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Oct. 16, 2013 - Freedomain Radio - Stefan Molyneux
01:03:27
2507 The Fall of the United Kingdom

The state of the United Kingdom economy including government spending, budget deficits, interest on the debt, unfunded liabilities, public sector worker pensions, retirement savings, educational spending, health care costs, the death pathways, the myth of austerity, taxes, military spending, monetary policy, inflation, standard of living, income distribution, unemployment and mental health.

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Hi, everybody.
My name is Stefan Molyneux.
I'm the host of Freedom Aid Radio.
I hope you're doing well.
This is a presentation entitled The Fall of the United Kingdom, and I hope that you will enjoy it.
It can be some tough stuff, but it is pretty essential as to how you're going to be living your life for the next five or ten years.
So what are we trying to do here?
What am I trying to do?
Well, I want to look at the present state of the UK economy and attempt to shine a spotlight on Well, let's call them areas of concern, shall we?
So, mainstream media, government officials, point to the picture of rosy economic growth of the green shoots of recovery and impending financial recoveries.
Just around the corner, we're going to have a look at the hard numbers and empirical evidence instead of just making blind assertions.
Of course, the media wants you to keep spending.
Government officials want you to keep spending.
They may not be telling you the unvarnished truth.
The United Kingdom.
Unsustainable yearly deficits in the government, record levels of household debt, double-digit cost of living increases, staggering amounts of unfunded future liabilities, stuff the government has promised to people that it simply does not have the money to pay, disastrous central banking monetary policies in a health care system that has been described as being on the brink of collapse.
Hopefully, this information will help people brace themselves for the unfortunate reality that I'm sorry.
There will be no economic recovery.
You need to prepare yourself accordingly.
Total government spending from 1985 to 2015.
So the red bars on the right are estimates, and of course the government is lowballing these estimates and highballing the amount of taxes they expect to receive.
And as you can see, these are all adjusted for inflation.
This goes pretty catastrophically higher over time.
The end result of this is bankruptcy, of course.
In 1985, the total United Kingdom government spending was £150.9 billion, which amounted to £2,657 per person.
In 2000, it had skyrocketed £338 billion, or £5,735 per person, 115% increase from 1985.
Oh, a mere 13 years later, ladies and gentlemen, UK government spending was £668 billion, £10,527 per person, a 342% increase from 1985.
Madness.
So, a way of looking at this is to think of the government in terms of years, to think of you in terms of months with your credit card debt, right?
That in a staggeringly short amount of time, in a matter of a dozen or two dozen months, you have added 342% to your spending.
This is completely unsustainable, and we'll go into why.
The UK Office for Budget Responsibility I'm sorry, it's just hard to say that with a straight face.
OBR predicted a budget deficit of £121 billion in 2013 and £120 billion for 2014.
It's amazing that despite all the historical momentum, it goes down in the future.
In the last 44 years, the UK has only had an annual budget surplus six years for a total of £46 billion.
In those other 36 years, the United Kingdom has run up a budget deficit of over a trillion pounds.
Or, 1-0-3-8-2-6-6-0-0-0.
Donut, donut, donut.
So that's, of course, not good and not sustainable.
Now, of course, when the UK runs a budget deficit, it offsets the difference by selling bonds.
And bonds are, give me money now and some government in the future, by taxing the unborn, will give you more money back later.
And that's pretty ruinous, of course, because the government doesn't make any money.
I mean, it prints money.
But that's like saying that a counterfeiter makes money.
He doesn't.
He just steals money through inflation, which is kind of what central banking is all about.
These bonds, also known as gilts, because that's what you should be feeling for shafting the unborn, is guilt, added together make up the UK's national debt, not including unfunded future liabilities.
Unfunded future liabilities are not counted in the national debt, though of course they should be.
Public net debt.
United Kingdom from fiscal year 1965 to 2015.
And again, well, the sources for all of this will be available in the low bar.
You can go to fdrurl.com forward slash UK and you will see all of these.
So you can see cooks along until the 70s, goes mad through the 90s.
And of course, 2005 onwards, it just goes completely mental.
And the estimates are going to be even worse when the facts come in.
The United Kingdom's national debt, not including, again, unfunded liabilities, is estimated at over 1.2 trillion quid and increases at a rate of, drumroll, 5,169 pounds per second, 310, 212 pounds per minute, 18.6 million pounds per hour, or 446.5 million pounds per day.
So this is almost £20,000 for every man, woman and child in the UK, and over £42,151 for every employed resident.
And for the sake of generosity, if not reality, we will count everyone in the government as gainfully employed.
And take those people out of the equation, I think it's you, me and one guy in Warwickshire who's paying for the entire government.
Let's take a look at interest on the UK national debt from 1985 to 2015.
Again, some projections.
So, in 2009 to 2010, a nap and a half ago, the national debt stood at £759.5 billion.
The national debt now is more than £1.2 trillion, an increase of 60%.
Over just a few years, this is the rollercoaster that makes fetuses go, ah!
This year, the interest alone on the debt will be almost 50 billion pounds, costing every household over 1,900 pounds per year.
2017 to 2018, I guess that sounds like science fiction numbers, but frankly, it's the entire Hobbit movie twice, and we're there.
It is estimated to be at least...
£1,637 billion, an estimated increase of 34% over the current deficit, and interest payments will amount to over £71.3 billion.
So, to put this in context, the interest payments alone are more than the current annual budgets of the Home Office, i.e.
the Police and the Department of Education, which spend around £65 billion a year combined.
Interest will eat our children.
Let's take a tasty dip into the flaming fiscal hell known as unfunded liabilities.
The Office for Budget Responsibility, there it is again, has estimated total government pension obligations at 5.01 trillion.
See, 5 trillion would be fine, but.01?
Complete disaster.
