State of the UK

Carl, Dan and Justin discuss the absolute state of Britain.

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The UK economy has a lot of problems yeah it’s really really is struggling the sort of the depth and the scale of the problems are pretty serious when you start factoring things like investment low growth the skills Gap uh there’s quite a lot to unpack the debt the fact

That middle class Britains haven’t seen a real wage increase uh since 2008 for a decade and a half and Things Are starting to catch up with us and yeah as you can see the date at the top uh just at the end of November I I did one article quickly became two

Articles my particularly my YouTube algorithm was filled with all these videos about the econom impending economic Doom of the UK they’re all pretty similar but um yeah I left a lot on The Cutting Board as well could have could have gone to a part three actually

But um yeah it’s so you’ve broken down the keys sort of financial issues with uh with the state of the UK today then yeah that’s right uh looking at things like low growth investment debt uh Rising interest rates uh obviously the cost of living crisis uh part two looked at the housing crisis

We have and then how all of this is rebounding on public services we’ve got crumbling schools we’ve got failing uh Health Service arguably even non-existent sorry to interrupt but that is a staggering increase in public sector de isn’t it yes yeah that’s right Jesus Christ after 2008 because of the

Bailouts we it increased significantly but it’s just it’s just gone up and up I mean to be fair you could say the same thing for most G20 countries Western Europe the debt seemingly only goes One Way um but it’s it’s pretty B it’s particularly bad for the UK so the thing

The thing I Muse on this is is the Western World heading to financial collapse or did the financial collapse happen in 2008 and the body just hasn’t hit the floor yet that’s a good uh that’s a good question I mean I don’t want to be a I don’t want

To be a do merger but it is getting it keeps getting worse and ourselves as reality merg right what’s the reality of it because I mean I’m I’m no Economist just to be very very clear I don’t know anything about the economy and I can’t

Count but that looks bad yeah it is bad I mean the deficits are how do I say say this okay as long as the interest rate we pay on our debts is manageable but the problem is of course recently the last 18 months two years interest rates

Have gone up the cost of borrowing uh goes up the cost of servicing are existing debt is obviously increased and we can’t simply Kick the Can down the road by borrowing more money that’s not um Can can is getting heavier and heavier and heavier harder harder to

Kick so just as a quick thing who do we owe this money to well a lot is owned by the bank of England uh some by Foreign investors it’s a bit complex I think about 25% of our debt is uh inflation linked if I’m uh and not mistaken now that’s a problem

Because we’re in a period of high inflation so that’s also um a big structural problem too but even though um even though a lot is owned by the bank of England there’s only so many units of Pound Sterling um and our version of the bond the guilts uh that uh you know

International markets can absorb really and because of all the instability we’ve had the merry go round at number 10 we’ve had you know brexit we’ve had uh all sorts of um things referendums uh you know that’s also causing that’s also a big cause but certainly the 2008 crisis and our response to it

Is broadly speaking where it you know where it’s all began but uh because I mean there was a time where you know China and the likes would have would have been buying the debt um but increasingly they’re they’re they’re just not that interest in Western debt anymore is it because they think we’re

Not going to pay it back Notions like that yes I don’t know exactly what their reasons were they didn’t they didn’t share them but they they’ve decided to buy gold instead yeah that’s interesting good investment the problem is it’s a global uh crisis isn’t it lots of countries have problems with inflation

And things and some of these countries with the Russia Ukraine uh War leading to commodity prices particularly oil um uh and gas going up in price they’re saying ah sorry we can’t buy your pound sterling bonds your Euro bonds we’re going to you know we need to sort of get

Our own house in order now we’re Upper Creek because you know the traditional International investors are sort of looking elsewhere if you zoom out the dollar is rising in value that’s a problem for a lot of countries as well and um you know pound sterling is a bit

Further down the list isn’t it let’s be honest yes so um if if you’re going to hold a foreign currency in Asia you you might as well go for the dollar I mean not a lot of reason to hold the pound but but this is the debt and the deficit

This isn’t the complete economic picture and certainly not the uh a good there are problems we have of course we see a daily basis anything else you want to scroll down to yeah if we go down I mean I think growth is I started with growth because you know that determined so much

And it’s been at this level now for basically about two calendar year so growth in the region of Z less than a uh one percentile one percentage point so 1.2 million racists from Nigeria is less than 1% growth and uh immigration James O’Brien said that the immigration caused

The growth didn’t he he did he did where’s the growth then well just imagine how much how much further down this would be negative got so that’s what some people say yeah wor without go there we go right but the problem is we’re not growing but our population is growing

