Boom and Bust Budget?

Looking at the budget out of which I seem to come out about the same, in terms of personal finances, there were a few aspects that I didn’t like that much, however I expect those who understand more about economics or the sound of underground spirits better than I do will soon correct me on.

The first is the way the VAT rise has been handled, in as much as this seems likely to cause a minnie boom at he end of this year followed by a minnie bust at the beginning of next.

In physics there is a thing called the butterfly effect and I hope it doesn’t apply with underground spirit noises.

Another is the personal allowance thing, doling out this extran money in the same amount to everyone with an income under £101,000 per year seems a bit daft really, I don’t really think it is appropriate to be giving tax breaks to people earning over £1,000 pounds a week.

The other thing I don’t like the look of is that the wrst off of the pensioners seem to be hit disproportional hard.

The things I am not sure that it addresses that well are, the people at the bottom end of the skills bracket who are only marginally better off working than being on benefit and the public sector pension burden.

Anyway as I said I am a bit out of my depth here, and with books being zero rated the VAT increase will probably be pretty much offset by the increase in personal allowance, so I come out about the same.

Here is the link to the most recent pictures http://www.michaelsbookshop.com/610/id32.htm yesterday evening in Broadstairs, a few people dressed up in Dickens, period costume, something that only occurred to me after trying to photograph the Dickens costumes is that there are quite a few marginals in Broadstairs.

By this I mean they are not wearing clothing that relates to this period of time, but it often doesn’t look as though they are wearing clothing that relates to Dickens period of time either.

This isn’t any sort of criticism of people in Broadstairs and suppose it often most describes the group I fall into.

The rest of the page is pictures of Ramsgate today.

VAT Darling

Up until this budget I had thought that the government were acting in a fairly sensible way to try and mitigate the effects of the recession and that there seemed to be some sort of cross party unified approach to getting us out of it.

Here in the bookshop the budget doesn’t really effect anything much as books don’t carry VAT, however the most expensive part of the budget in terms of what the government has borrowed on our behalf is the cut in VAT.

It did occur to me though that this will be a very difficult and expensive reduction for many retailers to implement, I reckon that the paperback fiction in the shop runs to about 15,000 titles most I believe are priced at £1.99 consider the logistics of reducing them to £1.94.

Looked at another way say I am going to buy a new computer that is £400, will it being £390 make any difference?

While in a broad sense I am in favour of doing something but the VAT cut suggests a complete misunderstanding of how retail pricing works. Much of the thing is about thresholds, i.e. trying to get it under a particular round amount.

I will give you an example of what I mean using a book off the shelf, as steam boats are very much on my mind I have chosen; Turbine Steamers of the British Isles by Nick Robins.

The book was published to sell at £11.99 obviously the publisher was getting below the £12 threshold here. I managed to buy the bin end of it 10 copies for £30 and am selling it at £4.99 to get below the £5 threshold, 12 ½ p in this equation doesn’t really get you anywhere.

I am afraid the only way that I can see that this could possibly work, is that if the government is going to borrow n thousand pounds on behalf of every family in the country for repayment in 2011, 12, 13…………., would be to send us all a cheque for whatever it is, and a letter begging us to go out and spend it.