Or 342% of gross...
Domestic product.
So you owe the loan shark, known as the central bank and other people who've bought bonds and gilts, 342% of even the highly inflated GDP number put out by the government.
In other words, you have two kidneys, you owe 19 kidneys to a loan shark.
Not going to be a good weekend for you.
Now, of these obligations, see, the government knows about all these obligations, and remember, democracies are not about short-term vote-getting.
They're all about long-term fiscal responsibility.
Like, you know how you change the oil on the car that you rent?
Exactly the same thing.
Because of these obligations, the £5 trillion worth of obligations, how many have been funded?
Well, 6.25% have been funded, or about £313 billion out of the...
$5.01 trillion.
And this is according to the government's numbers, if you trust them.
Social security-related unfunded liabilities are estimated at $3.843 trillion, or 263% of GDP, which is why cannibalism among the old is not far away, tragically.
Unfunded public sector employee pension liabilities are estimated at £852 billion, or 58% of the gross domestic product.
So tens of millions of people have put up with indescribably boring jobs, and little career advancement, and putting up with other people in the public sector for 40 odd years.
They're counting on these benefits.
What Well, the usual.
Price controls, rationing, a semi-slide into fascistic hell, and all of this is Easy to see.
It's not even around the corner.
It's about to splat into the windshield.
And, of course, no particular politician wants to take on these issues.
Because why would you want to fix the economy, get everyone really mad at you, and hand a better economy to the idiot they vote in next because they're upset with you?
It's just not the way the system.
System's not broken.
It's designed to work this way.
How are the households doing?
Well, of course, as the economy slows, as cost of living increases go up, as inflation eats away at your savings and your earnings, what do people do?
Well, to maintain their lifestyle, they go into debt, you know, in the same way that a vampire, to maintain his lifestyle, goes into jugulars.
Household debt.
Percentage of GDP. Oh, my goodness.
Look!
England, number one.
Rules!
Household debt amounts to 98% of the United Kingdom's GDP, which is one of the highest percentages in the world.
For comparison, household debt amounts to 87% of GDP in the U.S., 91% in Canada, 82% in Spain, 67% in Japan, 62% in Greece.
You know, and if there's one thing you want to be better at than the Greeks...
It's not Tzatziki.
It's not Spanish operators.
It is debt.
And that's really when you know that you have achieved the world championship of debt.
60% in Germany and 48% in France.
Total outstanding personal debt stood at $1.425 trillion at the end of June 2013, up only 0.28% from the previous year.
Average household debt in the UK, excluding mortgages, is almost £6,000.
Average household debt in the UK, including mortgages, is over £54,000.
Total outstanding secured mortgage lending is $1.267 trillion, and we all know how that mortgage lending works out in the long run.
Outstanding consumer credit card debt stands at $157.8 billion.
The OBR predicts that total household debt, including mortgages, will reach almost $2 trillion by 2018.
The average amount owed per UK adult, including mortgages, is an estimated £29,000.
This is approximately 117% of average earnings.
So if you imagine that England was a man, a bloke, who wanted to apply for a car loan There would be a fair amount of giggling from the bank you were applying to the car loan for, followed by a trapdoor and a falling to the Hades of you've got to be kidding me.
The average household debt would reach approximately £73,000 and change for an increase of over 36% per household.
Every 16 minutes and 26 seconds, a property Is repossessed.
Tragically, we're no longer talking about the Falkland Islands.
Every five minutes and seven seconds, somebody will be declared insolvent or bankrupt.
Public sector...
Okay, let's say workers.
They earn an average of £4,500 a year more than those in the private sector.
With the gap only continuing to grow.
See, one of the things that happens when you have to voluntarily get your money from willing customers is those willing customers don't want to pay a whole lot more.
One of the great things about being a public sector worker is debt, counterfeiting, or the violence of taxation is what pays your salary.
And so there's not a whole lot of people who are going to say no to that, right?
If the local hitman parks on your lawn, you're pretty much going to look the other way.
The typical full-time public sector employee is paid 565 quid a week, while their counterpart in the private sector earns just 479.
And of course, as the public sector money goes up, the private sector money goes down.
It is less than a zero-sum game, but it certainly shows up that way.
Private sector employees have a longer average week.
At 33.4 hours compared with the public sector's average of 30.7 hours, the only thing that's important about that really is that if you work in the private sector, you really don't want the public sector workers to be very busy because they're usually very busy messing up your lives in staggering ways.
The widening productivity gap between the public and private sector cost the British taxpayer almost £60 billion per year.
The Centre for Economics and Business Research found that the public sector's productivity performance had been even worse than previously reported, declining 3.4% between 1997 and 2007.
One of the things that they found was difficult was that when measuring the productivity of public sector workers, they found that a lot of them had historically died in their chairs, but nobody had noticed.
And so it was a little difficult to figure that out objectively.
During the same 10-year period, productivity in the market sector rose by almost 30%, trying to outrace the rocks sliding down from the state.
And The cost of paying pensions to the United Kingdom's public sector employees will double over the next six years to the equivalent of £1,500 per household.
These households, of course, include those households receiving public sector pensions.
So, again, multiply that as you see fit.
Of course, as we all know, one of the things that politicians do is they promise benefits to be paid to public sector workers long after they're out of office.
And they do that to avoid strikes, riots and problems in the here and now of basically shafting those to come with a bill that would pretty much eat the planet.
And this is, again, not because the system is broken.
That's the only way the system can function.
Between April 2011 and April 2012, the net cost of paying the pensions of retired public sector employees was £8 billion.
However, according to the OBR, this figure is set to more than double To £16.2 billion in 2017 to 2018.
They could project after that, but that's like asking how fast will you run a marathon when you're 250 years old.
It's kind of academic because you'll be dead, as will the British economy to a large degree.
