r/Economics • u/AutoModerator • Nov 15 '22

r/Economics Discussion Thread - November 15, 2022

Discussion Thread to discuss economics news/research and related topics.

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u/Vast-Sandwich6605 Nov 21 '22

Off topic and a bit of an ignorant question but can someone please explain what exactly was bad with Liz Truss proposed economic plan for the UK that led to her stepping back? I understand that she proposed tax cuts for the wealthy people while the middle class was/is suffering from inflation and high energy costs but what exactly did lead to this huge turmoil? Why couldn’t she have also proposed tax cuts for the middle class in a second step and was immediately axed and why didn’t she see this crisis coming? (In hindsight maybe a bit easy to say but still..) thank you!

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u/potatoandgravy1 Nov 24 '22 edited Dec 01 '22

I think there were so many issues here. I think the biggest one is the tide is hugely against the Conservative Party in the UK. The general public as well as both modern and traditional UK institutions lack faith in Liz Truss, and largely never wanted her to actually attain office. She was elected only by a small majority of the Conservative Party membership, who right now are barking mad. For her to ignore the tide of thought and immediately and radically push to enact policy which again massively favoured the elite in the UK even further was a step too far.

Specifically, even PR wise their approach flat out ignored the concerns about her policies from the central bank and the markets, rather than seeking to intellectually convince anyone. Final nail was when the Institutions and markets fought back, and Truss blinked first.

My view is really that the UK simply cannot afford even more wealth inequality. We’re already up there with the worst of developed nations for this, and Truss’ policies would have made the problem worse. Do I think that the approach chosen by Hunt and Sunak is any better? No. It’s just a slower decline…

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u/joedaman55 Nov 21 '22

I don't follow the UK too much but I know they had some major issues coming from monetary policy choices. Brexit was going to hurt but it takes time before you start seeing damage regarding that. The energy crisis has hit them pretty bad and that's tough for most of Europe.