My reply could fill a book. You are of course correct.
We are where we are because of government policies since the 80s. Thatcher sold off the family silver gave away oil revenues, and made the rich, richer. New Labour increased our debt with pushing the cost of new projects into the future, (PFI).
I didn't start earning until I was 23. Up til then entirely supported by parents or government.
I worked as a doctor in the NHS for 30 yrs, paying taxes and contributing to the NHS pension scheme.
Unfortunately, I had to take early retirement following a massive heart attack.
I have been in receipt of that pension for 22 yrs now.
I'm pretty obviously a massive debit in my society account.
However, those in receipt of pensions tend to spend it and not hide it offshore.
We contribute massively to childcare support. We pay small businesses for work that we previously would have undertaken ourselves. Cleaners, gardeners, decorators builders etc. The money we receive goes straight back into the economy.
Many of us become full time carers, caring for a partner, at no cost to society.
Many become volunteers at no cost to society.
Pensioners can be the glue that keeps a community together.
I've spent most of my week supporting my 90 yr old neighbour following a fall. No charge.
We absolutely require migrants to support the contributors to the economy.
Us old folk aren't the problem. Old folk have always been an essential part of society since humans existed.
Government policies and anti migrant rhetoric are the problem.
I am recently retired and my income is two occupational pensions. I do not qualify for my state pension for a couple of years. I take great exception to people describing me as "economically inactive" or not a net contributor, for a couple of reasons.
Firstly, I have been fortunate enough to earn income and pay tax my entire working life; I've always regarded myself pleased to be contributing to the public good, rather than having to rely on it.
Secondly, people in receipt of pensions are still liable for income tax, VAT, council tax, etc., so we still contribute to the tax take. The only exception would be national insurance and, were I to take up paid employment again, then I'd be paying that.
Thirdly, the only way in which I'd be economically-inactive would be were I to sit on all my pension income and never spend anything on food, clothing, running the house or the car, buying nice things for the people I love, or travelling around this country and putting money into the hands of small businesses.
I acknowledge the genuine problems there are with the shrinking non-pensionable workforce, and entirely agree that this right-wing obsession with stopping energetic young people coming into the country and expanding the economy to be completely barking mad, and consider that it's based solely on racist attitudes and instincts. I do, at 64, have more health needs that I did at 24, and this is likely to increase as I get older, but I entirely agree with your analysis, Bear.
The problems started in the Thatcher era Bear. Sold off most council housing for a song. Allowed investment banking free rein, collapsed UK manufacturing, engineering and shipbuilding and outsourced UK owned utilities. Started to dismantle and underfund NHS, education and policing. Incompetent political and economic planning for the future! Some pensioners lost pensions to criminals such as Maxwell. Political policies around pensions kept changing, penalising many who now find they have no pension, or very little pension for a life of working - even that has been pushed back years when they need it most. Many migrants have been a blessing to counter all the above incompetence. People need to stop blaming them and nan and look instead to where UK's money has been going!
This is exactly the honest message that the current government need to be sharing, rather than boasting about how they're going to be tough on immigration.
They should also explain that Brexit means that we lost access to millions of young workers coming from Europe.
A friend of mine in HK recommended this piece to me this morning and he said that I should leave my reply as a comment on your Substack. So here it is:
“The Bear’s commentaries give me the confidence to take these arguments to residents when I’m out canvassing. I used an abbreviated form of this last week to two elderly people who told me “We don’t need immigration…” Stopped them mid-flow. V effective. I 💛 The Bear.”
We need lots of honest messaging about the value migrants bring to the economy and the cost of supporting an increasingly aged population. (I’m a recently retired, reasonably fit pensioner but I’m aware my health and care needs will rise in future years.) We also need honest discussions about the damage Brexit has done to the economy. However, this won’t happen while we have bad faith actors talking the country down, using divisive language and poisoning the discourse.
