LONDON, Dec. 21 (Xinhua) -- Britain's AAA sovereign debt rating could be at risk under threat from the eurozone debt crisis, ratings agency Moody's warned on Tuesday.
The agency's end-of-year assessment said Britain's AAA rating was currently still safe but there were "formidable and rising challenges" ahead.
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Showing posts with label Britain. Show all posts
Showing posts with label Britain. Show all posts
Britain's AAA rating at risk: Moody's
05/07 The Legend of Margaret Thatcher
By BRUCE BARTLETT
Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul.
Republicans have always admired former Prime MinisterMargaret Thatcher of Britain. Her 1979 election excited them enormously; Republicans viewed it as proof that their views were on the upswing and greatly increased their confidence that Ronald Reagan would be elected president in 1980 as part of a worldwide conservative trend.
Mrs. Thatcher’s stature among the American right has only increased since she was ousted by her own party in 1990. This is especially true now. Benjy Sarlin of Talking Points Memo says Mrs. Thatcher “has always been a popular figure in Republican circles across the pond, but she seems to have taken on a new relevance in recent years for the party’s leading lights.”
Mr. Sarlin cites a blog post on Mitt Romney’s Web site that draws a parallel between economic conditions in Britain in the late 1970s and those in America today. He reports that Newt Gingrich and Rick Santorum also invoke Thatcher’s name frequently in their quest for the Republican presidential nomination. And last month, Sarah Palin publicly requested a meeting with Thatcher that fell through because of Mrs. Thatcher’s physical condition.
While Mrs. Thatcher is a towering figure in British political history, well deserving of admiration, the conservative legend about her time in power is at odds with the facts. In this legend, she was even more aggressive than Reagan in cutting taxes and the welfare state. But that is not true.
As this table shows, taxes as a share of the gross domestic product in Britain actually increased sharply during Mrs. Thatcher’s first seven years in office before falling in the later years. Even at the end, they were significantly higher than they were when she took office. Spending also rose during her first seven years before falling in Mrs. Thatcher’s later years.
As this table shows, taxes as a share of the gross domestic product in Britain actually increased sharply during Mrs. Thatcher’s first seven years in office before falling in the later years. Even at the end, they were significantly higher than they were when she took office. Spending also rose during her first seven years before falling in Mrs. Thatcher’s later years.
To those familiar with Mrs. Thatcher’s tax policies, these data are not surprising. Although she cut the top personal income tax rate to 60 percent from 83 percent immediately upon taking office, the basic tax rate was only reduced to 30 percent from 33 percent. And in 1980, the 25 percent lower rate of taxation was eliminated so that 30 percent became the lowest tax rate.
More importantly, Mrs. Thatcher paid for her 1979 tax cut by nearly doubling the value-added tax to 15 percent, from 8 percent. Among those who thought Mrs. Thatcher was making a dreadful mistake was the American economist Arthur Laffer. Writing in The Wall Street Journal on Aug. 20, 1979, he excoriated her for taking with the one hand while giving with the other.
“The Thatcher budget lowers tax rates where they have little economic consequence and raises tax rates where they affect economic activity directly,” he complained.
In the 1982 forward to the British edition of his American best-seller, “Wealth and Poverty,” George Gilder was also highly critical of Mrs. Thatcher for failing to cut either taxes or spending: “The net effect of the Thatcher program has been a substantial increase in taxation on virtually all taxpayers.”
Although Mrs. Thatcher privatized many British industries and businesses that had been nationalized after World War II and sold off much of Britain’s public housing, in which the bulk of the working class lived, she did little to reduce the size of the nation’s welfare state.
In particular, Mrs. Thatcher, like all the members of her party, strongly supported the National Health Service, which provides national health insurance for every Briton.
A review of long-term spending trends in Britain by the Institute for Fiscal Studies shows that Mrs. Thatcher basically flattened a trajectory that had been rising since the war. That took a lot of political effort even though her party controlled Parliament and the prime minister of Britain has far fewer constitutional constraints than an American president. But at the end of the Thatcher era, the welfare state was still intact.
As Martin Wolf, a columnist for The Financial Times, told me, “Like all great politicians, Thatcher was a pragmatist, not an ideologue, who picked her fights carefully. She recognized that any head-on attack on the welfare state would have destroyed the party’s electability.”
Mr. Wolf said Mrs. Thatcher was far more concerned about fiscal stability and deficit reduction than lower taxes, and the idea that a debt default “would have been sensible would, to her, have been insane.”
