CHINA: ‘ Surpasses US in Terms of Purchasing Power to become largest in the World ‘

#AceWorldNews – CHINA – October 12 – China has surpassed the US in terms of GDP based on purchasing power parity (PPP), becoming the largest in the world by this measure, International Monetary Fund estimates show.

' Chinese Purchasing Power Outstrips United States. Though United States has greater GDP'

‘ Chinese Purchasing Power Outstrips United States. Though United States has greater GDP’

In 2014 China reached $17.6 trillion or 16.48 percent of the world’s purchasing-power-adjusted GDP, while the US made slightly less, 16.28 percent or $17.4 trillion, the FT reported citing IMF data.

PPP is recognized as the best way to compare the size of economies rather than using volatile exchange rates, which rarely reflect the true cost of goods and services. Thus a trillion US dollars are worth a lot more in China than in the US.

On the purchasing power basis, China is overtaking the US right about now and becoming the world’s biggest economy, according to the forecast.

The US has been the global leader since overtaking the UK in 1872. Most economists previously thought China would pull ahead in 2019.

According to IMF estimates, in 2015 the gap between China and the US will increase to almost a trillion dollars: Chinese GDP PPP will amount to $19.23 trillion against $18.286 trillion in the US.

However in terms of a real GDP the United States remains the undisputed world leader with $16.8 trillion output, significantly outpacing China with $10.4 trillion.

#Source:

#ANS2014 

#china, #gdp, #imf, #international-monetary-system-imf, #ppp, #purchasing-power-parity, #uk, #us

UNITED STATES: ‘ Debt to GDP Ratio Nearly Exceeds Group of Seven and Going Upward ‘

#AceNewsServices – UNITED STATES – The U.S. debt-to-GDP ratio has nearly grown to the Group of Seven (G7) average, a dramatic increase from 2000 when it was lower than most other G7 countries, according to this new progress report and scorecard from the Council on Foreign Relations Renewing America initiative.

Infographic_Balance_Owed_rev

At its current rate, the U.S. debt-to-GDP ratio will be higher than all G7 countries except Japan by 2040.

While other large wealthy countries have been cutting their entitlement programs, the United States has left Medicare and Social Security mostly untouched. Recent U.S. budget cuts have instead focused on discretionary spending, which goes toward areas such as education, infrastructure, and research and development—all of which constitute investments in future economi

By 2040, public debt is projected to top 110 percent, equal to the highest levels reached during the Second World War,” Renewing America Associate Director Rebecca Strauss writes. “And absent any policy changes it will likely keep climbing after-ward into uncharted territory for the United States.”

Americans will have to make difficult choices to get the public debt load under control. Sequestration, which took effect in 2013, only affected government spending projected to decline as a share of GDP.

Meanwhile, U.S. policy-makers left cutting entitlements or increasing tax revenues largely off the table, despite the fact that entitlements will account for nearly all new federal spending in the future.

Source: 

#ANS2014 

#debt, #deficits, #g7, #gdp, #group-of-seven, #investments, #united-states, #us

‘ Prostitution and Drugs Increase GDP by 9 Billion Euro’s ‘

#AceWorldNews – SPAIN – September 26 – Prostitution, drug trafficking and other illegal activities have finally been included in Spain’s gross domestic product, boosting it by 9 billion euros according to the latest statistics.

Sex workers demonstrate in the centre of Madrid on February 15, 2014. (AFP Photo/Pedro Armestre)

Sex workers demonstrate in the centre of Madrid on February 15, 2014. (AFP Photo/Pedro Armestre)

Latest data from the National Statistics Institute (INE) reveals the drug trade, prostitution, illegal weapon sales and gambling contributed some €9 billion, or 0.87 percent of country’s total GDP in 2013. The new figures show that drug trafficking comprised 0.5 percent of GDP while illegal sex trade made up 0.35 percent of the new total.

Overall, the recalculated figures increased Spain’s GDP by €26.2 billion to €1.05 trillion, reducing country’s debt ratio of 98.9 percent to 96.4 percent, according to the Bank of Spain.

The remaining increase to GDP was generated from the contributions of research and development and military armament.

Members of the platform of "Indignant Prostitutes" and their supporters staged a demonstration in central Barcelona to protest against the city's plans to modify a law that seeks to prohibit street prostitution in the Catalan capital, April 26, 2012. (Reuters/Gustau Nacarino)

Members of the platform of “Indignant Prostitutes” and their supporters staged a demonstration in central Barcelona to protest against the city’s plans to modify a law that seeks to prohibit street prostitution in the Catalan capital, April 26, 2012. (Reuters/Gustau Nacarino)

To assess the turnover of prostitution, the agency calculated the number of prostitutes working in Spain and consulted with sex clubs on the amounts they earn on average.

