ByPaul Wallis
PublishedOctober 23, 2022
Copyright AFP/File Philip FONG -
The vote ends five years of a Brexit saga in which Britain and Europe also sealed a divorce deal that bitterly divided the UK
The paywall-free Financial Times video discussing Brexit received a lot of praise for being straightforward and politically unbiased reporting. So it is. The word missing from the video is “revenue”. Debt is mentioned, but not explored in any detail.
OK, fair enough. You don’t insert the entire text of Lord of the Rings into a weather report, either. …But let’s not forget the markets had a fit and the pound went into free fall as the result of a mention of less revenue due to proposed tax cuts.
Try and find an instance of the market reacting to tax cuts anywhere else on Earth the way it reacted to the UK’s mere mention of such a simple policy. The market usually loves tax cuts. Not this time. Why?
If you search UK debt on Google News using the search dropdown, do you know what you get? Absolutely nothing. It’s not news. The UK now has a 100% debt-to-GDP ratio. That means you borrow as much as you earn. So far from Thatcher’s “can’t pay ourselves more than we earn”, this is the epitome of doing just that.
That’s £2.2 trillion with a Brexit pre-shrunk economy. It’s a pretty expensive hobby. As the revenue base shrinks with everyone, particularly Brexiteers moving their businesses and assets to the EU, it’s a much more expensive gambling-addict mode. According to a chart published last month, the actual debt is £2.4 trillion.
This is not to suggest that the UK is at risk of instant foreclosure. Quite the opposite. The moving vans won’t be arriving in any hurry, for a very pragmatic reason. Lenders want their money, not some deranged melodrama getting it. However, the fact that paying for the debt is now based on such a massive number doesn’t help.
As revenue shrinks, more borrowing will inevitably be required. This picture can’t change at all under Brexit. Strategically, it’s like driving your car over the White Cliffs of Dover and meanwhile taking out a personal loan before you hit the ground.
The market reaction to even the suggestion of reduced UK revenue was based on a much more demanding reality. When numbers don’t make sense, the markets don’t like it. Brexit has demolished trade with the EU. The US isn’t interested in doing anything, and much less interested if the Northern Ireland Protocol is compromised. The US could react very negatively.
This particularly tangled web created by alcoholic/coke and meth-based spiders underpins Brexit. The UK doesn’t want the European Court of Justice involved. Why not? Perhaps because it’s an external jurisdiction. That’d be at least consistent, but it’s also the presiding court in the EU. The ECJ can’t be uninvolved because there are member states involved. It’s not even a rational position for the UK to take, but as usual, it’s the default position regarding Brexit.
The debt is just to keep the wheels spinning while falling down the cliff. The UK has 66 million people, infrastructure, etc. to maintain. That can’t be paid for with thin air. The ever-shrinking Brexit economy can’t pay for that. Buildings have to keep standing, people must be paid, and water must keep pumping. Deregulated and privatized Britain had only one serious economic hot tap – The financial sector. That was big money, good for revenue, and that’s disappearing ASAP.
Project Near
The Tories made a huge deal out of Project Fear. Things would be fine. There was no sudden blowout. Just a mass migration of people, businesses, and money. That was OK, according to someone.
Presumably, if you can’t see them, things do look fine. The simple fact is that Brexit is so wide-ranging that the visible negative effects are everywhere. You don’t distinguish between individual raindrops when you’re getting flooded out, either. You also don’t solve a jigsaw puzzle when you can’t see all the pieces.
People with no economic, financial, or political education can’t even interpret what they’re seeing. Nor, thanks to the world’s most utterly craven media, do these people have any idea how to find collateral information, let alone collateral damage.
The cumulative effects of Brexit are that deep. The UK is in “systemic shock” at this point. The nervous system still works, but it’s basically babbling. The UK is lucky the Bank of England stepped in when it did. It was under no obligation to do so, and may not be able to do so again if things get worse.
The paywall-free Financial Times video discussing Brexit received a lot of praise for being straightforward and politically unbiased reporting. So it is. The word missing from the video is “revenue”. Debt is mentioned, but not explored in any detail.
OK, fair enough. You don’t insert the entire text of Lord of the Rings into a weather report, either. …But let’s not forget the markets had a fit and the pound went into free fall as the result of a mention of less revenue due to proposed tax cuts.
Try and find an instance of the market reacting to tax cuts anywhere else on Earth the way it reacted to the UK’s mere mention of such a simple policy. The market usually loves tax cuts. Not this time. Why?
