Population Concerns

We're seeing super lower fertility rates in southern Europe and eastern Europe where birth rates are 1.2 or 1.3 babies per family - which is way below replacement levels.

The Big Issue for March 1st had an article on the reducing population in western societies because of the shrinking birth rate.  The article went on to say that the solution was greater immigration, but without discussing what I see as a significant issue which is that of pension support (You knew I was over 50 didn't you? J).

The percentage of the total population who are over 65 is predicted to rise from 16% to nearly 20% in 2031 and 26.6% in 2071 Help the Aged

 The State Pension is paid from current income, and private pensions are currently invested in stocks and shares and other places.  As the proportion of retired people increases then a greater proportion of GNP will have to go on pensions, or pensions will have to be reduced.  Similarly the money currently invested will have to be disinvested to payout peoples pensions as the inflow into pension funds will be less than the outflow.  What will be the impact of this on the economy?  Supply and demand would suggest a reduction in the value of the assets as there would be less money chasing the investments, leading perhaps to a crash of pension schemes.

What can we do?  As the article suggested encouraging immigration would rebalance the proportion of people in the different age groups - alternatively start breeding!  Some without children have argued about supporting schools etc through taxation - no children = no future.

Robin Hood Tax - A Good thing?

It is also clear that such taxes could raise significant additional revenues of the order of $200bn - $400bn with minimal impact on the real economy or retail consumers.  The tax will have a highly progressive final incidence that falls mainly on the top income earners and wealth holders in society.  Report on Robin Hood Web site

When I first heard about the Robin Hood tax I was suspicious.  It sounds such a good idea and recently the Archbishop of Canterbury has written in support of it.  However, my concern was that if you raise that amount of money it has to come from somewhere - and the people it comes from aren't going to like it!  I decided to do a little research and found that the report from which the first quote came also contained:

The world’s top 1000 commercial banks have reported profits of between $700 billion and close to $1 trillion in recent years with the exception of last year when the financial crisis cut deep into these profits

So what is being proposed is to reduce banking profits by half - and we think that the banks aren't going to do anything about it?  And I'm not the only one to have thought of this: Ed West in the Telegraph and Church Mouse have raised similar concerns.

My other concern is that the motivation for this seems wrong to me.  Bankers are making so much money that most of us just gasp and someone suggests lets take some of it off them...  Well why not take some off Premiership footballers, or film stars, or business leaders?  There is a second issue behind this which to my mind may well have more merit, but seems to be getting less attention, and that is the impact that it might have in reducing the number of high turnover trades taking place in the financial markets.

Yesterday at Diocesan Synod we had a presentation on Giving for Life - the CofEs new stewardship approach.  This is rooted in a generous response to God's generosity to us, rather than, as have previous approaches, the fact that we are skint!  What is the motivation behind the Robin Hood Tax?

If it would be a good idea to reduce the short term trading in city institutions then let us debate that rather than implementing it on the back of an emotive marketing campaign about what we could do with the money raised, without looking too closely at the other impacts that it will have.  I have searched the web and failed to find anything looking at this - it is probably there - but doesn't seem to be very prominent in the current campaign.