Lightly because of uh what is it like 60% is because of mass immigration and you know um their dependence that they bring and then their offsprings so you know we’ve got uh you know stagnant stagnant economy uh a growing population so that means more scarcity less goods

And services what you’ve got here is sort of stagnant headline growth but of course if the population is growing you’ve actually got declining um GDP per capita exactly shared out hi folks we’ve rolled out a new feature on the website which is the ability to pay for an

Individual piece of content so usually it’s £5 a month every month to subscribe to all of the content on the website but I appreciate there are going to be people who simply don’t want to do that they they would be interested instead in purchasing a single piece of content for

A lower amount and they’ve got a particular particular Niche that they’re interested in watching and so they don’t want every single piece of content they just want this one thing so we’ve introduced this function where you can just simply purchase the one thing for 89 which I think is about $230 at the

Current exchange rates uh and then that’s just yours forever so there’s no sort of commitment there there’s no uh rolling subscription it’s just that one thing so that’s an option now that’s on the website it’s completely live it’s completely available and uh please go

And enjoy it I was going to say I I can’t count so you’re going to have to walk me through this but if there’s x amount of one resource and then y amount of another and the why grows and these have to be shared then that surely means

The PE the people in that category get less of what has to be shared among them from that and that’s the problem yeah I mean the xaxis only goes up to to 2% so um you know it’s uh actually that’s a really good point so the axis only goes

Up to 2% which we don’t get anywhere nearby no no recomend this is the growth of the economy the other thing to bear in mind is the amount of debt is it fair to characterize this as the growth of the economy this is a snapshot of the

Economy yeah yeah sorry I’m just but the the to the total economy is about the same size as amount of debt got we got 100% debt to GDP Rao that’s right yeah and and and the and the debt is rising a lot of it is inex link but it’s rising

At you know it’s it’s stred but it’s going to be around about 4% a year so the debt is rising at 4% a year so same size as the economy and the economy is stagnating so what you’re saying is we should cash out now no what I’m what I’m

Saying is we’re in a debt spiral yes is the debt is continuing to grow and it’s just going to it’s just going to eat everything yeah effectively we kind of are in a recession from that uh perspective because the debt interest repayments are obviously going to send

Us into the into the minus aren’t they because this doesn’t factor in that this is just the the growth the only line item bigger than what we we pay on the interest is the NHS yeah and even then it’s close of course it’s the NHS of

Course it is um so uh yes I actually look at the debt to GDP ratio below that but um you know obviously inflation um okay it’s better in that it’s slower but as you point out then that just means that prices are rising slightly slower

Slightly less um now to be fair the end of 2022 it was it was you know your double digit levels it’s pretty bad but um and bear in mind that these well not only are these incredibly bad double digit levels of inflation like 11% inflation a year right now if if you

Were if you’re an investor and you invested your money at 11% per year you could be a you could be a bus driver and You’ retire very rich indeed so again I not an economist this compound right right yes because for it to say it was

11% one year for it to return to the previous price that it was it would have to be negative 11% the next year so what we are seeing is a continual rise and so when they say oh inflation is down to 4.6% yes that’s on top of the what I

Mean that must be like 100% inflation over the past if if if inflation is down to 4.6% it’s growing at 4% 4.6% on top of the sum of all of that so the sum of all that looks like it’s probably like 105 or 110% something like that so

Need really need to go into the negative to get back to where we were before this crisis started but we’ve you know we’ve always got a we’ve got a never ending uh cost of living crisis here haven’t we it was before Russia Ukraine and arguably if you want to talk about house prices

It was before covid so um you know really it’s that there’s no there’s no long-term plan for uh for this tell you what that commune in Granada is looking at just saying um yeah quite I mean over here we we produce well apparently racism and nothing and little else our main export

Yeah but but in Russia they’ve got oil reserves they’ve got Commodities they’ve got vast fields of wheat um we know over here we’re actively encouraging Farmers to get out of the business yeah that’s crazy we’re are going to regulate them out of the business or we’re going to

Incentivize them out but for some reason the British government is desperate to strip out all the agriculture which is like the one key I always said there’s two key foundations for the economy it’s Agriculture and energy you can change anything else around you need agricultural energy and what else are

They doing on energy oh well um they’re basically building um new power cables over the channel so we get frenchle yes so we Reliance on the French yeah in in 2011 the conservative livem Coalition were asked if they’re going to build nuclear power plants and this is a quote

I think it’s from Nick C he said no it’s going to take take too long it won’t be done for 10 years well 10 years later would have been nice to have had all those nuclear power plants yes it would have yeah yes now yes uh given where we

