The ceaseless cycle of Christmas carols has been put away for another year, only to be replaced by another seasonal cycle with no joy, little originality and only the veneer of goodwill. If the miserable weather and post-holiday blues are not enough, the newspaper headlines will certainly drown you in the dismals!
After a blissful two weeks of virtually news-free isolation, the first headline to greet me on the doorstep on return from holiday was this from The Sunday Times; “PM in new year cash giveaway: Election pledge to raise pensions until 2020: Hints at income tax cuts for all to come.” This was followed by broadcast news that shrieked the next day’s headlines; “George Osborne targets £25 billion more in spending cuts.” It appears that the 2015 election campaign is now underway! Talk about conflicting messages! If you want evidence that politicians are more concerned with re-election than anything else, you don’t have to look any further.
If you believe that our political system is failing dismally, you are not alone. Leading thinkers like Thomas L. Friedman and Michael Mandelbaum are trying to alert us to this fact. Not only that, they are also stressing the need for urgency. In their recent book, ‘That used to be us’ they state, “Our sense of urgency also derives from the fact that our political system is not properly framing, let alone addressing, our ultimate challenge.” (P10.)
Their book is focused on the US political system, but the problems it portrays, and the fact that many of us are sleepwalking through them, are not unique to the United States; they are phenomena that are endemic throughout the developed world today. Friedman and Mandelbaum bemoan the failure to reap the dividends of “winning” the cold war, the rapid decline and the threat to the country’s “exceptional nation” standing, but the issues they describe are by no means unique to that nation. Unfortunately, US dominance of the world economy compounds the problems for the rest of us, and we therefore are as dependent on their ability to address their own problems as they are.
Standards are slipping and we are blindly letting it happen. People have got used to it. And if we don’t act to change things, they will continue to fall until our whole way of life is destroyed and becomes impossible to retrieve.
At the start of their book, ‘That Used to be Us’ Thomas L Friedman and Michael Mandelbaum give a very telling comparison of the current difference between the China and the US. They cite the example of the massive, beautiful 230,000 square meter (2.5 million square feet) Tianjin Meijiang Convention and Exhibition Centre taking only 8 months to build, and compare that with the fact it took 6 months to repair the escalators at Bethesda station on the Washington Metrorail – 2 separate escalators of 21 steps each.
If that stark comparison is not damning enough the authors complain that:-
A spokesperson for the Washington Metropolitan Transit Authority said that “the repairs were scheduled to take about six months and are on schedule. Mechanics need (my emphasis) 10-12 weeks to fix each escalator.”
One of the explanations given for this time was that it included “modernisation” because “the escalators were old and had not been kept in a good state of good repair.”
The most disturbing aspect was a commuter comment in a newspaper report that “my impression, standing on line there, is people have sort of gotten used to it.”
€2.1trillion! That is the estimated amount of tax revenues lost to the shadow economy in Europe this year, according to a recent report in European CEO Magazine.  And that is just in Europe: imagine what the global figure must be! What more do you need to know to recognise that our tax systems and the way we are governed need a serious overhaul?
The “shadow economy” is, by definition, a tacit admission of the extent to which people will go to avoid paying taxes. And when it reaches such massive proportions it becomes blatantly obvious that there is something fundamentally wrong with our tax systems and clear evidence that something needs to be done about it. Particularly at a time of economic turmoil when national debts threaten the stability of the whole global economy.
And if that isn’t enough to frighten you and convince you of the need for action, factor in the “legitimate” tax avoidance that is so endemic in the world today. This, with its consequences is what I am depicting in “The Democracy Delusion.”The shadow economy is to some extent the inevitable consequence of ordinary people reacting to what they consider to unreasonable taxes and tax rates. Yet, it no more than a reflection of what is occurring legitimately in the real economy and all this is combining to put our tax systems under enormous strain.
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