Agreed. Not retired, still working, but have been under the care of the NHS since October last year for a laundry list of issues. My consultants tell me they may as well treat everything now so I have a better chance of a long and healthy future. I just hope I can enjoy some of it instead of working until I kark it naturally just to keep these bad faith actors in the lazy lifestyles to which they have plainly become accustomed.
I’m “economically inactive” according to demographics, being retired early due to ill health, but below pension age.
My occupational pension is taxable, I pay full council tax (a lot), I pay utility bills which include VAT, I pay home insurance which includes VAT, we spend on luxury goods like food, & clothing which includes VAT.
Seasonally I grow things, spending on things around the garden/home maintenance which includes VAT
I pay my own dental costs which are high
Whomever came up with the demographic has no consideration for personal/home/family financial responsibilities🤬, it’s purely a slur.
If someone downsizes, or changes roles for a lower salary, are they then slipping into this demographic…?, because according to its use they are (lower/no income tax=“economically inactive”)
Clever accountancy creates “economical inactivity” by sending it on vacation offshore🤷♂️
The biggest issue, to me, is the wiggle room we give people who are not on PAYE to abuse the system and not pay their fair share of tax. Migrants pay PAYE when they're employed legally. But what was that I read yesterday about Foutrage paying tax in Belgium and using his company to lessen the tax burden on his GBNews earnings?
Why do we tax income from dividends or capital gains at a lower rate than we tax earned income?
And failing to tax the capital gains of the primary residences of owner-occupiers was likely instituted as part of a policy of encouraging home ownership, which was a bad idea anyway for various reasons.
It is an established concept in economics and shoots down the ignorant racist assertion that migrants steal jobs.
Government short sightedness was embedded long before Thatcher. For example in the 1970s the Police Federation pointed out to the government that the pension scheme was circa £4 million underfunded. They proposed that if the government filled the shortfall the Federation would establish an invested scheme. The response was a big fat no, because it was not affordable. Last time I look about 4 or 5 years ago the deficit was the high side of £420 million.
The massive lie, a function of dogma, delusion and spineless conduct is this. That it is possible to have decent public services and low tax.
It is of course a nonsense and the only beneficiaries of the current system are the relatively tiny cohort of exceptionally wealthy people and big corporations.
There is another lie, that Boomers have accrued wealth to the detriment of younger generations. Other than some pension arrangements that are no longer available and were by no means open to all, the great manipulation of the property market which is going to have to fund the care of my generation, is probably the only source of wealth that most ordinary people have.
In truth most of us are to one extent or another up colon creek with a busted outboard.
My late father in law was working for the treasury (Actuary and advisor). He wrote a massive report about our ageing population and its impacts to our economy in the late 80’s over 49 years ago and that report with recommendations ended up in the bottom of a drawer because non of the politicians wanted to hear.
Even after his retirement he made it clear that the governments were short sighted about the impact an ageing population has.
Yes yes yes. I do wish the cabinet reshuffle had brought Bear to the table. So much money and power to be gained from hate but the way you write surely demonstrates that reason and explanation can triumph. Or at least let’s get these numbers on the side of the bus. Oh and now Angela Rayner is free from her government posts perhaps she can focus on fixing social care which is surely her real destiny. 🙂
Having given the matter deep thought...at 66 I still have one or two but it takes heroic efforts and a lot of marmalade....we are faced with a hard choice. Option 1 execute oldies upon reaching pension age (sooner if the get too sick we could have a tribunal). The Logan's Run policy. This seems attractive at first blush but I think a slight tweak makes it even better. Under Improved Logan's Run we hit the problem at source. Too many youngsters are getting old and ruining it for the rest of us pensioners. So we must be bold and start with teenagers. The deficit in the economy should there be one...I'm not convinced...can be made up by selling their "stuff" and putting it in an investment fund for the good of society..... obviously mainly old people.
An excellent article! Remember going to a conference back in 2015 where this dilemma was a central theme so, why it hasn’t been properly addressed is down to our political system which is unfit for purpose.