Mrs. Thatcher, like Reagan, moved her country in a conservative direction. But Mrs. Thatcher’s fiscal accomplishments were much more modest than many of today’s Republicans think.
The lesson they should learn from her is that it is very hard to shrink the size of government even when a strong leader has complete control of the legislature, that it takes many years of arduous work to do so and that at the end of the day it won’t shrink very much.
12/10 Anh bán tài sản công để giảm thâm hụt ngân sách
Chính phủ Anh đang bí mật lập kế hoạch đối phó với khoản thâm hụt ngân sách trị giá 149 tỷ bảng thông qua việc chia nhỏ và tư nhân hóa bất động sản trị giá hàng chục tỷ bảng thuộc sở hữu của nhà nước.
Tờ Điện tín của Anh ngày 11/10 cho biết Thủ tướng Anh David Cameron đã yêu cầu tất cả các bộ trưởng kiểm kê và báo cáo toàn bộ tài sản nhà đất của đơn vị mình, kể cả thời gian các hợp đồng đang cho thuê cũng như những đơn vị đang thuê đất.
Cơ quan Thống kê quốc gia Anh (ONS) ước tính tài sản nhà đất thuộc sở hữu của chính phủ nước này hiện trị giá khoảng 370 tỷ bảng. Tuy nhiên, hiện vẫn chưa có một con số thống kê chính xác nào được đưa ra và các chuyên gia cho rằng tổng giá trị tài sản của chính phủ có thể lên tới 500 tỷ bảng.
Thách thức lớn nhất của chính phủ Anh hiện nay là phải tiến hành rà soát và lên danh sách lần đầu tiên những tài sản thuộc sở hữu của chính phủ, vì trên thực tế, chính phủ Anh cũng không biết chắc là họ đang sở hữu những tài sản gì. Điển hình như chỉ riêng Bộ Y tế nước này có tới 77.000 tòa nhà và con số này cũng chỉ mới được đưa ra gần đây. Tuy nhiên, chưa rõ liệu đây đã phải là con số cuối cùng hay không./.
(TTXVN/Vietnam+)
Tờ Điện tín của Anh ngày 11/10 cho biết Thủ tướng Anh David Cameron đã yêu cầu tất cả các bộ trưởng kiểm kê và báo cáo toàn bộ tài sản nhà đất của đơn vị mình, kể cả thời gian các hợp đồng đang cho thuê cũng như những đơn vị đang thuê đất.
Cơ quan Thống kê quốc gia Anh (ONS) ước tính tài sản nhà đất thuộc sở hữu của chính phủ nước này hiện trị giá khoảng 370 tỷ bảng. Tuy nhiên, hiện vẫn chưa có một con số thống kê chính xác nào được đưa ra và các chuyên gia cho rằng tổng giá trị tài sản của chính phủ có thể lên tới 500 tỷ bảng.
Thách thức lớn nhất của chính phủ Anh hiện nay là phải tiến hành rà soát và lên danh sách lần đầu tiên những tài sản thuộc sở hữu của chính phủ, vì trên thực tế, chính phủ Anh cũng không biết chắc là họ đang sở hữu những tài sản gì. Điển hình như chỉ riêng Bộ Y tế nước này có tới 77.000 tòa nhà và con số này cũng chỉ mới được đưa ra gần đây. Tuy nhiên, chưa rõ liệu đây đã phải là con số cuối cùng hay không./.
(TTXVN/Vietnam+)
NYT: 03/10 Fear and Favor by Paul Krugman
October 3, 2010
By PAUL KRUGMAN
A note to Tea Party activists: This is not the movie you think it is. You probably imagine that you’re starring in “The Birth of a Nation,” but you’re actually just extras in a remake of “Citizen Kane.”
True, there have been some changes in the plot. In the original, Kane tried to buy high political office for himself. In the new version, he just puts politicians on his payroll.
I mean that literally. As Politico recently pointed out, every major contender for the 2012 Republican presidential nomination who isn’t currently holding office and isn’t named Mitt Romney is now a paid contributor to Fox News. Now, media moguls have often promoted the careers and campaigns of politicians they believe will serve their interests. But directly cutting checks to political favorites takes it to a whole new level of blatancy.
Arguably, this shouldn’t be surprising. Modern American conservatism is, in large part, a movement shaped by billionaires and their bank accounts, and assured paychecks for the ideologically loyal are an important part of the system. Scientists willing to deny the existence of man-made climate change, economists willing to declare that tax cuts for the rich are essential to growth, strategic thinkers willing to provide rationales for wars of choice, lawyers willing to provide defenses of torture, all can count on support from a network of organizations that may seem independent on the surface but are largely financed by a handful of ultrawealthy families.
