interest rates dropped to very low levels. In addition the banking market opened up here and so 100% mortgages became much easier to get. In some cases it was possible to get 110% mortgages for a new property. Also, the government offered significant tax incentives to developers to build in certain areas of the country. Finally, property here is only taxed when it is sold, in the form of a stamp duty on the sale. In addition a capital gains tax is payable on the profit made from selling any property that is not one’s personal private residence. So, you had a workforce with rising wages and access to cheap money, builders incentivised to build and a government incentivised to encourage building because it collected taxes on each transaction. The consequence was a huge increase in demand for property and a consequent inflation of property prices.
The resultant property bubble can be illustrated as follows: A developer decides to build a new housing estate in three phases. Let’s say phase one is sold for €500,000 per house. Typically phase two will sell for €600,000 and phase three will sell for €700,000. During the property bubble phase three houses would sell just as quickly as phase one. An astute buyer could buy a phase one house for €500,000 but not transfer title to their name. When phase three was released at €700,000 that buyer would put their (never occupied) house back on the market at €650,000. They were guaranteed an instant profit of €150,000 with minimal tax implications because title for the property would transfer directly from the developer to the eventual buyer. My figures are probably not quite right but this sort of thing went on all the time: It was a Ponzi scheme. Despite these tax dodges the government raked in huge amounts of money and there was no incentive to slow the market down. The government used the extra cash to expand the public service sector. Notably, funding to the public health service doubled but I for one cannot see any increase in efficiency or improvement in patient service. Iron Law, anyone?
So, at the height of the bubble the banks were lending stupidly large amounts of money to both developers and private buyers who had no hope of paying back the loans unless the bubble continued. Of course it didn’t. Once the subprime crisis in the US started, the exposure of the Irish banks became obvious. The banks very quickly stopped lending but were still left with exposure to a whole bunch of loans that couldn’t be repaid. In late 2008 we came within 12 hours of a total banking collapse with a subsequent exposure of €400 billion. That’s half a trillion dollars and it’s a lot for a small country with a population of less than 5 million. Luckily the collapse didn’t happen but right now the government is buying up €50 billion in bad loans from the banks in the hope that they will start lending again. However it won’t work as the banks desperately need to recapitalise so they are pocketing the money from the government and are not lending to anyone. Worse still, the banks are likely to go cap in hand to the government looking for more money to recapitalise. Meanwhile the government is having to contend with an overpriced public sector and also nearly half a million unemployed people.
Are we in a death spiral? Not yet, but we are perilously close. Tax revenue is still dropping and unemployment is still rising. While both trends are slowing down they need to reverse, and soon. The cost of unemployment benefit is approaching €100m per week. We can’t raise taxes because salaries are dropping. The banks won’t lend money to keep small businesses going. Currently we are very exposed to Greece going down as the market will almost certainly come after Ireland next. If we were outside the Euro we could devalue our currency but that’s not an option. Finally, no-one has a clue how to get half a million people back to work. And the reason we’re called PIIGs is probably because we’re up to our ears in the brown smelly stuff.
Watch this space.
#######################
I feel the disappointment with the Celtic Tiger is greatly overblown. There is considerable schadenfreude among economists, politicians & the anti-free market ruling class in the rest of Europe who did not manage to get their economies into the same happy state of growth & had thus been predicting, for at least a decade, its imminent collapse. Their joy is clear because it alleviates them from having to explain to their own people why they couldn't.
However It should be remembered that Ireland went from 2/3tds to 4/3rds of British per capita GNP by achieving an average 7% growth (we managed 2.5%, usually). Their economy has now declined by 12.4% over the last 2 years whereas Britain's has fallen 4%. However we are borrowing money at 12.5% of GNP annually while Ireland is making strenuous efforts to balance its budget. Without that artificial stimulus we would therefore be in a similar position, as would the USA & many other countries.
