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peterbirksAs you may be aware, I am of the view that Lloyd George was the creator of the biggest Ponzi scheme in history when he came out with the "cheap votes" budget of 1909 -- promising pensions to all and sundry, to be financed on a "pay as you go" basis. In other words, the workers of today fund the workers of yesterday -- a fine scheme so long as there are more workers today than there are workers of yesterday. Hence the Ponzi nature of the whole thing.
One of the few things that Brown got right in his now-quite-clearly disastrous reign as Chancellor was to note that there was a pensions time bomb and that something needed to be done about it. Unfortunately, one thing that he did not do was really do anything about it. In fact he actually increased the tax on pensions rather than removed it -- another income generator that people would have to pay for tomorrow.
But even Brown as Chancellor didn't actually sit down and say "hey, I've got a good idea. Let's boost the government coffers by taking stuff OUT of the funded sector and putting it INTO the pay-as-you-go sector"! No, even Brown wouldn't on one side of his face say that we were facing a pensions time bomb, and then with the other side of his face make that bomb a bit bigger.
But that is precisely what Alistair Darling has done.
You may recall that in December it was spotted that there was a £7bn pension shortfall in the Royal Mail pension scheme. In February the trustees' chairman, Jane Newell, said that the fund's deficit might be "significantly larger" than that. She noted that "at present, a winding-up the plan would not even be able to provide as much as 50% of members' benefits".
Now, the extent to which pension trustees can fuck up pension plans is partly the fault of the trustees, partly the fault of Gordon Brown (see change on taxation relief circa 1999) and partly the fault of Margaret Thatcher (see change in rules of how you had to reduce payments if your surplus went above 105% -- an insane misunderstanding of volatility if ever I saw it). But that's kind of by-the-by here. What is brilliant in its breathtaking chutzpah is what the government has done to "solve" this problem.
The rescue plan for the pension scheme (and perhaps we can now see why Brown is soooo determined to push ahead with the part-privatization) will actually BOOST the government's books by £24bn.
How can this be, you might ask? Are we in the land of Catch-22 Major Major economics, or just plain Alice In Wonderland economics?
The answer is simple. We, the taxpayer, are getting shafted to the tune of £10bn on the Royal Mail pension scheme, but while the £24bn in assets of the scheme will be transferred across to pay down government debt immediately, the £34bn liabilities will be booked in the same way as all government pensions -- i.e., on a pay-as-you-go basis that don't appear on the books as government debt at all.
It would have been legal and, indeed, desirable, to maintain the scheme as a funded scheme, with an attempt to get the books back into balance. However, this wouldn't give the government books an immediate cash injection at a time when Alistair Darling is in desperate need of such an injection.
And, so, at the stroke of a pen (unless the Labour rebels manage to kybosh the part-privatization scheme), the government will accumulate an extra £34bn in long-term debt (known in the land of this administration as "Not My Problem debt") and extra £24bn in short-term assets. By way of comparison, Lloyd George said in 1909 that to finance the pensions he would need to raise £16 million, but that this would also pay for eight new dreadnoughts. One might also note that the 1909 bill wasn't the freat vote winner that the Liberals hoped. In 1910 they saw their majority wiped out, gaining virtually the same number of seats as the Unionists (275 to 273).
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I have been tinkering with my playing style ever-so-slightly in an attempt to discover new ways to run bad. You will be pleased to know that I have been entirely successful in this aim.
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One of the few things that Brown got right in his now-quite-clearly disastrous reign as Chancellor was to note that there was a pensions time bomb and that something needed to be done about it. Unfortunately, one thing that he did not do was really do anything about it. In fact he actually increased the tax on pensions rather than removed it -- another income generator that people would have to pay for tomorrow.
But even Brown as Chancellor didn't actually sit down and say "hey, I've got a good idea. Let's boost the government coffers by taking stuff OUT of the funded sector and putting it INTO the pay-as-you-go sector"! No, even Brown wouldn't on one side of his face say that we were facing a pensions time bomb, and then with the other side of his face make that bomb a bit bigger.
But that is precisely what Alistair Darling has done.
You may recall that in December it was spotted that there was a £7bn pension shortfall in the Royal Mail pension scheme. In February the trustees' chairman, Jane Newell, said that the fund's deficit might be "significantly larger" than that. She noted that "at present, a winding-up the plan would not even be able to provide as much as 50% of members' benefits".
Now, the extent to which pension trustees can fuck up pension plans is partly the fault of the trustees, partly the fault of Gordon Brown (see change on taxation relief circa 1999) and partly the fault of Margaret Thatcher (see change in rules of how you had to reduce payments if your surplus went above 105% -- an insane misunderstanding of volatility if ever I saw it). But that's kind of by-the-by here. What is brilliant in its breathtaking chutzpah is what the government has done to "solve" this problem.
The rescue plan for the pension scheme (and perhaps we can now see why Brown is soooo determined to push ahead with the part-privatization) will actually BOOST the government's books by £24bn.
How can this be, you might ask? Are we in the land of Catch-22 Major Major economics, or just plain Alice In Wonderland economics?
The answer is simple. We, the taxpayer, are getting shafted to the tune of £10bn on the Royal Mail pension scheme, but while the £24bn in assets of the scheme will be transferred across to pay down government debt immediately, the £34bn liabilities will be booked in the same way as all government pensions -- i.e., on a pay-as-you-go basis that don't appear on the books as government debt at all.
It would have been legal and, indeed, desirable, to maintain the scheme as a funded scheme, with an attempt to get the books back into balance. However, this wouldn't give the government books an immediate cash injection at a time when Alistair Darling is in desperate need of such an injection.
