A Holistic Approach To Big Socio-Economic Issues

General and Other Policy
1

In the UK, we like to believe that demographic problems, and economic problems are not related. That problems to do with culture, have nothing to do with housing. And so on, and so forth.

This is not true.

Fundamentally, economics & finance are all about human action anyway and economics is known as a social science.

I’m going to go over some issues here and I hope it will promote a more multi-pronged holistic discussion.

Housing
Housing, in the UK is now well over 300% of GDP - over 3x the size of the rest of the economy (Reference: Financial Reporter Co UK)

This is a bubble and it is not sustainable.

Our national obsession with propping up the housing markets with quantitative easing, artificially low interest rates, government subsidies, planning barriers and of course, the biggest subsidy of all - unrestrained immigration is having an enormously detrimental impact on the rest of the country.

For example, we talk about low birth rates of British citizens and rightly so. However, we never talk about the impact that sheer cost-of-living and specifically, rent prices and home prices, has upon people looking to start families.

I give you a reference from the Royal Economic Society on this matter, who stated that people were postponing having children as long ago as 2017 due to sheer unaffordability of home prices. (reference: RES)

And what else does this cause? It causes our idiot politicians to think “Oh, people have less children, this means we need more immigration!”

Which itself, just feeds more artificial demand into the housing market.

The only beneficiaries of this are multi-home landlords - it’s an enormous cost to everyone else.

For example, housing benefit now costs the UK government over £30billion billion per year (Reference: The BBC) - we are paying for this as taxpayers, yet we never discuss the primary drive of cost here.

This is what I mean by a holistic view of policy and problems.

We see the housing benefit problem, and yet we refuse to talk about the other factors that relate to it such as sheer unaffordability of housing, such as immigration, such as all the other subsidies that have distorted the housing market.

We pay lip-service to low-birth rates, and poor family formation rates in the west, but we don’t dare connect this to the actions of the government & the Bank of England in creating another housing bubble.

This is why policy making is so difficult. Some of the issues are multi-facted and we need to stop thinking in simplistic terms.

There must be nothing sacred in our discussions of policy because often, this ties into very “Un-PC” issues.

2

I think this is the basis of the most important subject upon which all policies should be based: What is the ideal population of the UK, supported by a sensible housing plan, training for the young to ensure no real unemployment bar those really unfit to work. then we can decide how much electricity we need, how much water, how many police, how many doctors, nurses, etc. it’s not rocket science. The big decision is how to put money aside properly for pensions so that they are all funded. Then, get out of the way of business, so that they prosper, and enough money is coming in to pay for necessary public structure, while removing anything unnecessary. Am I being overly simplistic? all the best

3

My view is actually that the government broadly needs to take only remedial actions to address externalities (E.g. public health and safety and other related issues).

As far as housing, then of course the holistic view would be to look at simple supply and demand and attempt to reduce demand by simply stemming the tide of immigration and opening up more sites for development.

As far as the unemployed go, there is a difference between “floating unemployment” and “long-term unemployment” and so forth.

For example, in places like Middlesborough, unemployment broadly is a systemic long-term issue due to decades of “government planning” going awry and underdevelopment (due to over-reliance on a defunct set of industries).

What I would instead do is make these areas effective tax havens by allowing them to discount certain rates of taxation (such as business rates). That would encourage more capital to flow into these areas out of London which is overstimulated if anything.

Regarding electricity and water, bottom-line, is that there is no such thing as “oversupply” and planning is a fools errand. Bottom line is that we don’t have the supply to meet the needs of the population at a sensible cost due to previous failed attempts at national policy (Such as the green energy white elephant). So we need to just allow energy companies to set up new operations without punishing them for it.

And finally, regarding savings for pensions… I believe the real villain here is inflation.

E.g. if cost of living rises, peoples’ savings are eroded and ability to save is also eroded.

This, by itself, necessarily leads to less saved for retirement.

Prime example of what I mean by a holistic approach to policy.

And finally, regarding your approach to business, we are definitely overregulating and overtaxing enterprise.