In international economics we speak of the "impossible trinity": fixed exchange rates, free movement of capital and national monetary sovereignty are also individually desirable, but it is impossible for all three to co-exist in the same global economy.
During the pre-WWI gold standard era we had fixed exchange rates and free movement of capital, but national monetary policy was dictated by the international markets.
During the post-WWII Bretton-Woods era we had fixed exchange rates and national monetary sovereignty, but this was enabled by strict capital controls, and the Bretton-Woods system collapsed when those capital controls were circumvented (for example by the "Eurodollar" markets).
During the more recent "Washington Consensus" era we had free movement of capital and national (or EU in the case of the Eurozone) monetary sovereignty, but exchange rates float freely.
Now it seems like there's also an "impossible trinity" in demographics, where the following three attributes are all individually desirable in a population, but it is mathematically impossible for them all to coexist simultaneously:
1. A long life expectancy
2. A stable or falling population size
3. A high ratio of workers to retirees.
(I suppose an exception would be if a country were to have mass emigration of its elderly, but why would any other country be willing to take them?)
And also note that this impossible trinity takes no account of how much of the population is native-born vs foreign born: this is particularly significant in the case of the UK, where (AIUI) an unusually large fraction of anti-immigration sentiment is motivated by a desire to minimize the overall population size as opposed to just the foreign-born proportion of the population.
Spot on! And I say this as someone who is now in receipt of my state pension though I'm actually still working because a) I really do love what I do and b) I'm stupidly well paid for doing it. The amount of income tax I pay has of course increased now, but I still maintain that I'm not paying enough really. The trouble in this country seems to me to be that we want Nordic-style benefits, but we're not prepared to pay Nordic-level taxes to get them. I would personally have no problem with it - I spend a lot of time in Denmark (I work for a Danish company) and while they do also have problems, they're getting a lot of things right.
Morning Bear,
My reply could fill a book. You are of course correct.
We are where we are because of government policies since the 80s. Thatcher sold off the family silver gave away oil revenues, and made the rich, richer. New Labour increased our debt with pushing the cost of new projects into the future, (PFI).
I didn't start earning until I was 23. Up til then entirely supported by parents or government.
I worked as a doctor in the NHS for 30 yrs, paying taxes and contributing to the NHS pension scheme.
Unfortunately, I had to take early retirement following a massive heart attack.
I have been in receipt of that pension for 22 yrs now.
I'm pretty obviously a massive debit in my society account.
However, those in receipt of pensions tend to spend it and not hide it offshore.
We contribute massively to childcare support. We pay small businesses for work that we previously would have undertaken ourselves. Cleaners, gardeners, decorators builders etc. The money we receive goes straight back into the economy.
Many of us become full time carers, caring for a partner, at no cost to society.
Many become volunteers at no cost to society.
Pensioners can be the glue that keeps a community together.
I've spent most of my week supporting my 90 yr old neighbour following a fall. No charge.
We absolutely require migrants to support the contributors to the economy.
Us old folk aren't the problem. Old folk have always been an essential part of society since humans existed.
Government policies and anti migrant rhetoric are the problem.
I am recently retired and my income is two occupational pensions. I do not qualify for my state pension for a couple of years. I take great exception to people describing me as "economically inactive" or not a net contributor, for a couple of reasons.
Firstly, I have been fortunate enough to earn income and pay tax my entire working life; I've always regarded myself pleased to be contributing to the public good, rather than having to rely on it.
Secondly, people in receipt of pensions are still liable for income tax, VAT, council tax, etc., so we still contribute to the tax take. The only exception would be national insurance and, were I to take up paid employment again, then I'd be paying that.
Thirdly, the only way in which I'd be economically-inactive would be were I to sit on all my pension income and never spend anything on food, clothing, running the house or the car, buying nice things for the people I love, or travelling around this country and putting money into the hands of small businesses.
