Labour Party Conference

It’s a sad state of affairs when the most right wing version of the Tories are free to shut down parliament despite no majority or mandate, a party happy to crash us out of the EU with no deal to make rich MP’s of that party even richer.
Sadder still that Labour are pilloried for suggesting we work less hours, that social care for the elderly be free, that our utility and transport services should not be run for profit by big overseas business and that tax loopholes be closed in an effort to create a more equal society.

 

Not quite. If you purchase using borrowed money then you have to factor in the cost of capital such as interest. Also if you intend to repay borrowed money then the 'household' would need to generate funds to facilitate the repayment.

 

Your understanding is flawed.
It appears to be based on US anti socialist propaganda, I don’t know hoe it’s possible to fix that belief, for you and others like you.

 

The value of your asset appreciates over time thus negating the cost of your borrowing. I’m loathe to use the house analogy but if you buy a house with a 30 year mortgage at the end of that period it will be worth more than you paid for it. I’d recommend David Allen Green for his views on the cost neutrality of nationalisation though he is not in favour of it. His views are relative mainstream.

 

Perhaps you could start by explaining how I am wrong rather than criticizing?

 

If you have a house worth £1m and a mortgage of £100k then you still have to finance and pay the mortgage? You could always sell the house or privatise the nationalised industry.

BTW I'm not arguing either pro or anti nationalisation, I'm just looking at it from a 'boring' accountants viewpoint.

 

Kind of getting off track here but another point of that is that, say you pay off your mortgage by the time you're 60 and your house is worth 200k. If you live to 80 you probably have an asset that would cost you 1,000 a month to rent. At that rate (20 x 12 x 1,000) you have value of 240k in the house, plus the market value of 200k that you still own. At this rate we'll all be millionaires!

 

Only on paper, in the balance sheet. In practical terms, it's worth bugger all until you sell it again. Which in terms of nationalisation, kind of pulls the rug out from under itself.

 

I don’t believe I criticised. I thought I’d simply pointed out that I don’t know how to fix that belief.

All over Northern Europe there are successful ‘socialist’ economies, where effort is rewarded. The evidence is there to see, why would you ignore evidence and simply repeat a mantra? That’s what’s wrong with the world, and that’s what I think may be impossible to fix.

Very rich people have a desire to be ever richer, when the result of that is that millions of others die in poverty, they manage to make that look ok by promoting mantras like the one you repeated.

 

I spent a lot of time living in Canada and the US. I am neither capitalist or socialist, they both have their merits on a pure level but both are flawed in practice. I’m not sure what the answer is though sadly. There isn’t a party either in North America or UK that I would happily vote for.

 

That was the argument against the introduction of the minimum wage, and it was found to be incorrect then.

If the minimum wage increases, then the lowest paid people will have more money to spend, which in turn will fund more discretionary purchases which will increase the revenue of companies (large and small). They can then pay more money to all staff (Yes, I know the directors will probably take dis-proportionally more).

If minimum wage is increased past a certain point, it will also reduce the benefit bill to the country, which could in turn also lead to lower taxes.

 

Again this is a modern disease due to the amount of information/ misinformation available.
We have to be realistic and understand that we are all different, so it’s not possible for a political party to mirror our complex political views.

The best we can hope for is a party that broadly aims in the right direction, and in truth, no government is going to be able to enact its entire manifesto, it’s simply pointless hoping to be satisfied by any of them.

 

That’s irrelevant. Would you say that EDF has no value as a company?

 

Only on paper, until such time as its sold.
Same as my house. I've paid for it and, if I was so inclined, I could have it valued, but I can only realise that value if I sell the house. That's ok if I'm downsizing or suchlike, but pointless if it leaves me homeless.

 

That comparison might work better if you were renting out a room on AirBnb - You (and EDF) are receiving an income through owning assets. The value of the assets might appreciate or depreciate, but you/EDF bear the costs of maintenance until you sell to realise the profit (or loss) from the asset, but at the same time you are gaining from the profits on any income.

 

Macro economics doesn’t quite work like that. Your valueless EDF is ‘worth’ billions. All monetary transactions beyond a certain financial level only exist on paper. A reasonable example is the East Coast Mainline where govt has demonstrated that without shareholders to pay you can run it at a profit l.

People buy a house because they see rent as a waste of money as you get no asset at the end of it. If there was no value to the transaction no one would buy a house.

And none of that is relevant to nationalising industry. We need to get away from comparing national budgets to household ones. There is zero link between the two and it’s counterproductive.

 

Isn’t it everyone’s desire to be better off?

 

Cloud cuckoo land. Do you think it won’t impact the businesses?, thereby either going bust or putting up prices, thus negating any of your benefits or making unemployment even worse.

 

You can desire to be better off *at the expense of others*, or you can be better off *in a way that benefits others and yourself*.

So you can be rich, and pay a fair amount of tax to contribute to society and donate extra to charity (see Bill Gates), or be rich and avoid paying taxes to the detriment of society while burning the remaining resources as fast as possible (Trump, Koch Brothers, etc).