UK tax to GDP
Looking around the electoral promises today we see two major calls. One, that we’ve all got to pay much more into the welfare state we’ve got. The promises made about the NHS, pensions, supporting the poor, require more money. Well, OK. We also see that we’re being implored to have more welfare state. We should have state paid care for every elderly. We’ve got to massively increase the amount of redistribution to ensure that no child grows up in a household on less than 60% of median income – that’s what child poverty is these days.
There is a certain problem with the collision of both demands:
The post war generation were the first and biggest beneficiaries of the magic money tree. In on the ground floor of the welfare ponzi scheme, powered by print-on-demand fiat money. In the face of privation by post-war malaises from rationing to fallen fathers, they welcomed the largesse of Clement Attlee’s Labour government with open arms.
Ever since then the welfare state has grown and grown, by turns squeezed and released, the toothpaste never quite going back in the tube no matter now much the Tories tried. What passed for austerity in the 2010s was simply a slowing of the rate at which national debt increased, and to call it austerity makes a mockery of the universal deprivation that coined the term in the 50s.
Quite so and after that couple of generations the bills are becoming due. Which means that in order to pay for the current welfare state we’ve already promised ourselves we’ve not got the revenue possibility of the welfare state still to be built.
Which is interesting really, isn’t it? We can’t afford that Ford Escort yet we’re being urged to upgrade to the Bentley already?
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Maybe the root of most national problems is a flawed governance system. As Conservatives compete with Labour to spend money they don't have, the bad part is they know they can do it. Politicians are not constrained to live within their income from taxes & tariffs. Borrow the extra if they can, print it if they have to -- either way, the spending goes on. There is nothing in the governance system to stop them from over-spending or from making future financial commitments they will not be able to honor.
Keynes was not necessarily wrong when he recommended that governments should run a counter-cyclical deficit during hard times and a surplus during good times. But politicians only run deficits.
Governance -- suppose the UK had two parliaments -- one in Bristol that was responsible only for raising the money to fund government, the other in Inverness responsible only for spending (or saving) the money supplied by the Bristol parliament. Sell the Palace of Westminster to the Disney Company, and turn it into a profit-making tourist attraction. We can dream!
Ah! separation of powers! You could try direct election of the PM, and with all power in the hands of regional governments except powers specifically enumerated - what we in America had, until we broke it. As they say: "Take our Constitution! (We aren't using it!)"