I genuinely don’t understand it. We had years and years of brutal public services cuts and them being ground to the bone, where’s the money gone? People around me just say “tax cuts/payoffs for billionaires” but idk if that’s verified
Military contractors mostly. “More aid to Ukraine” is usually code for “we’re giving money to the US MIC”. Also the money isn’t “saved” in that it now exists somewhere and therefore has to have gone someplace to exist there, the government simply doesn’t borrow as much for those services anymore. Probably borrows a lot more for other stuff though so in the end it doesn’t even balance out.
The money went to the budget deficit. Typically, a government takes on an amount of debt to effectively pay for today’s problems with tomorrow’s (devalued via inflation) currency, assuming that their interest rates are less than the rate of inflation. During the 2008 crisis, QE made the debt a problem for some people. Austerity measures are designed to catch up on the repayment of the debt.
The austerity measures disproportionately impacted the poorest households, while the wealthiest bore a much smaller burden. Spending cuts impacted the social security and public services the poor households rely on. The top rate of income tax was reduced, which left more money for the richest households. Quantitative easing shoved money into the financial system, which made loans easier to come by, which drove up prices of assets such as homes, which made those who owned them wealthier while those who didn’t own property are now unable to buy.
The UK can pay someone to make sure that farm shops have slate roofs, and an inspector to ensure 16 mile radius goods sold there, but won’t fund social housing or medical care. The rich get what they want, and the poor get fucked.
That’s excellent thanks
Nice write up. @[email protected]
Thanks mate 👍
During the 2008 crisis, QE made the debt a problem for some people.
I read this as “Queen Elizabeth made the debt a problem for some people” and was struggling to figure out what she had done or said in 2008 that influenced this, before I eventually realized you meant “Quantitative easing”
She didn’t help much either though.
The Sovereign Grant was some £86 million, which certainly sounds like a lot, but the reality is that heads of state are actually just really expensive no matter whether you have a republic or a monarchy. Maybe you could argue that a president could just quietly exist in the background while people expect a monarchy to be lavish and fancy, at least to a degree. There’s a lot of pomp and ceremony associated with the head of state, because they not only represent the government of a country but also serve as a cultural symbol for the nation as a whole.
For comparison, in the US, excluding the policy departments within the Executive Office, the White House Office and Executive Residence and presidential salary budget lines totalled almost $94 million in FY 2025. This does not include the cost of Secret Service protection (paid by the Department for Homeland Security) nor does it include the cost of Air Force One trips (paid by the Department of Defence). And while Brits complain about their monarch not having to pay tax, I think the fact that the American president, or at least the current one, cheats on his taxes is also a somewhat open secret.
I’m American and technically also British despite never having been there (I hold a type of second class citizenship through Hong Kong), and I honestly think £86 million is a bargain for the UK monarchy considering their cultural draw and the fact that they’re not just the head of state of the UK but a dozen other countries as well.
Now, one can argue all day about whether it’s appropriate to have a monarchy in the modern day, even if that institution were to be discharged of even theoretical political power like it is in Japan, and whether such an institution is compatible with democratic principles like the rule of law, but that’s something I’m wholly unqualified to opine about.
one can argue all day about whether it’s appropriate to have a monarchy in the modern day
That was my main point, I wasn’t really talking about how expensive or otherwise they are (although admittedly it came from a misunderstanding of QE).
I’m from the UK, and it absolutely sickens me that we still have a monarchy, any monarchy (let alone this particular one). I’m opposed to monarchy in principle, and would be even if the specifics of our monarchy weren’t so repulsive.
Appreciate the detailed post, but the cost argument is just window-dressing for me. It’s the core concept I reject. Hopefully we can get shot of them one day.
This is a really helpful answer thanks. I understand the first 2 sentences of the 2nd paragraph, can you ELI5 the rest of the paragraph?