And these organizations have long provided havens for conservative political figures not currently in office. Thus when Senator Rick Santorum was defeated in 2006, he got a new job as head of the America’s Enemies program at the Ethics and Public Policy Center, a think tank that has received funding from the usual sources: the Koch brothers, the Coors family, and so on.
Now Mr. Santorum is one of those paid Fox contributors contemplating a presidential run. What’s the difference?
Well, for one thing, Fox News seems to have decided that it no longer needs to maintain even the pretense of being nonpartisan.
Nobody who was paying attention has ever doubted that Fox is, in reality, a part of the Republican political machine; but the network — with its Orwellian slogan, “fair and balanced” — has always denied the obvious. Officially, it still does. But by hiring those G.O.P. candidates, while at the same time making million-dollar contributions to the Republican Governors Association and the rabidly anti-Obama United States Chamber of Commerce, Rupert Murdoch’s News Corporation, which owns Fox, is signaling that it no longer feels the need to make any effort to keep up appearances.
Something else has changed, too: increasingly, Fox News has gone from merely supporting Republican candidates to anointing them. Christine O’Donnell, the upset winner of the G.O.P. Senate primary in Delaware, is often described as the Tea Party candidate, but given the publicity the network gave her, she could equally well be described as the Fox News candidate. Anyway, there’s not much difference: the Tea Party movement owes much of its rise to enthusiastic Fox coverage.
As the Republican political analyst David Frum put it, “Republicans originally thought that Fox worked for us, and now we are discovering we work for Fox” — literally, in the case of all those non-Mitt-Romney presidential hopefuls. It was days later, by the way, that Mr. Frum was fired by the American Enterprise Institute. Conservatives criticize Fox at their peril.
So the Ministry of Propaganda has, in effect, seized control of the Politburo. What are the implications?
Perhaps the most important thing to realize is that when billionaires put their might behind “grass roots” right-wing action, it’s not just about ideology: it’s also about business. What the Koch brothers have bought with their huge political outlays is, above all, freedom to pollute. What Mr. Murdoch is acquiring with his expanded political role is the kind of influence that lets his media empire make its own rules.
Thus in Britain, a reporter at one of Mr. Murdoch’s papers, News of the World, was caught hacking into the voice mail of prominent citizens, including members of the royal family. But Scotland Yard showed little interest in getting to the bottom of the story. Now the editor who ran the paper when the hacking was taking place is chief of communications for the Conservative government — and that government is talking about slashing the budget of the BBC, which competes with the News Corporation.
So think of those paychecks to Sarah Palin and others as smart investments. After all, if you’re a media mogul, it’s always good to have friends in high places. And the most reliable friends are the ones who know they owe it all to you.
By PAUL KRUGMAN
A note to Tea Party activists: This is not the movie you think it is. You probably imagine that you’re starring in “The Birth of a Nation,” but you’re actually just extras in a remake of “Citizen Kane.”
True, there have been some changes in the plot. In the original, Kane tried to buy high political office for himself. In the new version, he just puts politicians on his payroll.
I mean that literally. As Politico recently pointed out, every major contender for the 2012 Republican presidential nomination who isn’t currently holding office and isn’t named Mitt Romney is now a paid contributor to Fox News. Now, media moguls have often promoted the careers and campaigns of politicians they believe will serve their interests. But directly cutting checks to political favorites takes it to a whole new level of blatancy.
Arguably, this shouldn’t be surprising. Modern American conservatism is, in large part, a movement shaped by billionaires and their bank accounts, and assured paychecks for the ideologically loyal are an important part of the system. Scientists willing to deny the existence of man-made climate change, economists willing to declare that tax cuts for the rich are essential to growth, strategic thinkers willing to provide rationales for wars of choice, lawyers willing to provide defenses of torture, all can count on support from a network of organizations that may seem independent on the surface but are largely financed by a handful of ultrawealthy families.
And these organizations have long provided havens for conservative political figures not currently in office. Thus when Senator Rick Santorum was defeated in 2006, he got a new job as head of the America’s Enemies program at the Ethics and Public Policy Center, a think tank that has received funding from the usual sources: the Koch brothers, the Coors family, and so on.
Now Mr. Santorum is one of those paid Fox contributors contemplating a presidential run. What’s the difference?
Well, for one thing, Fox News seems to have decided that it no longer needs to maintain even the pretense of being nonpartisan.