Are now nuclear power is looking a much more attractive proper he was looking like that all the time like from the very conception of nuclear power it was always looking like it sorry no you’re right yeah yeah interest rates I mean yeah obviously they’ve climbed and climb

So you know as they go up so do our debt service repayments which is uh down to is now like second on the list of government expenditures so the first graph with the debt kind of the explosion of government debt means that you know um when interest rates go up

The cost of servicing that debt becomes uh much so unlike the GDP growth chart this one doesn’t stop at 2% this one goes up to 6% yes this one yeah yeah and and the UK government just cannot afford two let alone six but that’s because this is measuring bad things yes the

Good things stops at 2% the bad thing stops at. well and also it didn’t get anywhere near that 2% as well so there was also that the problem is the Bank of England haven’t set a date for when interest rates are going to be capped

Which is a econ speak for you know when they’re going to stop they’re saying in it could be the first half of this year but then there’s always a three-month lag anyway so um and those are those are world world so my my theory that it will

Be before uh um Q3 a simple reason that the US will lead it and they need a feel-good feeling in the economy before the election so tell me about capping interest rates because I don’t know how that works I don’t know why that works well yeah interest rates will keep

Going they will keep Rising until the we reach an equilibrium and things start evening out but the the problem is is that this doesn’t happen in a vacuum you know the the bank of England um only has so much uh Power to exercise over monetary inflation these are affected by

Other things like commodity prices and you know uh overseas investors and so is this something akin to sort of putting your finger in the hole in the dam and then another comes out you have to put another finger in well it’s sort of a bait and switch I mean really the the

The money’s the inflation is coming from the money they printed yeah but they’re but they’re doing a a slight of hand and saying oh no it’s because interest rates a too low I I’ll tell you one of the one of the main leading indicators for interest rates shipping costs oh yeah so

If you got I don’t know bunch of yemenese rebels hold holding up one of the main um Shipping Lines um yeah leading indic of um inflation what what’s this one telling is total investment so yeah after uh debt interest rates cost of living we start looking at investment we start

Looking at the skills Gap and um yeah uh sort of thing so investment is an issue in the UK since really since brexit it’s sort of flatlined and we just don’t invest properly the problem is is that UK businesses don’t invest in capital Machinery technology Human Resources so

Training and whatnot um and you know this is a big this is a big structural problem in the economy because then this affects output that’s why growth is low and then this is why people don’t get uh wage increases and it’s a self perpet it’s a self reinforc is this chart

Telling me that China invests 43% of everything they make back into themselves in order to grow well yeah that’s uh that’s basically into industry and Niche markets and things like that you see we used to we used to invest a lot we were one of the highest in Europe

Uh but again I think it I think again that sort of comes back to 2008 and then after brexit a lot of confidence in the UK economy dropped and we’ve not really picked up uh since then so yeah these aren’t encouraging because I mean just

On a on a you know on a local practical basis I mean this business reinvests a lot into itself I mean the reason we have all of this now is because um from the first two years a lot of that money was reinvested back into the business to

Make it better generally that’s not the trend yeah and that is you know obviously not what Britain as a whole is doing um even even though um places that do show strong growth you know the the well China the indias the Cs the the Japanese the swedes and even the French

Even the French have got higher um investment rates than we have put me in charge of economy yeah right what we got oh dear what’s this one Justin yeah this is sort of a bit more um on investment so we’ve got public sector before um that

We’ve got uh the private sector but yeah that again here as things have gotten worse public sector investment in public um Services has gone down obviously people will recall the austerity period under Cameron in the wake of the the bailouts and things and it’s really continued um from them because if you go

Back to interest rates uh back then interest rates were more manageable they were lower well lower than we have now but instead of investing in infrastr structure schools instead of tackling some of the problems with the NHS we cut back spending we’ve got you know fewer police on the streets we’ve got we’ve

Literally got crumbling schools we might see that on part two the perforated concrete needs to be replaced in 700,000 schools and education institutions so a lot of these problems the problem is that it’s all collapsing in on itself now and so so you’re saying why we were

B borrowing billions um at a low interest rate we could have used that cheap money to um update the infrastructure would have been a good idea I mean obviously as they say you know hindsight is always uh 2020 but instead we are in the practice of

Borrowing money to keep the lights on in the NHS today so you know we we we’re borrowing to consume rather than borrowing to invest yes absolutely yeah now we’re sort of Trapped In This sort of um cycle so here yeah here’s where you see the trend line is pretty consi

Consistent up to the vote and then after that um I think investor confidence just slipped obviously the even though the pound devalued you think people might want to invest more because they’re getting more for every one Euro $1 but that didn’t really happen a lot of uh

