A question for Nick Clegg: What are you going to do now?

Being as Nick Clegg and I are such good friends and all, I hope he won't mind if I ask him a question.

What are you going to do now, Nick?

So far, you seem to have been leaning against borrowing to fund tax cuts. You argued yesterday that any tax cuts should be sustainable, and promoted your own package.

I presume you meant by this, the 4p income tax cut you are proposing to pay for by other tax rises.

But if you do not want more borrowing, what will your response be to any tax cuts proposed by the Chancellor next Monday.

Will you oppose them? Or will you join the Tories in calling for a lower rate of spending growth in 09-10?

Your decision really matters because it will help determine the political centre of gravity.

Will it be you and Cameron arguing that borrowing is too high, tax cuts need to be sustainable and the idea that slower spending growth is a cut is wrong? Or will it be you with the Prime Minister?

Tough choice. What are you going to do now Nick?

Comments

[Ian Greenwood]

Good Questions for Clegg.

Can I post some answers for the middle road success needed out of the Credit mess? (see also

http://timesonline.typepad.com/environment/2008/09/limits-to-growt.html?cid=129077216#comment)

which requires some patience but has interesting debate and conclusion, Here are today's comments

ENLIGHTENMENT NEED – for accountants, officials and the public.

Reassurance by Professor Bruce Denness (New Civil Engineer) Letters 16-11-08) on climate change, whether cooling or warming, is not what we need at the moment, unless the idea is to empower engineers’ thinking/innovative solutions, giving them hope and harnessing their energy into working together. What is needed is more clarity and innovation over money supply. To achieve BOTH of Professor Denness’s suggestions is possible: for slight recession (in consumerist terms and over a long period) can be compensated for by energy efficiency but it requires action NOT only by alternative supplies and waste management as he says BUT ALSO by SUPER-INSULATION. These amount to an opportunity for re-defining growth to engineer a sustainable future as has been said before. The positive way forward is to protect the floating ice which will require innovative thermodynamic thinking – essential for water resources for the reasons below – and accountants’ and government officials’ clear thinking to get funding flows more suitably directed.

Recognition must be made that the Arctic floating ice is under immediate threat and its implications - when it is gone it’s gone and SO WOULD MOUNTAIN ICE be gone! Why is this so important in its implications for money supply ?

Recent correspondence from a Fellow of the Royal Geographical Society acknowledges “overlooked” climate change – what I call the “cushioning effect” of the large area of floating Arctic ice – it has been absorbing latent heat as it melts while adding nothing to sea level rise. This is soon to end as this ice completes its melting (which appears now to be almost inevitable, given reports of another half a metre shrinkage of height ). Without unity of action by engineers and the funds to achieve solutions, mountain ice is next. But there is a way - Climate, Energy and Credit Reform:

When the mountain ice suffers SO DOES THE ECONOMY. Under accelerated melting on the Alps, Himalayas and the Rocky Mountains in the USA, river water will be seriously affected. During dry seasons, food and water shortages could be calamitous – no wonder Australians have coined the term Climate Code RED because of this drying effect on the 1950s civil engineering masterpiece, the Snowy Mountains Scheme previously giving continuous power and water. What of the USA, European and Asian river flows and hydro systems as summer heat is concentrated on the North?

Two keys are needed to solve this problem.
1. Changes in revenue gathering from the profit on false value into wealthy countries’ GDP (as imports are sold here/there at high prices). Part of this can be collected and redirected fairly in each country across the world by an Environmental Tax (VAT –like) and splitting equal dollar amounts between consumer and producer nations, allocated direct to projects. This requires a sea-change of ethical and economical understanding.

2. Redirection of false value previously allowed to banking during bouyant economic times. These can now be more clearly recognised as an imperative for global security given the super-wealth over decades and the gathering “bust”. But the immediate opportunity would be to improve bank money to about half of previous levels from the money creation process and at the same time direct some of the future proceeds from this money against the above-mentioned threat of ice melt - offsetting a VAT-like Environmental/Energy Tax which people would accept - which would also prolong fossil fuel supplies. As one correspondent says “investing long-term helps against inflation”.

So initially, investment in new forms of super-insulation is practical to avoid inflation and the money supply can be directed to do it using the private sector borrowings provided by banks. A step forward was achieved as super-insulation for walls was proven over 2 winters and several projects to retain the value of thermal mass by a factor of between 4 and 10, but it could usefully do with a subsidy to improve uptake. This avoids the need to demolish the buildings, the reconstruction of which is energy intensive.

At a detailed technological level a major benefit would be to protect against further waste of natural gas and energy (which warms the atmosphere and the sea) by utilising SUPER-INSULATION externally applied to make more effective use of thermal mass. Our full scale pilot shows about a tenth of the energy loss through walls and potentially similar savings overnight thru windows. Redirecting revenue via an Environmental Tax fairly distributed would begin a serious attack on climate change.

An offset from the banking profits on “free” money would give a tax-neutral means to avert the otherwise inevitable calamity. Interest-free central bank money would give the kick-start and fill the hole in well-secured housing mortgage money which will then also increasingly fill that hole.

Ian Greenwood 0121 449 0278 (see OPEN LETTER TO MINISTERS below and "Every town an Eco Town" on www.STEERglobal.org)

Dear Editor,

OPEN LETTER TO ED & DAVID MILIBAND & TO GORDON BROWN

FIDDLING WITH TAX RATES WILL NOT DO.

The UK/US governments may be failing to learn from the economic fiasco. Like rabbits transfixed our economists and politicians could fail to recognise the practical action needed. The Eastern economies will soon be running rings round us. Could Western nations face melt-down? Not if action is taken on the scale required.
UK/US chased after the quick buck; now all those paper profits are disappearing into a black hole. With the £ in decline action is needed even more urgently. We need to get back to WORK – more REAL Work not services. The most useful thing to help our
exchange rate would be REDUCING ENERGY WASTE and COST. This can be done quickly by using SUPER-INSULATION on the exterior of walls: for more efficient thermal mass. Here is a way to for rapid well-directed funding.

If we got back to work doing this job, real work, confidence would return. It’s simple enough. ADJUST THE FLOW OF BASE RATE CREDIT MONEY INTO THE PUBLIC PURSE to stop credit bubbles or boom/bust and enable an offset of the ENVIRONMENTAL TAX spent DIRECT TO PROJECTS with a JUST return to the producer nations even if that would require less VAT at home. Massive investment in simple technology and training can be achieved: using half the “free” commercial money, creating more bank business and a revenue stream for later climate change and energy transition necessities.

The TOOLS are at HAND to get us out of this mess. Set the target at half of 2006 credit money, get the middle income earners to borrow enough to complete the super-insulation job with a generous subsidy (filling in some of the UK hole in commercial bank-created money) CREATE enough money to get the economy KICK-STARTED but only enough to fund PRODUCTIVE WORK to reduce our ENERGY BILLS and TRANSPORTATION COSTS etc. - the NEW GOLDEN RULE. Then the Credit Money diversion and Environmental Tax funds take over.

The banking and financial services have been acting in the same way as the rip-off car industry in the 60’s and 70’s which is now virtually all foreign owned due to greed, bad communication and mismanagement. Do we wish them all to go the same way?
We LOOK to you for ACTION in the RIGHT direction.

THANKS