Nobody who was paying attention has ever doubted that Fox is, in reality, a part of the Republican political machine; but the network — with its Orwellian slogan, “fair and balanced” — has always denied the obvious. Officially, it still does. But by hiring those G.O.P. candidates, while at the same time making million-dollar contributions to the Republican Governors Association and the rabidly anti-Obama United States Chamber of Commerce, Rupert Murdoch’s News Corporation, which owns Fox, is signaling that it no longer feels the need to make any effort to keep up appearances.
Something else has changed, too: increasingly, Fox News has gone from merely supporting Republican candidates to anointing them. Christine O’Donnell, the upset winner of the G.O.P. Senate primary in Delaware, is often described as the Tea Party candidate, but given the publicity the network gave her, she could equally well be described as the Fox News candidate. Anyway, there’s not much difference: the Tea Party movement owes much of its rise to enthusiastic Fox coverage.
As the Republican political analyst David Frum put it, “Republicans originally thought that Fox worked for us, and now we are discovering we work for Fox” — literally, in the case of all those non-Mitt-Romney presidential hopefuls. It was days later, by the way, that Mr. Frum was fired by the American Enterprise Institute. Conservatives criticize Fox at their peril.
So the Ministry of Propaganda has, in effect, seized control of the Politburo. What are the implications?
Perhaps the most important thing to realize is that when billionaires put their might behind “grass roots” right-wing action, it’s not just about ideology: it’s also about business. What the Koch brothers have bought with their huge political outlays is, above all, freedom to pollute. What Mr. Murdoch is acquiring with his expanded political role is the kind of influence that lets his media empire make its own rules.
Thus in Britain, a reporter at one of Mr. Murdoch’s papers, News of the World, was caught hacking into the voice mail of prominent citizens, including members of the royal family. But Scotland Yard showed little interest in getting to the bottom of the story. Now the editor who ran the paper when the hacking was taking place is chief of communications for the Conservative government — and that government is talking about slashing the budget of the BBC, which competes with the News Corporation.
So think of those paychecks to Sarah Palin and others as smart investments. After all, if you’re a media mogul, it’s always good to have friends in high places. And the most reliable friends are the ones who know they owe it all to you.
Xinhua: British economist: China has promising growth prospects
June-2-2010
China has promising growth prospects and should not be blamed for world imbalances, says Danny Quah, a renowned British economist.
"Emergency financing that was placed in the Chinese economy to counter the downturn from the 2008 global financial crisis was the right thing...The imbalances is a global problem, not a China problem," said Quah, a professor at the London School of Economics and Political Science.
China did the right thing in infusing its economy with fiscal stimulus, Quah said in a recent interview with Xinhua.
He also declined to describe the ballooning real estate prices as a bubble, pointing out "the strong fundamentals" of China's economy.
He said the expansion of China's housing construction will be proved useful eventually, given the fact that "China is still engaging in the task of moving hundreds of millions of people from rural areas to urban China to continue to power its manufacturing and industrial progress."
"So I would not describe it as a collapse of real estate bubble, we can look forward to a rationalization of housing and real estate prices," Quah said. "The improvement and expansion of housing stock will play an important role in continuing to move the Chinese economy forward."
"I think Chinese fundamentals will continue to be strong. And a little bit of high inflation, as long as it doesn't break out into some kind of runaway high inflation, is probably no bad thing," he said. "We will get it under control again as the Chinese government did previously."
On allegations that China deliberately keeps its currency RMB weak to obtain unfair advantages in trade with countries like the United States, Quah said people who draw such a false conclusion are misguided.
"The United States is running a trade deficit not just against China. It is running a trade deficit against almost 100 other countries," he said. "China is not unique in how it is exporting more to the United States than it's importing."
The U.S. government was beginning to run a large trade deficit long before China's trade surpluses started grow, he added.
"If you take the ratio of China's bilateral trade surplus against the U.S. as a fraction of the U.S.' overall bilateral trade deficit against all of the countries, it has remained constant over the last 15, 20 years," Quah said.
He said these facts clearly show that the appreciation of RMB will not end the U.S. trade deficit, instead it may produce unexpected repercussions upon the U.S. economy and the rest of the world.
Quah said RMB appreciation would also force American consumers to purchase goods from other nations at higher expenses.
"Revaluation proponents should be reminded that manufacturers of the U.S. rely on the inputs from China," he said. "If China's commodities get more expensive, it would hurt the U.S. industry, and hundreds of thousands of jobs will be destroyed."