To make matters worse, these estimates don't represent the full cost of taxpayers as they deduct The amount contributed by the employer into their employees' pensions, but in this case, the employer is the state paid for by the taxpayers.
When calculating the full cost of these pensions, analysts predict the total figure will be closer to £39 billion.
To nobody's great surprise, public sector unions have fiercely resisted even moderate reforms, which is the only time you will see fierce dedication from any public sector employees.
Meanwhile, private sector pensions have been drastically reduced, and the Bank of England's quantitative easing, which is also known as monopoly-style money printing, has obliterated returns for private savers.
So the retirement savings shortfall, we got a global average of 44% and 63% in UK. Yay!
50% in China, 48% in Brazil, 42% in Canada, 35% in Hong Kong, 33% in the USA, and 33% in India.
So this...
Eat the future to feed the present.
Eat your seed crop to feed the beast.
It has been occurring, of course, for a few generations in England, certainly since the post-war period when all of the useless eaters of the empire came home and you had to set up a socialist government because they weren't fit for the private sector.
This has been going on for quite some time.
A recent study found that the average retirement in the United Kingdom is expected to last 19 years, but typical retirement savings will only last seven years, at which point hungry eyeballs turn to cats.
This 12-year shortfall in the UK is the worst identified by this international study, which covers over 15,000 people in 15 countries around the world.
And normally, of course, when governments get into this kind of fiscal problem, they just start a war to kill off the excess population, but nuclear weapons have kind of rendered a lot of the leaders of the West and of Europe to be in the blessed are the peacemakers' categories because their families can also be turned into nuclear shadows, not just the children of the working classes.
Two-thirds in England believe that their financial preparations for a comfortable retirement are inadequate.
34% are not preparing at all, and 33% believe they're not doing enough.
So at least somebody in England is good at math.
More than in any other country surveyed, UK residents were found to prioritize saving for a vacation vacation.
Over saving for retirement.
When asked if they could only afford to save for one of these options, 58% chose a holiday while only 32% chose retirement.
Which may sound idiotic, but it's actually not.
Because what is your money going to be worth when the government performs a soft default and prints pounds like crazy to pay off its liabilities?
Why not have a vacation now?
There's a fellow whose grandfather I knew He was in the Weimar Republic, you know, when they printed all this money to help pay off the war debt from the very unwise Treaty of Versailles, and he took his life savings across the street.
He had to run across the street because he was losing money as he crossed the street, and he bought a lovely, I'm sure a very tasty, cup of coffee with it, and then he was done.
The average UK resident believes that 42% of their retirement income will come from the state, and for 18%, their state pension will be the most important source of retirement income, other than lemonade stands.
Given the aforementioned unfunded Social Security and pension liabilities and the ever-increasing national debt, the economic reality is that millions of UK residents will be forced to work much longer than planned or face a drastically reduced standard of living.
Ah, education Thank you.
So, let's have a look at these numbers.
State spending on education in England started out the 20th century at a little less than 2% of GDP. Spending increased steadily, reaching 4% in 1960.
It doubled, but of course there was a baby boom.
Peeking at 6.5% in 1975, before declining to a low of 4.25% in 1989.
In the 2000s, education spending increased rapidly, rising from 4.34% of GDP in 1999 to a peak of 6.07% in 2010.
So the UK spent a total of £42.69 billion on education in 2000.
And this has increased to an estimated £87.27 billion in 2013.
A 104.4% increase in 13 years.
Have the children split like meiosis and mitosis?
No, of course not.
What happens is you have to look at people dependent on the state, whether they are welfare recipients, military industrial complex recipients, students, retirees.
They're livestock for the bureaucracies.
And if the farmer wins the lottery, he doesn't start spending money on making his cows more comfortable.
He doesn't install iPads and down pillows in their stalls.
No, he just spends money on his own stuff and keeps his cows in the same state.
So it doesn't really matter if you add more money to government programs.
It doesn't improve what they generally do, and often it makes it worse because we fail to remember that this is a livestock situation, not a charity situation.
In an assessment of the education systems of 50 countries, the UK was ranked 6th, trailing Finland, South Korea, Hong Kong, China, Japan and Singapore respectively.
For comparison, the US was ranked 17th, despite having the highest levels of educational spending in the world.
On the plus side, the farmers all had big screen TVs.
Healthcare, oh lordy.
The United Kingdom healthcare spending grew by 5.7% per year on average between 2000 and 2009 in GDP-adjusted terms.
And some people say, well, there's more technology in healthcare, but there's nonsense.
You only invest in technology when it saves you money.
For the most part, technology has driven down the cost of, say, getting information from one place to another through faxes and email and 3D printing.
And so it should be driving costs down to have technology in healthcare not up.
While the actual amount spent on healthcare rose in a continuation of the long-term trend, it shrunk as a percentage of GDP by 1.9% in 2010 and 0.4% in 2011.
In 2000, almost £50 billion was spent on health and that grew to an estimated £124.35 billion in 2013, a growth of over 250% in 13 years.
In the UK, 82.8% of healthcare spending was funded by the government, down from 83.5% in 2010, but still well above the worldwide average of 72.2% because you get more communism for your healthcare dollar in the UK than in almost every other country.
The UK had 2.8% practicing physicians per 1,000 residents in 2011, a large increase from the 2.0% doctors per 1,000 in 2000, but well below the worldwide average of 3.2%.
There were 8.6 nurses per 1,000 residents on par with the worldwide average of 8.7.
Number of hospital beds in the UK, 3 per 1,000 residents, well below the worldwide average of almost 5 and down from 4.1 in 2000.
In line with many countries, the number of hospital beds per capita in the UK has fallen gradually.
Over the past decade, this decline has coincided with a reduction of average length of hospital stays and an increase in outpatient surgeries.