Other things sort of play into it and um yeah so it’s really but I’m sure up to that up to that 2016 Mark I think we were sort of you know we were leading so so so my my issue with this is the way brexit was done is oh have you ever seen

That film blade where he’s got the the half human half vampire the strengths of the vampires but none of the weaknesses yeah we’re the opposite of that yeah we the weakness of the vampire did brexit is we kept all the weaknesses of the EU and we didn’t we didn’t take on any of

The strengths of being independent yeah so we basically kept all of the bad things about the EU and then and then did none of the things that we were now able to do I really think we should have just abolished corporate tax yeah I mean there’s there’s a whole bunch of things

We could have done to under we left the EU and then and then basically did nothing so I’m not surprised that the investment rate fell after brexit because we we we were trying to operate on an old model that we’re no longer part of rather than embracing something

New yeah absolutely I talk about the tax code in part two our tax code is a mess corporate tax whether it’s um vat all of it it’s it’s definitely a big problem and we need to kind of sort of address that we go to a flat rate or what we do

I I I worked in an office once where our in-house lawyer had a copy of the tax code in his office and it was just it’s a big one multiple shelves yeah absolutely and it was one book the UK text code crazy yeah I mean can we go to

That I wouldn’t mind talking about the text yeah it’s it’s part two it’s article two so it’s the next tab along actually so that’s productivity wage uh we’re not very productive either to be uh honest and that’s a big problem but of course if you’re not investing in uh technological upgrades Capital Machinery

That’s going to impact productivity and if your company’s not as productive you know it’s uh you know that’s going to affect wages and and it fell off Trend in 2008 again and for some reason we won’t be productive in 2020 I mean that that I think is

Probably going to be a fairly Universal yes yeah isue so I’m not too worried about that yeah um oh yeah this one household income yeah so again flat Flatline even even left leaning sources even the guardian says we haven’t had a real wage increase in a decade and a half and some people

Say it’s about 11,000 a year and and bear in mind these are official numbers so actually people have had a pay cut in the last 15 years and as I always say the um CPI the Consumer Price Index the price of basic goods and services has gone up about 47

A half% in that time so you can see what’s we’re getting hit from both ends uh really um put that in the thing so yeah wage growth is um pretty low and a lot of people I think on the ground level I know a lot of people in Tech and

Things and they’re like you know British companies just don’t you know they they don’t pay as much you know you’re underpaid you’re overworked uh they get better offers from you know overseas and things and uh you know that’s uh that’s also so I don’t really mind when we’re falling behind like Central Europe

Because of course they’re a bit more liberated than we are on getting on and doing things and they they they’ve taken on less of the the ridiculous policies than us but I really don’t like seeing that we’re behind France and all of these charts yeah that bothers me behind

Them on both racism and wage growth yes but of course wage growth you got to talk about again Mass immigration because that’s putting downward pressure on wages as well and um you know so yeah debt interest repayments are second that’s what I saying about NHS yeah just insane so I think the

Operational budget of the NHS is something like 137 billion it’s really really close at this point so is this I think housing benefit is third that’s how much we pay sorry the UK debt interest payments are almost one NHS per year yes godamn yeah almost yeah 123 billion

Just being flushed down do the um this is why don’t have part two so this is a few more housing mortgages the tax code um so let’s talk about the taxes then I hate taxes go up there’s there’s actually a couple of funny anecdotes there just to so

Yeah um obviously there’s issues to do with council tax yeah is one thing vat is kind of a little bit all over the place um with Goods being priced differently there’s our corporate tax rate which is currently 25% which is just too high it’s just way too high and

So many countries have it lower and companies are so on this this this drives me absolutely mental right corporate tax a a corporation isn’t a person that shouldn’t pay taxes right it’s just a collection of people themselves should pay taxes raise people raise tax on the individual if you want

That money right philosophically it’s messed up but secondly strategically we’re going to leave the European Union okay well how about we look at the say Britain’s nearest neighbor that has it’s a modern first world economy they all speak English what’s their corporation tax oh 12.5% well they’re under big pressure to

Raise it from the EU talking about Ireland we are of course talking about Ireland which is why if you use YouTube or whatever the headquarters are in Ireland all of the American companies headquarter in Ireland and then just operate in the UK okay so they’re deliberately undercutting us and their

Their economy is of course skyrocketing because of this just very small tactical thing that they’ve done and we could just be like okay we’re going to go 6.5% now well we could have gone Z I would have G I would have Z we could have done