Prostitution in Spain was decriminalized in 1995. The trade itself is not directly addressed in the Criminal Code of Spain, but exploitation such as pimping is illegal.

At the same time prostitution is not considered a job and thus has no legal recognition.

Source: 

#ANS2014

#drugs, #gdp, #prostitution, #spain

” Money Cannot Be Created or Destroyed “

#AceDebtNews says this was recently sent to my news desk and relates to as they call it “doozy of a working paper “ available to download as PDF if you are willing to pay, basically l thought the following extract from the Washing Posts Wonk Blog says what is really important on austerity, as these two eminently qualified people state their own opinions on austerity of this government!

Governor of the Bank of England Mark CarneyÒscar Jordà of the San Francisco Fed and Alan M. Taylor of the University of California-Davis have a doozy of a working paper out on the macroeconomic effects of austerity. The chart above has the money stat: According to their numbers, the U.K.’s experiment with austerity starting in 2010 led to a 3 percent reduction in growth. If true, that’s a big, big indictment of the Cameron government‘s policies.

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/09/british-austerity-was-even-worse-than-you-thought/

: This is a link to a Money Week Video – Their intention being to sign you up for their magazine – but if time it is well worth a watch – beware you cannot stop it or roll-back just leave and close tab!  This video long and drawn out as it is trying to put fear in us to invest wisely, with them of course and through their financial advisers advice even though they do not state this outright. Also going to the extent of adding a disclaimer to their video, to take independent advice! Also states from their point of view that this country is bankrupt and has been for a very long time!  http://pro.moneyweek.com/myk-eob-tpr123/EMYKP909/?a=5&o=128929&s=133565&u=75227&l=428374&r=MC&g=0&h=true

Spending Rises as Austerity BitesThen thirdly this simple report in the New Statesman that our Chancellor of the Exchequer argues it is nothing to do with his policies, as so many Chancellors have done before over the last 40 years! Then pray tell me whose fault is it ,we have debts totalling X and as a percentage of our GDP they are Y and that we will never repay them as they cost Z . My why not putting figures for XYZ is simple: figures lie and so do politicians! We do not need a statement of what we owe, but we need a solution of what we owe, does anyone have this solution, well of course not, or if they do, then pray tell us all, do it for nothing and admit the truth!

Well read it all if you like and then leave your comments or share:

The Chancellor‘s claim that “the pace of fiscal consolidation has not changed” is not supported by any of the available data.

The Chancellor does not deny that growth has been much weaker than forecast, although it’s worth repeating the scale of this under-performance. In June 2010, the Office of Budget Responsibility predicted that by now the economy would be about 7 per cent larger, driven by a sharp rise in business investment and exports, while the deficit would have fallen by two-thirds. What has actually happened? In fact, GDP has grown at less than a third of that rate, business investment has fallen, and the path of deficit reduction bears no resemblance at all to the original projections (which is, as I’ll elaborate below, a good thing).    

But, the Chancellor argues, this under-performance has nothing to do with fiscal policy:

More at: http://www.newstatesman.com/politics/2013/09/what-osborne-wont-admit-growth-has-increased-because-slower-cuts

My Personal View: 

So as with all my articles l will give you my very simple understanding of all that has to be done in 5 very simple lines, l call this my `Five Steps to Becoming Debt Free’ l realise only a few will read it or even understand it, but most of all will never ever agree to it, WHY – simply wanton-greed and this will prevail until people either have nothing, or until they realise that wanting more will lead them into a pit of despair they will never ever get out of …….

Well here are my simple and easy tips:

1. Everyone does not owe anyone anything!

2. They do not want anything!

3. They make do and mend!

4. They only buy what they need!

5. They except the fact to live their life with less not more!

So l leave you with these questions!

If l had never borrowed more than l could afford, would l now be in debt?

If l had never borrowed for things l did not need, would l now be in debt?

So if l had lived my life to satisfy my need , and not my want, would l now be in debt? 

If you answer NO to any of these three question, then stop borrowing and lending more, and learn to manage what you have already borrowed!!!

Ace Related News :

Money Cannot Be Created or Destroyed

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China: “Preparing to Surpass the US as World’s Largest Economy”

#AceNewsServices  says many various sources l have spoken to in my travels, have varying opinion’s of China’s increasing size, wealth and power, here is one such opinion. As China is preparing to surpass the United States as the world’s largest economy in purchasing power and parity terms, (using China’s grossly exaggerated economic figures). Already its economy is supposedly 80% the size of the US, and if current growth rate differentials persist, it could possibly take China about two years to surpass the US.