This, of course, is at a time when the population generally is aging.
You would expect it to be going the other way, but you have to control costs, and you certainly wouldn't want to cut any bureaucratic salaries or public sector pensions in order to actually take care of poor people who will suffer in almost every political system or those with the least power, the children, the elderly, the poor, and so on.
There has also been a significant growth in the availability of diagnostic technologies such as CT scanners and MRI units in most countries in the last decade.
The UK has also seen an increase in such technologies.
The number of MRIs in 2011 was 5.9 per million residents.
It is less than half the worldwide average of 13.3.
The number of CT scanners stood at 8.9, less than 40% of the average of 23.2 per million population.
And these costs don't show up very obviously.
If somebody gets a late diagnosis and somebody dies and so on, that doesn't show up as a cost to the healthcare system.
In fact, it shows up as a savings to the pension system.
So how the government measures what is worthwhile and what is valuable is quite a bit different from how you and I would do so, to the catastrophic detriment of many.
UK health spending accounted for 9.4%, slightly above, of GDP, above the worldwide average of 9.3.
Health spending as a share of GDP is much lower than in the United States, which spent 17.7% of its GDP on health in 2011.
It is also lower than other countries.
You can read these for yourself if you want to pause.
In terms of per capita spending, the UK spends slightly more than the average on health, £2,183 compared to the worldwide average of 21.41.
Health spending per capita in the UK is only 40% of the US, which spent 5,454 pounds per capita in 2011.
Of course, one of the things that's happened in the United States is you have 50% of the spending on healthcare in the US is from the government, but you still have private industries attempting to get their hands on that money, and so you have private profit and public funding, which is kind of a fascistic model, And you have huge restrictions on who can provide healthcare and write prescriptions and so on.
I mean, the requirement that only physicians could write prescriptions dates from after the Second World War.
It's not really very old.
And so in the US, you've got a lot that is interfering with the free market delivery of healthcare, which has the usual results of driving up costs.
Most countries have experienced significant life expectancy increases in recent decades attributed to progress in medical care and improvements in living conditions.
Life expectancy at birth in the UK is 81.1 years in 2011, a year more than the average of 80.1.
That being said, several major European countries, such as Italy, Spain, and France, have registered a higher life expectancy than the United Kingdom.
Although, to be fair, given how much it rains and is drab and foggy and dismal in the United Kingdom, it certainly feels longer.
Obesity rates, of course, have increased worldwide in recent decades in the UK. The adult obesity rate was 24.8% in 2011.
This is lower than the US, which is at 36.5, but still higher than the average at 22.8%.
Of course, obesity's growing prevalence points to a further rise in health problems and a higher health care cost down the road for an already strained system.
What's interesting, of course, is that the biggest problem that the poor face these days is obesity, which is quite a bit different than the problems that the poor faced in the past, which generally was eating each other.
So, step forward.
A recent report suggests that health and social care could account for 50% of all government spending in 50 years, a massive rise from the 20% currently spent.
The Care and Quality Commission and non-departmental public body has identified 45 hospitals, about 20% of the total in the UK, which have serious quality and financial problems dating back over five years.
Another 20% of hospitals were described as coasting along and not doing terribly well.
These reports come amid a slew of additional scandals involving NHS care and new research that revealed that one in ten patients, about one million patients a year, suffers avoidable harm in NHS hospitals and care homes.
Just let that settle in.
One in ten patients suffers avoidable harm in the very place that they go for healing.
This is like having one in ten iPads blow up in your lap.
Recent hospital inquiries have noted serious departures from the standard of basic care which every patient is entitled to expect, including physical abuse of patients, patients and bedding being soiled with urine and feces for considerable periods of time, as if a shorter period of time is not so bad, and other sanitation problems including medical waste being improperly disposed of, leading to potential contamination.
It was also reported that up to 10,000 cancer patients were dying needlessly in the UK each year due to late diagnosis.
And of course, that saves the system money.
In a private insurance system, a late diagnosis actually is a big problem.
You've got to pay out life insurance when the person dies.
And you also get bad press.
People don't want to do business with you and so on.
So in a sort of freer system, a free market system, it's a negative system.
What are the particular negatives in the UK for these kinds of late diagnoses?
David Pryor, head of CDC, has warned that the country's healthcare system is presently on the brink of collapse.
According to the Office for National Statistics, as many as 1,165 people accidentally starved to death in NHS hospitals over the past four years.
In 2011, 43 patients starved to death and 291 died in a state of severe malnutrition, while the number of patients discharged from hospitals suffering from malnutrition doubled to 5,558.
Sick children are also being discharged from NHS hospitals to die at home or in hospices on controversial death pathways.
Fine name for a heavy metal band, not a good name for a health care policy.
Until now, this was thought to have involved only elderly and terminally ill adults.
However, the practice of withdrawing food and fluid by tube has been found to be used on young patients as well as severely disabled newborn babies.
One doctor admitted to starving and dehydrating ten babies to death in the neonatal unit of a single hospital.
In a leading medical journal, the physician revealed the process can take an average of ten days, during which a baby becomes smaller and shrunken.
Which I guess would also be true of the doctor's heart, if it was even present at all.
Over 130,000 patients are known to die each year on these death pathways.
NHS hospitals have also been accused of distorting numbers to mask the number of patients dying under these conditions.
Hospitals are paid millions to hit targets for the number of patients who die on the Liverpool care pathway.
Incentives have been paid to hospitals that ensure a set percentage of patients who die on their wards have been put on the controversial regime.
In some cases, hospitals have been set targets that between a third and two-thirds of all deaths should be on the pathway.
Over £30 million in extra money from taxpayers is estimated to have been handed to hospitals over the past three years.
To achieve these goals, which is a medical hit, frankly.
