EU Referendum: what it means for ME (+ a poll)

[Jonathan Edwards]

Presumably a lot of these million people are working ? Their jobs would need to be filled or else their jobs evaporate in which case that's a big chunk out of the economy.

If the idea is just to depopulate London surely there are other methods rather than leaving the EU. In fact i don't see how leaving the EU would help in the long term. All major cities have an overpopulation issue, brought on by the fact that most politicians don't want to deal with it because it is a long term issue with no quick fix and would require a lot of spending.

I think a lot of people want to use the EU as an excuse for the ills of modern life but generally a lot of these ills should be sorted at a local or national level.

Seems like the UK are spending a lot of cash to treat their expat retirees in the EU, if all of these were to return to the UK the strain on the hospitals would increase not decrease i imagine.

Dear @BurnA,
But 'a big chunk out of the economy' is of no interest, except to people who gamble on shares going up. Wealth is not even based on money movement ('the economy'). But in as much as there is a relation it is to GDP per capita, not GDP. If all these people leave then there are fewer capita to share the GDP out amongst. And the argument about these people working and the retirees in Spain not is another Ponzi situation - those working will be retirees themselves in time. In the long term you do not want more young working people, you want a balanced age profile that can be constant. Otherwise you just end up with more and more people - as is the current situation.

having worked in science for forty years I have come to learn that most people are dumb when it comes to simple maths - like the Ponzi thing, there is no perpetual motion machine. Economists simply do not understand that. As I said before, the people who do are the Big Short guys who pretend to believe in the economists' theories but then make a killing on the fact that they don't make sense.

Moreover, a lot of the extra people working are pushing wages down by accepting less than a living wage in cash and paying virtually no tax. That does nobody any good. The vast numbers of people doing cleaning and similar jobs for cash and not even paying tax at all are making sure that nobody can do that sort of work for a reasonable wage and pay tax. The rich love it. But the majority of people in the UK have just voted to say that it stinks.

 

[BurnA]

But 'a big chunk out of the economy' is of no interest, except to people who gamble on shares going up. Wealth is not even based on money movement ('the economy'). But in as much as there is a relation it is to GDP per capita, not GDP. If all these people leave then there are fewer capita to share the GDP out amongst. And the argument about these people working and the retirees in Spain not is another Ponzi situation - those working will be retirees themselves in time. In the long term you do not want more young working people, you want a balanced age profile that can be constant. Otherwise you just end up with more and more people - as is the current situation.

I accept growth for the sake of growth so that the very wealthy get wealthier, is pointless.

I was thinking more short term in that if a few million people were forced to leave, this would create a shortage in tax take, coupled with an influx of retirees would lead to a strain on the UKs finances / healthcare system.

Whilst you may be correct in what you say, there is no guarantee that UK politicians will see things similarly, in which case it won't matter if you are in the EU or not, they will make policy decisions to increase growth, GDP etc because that is what they have been brainwashed to do. The economosts and advisors outside the EU are just as stupid as those in it I imagine.

But the majority of people in the UK have just voted to say that it stinks.

Yes but what exactly stinks ? People vote one way or another for all sorts of reasons, l'd say a lot of people have absolutely no idea the implications of leaving ( and how could they ?)
Presumably the people who voted leave did so because they feel a certain important aspect of their life will be improved by being outside EU.

You suggest that a London needs to shed about 1 million people but the London area voted in favour of remain, so if pollution, overcrowding, under resourced hospitals and schools etc. were concerns for you they don't seem to be equally concerning for the majority of Londoners ?

 

[Luther Blissett]

I was thinking more short term in that if a few million people were forced to leave, this would create a shortage in tax take, coupled with an influx of retirees would lead to a strain on the UKs finances / healthcare system.

Sort of, but in a non mad system, tax take doesn't matter that much. A country sovereign in it's currency can always afford to purchase non scarce good and services. There are millions of people unemployed and underemployed. (many with healthcare skills)

It's never mentioned, but Government debt = Private savings. The plans to reduce Government debt reduces Private Savings, this is why austerity does not work. It's a basic law of double entry accounting. The Uk can always pay its debt if it so chooses, it is the monopoly issuer of currency.

The idea that the UK can somehow run out of money accidentally, is as daft an idea as if the Football League suddenly announced that it couldn't award goals to a scoring team because there was a goal deficit! (Imagine the ridicule that would bring)

I'm not saying that you would not agree with me, but basic national accounting and logic are totally missing from most economics presented to the public.

It serves as a useful excuse for Governments to not spend money on the General Welfare, they are always comparing the state budgets as if they were a household, 'maxed out the credit card' etc etc.