A Shanghai branch of Industrial and Commercial...

A Shanghai branch of Industrial and Commercial Bank of China, largest in the world. (Photo credit: Wikipedia)

That said any chance of raising the status of China, will need to rely on the west and their want of their goods and services, oh they could continue to build their massive cities and continue building, also invite more and more foreign businesses to take up residence, with the intention of growing their GDP. Whilst in the meantime they spread their dominate hand across the westernised world, though with one small draw-back and that is they are not signing from the same hymn sheet as other countries, so to speak.

Their real aim is to not just take over as the world’s largest economy, but to eventually humiliate and deemed the countries for so long that saw them as a third world economy, and purchased their goods, at cheapest possible prices. Thus keeping their country down and their people poor, but education, training and self-sufficiency is the watchword’s of the Chinese people, led to watch and learn from other countries, silently in the back-ground planning a strategy, like their “Terracotta Warriors” of days gone by, and utilising the old ways of warfare, but this time as traders.

At present market exchange rates, China’s GDP is much smaller, and is expected to remain less than the US until 2028. This is hardly surprising. After all, China has four times as many people as the US; if every Chinese worker were to earn the US minimum wage, its GDP would be larger than the US. That is not a very high bar. With that economic size comes military power and global cultural clout. Though at the present changes in the population from lower-class to middle class the requirement for greater supplies of westernised products, will grow thus leading to disparity of incomes, between the have’s and have’nots and leading to social problems.     

History of China

History of China (Photo credit: Wikipedia)

China’s awe-inspiring rise is often framed as the return to a historical norm. A common belief is that for most of the last 5,000 years, China was the world’s centre of wealth, culture, technology, and power. The 19th and 20th centuries, we are told, were a brief aberration, and China is now simply retaking its rightful place as the world’s pre-eminent nation. This trope gives China a certain air of inevitability.

The problem is, it’s not really accurate.

The truth is that for most of its history, China has struggled to overcome a number of chronic difficulties that have usually kept it from global pre-eminence.

Territories occupied by different dynasties an...

Territories occupied by different dynasties and modern political states throughout the history of China. (Photo credit: Wikipedia)

Let’s start by recalling ancient China, starting from 5,000 years ago. The early pre-Chinese kingdoms – Xia, Shang, and Zhou – roughly coincided with ancient Egypt, Babylon, Persia, and Greece, and China’s famous Han Dynasty coincided with Rome. Ian Morris, a Stanford historian and author of Why the West Rules – For Now, has constructed an “index of development” that takes into account energy use, urbanisation, information technology and war-making capacity. According to Morris’ index, the Mediterranean and Middle Eastern civilisations of the Ancient and Classical periods were well ahead of their Chinese counterparts.

For example, the Roman Empire had many more miles of roads than Han China, and much more shipping. Although China had a few things that Rome did not – most notably the horse collar and paper – Rome in general had far more impressive engineering and technology, including advanced plumbing, mining techniques, and construction techniques. Han China was poorer–most people’s houses had dirt floors. In terms of basic science, Morris has less to say, but ancient Greece was hard to beat in this regard (though ancient China was ahead in algebra). Military power is hard to gauge, since China and the West never directly confronted each other.

A Chinese bronze statue of a mythological chim...

A Chinese bronze statue of a mythological chimera (a lion-like creature with wings, horns, fangs, and claws), from the Eastern Han Dynasty, dated 1st century AD. (Photo credit: Wikipedia)

According to Morris’ data, China became richer and more developed than the West’s leading nation around the 6th century A.D. The fall of Rome and the division of the Mediterranean into European and Middle Eastern halves stifled sea trade, while China assimilated its rich South and began growing rice on a large-scale. For the next 1,000 years, China was the richest place on the planet. During the years from 500 A.D.  to 1200 A.D., China invented the compass, gunpowder, printing, compartmentalized ship hulls, paper money, advanced farming techniques, and a great deal of algebra and astronomy.

But China’s pre-eminence was hardly uncontested during this period. Though Europe was an economic, military and technological backwater during the Middle Ages, the Islamic empires – the Umayyad and Abbasid caliphates – rivalled China in size, and actually defeated China in their one military clash (the Battle of Talas). Islamic civilisation was also no slouch in basic science.