Among trusts that confirmed the use of targets was Aintree University Hospital's NHS Foundation Trust, which said that the percentage of patients who died on the pathway was 43% against a target of 35%.
Good job.
Over the year, the Trust received £308,000 for achieving goals involving the Liverpool Care Pathway.
There are also countless stories from doctors fighting uphill battles to have patients taken off the pathway, only for them to quickly recover and be discharged from the hospital.
So let's start drawing to a close here with the myth of austerity.
So, with great fanfare in 2010, were announced the Great Dragons of Austerity had been released from the Bastille, and these were to include tax increases and spending cuts designed to slash the budget.
I love how they use these dramatic words.
I was eating 9,000 calories a day.
I'm going down to 8,800 calories a day.
I'm slashing my food intake to a near-starvation diet.
I'm cutting to the bone.
This is the nonsense they expect people to swallow, and of course most people do.
Spending cuts, of course, haven't taken place at all.
Thus, austerity in the UK really just comes down to tax increases, because it's a lot easier to force taxpayers to fund people who might otherwise cause you trouble if you cut their budgets.
So, this is the same as in the US. UK politicians use the deceptive practice of baseline budgeting as part of fiscal policy.
So, what that means is you can actually still increase your spending, but claim that you're cutting spending.
How is this voodoo achieved?
Well, what you can say is, well, we were expecting to grow at a 6% rate But you see, now we're only growing at a 5% rate.
That's like 1% lower, man.
We are slashing to the bone.
We are cutting.
It's austerity, man.
To quote Daniel Mitchell from the Cato Institute, that's sort of like saying your diet is successful because you're only gaining 2 pounds a week rather than 5 pounds.
For all the talk about drastic cuts and cutting spending to the bone, public spending has increased every single year.
Going all the way back to 1954.
I mean, government press conferences might as well be this.
Booga booga!
Booga booga booga!
And people going, ah, interesting.
It's nonsense.
According to the government's own budget from 2011 to 2012, to 2016 to 2017, public sector expenditures will increase from £647 billion to £750.
Plus billion pounds.
Because that, my friends, is what the government calls austerity.
Taxes.
From death to taxes.
The United Kingdom's federal tax revenue is forecast to be 568.8 billion pounds, or 36% of GDP in 2012 to 2013.
This is equivalent to just over 11,000 pounds for every adult in the United Kingdom.
So, of an adult population in the UK of about 51.4 million people, it is estimated that there will be 29.7 million taxpayers in 2012-2013.
Around 3.8 million of these will pay a tax rate of 40%, providing 36.5% of the total income tax revenue.
And 307,000 taxpayers paid an additional 50% on all income over £150,000, providing 24.6% of total tax revenue.
This would, in fact, even be higher if it wasn't for the fact that a lot of champagne socialist lefty types like Bono and so on, who would normally be paying for all the government programs that they advocate as necessary to help the poor, except that the moment they see the actual results of that which they advocate, i.e.
high taxes, they Vanish like phantoms to tax-free havens in places like Switzerland and so on to avoid falling into the bear trap of the policies that they recommend as useful to society.
In the 2009 to 2010 tax year, more than 16,000 people declared an annual income of more than one million pounds.
To HM Revenue and Customs, after the new 50% top rate of income tax was introduced, that number fell.
To just 6,000 because the rich really know how to cull.
It is believed that rich citizens moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.
Increasing the highest rate of tax actually led to 7 billion pounds in lost tax revenue.
Well, it's nice to think that it's not England that's losing tax revenue, it's other countries that are gaining less, but still some.
The 50% top tax rate was reduced to 45% in April 2013.
The VAT, value added tax, because we all know how much taxes add value.
This rate has been 20% since January 2011 as part of the austerity measures.
Previously, it was 17.5%.
See, when a government goes through austerity, it may rig its books to sort of indicate to you somehow that its rate of growth is slightly slowing, but it's still going to grow.
But when austerity hits you, you've just got to pay more.
Sorry, or you go to jail.
In 1994 to 1995, a reduced rate was introduced for domestic fuel and power, originally 8%, but now 5%.
The reduced rate has been extended to other products, and other goods are exempt from taxation.
One of the great things about having exemptions in general policies is then people will donate money to your campaign to become a politician, become a political leader.
People will donate money to you so that you will give them exemptions from the universal law.
You can just check out all of the thousands of exemptions that have been handed out like candy for Obamacare in the United States.
It's the same thing all the time.
The VAT is expected to raise a little over £100 million in 2012 to 2013.
This is equivalent to the aptly numerically precise £19.84 for every adult in the UK, or £16.26 per person.
The United Kingdom has a corporate tax rate because we all know that legal fictions, pieces of paper, actually pay taxes.
It doesn't come out of the salaries of the employees or the profits of the shareholders or the, well, really doesn't come out of the wages of the executives.
So we all know that corporations, pieces of paper, can be taxed.
The same way you can send pieces of paper to war or marry them or roll them up and have sex with them.
And so it's really important to remember it's a corporate tax rate.
It never hits any individual.
It never hits workers or anything like that.
There's a corporate tax rate of 28%.
For comparison, the highest corporate tax rates in the world are the US, at almost 40% of Japan, at even closer to 40%.
France, 34.4%.
Belgium, 34%.
Germany, 30.2%.
Spain, New Zealand, Mexico, and Australia are all at 30%.
And Canada, at 29.5%.
That's why I'm here.
Military spending.
Because, you know...
It's an island, so got to be involved around the world.
United Kingdom military spending has fluctuated in the last century, peaking at 46.4% of GDP in World War II and declining from 10% in the early years of the Cold War to 3% today.
So, in 1985, again, all inflation adjusted, 19.10 billion pounds were spent on defense, increasing to 42.11 billion in 2013.
This is a 120% increase in 13 years.