Income tax rates go up like this (purely example) 0-20000 - 10% 20-40000 - 15 40-80000 - 20 80-100000 - 30 100-150000 - 40 150000+ 45%
If you make 75000 in this example, you’re taxed 10% on the first 20k, then 15% on the next 20k, then 20% on the remaining 15k, so 2000 + 3000 + 4500.
Lowering the top rate of income tax means that the people who earn more than whatever the limit is (150k in this example) pay less tax. Generally, the consensus is that the rates should shift to the higher income rather than the other way around.
Quantitative easing is the government buying up bonds to support their value. If everyone stops paying their mortgage, the economy tanks because the bonds that represent those mortgages go to zero. If the government promises to buy some them in spite of the zero value, the value is propped up. The people who benefit, by and large, are capitalists (those who make their money from already having lots of money ie wealthy). But it makes the cost of loaning money lower, so it becomes easier to get a loan, which combined with limited housing leads to an increase in sale prices of houses.
That’s really helpful thanks 😊
“It went to the billionaires” is the short version.
Also to prop up house/property prices in general and pension funds which is a bit wider of a group but generally still the people on the upper end of the wealth rank.
Stupid thing really is when you have an asset bubble it does crowd out other investment. It needs to burst for the good of the economy. The QE and such stopped the opportunity for
investors to learn that they should invesgovernment to force investors to invest in productive capacity rather than asset bubbles.Yes. Unfortunately the pension funds were set to have a bad time, and mutual funds and other retail investment vehicles were as well; in order to “save” the average person, QE was implemented and had a convenient side effect. But really, nobody truly knew what the reaction would be. It was all novel.
Usually, it ends up in the hands of the elite.
Otherwise they wouldn’t lobby for it.
I live in the US and I am almost 60.
I have seen so many tax cuts in my life and I have never seen spending reductions. The they does a tax cut also just spent more.
I keep wondering when will people stop buying the lie of tax cuts……
I’m almost 40 and I’ve only ever seen tax cuts for the rich. My taxes have only gone up. I’d be fine with my taxes going up if the rich people’s taxes went up too, but I pay more taxes than Amazon.
Check out “Gary’s Economics” on YouTube… he does a great job explaining these type of things
There are several dials that can be tweaked to balance the budget. A (neo)liberal is for low taxes, small government, and selfcare. So their cuts, when the governments expenses are higher then the incomes, are in public services. And they won’t put it back, because that’s against their ideology.
But why cut social care and police? Even if you say medical care is down to the individual (hard disagree) why cut the police which they use, and social care which is important for children?
Two things, firstly the one thing that needs to be avoided at all costs is raising taxes. Since this robs working and succesful people from their personal ability to take care of themselves and their families. Secondly that there needs to be a class distinction between the people who take advantage of the system and those who don’t. That is to say that in their mind society is functioning in such a way that anybody can ‘make it’ through some effort. And that those who supposedly don’t put in the effort aren’t supposed to be cuddled and given handouts, as an incentive to put in the effort as well.
There is perfectly fine education, care and protection through private parties. Just hire those. You can’t? Well I guess you aren’t trying hard enough. We can concentrate police presence in criminal neighbourhoods. We can concentrate care and education in the neighbourhoods that do function correctly.
This is their ideology I’m describing, not my own, just to be clear. Im being sarcastic.
Reality is ofcourse more nuanced than what im saying, after all the neocon ideology needs to exist in the real world and adapt to it. Which mostly seems to lead to populism.
The Tories pissed it all into the channel as far as I can tell
I don’t know about UK specifically, but to pay off the national debt is a common argument for austerity.
Most of the politicians in power over the last decade or so made their friends in private business incredibly rich. Just think of the millions of pounds spent on covid masks that were either not delivered at all or were of such poor quality that they wouldn’t offer any protection. No one went to jail for that, but plenty of MP’s got paid I’m willing to bet.
That’s where the bulk of that money went.
Pensions, benifits and servicing debt mostly.