I acknowledge the genuine problems there are with the shrinking non-pensionable workforce, and entirely agree that this right-wing obsession with stopping energetic young people coming into the country and expanding the economy to be completely barking mad, and consider that it's based solely on racist attitudes and instincts. I do, at 64, have more health needs that I did at 24, and this is likely to increase as I get older, but I entirely agree with your analysis, Bear.
The problems started in the Thatcher era Bear. Sold off most council housing for a song. Allowed investment banking free rein, collapsed UK manufacturing, engineering and shipbuilding and outsourced UK owned utilities. Started to dismantle and underfund NHS, education and policing. Incompetent political and economic planning for the future! Some pensioners lost pensions to criminals such as Maxwell. Political policies around pensions kept changing, penalising many who now find they have no pension, or very little pension for a life of working - even that has been pushed back years when they need it most. Many migrants have been a blessing to counter all the above incompetence. People need to stop blaming them and nan and look instead to where UK's money has been going!
This is exactly the honest message that the current government need to be sharing, rather than boasting about how they're going to be tough on immigration.
They should also explain that Brexit means that we lost access to millions of young workers coming from Europe.
Dearest Bear,
A friend of mine in HK recommended this piece to me this morning and he said that I should leave my reply as a comment on your Substack. So here it is:
“The Bear’s commentaries give me the confidence to take these arguments to residents when I’m out canvassing. I used an abbreviated form of this last week to two elderly people who told me “We don’t need immigration…” Stopped them mid-flow. V effective. I 💛 The Bear.”
This really nice to hear, MA, I really appreciate it!
Thanks Bear.
We need lots of honest messaging about the value migrants bring to the economy and the cost of supporting an increasingly aged population. (I’m a recently retired, reasonably fit pensioner but I’m aware my health and care needs will rise in future years.) We also need honest discussions about the damage Brexit has done to the economy. However, this won’t happen while we have bad faith actors talking the country down, using divisive language and poisoning the discourse.
Agreed. Not retired, still working, but have been under the care of the NHS since October last year for a laundry list of issues. My consultants tell me they may as well treat everything now so I have a better chance of a long and healthy future. I just hope I can enjoy some of it instead of working until I kark it naturally just to keep these bad faith actors in the lazy lifestyles to which they have plainly become accustomed.
Another absolute belter. Facts as opposed to rabble rousing.
I’m “economically inactive” according to demographics, being retired early due to ill health, but below pension age.
My occupational pension is taxable, I pay full council tax (a lot), I pay utility bills which include VAT, I pay home insurance which includes VAT, we spend on luxury goods like food, & clothing which includes VAT.
Seasonally I grow things, spending on things around the garden/home maintenance which includes VAT
I pay my own dental costs which are high
Whomever came up with the demographic has no consideration for personal/home/family financial responsibilities🤬, it’s purely a slur.
If someone downsizes, or changes roles for a lower salary, are they then slipping into this demographic…?, because according to its use they are (lower/no income tax=“economically inactive”)
Clever accountancy creates “economical inactivity” by sending it on vacation offshore🤷♂️
The biggest issue, to me, is the wiggle room we give people who are not on PAYE to abuse the system and not pay their fair share of tax. Migrants pay PAYE when they're employed legally. But what was that I read yesterday about Foutrage paying tax in Belgium and using his company to lessen the tax burden on his GBNews earnings?
Why do we tax income from dividends or capital gains at a lower rate than we tax earned income?
And failing to tax the capital gains of the primary residences of owner-occupiers was likely instituted as part of a policy of encouraging home ownership, which was a bad idea anyway for various reasons.
https://pedestrianobservations.com/2017/05/10/cities-should-not-encourage-home-ownership/
Morning Bear.
I apologise in advance for shouting.
THE LUMP OF LABOUR FALLACY.
It is an established concept in economics and shoots down the ignorant racist assertion that migrants steal jobs.
Government short sightedness was embedded long before Thatcher. For example in the 1970s the Police Federation pointed out to the government that the pension scheme was circa £4 million underfunded. They proposed that if the government filled the shortfall the Federation would establish an invested scheme. The response was a big fat no, because it was not affordable. Last time I look about 4 or 5 years ago the deficit was the high side of £420 million.