The interest on the national debt was $46.5 billion, as you remember, and so interest on the national debt is more than what is called defense, and we would call government military spending defense in the same way as we would call welfare charity and government schools, say, education.
So this is £1,700 per UK household.
I hope you feel that you're getting your money's worth.
According to the recently released book, Investment in Blood, the True Cost of Britain's Afghan War, the war in Afghanistan has cost the UK at least £37 billion.
Since 2006, it has cost an estimated £15 million per day to maintain a military presence in Afghanistan's Helmand province.
Do you know that the American military in Iraq and Afghanistan uses more oil per day than the entire billion-person economy of India?
It is an environmental catastrophe.
The equivalent of £25,000 will have been spent for every one of these 1.5 million inhabitants, which is more than most of them will earn in a lifetime.
But on the plus side, we do leave them with landmines.
So, you know, these things do tend to balance out if you're Satan.
This breaks down to $31.1 billion in military costs, $3.8 billion for the future care of veterans, and $2.1 billion for civilian development in Afghanistan, which is also known as bribing everyone in a turban.
This guy calculates that by 2020, more than £40 billion will have been spent on the war in Afghanistan, which is equivalent to more than £2,000 for every taxpaying household in the country.
And of course, this is how wars...
You should, of course, say, well, this is going to be the bill.
Do you want to be patriotic and wave the flag, or do you want to save yourself 2,000 quid plus taxes and interest for over that time period?
Well, I think a lot of people would find that they would side with the blesses out of the peacemakers people and a little less of the warmonger.
It's easy to be warmonger when it's subsidized by other people, particularly people who haven't been born yet.
The official claimed cost of the Iraq war is 9.24 billion pounds, which includes 577 million in humanitarian reconstruction and development aid.
Because you break them and you build them.
Obviously, that's the point of war.
This figure does not include routine training, maintenance, soldier salaries, or any cost due to their long-term injuries and needed mental health care.
As with most government figures, it's not a question of if, but just how much more, or by how many multiples the real economic cost happens to be.
This doesn't include the opportunity cost of having people blowing people up over there, rather than actually doing something productive in the domestic economy.
If you want to know more about the Iraq War, have a couple of shots, sit back, grit your teeth, bite down on something hard, and check out my presentation, Iraq, A Decade of Hell.
It's important to look at.
The Libyan War.
Originally, Defense Secretary Liam Fox claimed that the Libyan War would cost taxpayers around £260 million, but gave limited information as to how that figure was reached.
He may have not been flexible enough or have enough rubber gloves to show you how that figure was extracted.
An independent researcher estimated the cumulative cost of the operation after the end of August 2011, the war continued for another two months, was between $1.38 billion and $1.58 billion.
Five to six times is not a bad rule of thumb when it comes to guesstimating how much stuff is going to cost.
The one thing that you want to be really careful of is when governments say that stuff is revenue neutral.
That means it's wildly unpopular and it's going to be astonishingly expensive in the long run.
Using another method, the costs were potentially even higher, between £850 million and £1.75 billion.
This conservative estimate for military expenditures in Libya is up to seven times greater than the figure originally claims.
The figures give the costs incurred due to military operations in Libya alone, ignoring routine training, maintenance costs and other expenses, not to mention, of course, the aforementioned opportunity costs.
Official numbers are included in the core Ministry of Defence budget and remain unavailable.
A recent study found that young men who have served in the British military are about three times more likely than civilians to have committed a violent defence.
The violent defence is not war.
I mean, obviously it is, but the violent defence in this category is at home afterwards.
And served, of course, you don't serve.
You're paid.
I mean, you serve coffee.
You don't serve the war machine.
What happens is you may join their voluntarily, but everybody's money is conscripted by force to pay for this stuff.
Here's a quote from the study.
Being deployed in itself wasn't a risk factor for violent offenses, but being exposed to multiple traumas, like seeing someone get shot, increased the risk by 70 to 80%.
The researchers who desperately didn't want to lose their funding stressed that although the study pointed to a serious problem for those affected, it did not mean that all ex-soldiers would become violent criminals.
Of course.
In July 2013, it was reported that more British soldiers and veterans committed suicide last year than were killed in battle.
Seven serving soldiers were confirmed to have killed themselves, while 14 died in suspected suicides.
The Ministry of Defence doesn't track what happens to veterans, and so no one knows how many are suffering from post-traumatic stress disorder or have taken their own lives.
This is true in America as well, that many more soldiers are dying through suicide than roadside bombs.
Monetary policy.
Since 2008, the Bank of England has purchased 21% of government guilt, aka debt holdings.
This means that a significant portion of UK debt is being financed by the Bank of England.
This is, as I've said before, like...
Attempting to pay your visa bill with your visa bill.
The Bank of England has used quantitative easing, otherwise known as creating money out of thin air, otherwise known as counterfeiting, to purchase £375 billion worth of government debt since 2009.
For those yanks, the Bank of England is to the UK, as the Federal Reserve is to the United States, a somewhat private but politically controlled entity which lends money to the government in return for stealing the souls of the serfs.
Large debtor nations use their central banks to create new money to finance government debt, which in turn devalues all the currency presently in circulation and disrupts market price signals.
These incredibly destructive boom and bust cycles occur primarily due to these disrupted market signals, leading to a misallocation of resources in the market.
I won't get into all the, I think, very exciting technical details.
I've got a number of shows, podcasts.
You can find them on my website, freedomainradio.com.
Talking about the Austrian cycle of the Austrian theory of the business cycle, it's very interesting stuff.
So, of course, when the misallocations, right, you get all these weird price signals and interest signals because the government's screwing around with money and interest rates.
This confuses entrepreneurs and they then invest in a whole bunch of stuff that they think people want because they're reading the price signals wrong.
Well, I'm not reading them wrong.