When asked what is behind the world imbalances, Quah said: "The direction of the causality I think is much more compelling from the behavior of the U.S. economy to the rest of the world than it is from China to the U.S. economy."
"The inability of the dollar to adjust the world imbalance contributes much to the financial crisis," he said.
"If you believe this alternative of this pattern of causality, then how we fix the problem of trade deficit imbalances is to fix the U.S. economy," he added.
Quah said the U.S. role in the world economy is no longer as optimistic as it was. Other parts of the global economy are actually growing faster and already having a much bigger role in the global economy. American consumers have to be more careful with their borrowing behaviors, he said.
"When they do that, I would argue, a more rational attitude toward savings and consumption. That would restore the world pattern of global balances," he said. "We would need other things as well, but I think that is the single largest cause for global imbalances."
Quah said the "global economy's center of gravity," a quantified indicator showing the global distribution of economic activities, has been moving 2,000 km eastwards for the past three decades, indicating the increasing importance of the East in the world economy.
However, "it may take decades if not centuries to see a shift of leadership from the West to the East with the reconfiguration of political power and soft power paralleled with the economic power," he said.
China has promising growth prospects and should not be blamed for world imbalances, says Danny Quah, a renowned British economist.
"Emergency financing that was placed in the Chinese economy to counter the downturn from the 2008 global financial crisis was the right thing...The imbalances is a global problem, not a China problem," said Quah, a professor at the London School of Economics and Political Science.
China did the right thing in infusing its economy with fiscal stimulus, Quah said in a recent interview with Xinhua.
He also declined to describe the ballooning real estate prices as a bubble, pointing out "the strong fundamentals" of China's economy.
He said the expansion of China's housing construction will be proved useful eventually, given the fact that "China is still engaging in the task of moving hundreds of millions of people from rural areas to urban China to continue to power its manufacturing and industrial progress."
"So I would not describe it as a collapse of real estate bubble, we can look forward to a rationalization of housing and real estate prices," Quah said. "The improvement and expansion of housing stock will play an important role in continuing to move the Chinese economy forward."
"I think Chinese fundamentals will continue to be strong. And a little bit of high inflation, as long as it doesn't break out into some kind of runaway high inflation, is probably no bad thing," he said. "We will get it under control again as the Chinese government did previously."
On allegations that China deliberately keeps its currency RMB weak to obtain unfair advantages in trade with countries like the United States, Quah said people who draw such a false conclusion are misguided.
"The United States is running a trade deficit not just against China. It is running a trade deficit against almost 100 other countries," he said. "China is not unique in how it is exporting more to the United States than it's importing."
The U.S. government was beginning to run a large trade deficit long before China's trade surpluses started grow, he added.
"If you take the ratio of China's bilateral trade surplus against the U.S. as a fraction of the U.S.' overall bilateral trade deficit against all of the countries, it has remained constant over the last 15, 20 years," Quah said.
He said these facts clearly show that the appreciation of RMB will not end the U.S. trade deficit, instead it may produce unexpected repercussions upon the U.S. economy and the rest of the world.
Quah said RMB appreciation would also force American consumers to purchase goods from other nations at higher expenses.
"Revaluation proponents should be reminded that manufacturers of the U.S. rely on the inputs from China," he said. "If China's commodities get more expensive, it would hurt the U.S. industry, and hundreds of thousands of jobs will be destroyed."
When asked what is behind the world imbalances, Quah said: "The direction of the causality I think is much more compelling from the behavior of the U.S. economy to the rest of the world than it is from China to the U.S. economy."
"The inability of the dollar to adjust the world imbalance contributes much to the financial crisis," he said.
"If you believe this alternative of this pattern of causality, then how we fix the problem of trade deficit imbalances is to fix the U.S. economy," he added.
Quah said the U.S. role in the world economy is no longer as optimistic as it was. Other parts of the global economy are actually growing faster and already having a much bigger role in the global economy. American consumers have to be more careful with their borrowing behaviors, he said.
"When they do that, I would argue, a more rational attitude toward savings and consumption. That would restore the world pattern of global balances," he said. "We would need other things as well, but I think that is the single largest cause for global imbalances."
Quah said the "global economy's center of gravity," a quantified indicator showing the global distribution of economic activities, has been moving 2,000 km eastwards for the past three decades, indicating the increasing importance of the East in the world economy.
However, "it may take decades if not centuries to see a shift of leadership from the West to the East with the reconfiguration of political power and soft power paralleled with the economic power," he said.
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