Ireland's growth to a point where it matched the per capita income of the USA was not a bubble. It was achieved by cutting corporation tax to 12.5% & cutting regulations, particularly those on housebuilding. It achieved nearly 20 years of growth which is longer than bubbles last. If there was some overselling of houses - well so what - they are now in a market correction but it will correct itself. The fact is their government is solvent, at least by comparison to ourselves, its markets are free and its taxes are low. All this suggests it will be back into growth before us.
A problem they do have is that they are part of the Eurozone whose value is run in accord with the needs of all the Euro economies of which Ireland as a very small part indeed. That meant they couldn't earlier set interest rates at a level which would discourage housebuilding speculation & they can't now allow their currency to fall, as Britain & America's is. They would be better off out but that is their decision & while it makes the process of cutting government spending much more painful than it need be it does not affect the underlying strength of the economy.
The one place where Ireland's economy is in danger & which is not discussed, is their energy supply. They have gone hysterical about nuclear, partly because the English plant in Sellafield across the Irish Sea makes it patriotic to be anti-nuclear & partly because it is generally fashionable (remember Ireland fashionably led off in Europe in making smoking in public places illegal). At present they produce $7.75 of GNP per kwh of electricity. This is the highest ratio of any developed country (Britain is 3rd at $6.14) & it is likely to get worse because part of their power comes from the Hunterston nuclear power plant in Scotland which is being extended beyond its official retiral age. When Britain faces blackouts it looks unlikely we will be willing to export electricity there. That could, of course, be settled by Ireland by making a decision to go nuclear or even expand their conventional power. Indeed seeing how well they have done with that much power shortage already it is clear they have the potential to grow even faster than they have been doing.
So do we if we adopt the policies that have worked there.
UPDATE
Jerry Pournelle has also reprinted this as part of the ongoing discussion. He conclude in response to my last paragraph that
Cheap energy plus freedom equals prosperity.which covers it succinctly. I wish most Nobel prize winning economists knew as much.
Labels: ecnomic growth, Fixing the economy, International politics
Thursday, December 24, 2009
ECONOMIC MIRACLES
We may be in a mess at the moment butb it often helps to see how much worse things could be.
In 1945 Germany was like Gaza but with far less aid, houses or law. This is how the German "economic miracle" brought them up to being richer than almost other European countries. Simple free marketism.
In 1945 Germany was like Gaza but with far less aid, houses or law. This is how the German "economic miracle" brought them up to being richer than almost other European countries. Simple free marketism.
Labels: ecnomic growth, Fixing the economy
Thursday, December 17, 2009
Britain's maximum growth option
"Academic studies show that each extra one percent of an economy taken up by public spending reduces the growth rate for that economy by 0.15%"
I commented that this single remark should be written in fire wherever the powerful gather so here it is ;-)
Also in Conservative & UKIP election material
That would mean if government spending were reduced from the present just over 50% to 20% we should expect growth to increase by about 5%
Note inter alia that that is the equivalent of a rate of return of 15% plus the inflation rate, which is far better than ever charged so it is more rewarding to borrow more & cut taxes than not to, though only if the borrowing is actually used to keep government off the back of the economy rather than to increase government spending. Theoretically that would mean Brown was right to say it is better to borrow for growth if he had been using the money to cut taxes & promote growth in the productive part of the economy rather than growth in the government part. This is pretty much what Reagan did when he cut taxes & let the deficit increase in the expectation increased growth would take care of it. It was described as "Voodoo economics" but there is no dispute that it worked. I must admit my Presbyterian conscience is uncomfortable at the thought of government simply borrowing but if it is used to promote real, return making, investment rather than the day to day spending politicians so often describe as "investment" the figures show it will work.
Less academically certain lets look at the effect of over-regulation. I have previously calculated that over-regulation in Britain costs us the equivalent of 100% of our current economy. If we assume that some of government spending which we are looking at cutting actually does have some economic use we should expect productivity released by the cutting of useless regulation to have, if anything, a slightly greater positive effect on growth. Taking only the same o.15%/1% ratio cutting all of this parasitism would improve growth by 15%.
