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    tomder55's Avatar
    tomder55 Posts: 1,742, Reputation: 344
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    #1

    Sep 16, 2022, 04:36 AM
    Liz Truss is no conservative
    She was touted as the most conservative PM since Maggie Thatcher.

    So why is one of her first acts then to put price controls on energy ? That is far from a conservative solution.

    Liz Truss to freeze energy bills at 2,500 a year average, funded by borrowing | UK cost of living crisis | The Guardian

    Liz Truss energy plan: 1,000 a year off bills as Prime Minister announces ‘extraordinary measures’ (yahoo.com)

    Extraordinary challenges call for extraordinary measures, ensuring that the United Kingdom is never in this situation again

    Phrases like this are commonly used when pols plan to implement bad socialist policies that usually are paid for by taxes aka wealth redistribution. In this case they will pay utility companies to keep prices down .The cost estimated to be over $120 billion to the Brit taxpayers .

    What we call inflation the Brits call cost of living . It is up double digits and energy price is the alleged culprit. Not so fast . Before Russia's invasion of Ukraine, the CPI in the UK was already 6 percent, The war brought the # up . But excluding energy ;the CPI would still be up 7% . Fix the energy prices and the core inflation is still unacceptable .

    As with the US ;the reason there is inflation is due to covid stimulus monopoly pounds chasing too few products . It is a demand fueled inflation . That included such things as subsidized wages of furloughed workers ;other income support programs, paid sick leave, massive expansions of NHS funding.They even went so far as to cover the cost of some restaurant meals .

    'Eat out to help out' offer contributed to UK second COVID wave: study | Reuters

    All this paid for by the devaluation of the pound by the Bank of England.

    As in the US ,the Brit is paying the price of do good /feel good /good intention socialism for the unforced error of dictatorial covid mandates .

    A conservative solution to the energy problem that she apparently will also embrace eventually (at least she pays lip service to it ) is to get out of the way of energy development .
    Curlyben's Avatar
    Curlyben Posts: 18,509, Reputation: 1860
    BossMan
     
    #2

    Sep 16, 2022, 10:48 AM
    Hi tomder,
    Interesting that you quote the energy price controls she's instigated.
    The UK energy market is currently completely broken and running away with vast price inflation.
    The average households bill has more than doubled over the last 12 months and was set to double again over the next 6 !!!
    This is unsupportable and needed action, even well off households were feeling the pinch from this ludicrous situation.

    The rest of your piece puts the blame on Covid stimulation, really not true and clearly a partisan take on the matters in hand.
    The biggest issue in play here is Russian aggression in Ukraine that has made gas supplies unstable, with all the knock on effects that has.
    jlisenbe's Avatar
    jlisenbe Posts: 4,478, Reputation: 156
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    #3

    Sep 16, 2022, 11:52 AM
    Key phrase is "funded by borrowing". It's the go-to play for our current crop of cowardly pols, and we foolish voters stand by and watch. Note that it's not just borrowing, but "increased borrowing". So you have a deficit at present, and now you will have an even larger deficit. "Scheme" is a pretty good descriptor.

    In her first big act as prime minister, Truss said the government would fund the scheme to reduce the unit cost of energy through increased borrowing.
    tomder55's Avatar
    tomder55 Posts: 1,742, Reputation: 344
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    #4

    Sep 16, 2022, 04:50 PM
    Ben artificial government manipulation of prices is a recipe for scarcity . We in the US tried price controls in the 1970s and that resulted twice in long gas lines and other nonsense like odd and even day purchases .

    Great Britian fell into the green trap and shut down it's own production Price controls is a disincentive for producers to provide more energy.
    tomder55's Avatar
    tomder55 Posts: 1,742, Reputation: 344
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    #5

    Sep 17, 2022, 04:26 AM
    Inflation happens when either supply or demand are distorted (or the currency is distorted by government policy) . Yes the Ukraine war is playing a role on the supply side. But as I mentioned ;Great Britain was experiencing unacceptable inflation before the war.

    My point is that these government manipulations are a major cause of inflation. What would've happened if instead of putting windmills up in the sea Britain instead redoubled it's drilling ? Energy security is national security and your government was asleep at the wheel . Your government caused dependency on Russia . That was a choice you made .

    Price controls distort the market because they effectively increases demand at a time when supply is short . The idea that taxpayers have to pay incentives to the suppliers in terms of deflated currency further distorts the market .

    I have no good news for you. For the immediate future the solution would come too late which is to reverse crazy policies that rely on foreign nations for your energy security . Instead your should have an all hands on deck approach to energy self sufficiency.

    That is also my solution for America's energy . Our price is too high and is being artificially manipulated by Clueless emptying our strategic oil reserve onto the market . Our officials have done everything possible to kneecap our energy self sufficiency .
    tomder55's Avatar
    tomder55 Posts: 1,742, Reputation: 344
    Ultra Member
     
    #6

    Oct 21, 2022, 03:15 AM
    Now that the Tories have ousted their mistake ;will Boris Johnson return like Cincinnatus to save the party and the nation from itself ?

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