Revision [74816]

This is an old revision of Economic Freedom made by nick on 2015-07-02 21:20:55.


Reform: 4-Pillars of the Liberal Awakening

iii) Economic Reform

Reasons for why change MUST happen:
  1. Complete Moral Collapse and Economic Failure of Banks and the financial sector in general
  1. Complete Failure of Government to anticipate the financial collapse, or to regulate financial sector.
  1. Vast government (tax payer) debt used to underwrite and bailout banks.
  1. Government created a debt mountain for the young generation to pay off so that the current middle age, middle class incumbents can maintain their lifestyle.
  1. Keynesianism & Monetarism don’t work: governments, central banks and economists think that they can control the economy, but in fact only create problems for the future.

Banking & Finance
  1. Get rid of the Bank of England.
  1. The self styled ‘Experts’ and should never again attempt to manipulate and control the economy or business.
  1. Interest rates to be determined by the market.
  1. Money Supply targets to be abolished.
  1. Split up High Street banks into town of regional lending banks to support industry: end up having thousands of independent banks.
  1. All banks pay into an ‘Insurance Levy’ that will underwrite any bank failure.
  1. The taxpayer will NEVER underwrite banks again.
  1. Individuals should spread their risk between banks to avoid the possibility of loss.
  1. The city of London financial sector to be re-modeled as having prime duty to invest in UK industry, business, and Education/Research sector.
  1. 1) All businesses - especially the banking and financial sector - should operate within the same parameters as all other capitalist business, and never be underwritten by government again.
  1. All the financial sector will operate under the same ‘moral hazard’ as other businesses.
  1. To avoid ever again the ‘too large to fail’ situation, retail banks will be broken up into very small local units, and be solely involved in lending to individuals and businesses.
  1. Riskier financial organisations such as investment banks will be be stopped from any socially useless money trading schemes.
  1. When banking investors know that they are not guaranteed to get their deposits back, then they will be more careful about spreading their risk.

Government Borrowing
  1. Government to average a 2% budget surplus on any 7 year period of expenditure.
  1. Deliberate deficit spending to be outlawed: protect the next generation.
  1. Government debt to be reduced to zero over 25 year period.
    1. Tax receipts used to pay debt interest.

  1. Huge increase in productivity to enable all the social benefits of shorter working hours. Goal of a 4 day week.
  1. Make Output not Input the measure of workplace success. Anyone who hangs around late in the office is obviously inefficient and therefore not worthy of promotion.
  1. Politicians, Economists, and Civil Servants have be shown to be totally incapable of controlling or predict the world’s economy, and are victim to events.

  1. Corporation Tax to be abolished - companies shouldn’t be punished for being successful, but instead encouraged to re-invest their profits.
    1. However, the taxation on any profits moved out of the company - in the form of dividends etc. - will be very heavily taxed, at a rate starting at 75%.
    1. The socially useless Stock Exchange culture of rapid share transactions will be punitively taxed. Stocks and shares should only be bought as long term investments, and used as means for helping businesses to grow and expand.
    1. There will a sliding scale of taxation on stocks & shares capital gains depending on how long the shares have been held. This will encourage private equity organisations, hedge funds etc. to hold stock for several years, so that when they come to sell taxation rate will be far less.
    1. Traders who buy and sell shares within 48hours will be taxed at a 98% on any capital gains.
    1. Increased tax on dividend payments to encourage companies to re-invest profits.
    1. Individuals too will be encouraged to buy shares as a long term investment, and get involved in the running of the company - including scrutinising the directors.
    1. All large investors such as pension and insurance funds will be told that they have to be ‘activist investors’, attending all AGMs, and scrutinise the board of directors.

  1. A new law will be brought in that forbids government from borrowing to pay for services (except in exceptional circumstances such as war).
  1. All annual spending will have to be met through equivalent revenue raised through excise and taxation.
  1. A commitment to pay off the total national debt in 25 years, thus creating a better and more prosperous society for the next generation.
  1. To meet this commitment, a surplus of revenue over spending will, therefore, have to occur every year.
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