Combining both factors with our present long term growth rate of 2.5% & compounding them we get (1.15 x 1.05 x 1.025) a possible growth rate of 1.238 ie 23.8%
Without even including X-Prizes
I think there are other things government can do that enhance growth more than putting the same money into tax cuts - legal aid to inventors trying to patent worldwide; improving transport infrastructure; providing technical education - but not many.
This sounds, even to me, pretty incredible but remember that though China has managed 10% growth over a long period & up to 11.5% China's economy is widely differentiated between the old socialist hinterland & the world's freest markets in Guangdong province beside Hong Kong which has managed 20%, though they have unlimited immigration from the hinterland. And China still has quite a big state sector - it is not run by libertarian supermen.
Also we should expect that growth rate to decline over time because it is being artificially pushed up by deregulation. When the economy grows faster than 7.5% it is catching up on foregone growth caused by over-regulation. As the regulatory overhang falls so will the benefit of deregulation.
Nonetheless a decade averaging above 20% growth would make us 8 times wealthier & almost make up for the last 6 decades of overregulation (4 decades of them "environmental") & consequent slow growth.
At the very least aiming for that & falling short would be better than the very best our current crop of leaders dare to dream of.
Labels: ecnomic growth, economics, Fixing the economy
Monday, August 24, 2009
HABITS OF HIGHLY EFFECTIVE COUNTRIES - FACTORS AFFECTING GROWTH
I have blogged previously on this immensely valuable pdf document - a statistical analysis of what factors correlate with growth. It is worth doing it again & I am now going to reprint stuff from
Chapter 9 FACTORS AFFECTING GROWTH pdf page 53:
"resource-rich countries are usually slightly more prosperous than resource-poor ones. The problem is that they are not as prosperous as they should be"
"there is a great deal of evidence to the effect that governments tend to use resources less efficiently than entrepreneurs. The most significant point is that
what matters more than how much governments take in tax is what they do with it. The evidence suggests that governments are more likely to promote growth if they use their revenue primarily to:
build infrastructure, especially
transport infrastructure;
provide services, rather than
regulate economic activity;
do things that don’t duplicate
what the private sector can do,
specifically that they do not
compete with it; and
increase efficiency by outsourcing
and privatising." p54
"strong correlation between ‘business tax friendliness’ and growth. Tax friendliness measures the impact of tax complexity and incidence on business" p54
"governments are best advised to do less rather than more because the downside risk of what they do is greater than the upside potential" p55
"countries with the world’s smallest governments tend to be super-achievers" p55
"Notwithstanding a value-free approach, much of this report refers to indices of freedom defined in various ways (civil liberties, rule of law, economic freedom, political freedom et al). This was not contrived; it is simply that the factors that correlate most with prosperity happen to be indicators of some form of freedom. We expected other factors to present high positive correlations, such as natural resources, climate, history, culture, religion and governance. Neil van Heerden, former head of the SA Foundation, suggested that these ‘negative’ findings might be more instructive than positive correlations. Identifying the
extent to which people ‘know things that just ain’t so’ is essentially the falsification of hypotheses." p56
"key finding is that the least regulated economies (top quartile) grow 2.2% faster than those that are most regulated (bottom quartile)." p56
"It finds that efficient economies rely more on commonlaw than regulation, and that social democracies (like Denmark, Norway and Swede) benefit from streamlined business regulation, they offset the burden of welfare by liberating productive market forces" p57
"The world’s twenty least regulated economies are all (except Taiwan) rich first world countries, including all G8 countries" p57
"such as health and safety regulation, most of which has never been shown to have benefits exceeding costs, and all of which imposes enormous direct and indirect costs
on people at the expense of prosperity" p57
"A retreaded tyre regulation in the USA, for instance, was found to have cost a few million dollars for every sub-standard tyre identified by the measure" p57
"regulatory compliance (‘red tape’) cost South African businesses R79 billion in 2004, equivalent to 6.5 per cent of GDP" p57
"An OECD study found that over-regulation is the major cause of the slower rate of growth of the European Union compared to that of the USA. But what are the benefits of regulation? The study found ‘no quality benefits’. We all know that government is
costly, but a 75-country study found that regulations usually cost a country twenty times more than they cost the government" p58
"government may have a more intransigent problem with excess red tape than it realises. This is its fourth major attempt at systematic regulatory review. The first...The report was circulated through the Cabinet to all departments with a view to them addressing the problem in accordance with its recommendations.