Meanwhile, China during its golden age was plagued by internal and external security threats. The An Shi rebellion tore apart China’s Tang dynasty at that empire’s height, killing millions; the dynasty never recovered. The Jurchen (ancestors of the Manchus) conquered North China in the 1100s, forcing the Sung Dynasty – the wealthiest and most technologically dynamic of the old Chinese dynasties – to relocate to the south. In the 1200s, the Mongols conquered all of China, which they ruled until 1368.

A 24 point compass chart employed by Zheng He ...

A 24 point compass chart employed by Zheng He during his explorations. (Photo credit: Wikipedia)

China regained stability during the Ming dynasty in the 14th to 17th centuries. During that dynasty, China was militarily powerful, defeating incursions by the Mongols, Japanese, Dutch, and Portuguese. But this period was also a “Great Stagnation” for China. Technological progress essentially stopped. A brief spurt of exploration by the Chinese explorer Zheng He (whose scope may have been exaggerated; none of the giant ships attributed to the expedition have ever been found) proved to be one of a kind, when the Chinese government restricted shipbuilding.

During the first half of the 2nd millennium A.D., the Middle East stagnated as well, but Europe was climbing out of the deep hole of the Middle Ages. By the 1500s, propelled by the discovery of the New World, Europe was making rapid strides in science and technology; by the 1600s, according to economic historians, much of Europe was richer than China.

So to sum up, China has always been one of the world’s leading civilisation’s over the last five millennia. But it has only held both economic and military preeminence for brief periods of time—the late 1300s and 1400s being the most notable. Why has China not been preeminent for longer stretches? History is not a science, but we can make some guesses. The very thing that makes China so powerful and important – its titanic size – also endows it with fundamental weaknesses.

Throughout its history, China has been plagued by enormous rebellions, from the An Shi rebellion in the 700s to the Taiping Rebellion in the 1800s. These rebellions are always incredibly destructive of human life and the economy. They often expose China to external conquest, as with the fall of the Ming dynasty in the 1600s or the Japanese conquests in the 1930s. They sometimes result in the rise of extremely destructive and dysfunctional regimes, like Mao’s ascendance in the 20th century.

Why does China have all these big rebellions? Because it’s big. Large countries are geographically and industrially diverse, and therefore it becomes difficult to agree on what public goods to provide (this is why city-states are often very efficient). Regions fight over resources. In addition, China is endowed with very few natural resources relative to its enormous population size, meaning that food and water shortages can be acute and terrible.

The music video for "L'Âme-stram-gram&quo...

The music video for “L’Âme-stram-gram” used a replica of the Great Wall of China, which justified its high cost. (Photo credit: Wikipedia)

China’s incredible bigness has other drawbacks. It made China difficult to defend in ancient times. In modern times, it means that China has lots of powerful neighbour – India, Russia, and Japan – with whom relations are not always smooth. And some historians, such as Jared Diamond, have argued that China’s size held back its technological progress; because it could win wars by sheer size and rely on its domestic economy, they argue, China was never forced to invest in military technology or open itself up to trade.

To understand how China’s constraints are threatening its rise today, read In Line Behind a Billion People: How Scarcity Will Define China’s Ascent in the Next Decade. Authors Damien Ma and William Adams discuss not only China’s resource constraints, but also how its heterogeneity – the deep divides between urban and rural, interior and coast, rich and poor – represents a real constraint on development.

Fortunately for China, this time may really be different. Modern communication and transportation technology mean that a big country is easier to defend and to integrate. Globalisation, and China’s embrace of trade, mean that China is more open than it was during most of its history. But China has shown signs of worryingly isolationist instincts, harassing foreign companies operating within its borders. Meanwhile, China’s increasingly aggressive policies toward its neighbour’s – notably Japan and India, but also Vietnam and the Philippines – run the risk of inviting an effort at containment. The “Middle Kingdom,” like Germany in Europe a century ago, runs the risk of fighting all of its neighbour’s at once.

In other words, China is vulnerable now for the same reason it was vulnerable in ages past. History is not a tale of Chinese preeminence, but a tale of Chinese oscillation. The same thing that often kept China from realising its potential as the world’s dominant nation – its tremendous, unwieldy size – means that although it may surpass the US in total GDP, its supremacy may well be short-lived and incomplete.

 

 

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“Social Mobility Has the Power to Help the Poor in Society”

#AceNewsServices says in a speech to the Resolution Foundation Alan Milburn calls for more action to restore the link between economic growth and earnings, highlighting the fact ,that where you are born affects your life and the future prospects for your children. What l found was that even though he agree’s with the present incumbents sticking to their policies ,though he realises that good intentions, need to be worked through to the end.