That the day after brexit we could have just said without in um Corporation taxes down to zero and there would have been a Quee of companies I know coming here it is insufferable bringing all the jobs with them it is absolutely insufferable but for some reason we’re

Trapped in this old Paradigm and a bit like the NHS they don’t want to they don’t want to address these problems because even the shortterm leveling up uh is going to lead to a fall in tax revenue and if you go to the first five seven minutes of our conversation we

Looking at article one we can’t afford that because we’ve already got uh unbelievable debt unbelievable debt and uh deficit and whatnot to scroll down a bit this is I mean VA is quite funny um you know I think in 2022 I think we spent almost a million pounds on a court

Case deciding whether a Jaffer cake was a biscuit with a bit of chocolate on it or a cake with chocolate on it because that affects its uh vatat uh vat bracket and it’s just and the same thing for gingerbread man with a chocolate smile uh well if they’ve got the chocolate

Smile that means they need to be at 0.25% and it’s like I hate to say I hate to be that person but I’m sure we’re the only country that can produce these kinds of mind boggly it’s all starting to sound like a aand novel at this point

Yeah absolutely the end of the article really looks at how this is impacting on uh policing Law Enforcement Education um Health Care infrastructure and whatnot and uh I’ve got to be honest guys at this point I just had to end the article cuz my head was about to yeah

Explode the um I mean I mean this is so I mean I I I saw what happened over Co and just thought yeah I’m buying private medical oh yeah absolutely it’s it’s almost because it’s it’s de facto closed off to you and then you’re left with uh private only private options something

Like 15% of the entire country is currently on an NHS waiting list yeah it’s it’s oh yeah right yeah like that is crazy is it it’s mad yeah it’s absolutely mad how is that sustainable it’s not and it’s not going down yeah it’s just okay that’s Bonkers fair enough private healthcare premiums are

Going to go up in price cuz they they’re going to know that a lot of people are saying just what Dan said a minute ago and they’re going to be looking at whatever is it berer and other things but uh then the market will demand a lot of this yeah obviously poverty

Destitution Food Bank usage is at an all time uh I and oh you you try and measure the Lost investment so it be an extra 31 and invested into industry yeah scroll up a little bit what was the heading for that um oh I think that was a bit yeah that

Was a bit on brexit look hands up I was for brexit at the time I think we were sold we were sold a lie to be honest that’s that’s I didn’t want oh no I disagree with that go go into I I I don’t think the brexit the problem the

Problem was is that we didn’t take advantage of any of the things that it offered us sure yeah sure we still could we could tomorrow yeah exactly the conservatives have got the physical power to do everything that would work in our advantage yeah I just put a little bit on brexit immigration because

Obviously those are quite large topics but to sort of um get a bit of um perspective Mass immigration gets a mention yeah towards uh the end R radical Liberation had a good definition of U Mass immigration which I quite like which is mass immigration is any level of immigration that exceeds the house

Building of a Nation that’s a good one and so what are we so we’re at 200,000 a year 200 no more no no we build 200,000 houses oh right I was going to say yeah oh yeah yeah our immigration way so so so basically our immigration rates is

About three times net immigration about three times the level of house building the the problem with that is that house building is based on the amount of immigration that we’re having the reason we build 200,000 houses a year is because of the number of people coming

In so if we had say 5,000 people coming in every year then we wouldn’t build 200,000 houses and a lot of the quality of these new builds are just not they’re appalling yeah they’re for individuals they’re not they’re not for families um so yeah I mean it’s um there’s a lot uh

Good things I mean actually did a podcast with radical Liberation precisely on these articles and we looked at these um this is quite good actually this is a screen cap from a YouTuber called the wandering turnip he basically goes across towns and cities in the UK and he sort of documents uh

The decline on the ground level particularly with property and uh industry and we can do that in Swindon we can just walk through exact noticed yeah I did yeah um but um people don’t believe me but like 10 years ago swind was actually quite nice that was heaving

Down the whole country was actually yeah you know I said this San in the notes so you’re um you did a talk with Peter Whittle round about the end of the summer it was quite downbeat but you know we all are and that that’s what kind of uh inadvertently inspired these

Articles Carl so thanks I appreciate the work but know you see the decline in real time uh you see it around you and it’s not it’s not nice because it doesn’t have to be like this it didn’t used to be like this because of our traitorous Elites uh here we are you

Know we need to clear them out if you appreciated that episode from the podcast of the Lotus Eaters you can go to lotus.com to get access to all the premium content that’s on the site such as the brok anomic series this episode on behavioral economics you like to find

Out what else being put out you can follow on Twitter at lusers on Twitter thank you and Goodbye