Friday, March 14, 2008

The Budget

You might (or might not) be surprised I haven't mentioned The Budget, to be blunt it's because I knew what the result was going to be before it even started - I'm going to have less money. Sure it's all what you gain on the swings you lose on the roundabouts, but those are tiny swings and massive roundabouts.

The simple point is that the government needs more money as things cost more, except... except why is that?

It sounds a daft question, but hey I like daft questions especially when the default answer currently seems to be "because" so let's get to it.

Firstly are prices going up? Well it depends on what the government spending money on? The price of land is going up, if the government is buying it for roads or other developments; that's simple supply and demand. The price of goods is going up, but why. And wages are going up, because the cost of living is rising; but why is the cost of living rising?

I've dealt with land elsewhere to summarise we have a finite amount of land and essentially an infinite demand; oddly enough costs go up, but it's not helped by the governments insistence that they never fall.

The price of goods and cost of living have some overlap. Utilities are charging us more either as a direct result of fuel, or for maintenance, or both. Given the state that most utility infrastructures were left in this isn't surprising. Fuel is costing us more, other goods are costing us more. We need more money to pay for this so wages need to increase in line.

As the government also needs to pay for services and wages it makes perfect sense that they too require more money except...

Well income tax is a percentage so is VAT, so if wages increase and the cost of goods increases then so does the amount in tax received. But why is the cost of goods increasing, we expect prices to fall as the processes get more efficient. Unless the goods themselves are becoming scarce what would drive up their cost? Well the stores are having to pay higher wages for people to buy the goods that are increasing in cost because the stores are having to pay higher wages because... That's a circle, but still it requires something to kick-start it off.

Well fuel prices are increasing and goods need to be transported, so that's costing more. The fuel price has nothing to do with the government except for the fixed fuel duty and VAT on top of it... ah.

Also rate bills have increased, because the local councils need more money because costs are rising... and we're back into another circle aren't we.

So except for the property price increases, the raw cost of fuel, and repairing a neglected infrastructure; it kind of looks to me that the reason that the government needs more money is because the government keeps taking more money off us in various different ways.

2 comments:

Invisible said...

w00t! Perpetual motion FTW!

(And who said it's impossible?)

FlipC said...

I wouldn't mind too much if they weren't wasting so much of the money they collect, try reading Plundering the Public Sector though I don't think too much therein will surprise you.