They're just being manipulated.
And then when it turns out that people don't actually want all the stuff, you know, like housing that people have built for them, you get a massive bust.
It's not due to the market.
It's due to the, you know, the government putting everyone on LSD and rolling them down a hill in a barrel full of monkeys.
Actually, that would be better monetary policy.
Let's make a note of that.
So this process allows governments to continue their deficit spending by stealing value from citizens' savings and using the hidden tax of price inflation.
The government prints a lot of money and the first people that they give it to get the full value of money and then the last group of people that get it, usually the poor and those on fixed incomes, really get it in the shorts because it's worth so much less by then.
Same amount of goods, more money means that you have to spend more money per good, which of course is inflation.
Inflation technically is the printing or creation of money.
The price increase is simply the effect of the inflation of the money supply.
When prices go up, of course, the governments love having a convenient intermediary scapegoat because people blame the greedy business owners and not the government and central banks which have devalued their currency.
Like, people say, oh, man, I can't believe they're putting less coffee in my coffee tin.
And it's like, well, no, this is not the, you know, folgers being cheap.
This is just that the money is being screwed up.
The Bank of England's Monetary Policy Committee has also kept interest rates at the record low level of 0.5% as of June 2013, with the stated goal of stimulating economic growth, which it may do to some degree, but of course what it does is it kills savings and thus job creation, entrepreneurship, capital investments and future worker productivity.
And worker productivity is absolute king when it comes to economic growth.
A group of global banks and funds have warned clients to steer clear of purchasing UK gilts, fearing that the Bank of England has opened the door to stagflation and risks losing credibility.
So a stagflation is when you have a stagnant economy plus inflation, which according to Keynesian economics is impossible.
And since you're supposed to inflate the money supply to deal with a stagnant economy, When you have already increased the money supply to the point where you're getting inflation but the economy remains stagnant, you're out of tricks.
You're out of con games in the Keynesian model.
Look into von Mises.
Look into the Austrian school.
It is sane as a way of understanding how this stuff works.
The UK lost its top, ah, credit rating for the first time since 1978 in February 2013, when credit rating agency Moody's downgraded the rating due to a weakened economic forecast for the country.
Don't know where they might be getting that from.
In April 2013, the son of a Fitch credit rating agency followed suit.
This is the inflation rate.
As you can see, it's trending upwards.
Again, the roller coaster of ZOMG continues.
According to the Office for National Lies and Statistics, the official inflation rate in, I repeat myself, in the United Kingdom was 2.8% in July of 2013.
From 1989 until 2013, the official inflation rate has averaged almost 3%, 2.81%.
Real inflation-adjusted incomes have been declining since the onset of the global financial crisis in 2008, wiped out 40% of Americans' wealth.
Between 2007 and 2012, the approximate 10% growth in average wages was far exceeded by the consumer price index inflation of 17%.
You don't just feel poorer, you are poorer, even though you may have more money.
To be exact, real incomes are 6.3% lower in 2012 than they were five years earlier due to price inflation, which is the result of money.
Inflation, which is the result of the government printing money rather than lowering spending or raising taxes.
Inflation is just a hidden and incredibly regressive tax.
It hits the poor hardest.
The situation in the UK appears even more grim when you look at the price increases of non-discretionary essential purchases, including food and energy.
So, let's do that, shall we?
Between 2002 and 2012, cumulative inflation of 29% was measured using the CPI and was far exceeded by increases in the prices of essentials.
The price of gas and electricity increased 142%.
Ten years, 142%.
Vehicle tax and insurance, 108%.
Fuel costs, 71%.
And food, 43%.
In the same 10-year period, average wages increased 36%.
If you just look at the last five years since 07, the trend looks even more alarming.
Between 07 and 2012, cumulative inflation of 17% was measured.
Gas and electricity, just in the short-term period when you had cumulative inflation of 17%, gas and electricity rose 46%, vehicle tax and insurance 88%, fuel costs 56%, and food 30%.
If you really want to know what is happening to your money, you can look this up if you want.
But you need to look at the price of this stuff in silver and gold.
So in America, for instance, people say, well, gasoline is so expensive.
Well, maybe it is.
In Federal Reserve notes, but gasoline has never been cheaper in gold, because gold is something that has real value, unlike the toilet paper monopoly crap that they spew out of their asses in the state.
Rent and housing costs also increased 24%, from £467 to £577 for the average household, according to another survey.
In the same five-year period, average wages only increased 10%.
Vehicle tax and insurance, 88%.
Fuel costs, 56%.
Your wages, 10%.
Inflation is like...
Being eaten to death by mosquitoes.
You want some vampire, you can whack a steak through its heart.
You can't possibly deal with the theft that occurs through inflation.
And of course, this only helps if you actually have a job.
And for reference, of course, in the last five years, the price of gold has risen 7.9%.
Don't even get me started on the bitcoins, eh?
Britain has slipped down the European League table on living standards as families continue to feel the pinch of the economic downturn.
An in-depth analysis by the EU measured material consumption in 37 European countries, including both private purchases and state spending, to give an accurate measurement of how well-off people really are.
In the latest figures, which cover 2011, Germany and Austria jumped ahead of Britain, which comes out at sixth.
A year earlier, in 2010, it was fourth.
The UK had the biggest fall in living standards of any EU country except for Greece, Cyprus, and the Netherlands in the past two years.
Greece, which lied and cheated its way into the European Union.
Cyprus, which has the government ripping people's money out of their bank accounts.
And the Netherlands.
So you're just ahead of that rat pack.
Income inequalities have been increasing both recently and over longer time periods.
The poorest have fallen further behind the average and the richest have moved further ahead.
So in the socialist paradise post-war period, particularly in the 1960s, all of these programs were put in place to make the rich give a little more and to make the poor a little richer to close income inequalities.