If you search UK debt on Google News using the search dropdown, do you know what you get? Absolutely nothing. It’s not news. The UK now has a 100% debt-to-GDP ratio. That means you borrow as much as you earn. So far from Thatcher’s “can’t pay ourselves more than we earn”, this is the epitome of doing just that.
That’s £2.2 trillion with a Brexit pre-shrunk economy. It’s a pretty expensive hobby. As the revenue base shrinks with everyone, particularly Brexiteers moving their businesses and assets to the EU, it’s a much more expensive gambling-addict mode. According to a chart published last month, the actual debt is £2.4 trillion.
This is not to suggest that the UK is at risk of instant foreclosure. Quite the opposite. The moving vans won’t be arriving in any hurry, for a very pragmatic reason. Lenders want their money, not some deranged melodrama getting it. However, the fact that paying for the debt is now based on such a massive number doesn’t help.
As revenue shrinks, more borrowing will inevitably be required. This picture can’t change at all under Brexit. Strategically, it’s like driving your car over the White Cliffs of Dover and meanwhile taking out a personal loan before you hit the ground.
The market reaction to even the suggestion of reduced UK revenue was based on a much more demanding reality. When numbers don’t make sense, the markets don’t like it. Brexit has demolished trade with the EU. The US isn’t interested in doing anything, and much less interested if the Northern Ireland Protocol is compromised. The US could react very negatively.
This particularly tangled web created by alcoholic/coke and meth-based spiders underpins Brexit. The UK doesn’t want the European Court of Justice involved. Why not? Perhaps because it’s an external jurisdiction. That’d be at least consistent, but it’s also the presiding court in the EU. The ECJ can’t be uninvolved because there are member states involved. It’s not even a rational position for the UK to take, but as usual, it’s the default position regarding Brexit.
The debt is just to keep the wheels spinning while falling down the cliff. The UK has 66 million people, infrastructure, etc. to maintain. That can’t be paid for with thin air. The ever-shrinking Brexit economy can’t pay for that. Buildings have to keep standing, people must be paid, and water must keep pumping. Deregulated and privatized Britain had only one serious economic hot tap – The financial sector. That was big money, good for revenue, and that’s disappearing ASAP.
Project Near
The Tories made a huge deal out of Project Fear. Things would be fine. There was no sudden blowout. Just a mass migration of people, businesses, and money. That was OK, according to someone.
Presumably, if you can’t see them, things do look fine. The simple fact is that Brexit is so wide-ranging that the visible negative effects are everywhere. You don’t distinguish between individual raindrops when you’re getting flooded out, either. You also don’t solve a jigsaw puzzle when you can’t see all the pieces.
People with no economic, financial, or political education can’t even interpret what they’re seeing. Nor, thanks to the world’s most utterly craven media, do these people have any idea how to find collateral information, let alone collateral damage.
The cumulative effects of Brexit are that deep. The UK is in “systemic shock” at this point. The nervous system still works, but it’s basically babbling. The UK is lucky the Bank of England stepped in when it did. It was under no obligation to do so, and may not be able to do so again if things get worse.
There are no handy hard numbers for revenue receipts and debts including projected interest rate rises.
Debt coverage is not a topic?
There are no projections for improving the trade situation.
Northern Ireland is critical and not a topic?
What else isn’t a topic?
Government by silence is hardly reassuring under these circumstances. Economic illiteracy is expected from Western governments. It’s been such a triumph in the past. The fact that a collection of Smugbridge-educated fools can’t even justify their own policies is a lot less reassuring.
The markets can be expected to continue to react very negatively to any further blows to revenue. Brexit is appropriately dying of its own hubris. The markets have read the riot act, and no further drivel will be tolerated.
Let’s put it this way – No numbers, no credibility.
Debt coverage is not a topic?
There are no projections for improving the trade situation.
Northern Ireland is critical and not a topic?
What else isn’t a topic?
Government by silence is hardly reassuring under these circumstances. Economic illiteracy is expected from Western governments. It’s been such a triumph in the past. The fact that a collection of Smugbridge-educated fools can’t even justify their own policies is a lot less reassuring.
The markets can be expected to continue to react very negatively to any further blows to revenue. Brexit is appropriately dying of its own hubris. The markets have read the riot act, and no further drivel will be tolerated.
Let’s put it this way – No numbers, no credibility.
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