Discover and read the best of Twitter Threads about #trussonomics

Most recents (6)

In a response to Richard Murphy's blog posted over the weekend, I think this is very insightful as to why the Tories are being so #cruel over #welfare #benefits and #CostOfLivingCrisis Support (a 🧵)... /1
/2 There is a new comment on The #Tories are now the most #rightwing governing party in the developed world:
"It could be worse than that. Maybe the rather tepid move to Labour in the polls is because of something darker.
Read 22 tweets
Reflections on the morning after - and especially the markets… 🧵

It may well take some time for the dust to settle on #KwasiKwarteng’s first #Budget (yes, 'Budget’: if it looks like a duck, walks like a duck and quacks like a duck, then it’s fair to call it a duck)...
The initial reaction from most economic commentators and in the financial markets has been a loud boo! There are some things I would have done differently. But the overall strategy is sound, and sentiment should recover as the economic benefits become clearer...
There are two aspects I particularly liked. One is the emphasis on breaking the ‘doom loop’ of weak economic growth and rising taxes, both with tax cuts and – at least as importantly – structural reforms on the supply-side...
Read 16 tweets
Really staggering 🇬🇧mini-budget just announced here in London. Ain’t nothing mini about it.

Record-setting borrowing *and* tax cuts. £100 billion price tag. No-tax & spend. Trickle down economics on steroids. Throws fiscal sustainability out the window.

A huge political gamble
The £45 billion in tax cuts just announced, mostly given to the wealthy & businesses, is biggest tax cut since 1972, when Chancellor Barber had his "dash for growth". It's 2% of GDP.

That ended in disaster. It's generally regarded as the most damaging UK budget in modern history
The #Truss & #Kwarteng trickle-down economics policy changes include:

🧐Highest income tax rate (45% for ⬆️150K) abolished
🍾Scrapping cap on bankers bonuses
🏨Scrapping planned increase in corporation tax
🏘️Cutting stamp duty
Read 12 tweets
Should #Truss go for the ‘nuclear' option of a 5% #VAT cut? In favour…

✅ can be done quickly (immediate boost to spending power)
✅ saves *average* household c£1,300 a year
✅ lowers headline #inflation (temporarily)
✅ struggling businesses could use it to help cashflow...

#VAT is one of the least bad (e.g. non-distortionary) taxes
❌ cutting it would have few supply-side benefits
❌ would be at least mildly #regressive (see my earlier tweet on this 🤓)
❌ a 5% cut would ‘cost’ £38 billion (could be better deployed elsewhere?)...
My verdict: it's right to consider cutting #VAT across the board (not just on #energy). It should only be a 'nuclear' option, as part of a broader package, but the scale of the crisis means everything should be on the table.

#truss #trussonomics
Read 3 tweets
A thread on #Trussonomics, from @paulwaugh's excellent piece below. Will extract some "highlights" (ie horrifying facts) in this thread. Please read and RT, so people understand what we're facing. (1)…
If there was any doubt about the human cost of the “cost of living crisis”, Dr Karim Brohi had a reminder of just what it looked like. At the weekend, the trauma surgeon tweeted: “Multiple admissions for attempted suicide overnight, again. ‘Jumped because can’t afford to eat’.
Dr Brohi said that people trying to take their own life was just one of manifestation of the “financial pressures we see”. Domestic abuse, more alcohol related injuries, even “multiple jobs leading to tiredness and accidents”, were all wrapped up in debt and economic hardship.
Read 12 tweets
Expect lots of warnings today from #TeamRishi about the cost of higher interest rates as the Bank of England (#BoE) hikes.

Three counters...

1. The #tax cuts proposed by #LizTruss are unlikely to have any significant impact on #inflation (they could even help to reduce it)...
2. It's #TeamRishi that's playing at 'fairytale economics' if they think the current ultra-low level of interest rates is normal, healthy or sustainable (most economists agree that fiscal policy is too tight - largely due to #Rishi's tax hikes - and monetary policy is too loose)
3. It is at least right to worry that rising short-term interest rates will add to the cost of public debt. But this simply strengthens the case for the government to lengthen the maturity of borrowing to lock in low rates - as #LizTruss has proposed!

Read 3 tweets

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