Speech: 

It is part of Britain’s DNA that everyone should have a fair chance in life. Yet too often demography is destiny in our country. Being born poor often leads to a lifetime of poverty. Poor schools ease people into poor jobs. Disadvantage and advantage cascade down the generations. Over decades we have become a wealthier society but we have struggled to become a fairer one.

Social MobilityThe global financial crisis has brought these concerns to the fore. In its wake a new public consensus has begun to emerge that unearned wealth for a few at the top, growing insecurity for many in the middle, and stalled life chances for those at the bottom is not a viable social proposition for Britain. As birth not worth has become more a determinant of life chances, higher social mobility – reducing the extent to which a person’s class or income is dependent on the class or income of their parents – has become the new holy grail of public policy. These are developments I regard as most welcome.

Recently my Commission issued our first annual state of the nation report to Parliament. In it we acknowledge that these are challenging times to make progress. Britain faces a triple squeeze: on economic growth, family incomes and public spending. In these circumstances it would have been all too easy for Government to abandon the aim of ending child poverty by 2020 and to avoid the long hard haul of making progress on social mobility. We believe the UK Government deserves credit for sticking to these commitments and making new ones. The test we apply, however, is not about good intentions. We take those as read. It is about whether the right actions are being taken.

Social Mobility Statistics  There is much to welcome in what Government, employers, schools and universities are doing. We see considerable effort and a raft of initiatives under-way. The question is whether the scale and depth of activity is enough to combat the headwinds that Britain faces if we are to move forward to become a low poverty, high mobility society. The conclusion we reach is that it is currently not. We conclude that the statutory goal of ending child poverty by 2020 will likely be missed by a considerable margin, perhaps by as many as 3 million children. We conclude too that the economic recovery, of which we have seen further evidence in today’s jobs figures, is unlikely to halt the trend of the last decade, where the top part of society prospers and the bottom part stagnates. If that happens social inequality will widen and the rungs of the social ladder will grow further apart. Poverty will rise. At best, mobility will stall. At worst, it will reverse.

To avert this we believe that policy-makers need to come to terms with a new truth that emerges from the mass of evidence contained in our Report. Although entrenched poverty has to be a priority – and requires a specific policy agenda – transient poverty, growing insecurity and stalling mobility are far more widespread than politicians, employers and educators have so far recognised.

Social Mobility StatisticsToo often – in political discourse and media coverage – these issues are treated as marginal when in fact they are mainstream. Poverty touches almost half of Britain’s citizens at some point over a nine-year period. The nature of poverty has changed. Today child poverty is overwhelmingly a problem facing working families, not the work less or the work-shy. Two-thirds of Britain’s poor children are now in families where an adult works. In three-quarters of those households someone already works full-time. The principal problem seems to be that those working parents simply do not earn enough to escape poverty. If we are to successfully tackle poverty and increase mobility we will have to do much more, as a nation to help the working poor of Britain.

There is a growing cohort of low and middle-income families squeezed between falling earnings and rising house prices, university fees and youth unemployment, who fear their children will be worse off than they have been. The proportion of 25-34 year olds owning their own homes has fallen from around 60% to 40% in just a decade. Too many able children from average income and middle class families – let alone low-income families – are losing out in the race for the top jobs. A society where opportunities are frozen rather than fluid hurts more than those at the very bottom end. It hurts the people President Clinton once famously called the ‘forgotten middle class’.

There is a glass ceiling in British society – and more and more people are hitting it. Whether it is law or medicine or journalism or politics the upper echelons of Britain are dominated by a social elite. One third of MP’s, half of senior doctors and over two-thirds of high court judges all hail from the private schools that educate just 7% of our country’s children. The data is so stark, the story so consistent, that it has all the hallmarks of social engineering. Sir John Major is right to be shocked. Elitism is entrenched.

Where Sir John is wrong is to argue this is the consequence of the actions of any one government. Deep-rooted inequality and flat-lining mobility have been decades in the making. Some say it is an impossible task to undo them. I do not succumb to that pessimism. There is no natural order that makes our society like it is. Of course there is no single lever that on its own can make a nation more socially mobile. No single organisation can make it happen either. All sorts of things make a difference. Family networks and parenting styles. Careers services and school standards. Career development opportunities and university admission procedures. But the key is employability and education.

Social mobility speeded up in the 1950’s thanks to a big change in the labour market. The shift from a manufacturing to a services economy drove demand for new skills and opened up new opportunities for professional and white-collar employment. More room at the top enabled millions of women and men to step up as a consequence. Social mobility has slowed down in the decades since primarily because of another big change in the labour market: the move to a more technologically based knowledge economy. Since the 1970s technological change has been skills-biased. People with higher skills have seen large increases in productivity and pay while those with low skills have experienced reduced demand for labour and lower average earnings.