Now, of course, state programs, government programs, are all based on coercion, on taxation, on laws, on prisons, and so on.
And coercion, one of the interesting characteristics, is that it generally achieves the opposite of its stated goals.
Like, you know, if you say, well, John Fowle's collector style, I'm going to kidnap this woman until she loves me, she's probably going to end up loathing you from here to eternity.
And the same thing is true.
You know, from the 70s, 60s and 70s onwards, the whole goal was to close income inequalities, but because we used coercion with the lie of virtue through guns, we used coercion to attempt to achieve this, we've achieved the exact opposite, which is to be expected.
The poorest tenths of the population now have, between them, 1.3% of the country's total income, and the second poorest tenths have 4%.
The richest tenths have 31%, and the second richest tenths have 15%.
The income of the richest tenth is more than the income of all of those of below average incomes.
The five bottoms, five tenths combined.
The proportion of total income going to the richest tenth is notably higher than a decade ago.
31% in 2009 compared to 28% in 1999.
The rest of the income distribution hasn't changed much over the last decade.
The official number of unemployed people in the three-month period between March and May 2013 was 2.51 million people, or 7.8%.
According to the official statistics, this, of course, doesn't count people who are underemployed, working temp, or part-time jobs, or those who've simply given up, crawled back into their mother's womb, and left the workforce.
According to a study from last year when the official number was 2.671 million, the true state of British unemployment was estimated at more than double the official number, at 6.269 million people when including underemployed or discouraged workers.
So almost 30 million out of a little over 60 million UK residents are employed.
Over 915,000 people had been unemployed for over 12 months in June 2013, up 32,000 or 88 a day from a year earlier.
An estimated 763,000 or 18.7% of economically active 18 to 24 year olds are presently unemployed, if you count soccer riots as being unemployed.
A total of 843,000 or 17.6% of 18 to 24 year olds are not presently in school, employed or undergoing any type of formal training.
The number of economically inactive people aged between 16 to 64 reached 9.04 million people, or 14.4% of the total population in June 2013.
Approximately 992,000 people over 65 years old are presently employed, which is up 64,000, or 6.9% from the previous year.
The claimant count, the number of people claiming the JobSeeker's Allowance unemployment benefit, was 1.4 million in July 2013.
There were 5.6 million working-age benefit claimants at the end of 2012.
5.697 million people are employed in the UK's public sector.
The Office for Budget Responsibility forecast a reduction in public sector workers of about 1.2 million staff, or 21% between 2011 and 2018.
It will either be none of that, and there will be a smoking crater, or there will be a lot more than that, and we'll start to see a few green shoots of genuine freedom.
An abundance of unemployed young people feel marginalized, pessimistic, and lacking in control over their lives, according to a recent survey.
This is important.
I mean, the reason that we included this in the presentation is that society has a problem, which is that young people don't really want to conform to stodgy old conscious rules.
And what society does to get rebellious teenagers to conform is it promises all of these things.
Goodies to them.
You know, conform, get a job, and you'll get a house, and you'll get a wife, and you'll get kids, and you'll get stability, and you'll stay.
If society can't offer these benefits to the young, then the young are basically going to give the middle finger to society and say, well, screw you.
Why should I obey with these rules when you don't have any goodies to offer me?
You can't bribe the youth into compliance if you don't have anything to offer them.
So it's quite important to see what's happening with the young because that is really the future of any stability in society.
The survey found that of those young people aged 16 to 24 who are unemployed and not pursuing formal education, 33% have experienced depression.
Of that age group, 40% feel ostracized from society, 36% believe they will never be able to find employment, and 37% rarely go outside their house.
In another survey of people experiencing issues with debt, 75% said the debt had a negative impact on their mental health, and 50% said it was causing problems at their place of employment.
The majority said financial concerns had caused problems with a partner, while 33% said they had a negative impact on the relationship with their children.
The UK has one of the highest rates of self-harm in Europe, with 1 in 250 adults self-poisoning or self-harm.
And we're not just talking running for office.
This is like really, really toxic stuff.
And this, of course, is the human cost of these disastrous policies and programs and this massive tumor-style growth of the state.
So, what really is to be said?
I know it's a doom and gloom rollercoaster, but it is important to, of course, understand where we are and where we could be going as a society.
A lot of the West was really founded on skepticism of the power of the state to solve complex social problems, on a rejection of the medieval-style guild system where you had to pretty much do the job that your father had and you couldn't really change anything,
a rejection of the sort of aristocrat-surf relationship and the retreat of centralized coercive authority from People's lives.
That really was the foundation of the modern West, of prosperity.
And for a variety of reasons, I've gone into this in a series on YouTube called The Death of the West.
It's a three-part series.
I hope you will check it out.
But for a number of reasons, we kind of broke that covenant of the 20th century, and we began to turn, as a society, our power over to the state to solve all kinds of complex social problems, how people should be educated.
How people's healthcare should be taken care of, how people's retirement should be funded, how money should be dealt with, how employment and unemployment and rules and regulations and safety and insurance and, I mean, you name it, we've just turned everything over to the state.
And it was a pretty sneaky job on our part, of course.
It wasn't really very noble.
I mean, we were just bribed.
We were told we were going to get free stuff.
And we were like, okay, free stuff beats freedom, and so let's do that.
And it was a slimy bargain with a particularly squid-like oily devil, and the result of that has been that we really unleashed.
A state which will forever grow until it collapses, in the Roman style, in the Empire style that has been the case throughout almost all of human history.
We are in the latter stages of that.
This process has to play itself out.
Too many people have become dependent on the power of coercion epitomized by the modern state, and so it's simply going to have to play itself out.
But hopefully the lesson we can learn from the coming challenges is that there is no good No service.
No money.
That it's worth surrendering your freedom for.
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