... it was never heard of again. The second was to be undertaken by the Small Business Council, but it was dissolved. The third (full & never heard from again). It may be helpful to establish why isolated departments did succeed at substantial market liberalisation" p58
Chapter 10 CHARACTERISTICS OF WINNERS & LOSERS p59
"sound policies can withstand almost any shock, and produce prosperity under almost any conditions." p59
"There is virtually no empirical evidence in favour of aid, subsidies, debt relief, technical assistance or protection" p59
"the Marshall Plan failed to generate prosperity. Furthermore, the UK received much more aid than Germany without achieving high growth. If anything, aid enabled it to perpetuate inappropriate policies." p59
"the relative size of education budgets does not correlate significantly with growth" p60
"highest growth countries cover the full range of possibilities, from poor (Trinidad & Tobago) to rich (Iceland), small (Luxembourg) to big (China), formerly capitalist(Ireland) to formerly socialist (Vietnam), resource-rich (Mozambique) to resource-poor (Finland), countries that were colonised until recent decades (Tunisia) and
ones that were not (Finland). There is also a wide range of cultural, religious, ethnic, historical and geographic diversity among high growth countries" p61
"experience of other countries is that it is likely to achieve and sustain high growth only if it resists the temptation faced by all governments to abandon a winning formula when sustained high growth is achieved. As this report shows, markets tend to respond enthusiastically to pro-market reforms" p62
"Trinidad & Tobago, shifted from one extreme to the other having elevated itself from the lowest to the highest growth rate group" p62
11 SHORT LIST OF WINNERS' POLICIES p65
"The proverbial “bottom line” is that the world’s experience suggests that ........ is likely to prosper if, and only if, it:
1. reduces crime;
2. relaxes and preferably scraps exchange control;
3. reduces time people have to spend with bureaucracy;
4. relaxes or scraps insistence on centralised bargaining
5. shifts from spending on economic regulation and
parastatals to spending on transfers and subsidies...
6. the rule of law;
7. foreign trade liberalisation;
8. business liberalisation;
9. banking and financial market liberalisation.
And from p 44
"The world’s experience appears to support the view that economic freedom may be a necessary and sufficient condition for prosperity."