And, so, at the stroke of a pen (unless the Labour rebels manage to kybosh the part-privatization scheme), the government will accumulate an extra £34bn in long-term debt (known in the land of this administration as "Not My Problem debt") and extra £24bn in short-term assets. By way of comparison, Lloyd George said in 1909 that to finance the pensions he would need to raise £16 million, but that this would also pay for eight new dreadnoughts. One might also note that the 1909 bill wasn't the freat vote winner that the Liberals hoped. In 1910 they saw their majority wiped out, gaining virtually the same number of seats as the Unionists (275 to 273).
_________________________
I have been tinkering with my playing style ever-so-slightly in an attempt to discover new ways to run bad. You will be pleased to know that I have been entirely successful in this aim.
_________________________
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no subject
Date: 2009-05-10 08:28 am (UTC)We have built a world that will always require more people and more resources than the year before to keep everything running. That is until we can't feed, water, house, power or keep happy the population time bomb that is the reason for the pensions time bomb.
Why things like SARS, bird and swine flu come to the fore as cities become slums and farming struggles to cope with the population size. A farming system that relies on chemicals and oil to produce 1000 calories of food with 10,000 calories of energy on abused farmland that can take it no more.
We lose 7 hectares of farmland per second. The top soil lost forever. Some plaything for the wealthy elite built in its place.
Idiot policemen, with not an ounce of brains, beating up those who realise the precariousness of our lives.
A new world in the making; the political and banking elite, their dim-witted and paid off security forces and the rest of us, in a Soylent Green apocalypse.
Living in a city I can understand that the inhabitants don't notice the encroachment upon their lives. Yet more immigrants dumped to "pay for the rest of you", crumbling infrastructure patched up whilst you sleep, food trucked and flown in at the dead of night from further and further away because your local farms were built on by banking speculators who have no other way of making "honest money".
It's all interconnected. All part of the lie of infinite economic growth. Gordon and Alistair have no solution because their lifestyles rely on the lie working, which it can't. The political underlings want it to work too otherwise they can't dip their grubby hands into the till to pay for the 4th house, the plasma screen in every room, the girly bras and tampons for those weird sex parties. Yes, he did buy tampons but you'll have to Google for information on what the pervert does with them.
"Democracy" doesn't work. Vote for none of them. Run the country by referenda instead.
no subject
Date: 2009-05-10 04:54 pm (UTC)Take a couple of the Big Pink Pills and lie down in a dark room. You'll thank me for it one day.
no subject
Date: 2009-05-10 05:04 pm (UTC)It's only your own stock of "medicines" that make city life bearable for you.
Anonymous, schmnonimous
Date: 2009-05-10 08:59 pm (UTC)Thing is, it's quite possible that any individual paragraph you wrote makes sense or at least has a point. Taken as a whole, it tends to indicate that you're chewing on a bar of Fairy Soap. I am concerned for you, in a sincere and distinctly suburban sort of way.
I would never lightly advocate the use of horse sedatives. Indeed, as one whose mother died because she had a pathological fear of going to the doctor, I approve of abstinence in all things medicinal. However, in your case, I am prepared to make an exception.
As HST wrote, "I hate to advocate drugs, alcohol, violence, or insanity to anyone, but they've always worked for me."
In the spirit of bucolic amity that I'm sure we can both agree on, let's go halves. I'll take the alcohol and violence, and I recommend that you take the drugs.
Insanity clearly isn't a contentious issue here.
What is the source of this "fact"?
Date: 2009-05-11 10:20 am (UTC)"A farming system that relies on chemicals and oil to produce 1000 calories of food with 10,000 calories of energy on abused farmland that can take it no more."
Re: What is the source of this "fact"?
Date: 2009-05-11 12:48 pm (UTC)Of course, there is food produced that is energy efficient (a ratio of greater than one), but there is also food that is horrifically inefficient. Iceberg lettuce imported into the UK, for example, will usually have an energy ratio of worse than 1:100. A similar ratio would apply to most low-calorie high-bulk foodstuffs that we import. Similarly, virtually anything that we import from the southern hemisphere is energy inefficient.
So, one could argue that, if the concept of imports and exports is included in the phrase "farming system" (and to fail to do so strikes me as disingenuous, because I see no eviodence of us only consuming what we produce at home, then the 1:10 ratio might not be a long way wrong when applied to the UK and when meat is included in the equation.
Earlier this decade, Britain imported 61,400 tonnes of poultry meat a year from the Netherlands and exported 33,100 tonnes to the Netherlands. We imported 240,000 tonnes of pork and 125,000 tonnes of lamb while exporting 195,000 tonnes of pork and 102,000 tonnes of lamb.
The failure to source locally is the major cause of energy inefficiency in food production, rather than the use of chemicals or the deterioration in the quality of farmland. And that's the area that on which we should be focusing, rather than all this "organic" bollocks ("organic, imported from South Africa" ... I mean....)
PJ
Sustainable Food
Date: 2009-05-11 06:14 pm (UTC)I wonder if the Greens still have their manifesto commitment to reduce the population to 20 million in the UK in 20 years. I always wondered how they would do that.
Side Note: When I was elected, there was about a 30% vacancy rate for allotments on my patch and had been for some years so that I was considering trying to turn a few that hadn't been occupied into a childrens play area. There's been a huge uptake over the last eighteen months, I've got a 3% vacancy rate now and two rejuvenated allotment associations. I think this is a good thing.
The Bowen Creature