The Work FoundationThis is not a peculiarly UK phenomenon. It is a trend that afflicts the developed world. The polarization into what the Work Foundation calls “lovely jobs” and “lousy jobs” first saw wages at the bottom end of the labour market become disconnected from GDP growth in countries like America and Canada. More recently the same has happened in Australia and Britain. Now it is happening in Germany and France and, to a lesser extent, even the Nordic countries. In most developed countries there has been a declining share of economic growth going to labour (and a higher share to capital) at the same time as there has grown wage inequality. In the UK, the share of national income going to wages of workers in the bottom half of the earnings distribution decreased by a quarter between 1979 and 2009.

Over recent decades, increases in zero hour contracts and self-employment, the decline of collective bargaining and strong trades unions, the collapse of internal careers ladders – in part a consequence of increased outsourcing and specialisation within firms – and the replacement of jobs with technology have all impacted opportunities for low paid workers to progress. Work just published by the Resolution Foundation finds there are 320,000 workers, overwhelmingly women, who have been trapped at the minimum wage pay level for five years or more and 140,000 for 10 years or more. But it is not just workers at the bottom who are being affected. These same forces are hollowing out the middle of the labour market and it is likely that as the cost of computing power continues to fall technology will replace many more middle-class jobs that rely on repetitive and routine tasks. Or at least make them less valuable in the labour market. In other words, the earnings squeeze already felt by people at the bottom could increasingly spread to those in the middle.

Across the developed world, we are witnessing a profound change in the labour market. This change is being experienced as a cost of living crisis by many families in our country. As their wages stagnate, prices – of energy, food, housing – roar ahead. Living standards are falling. Public anger is rising. And politicians are scrambling to keep up. It is welcome that the cost of living issue is now high on the political agenda. The problem is that the answers that the political parties are reaching for – whether caps on gas bills or more competition in the energy market – can, at best, provide only short-term respite. What is lacking – across the political spectrum – is a long-term answer about how the gap between earnings and prices can be closed. With inflation and interest rates across the developed world at record lows the cost of living crisis is as much a problem of falling earnings as it is of rising prices.

Without corrective action the risk is that the UK’s economic recovery, though welcome, merely perpetuates a decade-long decline in real earnings. Even at the height of the boom in the 2000s earnings were stagnating. The changes we are seeing in the labour market and the experiences of the last decade suggest that the old assumption of a tide of economic growth causing all boats to rise may no longer hold. Economic growth has become decoupled from earnings growth. That has profound consequences for our prospects of Britain becoming more mobile and more fair. A recovery that sees national wealth rise might be an economic success but if earnings fall it will be a social failure.

Just as the UK government has focused on reducing the country’s financial deficit it now needs to redouble its efforts to reduce our country’s fairness deficit. All parts of society have had to shoulder the pain of fiscal consolidation. In turn all parts of society should share in the proceeds of renewed economic growth. It should be a new and explicit objective of government policy to re-forge the link that has been broken between economic growth, average earnings and social fairness. That will require new thinking and some new approaches.

Unemployed StatisticsFor decades the public policy focus has been on moving people from welfare into work. With 2.5 million people still unemployed and appallingly high levels of youth unemployment renewed effort is still needed there. A job remains the best safeguard against being poor. But it is not a cure for poverty. Today the UK has one of the highest rates of low pay in the developed world. Five million workers, mainly women, earn less than the Living Wage. Outside of London, it is £7.65 an hour, hardly a King’s ransom. These are the people that heed the urgings of politicians of all hues to do the right thing, to stand on their own two feet, to strive not shirk. They simply do not earn enough to escape poverty. The working poor are the forgotten people of Britain. They desperately need a new deal. Of course, many more children in working families would be in poverty were it not for the State supporting their incomes. The cost of tax credits for families who are in work was almost £20 billion in 2011-12. My Commission estimates that the cost of Housing Benefit for families who are in work could be as high as £3 billion. During the late 1990s and early 2000s, public spending through higher tax credits effectively subsidized stagnating earnings and propped up living standards. In fact government-funded tax credits were the only substantial source of real income growth for low to middle-income households between 2003 and 2008. Austerity removes that prop. Quite simply, the taxpayer alone can no longer afford to shoulder the burden of bridging the gap between earnings and prices.

Across the political spectrum more and more questions are being asked about a system in which half of families with children have their incomes supplemented by the State even though they are in work to compensate for employers – many of whom are making large profits – simply not paying their staff enough to live on. We concluded in our Report last month that the time is right for Government to devise new ways to share the burden of bridging the gap between earnings and prices with employers in a way that is consistent with growing levels of employment.