Chapter 9 FACTORS AFFECTING GROWTH pdf page 53:
"resource-rich countries are usually slightly more prosperous than resource-poor ones. The problem is that they are not as prosperous as they should be"
"there is a great deal of evidence to the effect that governments tend to use resources less efficiently than entrepreneurs. The most significant point is that
what matters more than how much governments take in tax is what they do with it. The evidence suggests that governments are more likely to promote growth if they use their revenue primarily to:
build infrastructure, especially
transport infrastructure;
provide services, rather than
regulate economic activity;
do things that don’t duplicate
what the private sector can do,
specifically that they do not
compete with it; and
increase efficiency by outsourcing
and privatising." p54
"strong correlation between ‘business tax friendliness’ and growth. Tax friendliness measures the impact of tax complexity and incidence on business" p54
"governments are best advised to do less rather than more because the downside risk of what they do is greater than the upside potential" p55
"countries with the world’s smallest governments tend to be super-achievers" p55
"Notwithstanding a value-free approach, much of this report refers to indices of freedom defined in various ways (civil liberties, rule of law, economic freedom, political freedom et al). This was not contrived; it is simply that the factors that correlate most with prosperity happen to be indicators of some form of freedom. We expected other factors to present high positive correlations, such as natural resources, climate, history, culture, religion and governance. Neil van Heerden, former head of the SA Foundation, suggested that these ‘negative’ findings might be more instructive than positive correlations. Identifying the
extent to which people ‘know things that just ain’t so’ is essentially the falsification of hypotheses." p56
"key finding is that the least regulated economies (top quartile) grow 2.2% faster than those that are most regulated (bottom quartile)." p56
"It finds that efficient economies rely more on commonlaw than regulation, and that social democracies (like Denmark, Norway and Swede) benefit from streamlined business regulation, they offset the burden of welfare by liberating productive market forces" p57
"The world’s twenty least regulated economies are all (except Taiwan) rich first world countries, including all G8 countries" p57
"such as health and safety regulation, most of which has never been shown to have benefits exceeding costs, and all of which imposes enormous direct and indirect costs
on people at the expense of prosperity" p57
"A retreaded tyre regulation in the USA, for instance, was found to have cost a few million dollars for every sub-standard tyre identified by the measure" p57
"regulatory compliance (‘red tape’) cost South African businesses R79 billion in 2004, equivalent to 6.5 per cent of GDP" p57
"An OECD study found that over-regulation is the major cause of the slower rate of growth of the European Union compared to that of the USA. But what are the benefits of regulation? The study found ‘no quality benefits’. We all know that government is
costly, but a 75-country study found that regulations usually cost a country twenty times more than they cost the government" p58
"government may have a more intransigent problem with excess red tape than it realises. This is its fourth major attempt at systematic regulatory review. The first...The report was circulated through the Cabinet to all departments with a view to them addressing the problem in accordance with its recommendations.
... it was never heard of again. The second was to be undertaken by the Small Business Council, but it was dissolved. The third (full & never heard from again). It may be helpful to establish why isolated departments did succeed at substantial market liberalisation" p58
Chapter 10 CHARACTERISTICS OF WINNERS & LOSERS p59
"sound policies can withstand almost any shock, and produce prosperity under almost any conditions." p59
"There is virtually no empirical evidence in favour of aid, subsidies, debt relief, technical assistance or protection" p59
"the Marshall Plan failed to generate prosperity. Furthermore, the UK received much more aid than Germany without achieving high growth. If anything, aid enabled it to perpetuate inappropriate policies." p59
"the relative size of education budgets does not correlate significantly with growth" p60
"highest growth countries cover the full range of possibilities, from poor (Trinidad & Tobago) to rich (Iceland), small (Luxembourg) to big (China), formerly capitalist(Ireland) to formerly socialist (Vietnam), resource-rich (Mozambique) to resource-poor (Finland), countries that were colonised until recent decades (Tunisia) and
ones that were not (Finland). There is also a wide range of cultural, religious, ethnic, historical and geographic diversity among high growth countries" p61
"experience of other countries is that it is likely to achieve and sustain high growth only if it resists the temptation faced by all governments to abandon a winning formula when sustained high growth is achieved. As this report shows, markets tend to respond enthusiastically to pro-market reforms" p62
"Trinidad & Tobago, shifted from one extreme to the other having elevated itself from the lowest to the highest growth rate group" p62
11 SHORT LIST OF WINNERS' POLICIES p65
"The proverbial “bottom line” is that the world’s experience suggests that ........ is likely to prosper if, and only if, it:
1. reduces crime;
2. relaxes and preferably scraps exchange control;
3. reduces time people have to spend with bureaucracy;
4. relaxes or scraps insistence on centralised bargaining
5. shifts from spending on economic regulation and
parastatals to spending on transfers and subsidies...
6. the rule of law;
7. foreign trade liberalisation;
8. business liberalisation;
9. banking and financial market liberalisation.
And from p 44
"The world’s experience appears to support the view that economic freedom may be a necessary and sufficient condition for prosperity."
Labels: ecnomic growth, Fixing the economy
