Slowly getting back to normal
In a spare few minutes before a meeting starts, I've been able to play around with the BBC's interactive Budget Ready Reckoner
, which allows you to play around with the British economy by taking the decisions the Chancellor will have to tomorrow.
I think this
will take you to what cold-hearted, mean-spirited Murray would do:
Or if that (the longest URL I've ever seen) won't work, you could just feed this in:
basic rate of income tax (percent) : 10
higher rate of income tax (percent) : 25
higher rate threshold (£pa) : £40,000
personal allowance (£pa) : £6,000
national insurance contribution (NI) rate (%) : 5
NI upper earnings limit (£p.w) : £450
Value Added Tax : 5
duty on tobacco per pkt 20 (pence per pkt 20) : cut by £1
duty on a pint of beer (pence) : abolish it!
extra duty on a bottle of wine : abolish it!
extra duty on a bottle of whisky (pence) : abolish it!
extra duty on petrol per litre(pence) : abolish it!
vehicle excise duty (£p.a) for cars above 1,400cc : £50
department for education and employment (DFEE) : halve it
law and order (the Home Office) : increase by 25%
the ministry of defence : cut by 10%
uprate all non means-tested benefits by this amount : halve it
basic state pension : £100
(no change where not mentioned)
Results: massive boom in the next few years (the GDP increase graph is of course misleading as I'd end up with an absolute increase in GDP from 100 now to 154.5, compared with the forecasts of 121.6). There'd be a deflation shock, followed by high inflation. There's something badly wrong with the model, however, 'cos I get negative unemployment after 2004 (massive immigration could be the answer). Perhaps the US Census Bureau put this together? Government debt is almost eliminated by 2009. Oh, and everyone, yes everyone, except the pensioner couple is better off. I'm sure policies could be adjusted to provide a safe haven for pensioners.
Still, if we could solve that inflation problem and the unemployment glitch, it doesn't look like a bad solution, does it?
Interestingly, I've just plugged in tax hikes and spending increases and get almost the same macroeconomic results, but everyone is much worse off...