Clearly, there are tensions and trade-offs that will need to be made. That is why we argue government, employers and trades unions should collaborate on a new low pay strategy for Britain. The Resolution Foundation has done excellent work mapping out some of the areas where progress is needed. Key elements could include raising the national minimum wage which today is worth £1,000 less in real terms than in 2008; considering the merits of a sector-based approach to raising minimum pay levels as they do in Australia; reducing the direct and indirect taxes that low paid workers face in order to boost their net incomes; and encouraging and provide incentives for more employers to pay the Living Wage. As a first step Government could deploy more muscular transparency to promote higher wages: it could change the law to require firms to publish pay ratios as well as the number of staff earning below particular hourly pay benchmarks. And it could change how Job Centre Plus and Work Programme providers are able to pay incentives so that they are rewarded for the earnings people they help receive not just the jobs they are found.

These are short-term steps. The long-term solution to how Britain can overcome its low pay problem is likely to lie in improving skills so that Britain has many more high quality jobs that will allow us to compete successfully in the expanding global markets for high-value goods and services. That will require employers to more consciously invest in skills, training and career development for their workforces. Outside of the workplace my Commission believes there are four other key steps we need to take if all parts of society are to share in the proceeds of economic growth.

OECDFirst, extending early years’ education. The OECD evidence shows that child poverty is lowest and social mobility is highest where parents can rely on universal, quality and affordable childcare. Early education packs a double punch. It positively impacts children’s development and it enables more parents to work. Having all parents in a household in employment massively reduces the chances of a family being in poverty. Widely available, affordable childcare is the best means of securing income for a family, since it dramatically lifts the maternal employment rate. This is the conclusive evidence from the experience of the Nordic countries. In Scandinavia child poverty rates are less than half of British rates. Year by year we are making progress as a nation to extend and improve early years education but what we lack is a long-term plan for doing so. Government should devise one.

Second, closing the attainment gap between better-off and less well-off children in schools. For a long-time it was widely accepted by governments and publics alike that – when it came to learning – deprivation was destiny. Better off children would naturally excel. Poorer children would naturally fall behind. We now have extensive evidence that such social determinism is plain wrong. Countries as different as Canada, Poland and Singapore have demonstrated a great track record in raising attainment levels across their societies. In our country only 36% of children on free school meals – roughly the poorest sixth in society – get good results at aged 16 compared to 63% of other children. But over the last decade or so educational inequality has narrowed. Progress has been most startling in London where pupils who are entitled to free school meals now have attainment at the age of 16 which is 50 per cent higher than free school meal students elsewhere in the UK. London used to have some of the worst state schools in the country. Today they are among the best. That not did happen by chance. A decade of effort to raise standards and recruit good teachers has paid off. But it is not enough to lift children off the bottom. More needs to be done to get them into the top. So Government should ensure that raising standards and closing attainment gaps are the twin objectives for all teachers and all schools through the standards it sets, the inspection regimes it sanctions, the league tables it publishes and the reward mechanisms it deploys. Critically, it needs to incentivize the best teachers more to teach in the worst schools, including through higher pay.

Third, ensuring fair access to higher education and vocational training. In the most mobile societies students are helped to make the transition to employment, via higher education for the most academically able and via vocational education for those wanting to develop their technical skills. In Britain by contrast we face twin challenges – unequal access to higher education and a low priority being given to vocational education. When four private schools and one college send more students to Oxbridge every year than 2,000 state secondaries it is obvious that schools and universities need to do far more to ensure doors are open to a wider pool of talent. Meanwhile public policy, which for decades has prioritized university education over vocational education, desperately needs to devise a long-term plan to address the lower funding and greater complexity that “the other 50%” of young people face. Further education is less generously funded than higher education and has been subject to large cuts. Many FE colleges do sterling work but 1.5 million learners are in provision that is rated less than good. Alison’s excellent report points the way to a more demand-led system, where, for example, colleges are paid according to the outcomes students achieve rather than simply the numbers they recruit. And we look to Government to lead a national effort to end long-term youth unemployment – now at a 20 year high – by providing new job guarantees and by helping half of all employers to provide work experience or apprenticeships.

