Reply to: GDP per head falling

[vetran]

What? Both of them?

nah they became reform voters!

[NotAllThere]

...immigration is THE top issue for Tory voters..

What? Both of them?

[edison]

Yes. Why does inflation not take house prices into account? It is just about the definition of inflation.

There are some good videos on YouTube explaining how inflation is calculated and how the ONS massages the statistics. I've never been completely convinced that the published rates of UK inflation really match what the average person experiences.

[xoggoth]

eventually retirement age will overtake life expectency! Work until we die

Keep working after we die. Zombies are the solution!

[DoctorStrangelove]

Strangelove Grandfather worked until he was 78 when his dementia meant he had to stop, and no pension so he was on National Assistance for the next 3 years until he popped his clogs.

The other Grandfather died at 64 from cancer of the oesophagus, so he never had any return on contributions at all.

[willendure]

Work until we die.

I should add, I would quite happily work until I die, so long as the work is meaningful and so long as the proceeds benefit me and my family. My current boss is 85 years old and still running his business day-to-day, like a boss and a legend.

But seriously, no way am I opening a British ISA, all my investments are outside of the UK into the only economies where some kind of real return seems possible. Which mostly means the USA.

[willendure]

Listening to higlights of Bidens state of the union, he seems to think $400,000 a year is considered the threshold for high pay, and he promises not to raise taxes for lower paid workers who earn less than that.

Here in the UK if you earn 50K you are considered a high earner and you start to get taxed to death, 42% + loss of child benefits if you get it leads to 62% tax bands. And another 62% tax band for those earning between 100K and 120K. This reduces the incentive to do overtime for those near the thresholds of 50K and 100K. And those thresholds are not keeping up with inflation.. Both should have moved up 20% since 2021.
And Instead of moving the 45% threshold from 150K to 180K to keep up with inflation, they moved it down 20% instead.

Table shows Federal income Tax bands in the US, and states like Florida and Texas have no additional state income taxes:

10%	$11,600 or less
12%	$11,601 to $47,150
22%	$47,151 to $100,525
24%	$100,526 to $191,950
32%	$191,951 to $243,725
35%	$243,726 to $609,350
37%	Over $609,350

With the minimum wage nearing 25K a year, the UK will operate an almost communist equal pay for all after tax system, in a few years 95% of full time workers will all earn between 2000 and 4000 a month after tax.

Depressing isn't it? You are not allowed to accumulate wealth in this country any more. That is reserved for Tory party donors with dodgy Covid contracts and off-shore accounts. Social mobility is utterly dead in this country. None of this has anything to do with immigration.

[willendure]

Just 10x, house prices have probably gone up closer to 100x since 1972..

Yes. Why does inflation not take house prices into account? It is just about the definition of inflation.

[willendure]

They have, but (on average) they’ll take out a lot more than they paid in unlike the generations after them who will simply not have that luxury.
https://web.archive.org/web/20240214...-in-a-dark-age

I’ve nothing against boomers and one day I’ll be old too. But, the principles of equity dictate that the tax burden must be shared more fairly unlike the current setup where the burden of taxes is overly weighted towards earned income and the ever shrinking % of the population that works and keeps getting squeezed for more taxes to make up for the rising dependency ratio.

Interesting, but I note that it says "forecast" to receive state benefits of 1.2 million. What happens when the state realizes it cannot actually affort those forecast benefits? A state pension is just an IOU on the next generation for example, its not like your National Insurance payments went into some kind of investment fund.

The IOU is going to fall on gen X, a smaller generation, that simply cannot afford it. Of course our retirement age will get pushed up, and I think with falling life expetency in the UK, eventually retirement age will overtake life expectency! Work until we die.

The triple lock will probably be broken some time over the next few years. Even if it is not, the only way to pay for it will be to print the money. Argentina here we come!

[Fraidycat]

10p in 1972 corresponds to £1 or so now.

Just 10x, house prices have probably gone up closer to 100x since 1972..

[DoctorStrangelove]

You are aware, I assume, that there's been inflation since I started working in 1972?

10p in 1972 corresponds to £1 or so now.

I suppose I could dig out half a century of P60s & add it all up but I can't be arsed.

[sreed]

The "boomers" by the way paid significant taxes before they retired.

They have, but (on average) they’ll take out a lot more than they paid in unlike the generations after them who will simply not have that luxury.
https://web.archive.org/web/20240214...-in-a-dark-age

I’ve nothing against boomers and one day I’ll be old too. But, the principles of equity dictate that the tax burden must be shared more fairly unlike the current setup where the burden of taxes is overly weighted towards earned income and the ever shrinking % of the population that works and keeps getting squeezed for more taxes to make up for the rising dependency ratio.

[DoctorStrangelove]

Ah, "The Brain Drain".

It's been A Thing since the 1950s.

Lots of Brits went to Silicon Valley etc. since there's so little opportunity here.

Lots of British patents unexploited here & exploited abroad.

[malvolio]

Blame it all on the immigrants?

Immigrants are mostly working age, and willing to accept low paid jobs. Low paid workers help to make a profit for their employers, so it does not make much sense to claim they are responsible for falling GDP per head.

What is the reason? I think the main reason is that the baby boomers, who are the largest generation we have ever had, are now heading into retirement. Instead of earning, they are drawing down their pensions. Capital is more scarce, its harder for businesses to raise capital. Government revenues are falling and we are failing to invest in the national infrastructure.

The earnings power of a nation is its working population size multiplied by their productivity. Our working population is shrinking and so is our productivity, in no small part due to low rates of investment.

Right, you can get back to your Daily Fail now...

Not really sure I agree. Job-related pensions and non-state pensions are coming from invested funds, not capital, so that argument doesn't stand up. State pensions are paid for out of taxation, but that is not a huge cost in terms of overall GDP. There has also been an increase in inward investment since Brexit; £28bn in the motor industry is one example.

GDP per head is falling, that is true, but the causes are 90% about population, not lack of money in the system. That in turn is driven more by the ever increasing economically inactive population rather than retirees.

But enough of the good news. Another six months or so and today will look like the boom times...

[WTFH]

Quite. Can't be a*d to find the link but we are funding fees for a lot of students who avoid work for 3+ years doing pointless courses that are of little benefit to them or our economy. Time we started only handing student grants to the most able who are doing the sort of courses we need.

The courses we need - "we" don't give out grants for them, instead "we" charge a small fortune to the students to do those courses, so only the rich or students from abroad can afford to study them.

I'd love to see a link to show how many grants are given to students out of taxpayers money these days.