Ronald Reagan

The ten most dangerous words in the English language are "Hi, I'm from the government, and I'm here to help."

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

And I have to point out that government doesn't tax to get the money it needs, government always needs the money it gets.

How The Tax System Works

Suppose that every day, ten men go out for beer and the bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay £1.The sixth would pay £3.The seventh would pay £7.The eighth would pay £12.The ninth would pay £18.The tenth man (the richest) would pay £59. So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beer by £20.' Drinks for the ten now cost just £80. The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the£20 windfall so that everyone would get his 'fair share?' They realized that £20 divided by six is £3.33. But if they subtracted that from everyone's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so: The fifth man, like the first four, now paid nothing (100% savings).The sixth now paid £2 instead of £3 (33%savings).The seventh now pay £5 instead of £7 (28%savings).The eighth now paid £9 instead of £12 (25% savings).The ninth now paid £14 instead of £18 (22% savings).The tenth now paid £49 instead of £59 (16% savings). Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. 'I only got a pound out of the £20,' declared the sixth man. He pointed to the tenth man, 'but he got £10!' 'Yes, that's right,' exclaimed the fifth man. 'I only saved a pound, too.  It's unfair that he got ten times more than I did' 'That's true!!' shouted the seventh man. 'Why should he get £10 back when I got only two? The wealthy get all the breaks' 'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor' The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill. And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier. David R. Kamerschen, Ph.D.Professor of Economics

For those who understand, no explanation is needed. 

For those who do not understand, no explanation is possible.

The Bank of England was founded in 1694. In 1997 Labour removed the Bank of England as the regulator of the British banks.

Peter Lilley said in 1997 in the debate on the Budget (Hansard 11/111997 para 732):
"With the removal of banking control to the FSA - the 'super-SIB' - it is difficult to see how and whether the Bank remains, as it surely must, responsible for ensuring the liquidity of the banking system and preventing systemic collapse".

It is hard to put all the blame on the banks when the government had the job of regulating the banks.  If the government removed the speed limits and everyone crashed would you blame the drivers or the government?

Mr. Brown repeatedly praised the City's "innovative skills," bragging in 2006 that it was responsible for 40% of the world's over-the-counter derivatives trade -- which includes the now infamous repackaged subprime mortgages. He gave financial institutions a false sense of security by telling them on June 16, 2004, that "I am determined to ensure that we can lock in greater stability not just for a year, or for an economic cycle, but in this generation."

In the end labour governments always run out of money

Tax receipts soared in the Noughties, from this artificial credit boom, and Brown spent every penny of it, and more! He increased public spending by 5% p.a. compound, from 2001 onwards, creating a bloated & inefficient public sector, and somehow managed to still run spending deficits in the boom years. As the tide went out with the banking crisis, and tax revenues collapsed, this left us in the mess we are in today.

THIS is what Labour need to 'fess up to. That they were imprudent, totally incompetent across a broad range of areas, and under their stewardship the UK has plunged into the worst crisis since the 1970's (which funnily enough was also under Labour's stewardship when we had to go to the IMF for a Bail-Out).

Every Labour Govt in history has ended the same way - with a financial crisis brought about from over-spending. It's what they do. Every time. I pity the young people starting out in their careers now. A hefty chunk of their lifetime taxes will be used to service (let alone repay) the debt which has been needlessly incurred in the past 5 years. It's about £500bn at the moment (on top of £400bn existing debt), and will continue to rise for several years yet.

My generation should hang our heads in shame that we will selfishly leave a legacy of over £1trn of debt to the next generation - not to pay for a World War. No, just because we've been too greedy to accept more modest public services now. Instead Brown built up a completely unaffordable public sector that future generations will pay for, with interest. They will have correspondingly worse public services. What a smashing legacy. Well done Brown. Let's hope these dreadful fools are kept away from the levers of power for a generation (at least).

“The trouble with socialism is that you eventually run out of other people’s money.” – Margaret Thatcher

"We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists."
James Callaghan

“The trouble with theoretical economists is that they don't understand that when you have a deficit, you can only finance it by borrowing, and you've got to persuade people that it's worth lending money to you and that they'll get their money back... there's no way of escaping it.” Dennis Healey during the 1976 Stirling Crisis