I once asked the Office of Budget Responsibility why they kept comparing the UK with other countries in the Euro in respect of debts and deficits. The waffled answer was 'Because'.

I'm not very hopeful that the situation will improve, because these public myths are useful to the powerful, but not long ago, people demanded full employment, basic levels of resources to the poor and unfortunate, rules against excessive exploitation etc, and were willing to fight for them.

 

[Marco]

As entertaining a distraction as Brexit has been (and continues to be) I fear it's merely a sideshow in the context of the growing global debt mountain and stalled economic growth that is simply not sustainable and likely to collapse in a very bad way.

The key point is that governments and individuals have been living beyond their means for a very long time.

Post 2008, rather than tackle the underlying problems, governments worldwide have just compounded them through printing money to produce the illusion of growth (funded by borrowing of course with a mere $1 of growth achieved for every $3 spent) and low, zero or negative interest rates. The net result is to disincentivise investment in savings, innovation and entrepreneurship in favour of speculative asset bubbles such as housing and the stock market. Meanwhile the net effect of all this pump priming has been zero or amemic growth, negative inflation and an even greater debt burden at a time when the economic cycle would suggest an imminent recession.

The problem is that all this debt is predicated on/a claim on future economic growth, which in a 'post-growth' world can never be repaid. The deck of cards must collapse at some stage as do all such ponzi schemes. The question is when. The potential triggers are many.

We have become accustomed to the expectation that each subsequent generation will be 'better off' than the previous one - with stalled growth and a rising population I'm afraid this is no longer the case. The best we can hope for is a managed decline otherwise things could be very nasty indeed.

As for Brexit, the UK has severe structural problems that neither Brexit nor remain address. The best that can be said of Brexit is that come the inevitable crash we will be more in control of our own decisions/mistakes.

 

[adreno]

The economy is a construction. In reality, we could just decide there is no debt.

 

[worldbackwards]

The economy is a construction. In reality, we could just decide there is no debt.

You might like to try that when they're taking your furniture away.

 

[adreno]

You might like to try that when they're taking your furniture away.

You missed the point. You cannot decide anything as an individual. But as a society, we could decide to forego debt. The economy is a fiction. We could decide on another fiction.

 

[Luther Blissett]

It's never mentioned, but Government debt = Private savings. The plans to reduce Government debt reduces Private Savings, this is why austerity does not work. It's a basic law of double entry accounting. The Uk can always pay its debt if it so chooses, it is the monopoly issuer of currency.

The problem is that all this debt is predicated on/a claim on future economic growth, which in a 'post-growth' world can never be repaid. The deck of cards must collapse at some stage as do all such ponzi schemes. The question is when. The potential triggers are many.

Government Debt = Private Savings

For the mathematically inclined,

(G-T) = (S-I) – NX

G is Government spending,
T is Government taxation,
S is Private saving,
I is Investment,
NX is Net Exports.

The economy is a construction. In reality, we could just decide there is no debt.

Heretic!

Edited for spelling

 

[Snow Leopard]

Certain UK Conservative politicians are gutless wonders. Pulling out when the going gets hard...

 

[A.B.]

The EU wants Britain out as soon as possible, while Farage now speaks of compromises.

Farage says can envisage Britain contribution to EU budget post-Brexit: Le Figaro
http://www.reuters.com/article/us-britain-eu-farage-idUSKCN0ZG0GS

Merkel tells Britain no 'cherry-picking' in Brexit talks
http://www.reuters.com/article/us-britain-eu-germany-idUSKCN0ZE0SC

(Merkel's stance seems to represent the general opinion in the EU)

 

[msf]

I am not actually predicting that even Britain will leave the EU, but that people in other countries will indicate they agree with the British people. There is renewed interest amongst the bureaucrats in strengthening the EU but equally there is increasing dislike for them by the people. As the Greek situation showed the EU rules do not work. By the end of this year I suspect some of the EU leaders will find themselves in the same position as Mr Cameron - no longer wanted. Hopefully the EU can then be reborn as something people want.

Prof. Edwards, how does the fact that a significant proportion of the leave voters were voting against sharing their wealth with migrants lead you to conclude that the conditions are right for some kind of international labour movement?

 

[Jonathan Edwards]

Prof. Edwards, how does the fact that a significant proportion of the leave voters were voting against sharing their wealth with migrants lead you to conclude that the conditions are right for some kind of international labour movement?

I don't think I said anything about an international labour movement. That sounds like politics 100 years ago. What we need now is population control.

