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Comment by avidiax | Hacker News Reader

https://web.archive.org/web/20220611231105/https://www.econo...

What's the structural problem at play here? Brexit is definitely isolating, which promotes "comparative disadvantage", i.e. doing things domestically that are more efficient to achieve through trade.

Maybe there are demographic problems? Too many elderly, not enough youth and skilled labor?

They allude to democratic inefficiencies, i.e. voting blocs that receive more than they pay, creating poor allocation and disincentive.

But all of the above don't seem to be solvable. UK won't re-enter the EU, demographics can only be tweaked by immigration, and voting blocs are part of democracy.

So what does that leave in terms of solutions?

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The likely suspect - too much voting themselves money out of the treasury. The same problem the US is facing.

With Medicaid and the child tax credit being clawed back because of the pandemic, I don’t see how that’s true.

Where do you think all that deficit spending is going?

I should say the “end” of the pandemic

Given that the government we've had for the last 12 years have been privatizing and cutting back large amounts of the state (e.g. the criminal justice system is now falling apart by many accounts) that sounds rather like a hammer-see-nail outlook.

The bedrock of the nation is really not in a good place, unless you aim to merely be better than the Italians or Spanish, there has been a large increase in the use of food banks and that kind of thing.

What we did have during the pandemic was blatant corruption wrt to the purchasing of PPE and building test and trace organizations. Billions lost, conveniently in large part to companies that don't really exist. Governments should not be in power this long, they've run out of honest people.

If the state is being cut back by large amounts, where is all the enormous increase in spending going?

To handouts and corporate welfare. Whether through incompetence, design or outright corruption, it doesn't matter.

State has been and continues to be cut, with functions moved over to (read: bought from) private providers. But because there is no real competition among them, the privatisation drive does not push for any gains in productivity. Instead of a public entity doing something, that something is now bought from a private provider with elevated profit margins.

UK governments don't encourage competition. They grant charters. In the US you would probably call these "cost plus" contracts. But because these are essential services, a more accurate description would be: this is tax farming.

In large part the last paragraph I wrote.

The way the government deal with with the private sector in this country is utterly bizarre. It's very much a buy cheap buy twice type of pattern, only the companies that get the deals typically can't deliver anything (i.e. they just pass the money on to a real company, only that means the pricing mechanism/feedback is completely broken)

The one thing common across all low growth countries is bad demographics.

Doesn’t matter whether you’re Japan or Portugal - demographics seems to doom any notion of “growth”.

> So what does that leave in terms of solutions?

https://youtu.be/ZuXzvjBYW8A

For others who won’t know what this video link is, it leads to a pretty good talk about the generational wealth gap in Britain and potential solutions to close it.

I found it very informative. Thanks for sharing!

Thanks for providing an overview that I neglected to provide! I found this video on Y-Combinator News. I thought it worthwhile to share as I've learned from it as well.

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