Fourth, opening more doors to a career in the professions. The upsurge in professional employment in the middle of the last century created an unparalleled wave of social mobility in Britain. It created unprecedented opportunities for millions of women and men to move up and get on. Today, 42% of all employment in the UK is in the professions. That is set to rise to 46% by 2020. The professions will account for over 80% of employment growth in Britain in the next decade. The question is whether the growth in professional employment is creating a new social mobility dividend for our country. The short answer is not yet. At the top, the professions are dominated by a social elite. But it is not much better at the bottom. Last month we published new data about the social profile of doctors. One-third was privately educated. The pattern is similar among law students. Action is long overdue here. Take internships. They are a new rung on the professional career ladder. But they tend to go on the basis of who, not what you know. In professions from medicine to journalism most interns are still recruited informally, so favouring those in the know and those with connections. Most intern-ships are also unpaid, so disadvantaged those from less affluent backgrounds who cannot afford to work for free for any length of time. Last month we called on professions from law to medicine, politics to journalism to end the practice of unpaid internships. And we called on our country’s top employers to broaden the range of universities from which they recruit.

These are all challenging proposals. They are a challenge not just to national and local governments. But to employers and professions, councils and communities, schools and universities alike. A far bigger national effort will be needed if progress is to be made on reducing poverty and improving mobility. Economic recovery is not enough. Britain needs a social recovery too. That will require leadership at every level. Government cannot do it alone. But it does have a special role to play in setting the framework for policy and mobilizing the country to action. Despite the tough climate for doing so I believe that progress can – and must – be made. If Britain is to avoid being a country where all too often birth determines fate we have to do far more to create a level playing field of opportunity. That has to become core business for our nation.

 

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“God Provides the Answer and We Listen to Ourselves”

#AceNewsServices says l have just heard on the local news about how the UK economy has improved and is growing faster than any other country. Well we should all be so grateful and be patting this government on the back for a good job, of course let us look deeper and we see that this transparency, is a dark glass hiding the real truth.

The reason is, oh yes we have growth of 0.8% and a rise in-house prices of 24% in certain areas of the country, mainly in the South of England of course. So far so good …………………………………………….

So why am l such an pessimist? Well everything that has been achieved in this country for the last 30 years, has had a price and the price in this case is borrowing, lending and debt.

GovUk Borrowing £2 Billion Per WeekGeorge Osborne says we need austerity, and cuts of £25 billion are required, but the real cost is the#UK Debt stands as at today’s date, at over £900 billion and counting. According to “UK National Debt’s” latest figures and as l write, this is  £1.254.936.279 and some change. Check it out yourself when you read this post, and see how much it has grown, just click #UKDebt     

  • So how is this government funding our lifestyles as citizens? Well according to the ONS ………………..

UK Borrowing in UK in December 2013The UK national debt is the total amount of money the British government owes to the private sector and other purchasers of UK gilts.

  • Public sector net debt was £1,211.8 billion at the end of September 2013, equivalent to 75.9% of GDP
  • Source: ONS [1. ONS public sector finances ] [This figure excludes temporary effects of financial interventions (PSND ex) (page updated October 23rd 2013)

UK national debt

So as you can see the rise is dramatic in 2012-13 to say the least, but in 2008-2009 it was nearly half. Now you would think people would have learned that aFinancial Crisisin 2008, and how much everyone lost. This should teach us that borrowing too much does not work, but we are so easily tempted into buying what the devil wants, not what we need. 

Car Purchase 2008 - Debt 2009Now the BBC reports today that  figure from the SMMT that New Car Sales were up in 2013 in the UK car sales in 2013 recorded their best year since 2007, industry figures have shown, helped by cheap credit deals and stronger consumer confidence.

The Society of Motor Manufacturers and Traders (SMMT) said that 2.26 million vehicles were registered in 2013.

That was a 10.8% rise on 2012, although the figure is 6% lower than 2007’s 2.4 million figure.

The 2013 total was boosted by a 23.76% rise in sales in December, marking the 22nd successive month of increases.

Industry analysts say that attractive financing deals have tempted buyers, with three-quarters of sales to private buyers now involving a financing package.

So once again we are back into that borrowing circle, as this government literally con’s us into believing what they tells us, and  just like sheep, we follow them into the darkness to be shorn.

Finally as l said earlier and it may stagger some, due to the staggering amount ofPayment Protection Insurance and the Compensation” people are using their money as either deposits or part-payments to purchase new cars. Thus putting the monies stolen from them, back into the same pockets {or similar} that has just paid out the compensation!

Does this not sound ludicrous, to anyone or is it just me? 

I rest my case but mark my words, mark them well 2008 crisis was a walk in the park compared to what will happen in the future, no government, country or nation can borrow money on debts, and then charge interest just to keep “British Banks” in business.

You have been warned – more updates soon ……………………………………………………………………………………………….

 

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