 

[msf]

Ah, sorry, I thought you were suggesting that people across the EU would see that they were getting a poor deal from the EU and would co-operate to replace it with a more equitable economic system.

 

[alex3619]

But the majority of people in the UK have just voted to say that it stinks.

I agree. The rise in nationalist and far right sentiment is also a protest vote. People are just waking up to the consequences of not just forty-odd years of market liberalism, which has led to some of the biggest economic crashes ever (barring the one that started the Great Depression) but also to the problem of exponential growth with finite resources. Most material goods cannot be made forever in increasing quantities, period.

Exponential growth is counter-intuitive. It requires training to reasonably predict the problems. People are not dumb, just uneducated, for the most part. However people in general do tend to get locked into their beliefs over time.

Right up until systemic collapse in any system with exponential growth, everything looks rosy. With humans its authoritarian and free-pie-from-the-sky merchants who help perpetuate the rosy outlook.

None of the issues facing the world are insurmountable if we act. The problem is almost nobody is aware of the exponential growth issue, despite (to my recollection) the first warnings coming in 1963.

 

[alex3619]

The net result is to disincentivise investment in savings, innovation and entrepreneurship in favour of speculative asset bubbles such as housing and the stock market.

Yep. Speculative wealth assets, via financial instruments, are not tangible wealth.

 

[alex3619]

The economy is a construction. In reality, we could just decide there is no debt.

Yet that does not clean up pollution, reduce carbon emissions, replace critical shortages, or solve the population issue.

If saving money, and economic prosperity, was a prime motivator in politics, how come diseases that costs the world on the order of a trillion dollars per decade (ME and CFS) get chump change for research? How about other diseases, like fibro, which gets less research per patient that ME and CFS? (Though arguably ME gets even less, it only sounds like more due to conflation with CFS.)

Similar arguments apply to many other problems. They are not fixed, and that costs the public dearly.

Most of this comes down to spin merchants, authoritarian figures, and lack of education, including a long term decline in journalism. A rise in an educated, reasoning populace runs counter to vested power.

Yet here in Australia more than a million people are now engaged in politics, via online media. This does not mean they are sufficiently educated to make good choices, but its a start. Social media may change things. May. Not will. Many of us here on this forum are also engaged in politics.

 

[Jonathan Edwards]

Ah, sorry, I thought you were suggesting that people across the EU would see that they were getting a poor deal from the EU and would co-operate to replace it with a more equitable economic system.

I might have meant that but I on not sure why it would be an international labour movement.

 

[Marco]

You missed the point. You cannot decide anything as an individual. But as a society, we could decide to forego debt. The economy is a fiction. We could decide on another fiction.

Back in the day certain benificent rulers would, on the anniversary of their accession to the throne (not every year of course) cancel their subjects' debts and allow them to go back to being productive citizens again - a so called debt jubillee. All fine and well when the debts are miniscule compared to the wealth of the kingdom - not so realistic when debt is several times the nation's GDP and what about the creditors - who carries the can.

It could be argued that with the unprecedented period of very low interest rates means debtors (private and public) have had an extended debt holiday - at the expense of savers of course who have had to carry the can for those who borrowed more than they could afford to repay. I just hope they've used this holiday to pay down their debts (some chance).

Then of course we've had the various 'stimuli' from money printing/QE, low, zero and now negative interest rates and all to no avail. Growth and inflation are still flat. As one commentator says - if we were talking about a biological system and you had applied that much stimulus you'd be forced to conclude that the organism was dead.

Now the latest wizard wheeze being contemplated by central bankers is 'parachute money'. Basically with a fiat currency you can print as much of the stuff as you want so why not just print a lot and hand it out to everybody to pay of their debts, spend in the shops or whatever. Debts are cancelled and you boost the economy. Problem is when you just print money it ceases to have any real value so what happens to your savings, the value of your house etc?

Funnily enough, just a week after the IMF were issuing dire warnings about the impact of Brexit (and others were warning of the end of western civilisation) it appears now that the biggest threat to global finance (according to the IMF) comes from the potential collapse of Deutsche Bank and the contagion that would follow that would dwarf the aftermath of Lehman Brothers :

http://www.wsj.com/articles/deutsch...a-30-year-low-after-fed-imf-rebuke-1467278856

I know where I (and George Soros) would put my money.

 

[msf]

I might have meant that but I on not sure why it would be an international labour movement.

Well, it sounds an awful lot like one to me! I accept that it would probably use newer terminology though.

 

[Cheesus]

I know where I (and George Soros) would put my money

... I'm on tenterhooks. Gold?