The massive lie, a function of dogma, delusion and spineless conduct is this. That it is possible to have decent public services and low tax.
It is of course a nonsense and the only beneficiaries of the current system are the relatively tiny cohort of exceptionally wealthy people and big corporations.
There is another lie, that Boomers have accrued wealth to the detriment of younger generations. Other than some pension arrangements that are no longer available and were by no means open to all, the great manipulation of the property market which is going to have to fund the care of my generation, is probably the only source of wealth that most ordinary people have.
In truth most of us are to one extent or another up colon creek with a busted outboard.
My late father in law was working for the treasury (Actuary and advisor). He wrote a massive report about our ageing population and its impacts to our economy in the late 80’s over 49 years ago and that report with recommendations ended up in the bottom of a drawer because non of the politicians wanted to hear.
Even after his retirement he made it clear that the governments were short sighted about the impact an ageing population has.
Over 40 years ago sorry typo
Yes yes yes. I do wish the cabinet reshuffle had brought Bear to the table. So much money and power to be gained from hate but the way you write surely demonstrates that reason and explanation can triumph. Or at least let’s get these numbers on the side of the bus. Oh and now Angela Rayner is free from her government posts perhaps she can focus on fixing social care which is surely her real destiny. 🙂
Having given the matter deep thought...at 66 I still have one or two but it takes heroic efforts and a lot of marmalade....we are faced with a hard choice. Option 1 execute oldies upon reaching pension age (sooner if the get too sick we could have a tribunal). The Logan's Run policy. This seems attractive at first blush but I think a slight tweak makes it even better. Under Improved Logan's Run we hit the problem at source. Too many youngsters are getting old and ruining it for the rest of us pensioners. So we must be bold and start with teenagers. The deficit in the economy should there be one...I'm not convinced...can be made up by selling their "stuff" and putting it in an investment fund for the good of society..... obviously mainly old people.
🤣🤣🤣
An excellent article! Remember going to a conference back in 2015 where this dilemma was a central theme so, why it hasn’t been properly addressed is down to our political system which is unfit for purpose.
In international economics we speak of the "impossible trinity": fixed exchange rates, free movement of capital and national monetary sovereignty are also individually desirable, but it is impossible for all three to co-exist in the same global economy.
During the pre-WWI gold standard era we had fixed exchange rates and free movement of capital, but national monetary policy was dictated by the international markets.
During the post-WWII Bretton-Woods era we had fixed exchange rates and national monetary sovereignty, but this was enabled by strict capital controls, and the Bretton-Woods system collapsed when those capital controls were circumvented (for example by the "Eurodollar" markets).
During the more recent "Washington Consensus" era we had free movement of capital and national (or EU in the case of the Eurozone) monetary sovereignty, but exchange rates float freely.
Now it seems like there's also an "impossible trinity" in demographics, where the following three attributes are all individually desirable in a population, but it is mathematically impossible for them all to coexist simultaneously:
1. A long life expectancy
2. A stable or falling population size
3. A high ratio of workers to retirees.
(I suppose an exception would be if a country were to have mass emigration of its elderly, but why would any other country be willing to take them?)
And also note that this impossible trinity takes no account of how much of the population is native-born vs foreign born: this is particularly significant in the case of the UK, where (AIUI) an unusually large fraction of anti-immigration sentiment is motivated by a desire to minimize the overall population size as opposed to just the foreign-born proportion of the population.
Spot on! And I say this as someone who is now in receipt of my state pension though I'm actually still working because a) I really do love what I do and b) I'm stupidly well paid for doing it. The amount of income tax I pay has of course increased now, but I still maintain that I'm not paying enough really. The trouble in this country seems to me to be that we want Nordic-style benefits, but we're not prepared to pay Nordic-level taxes to get them. I would personally have no problem with it - I spend a lot of time in Denmark (I work for a Danish company) and while they do also have problems, they're getting a lot of things right.