plonkee money an english-er's thoughts on personal finance

November 25, 2008

what Obama could learn from Britain

Filed under: Uncategorized — plonkee @ 10:40 pm

Well, a couple of people are interested to know what I think Barack Obama can learn from the British economic situation.

Let’s start by saying that I am an out and out liberal, in both the British and American senses. The chances of me voting for the Conservative party are slim, and (were I given the opportunity) for the Republicans, non-existent. I also vote primarily on social issues rather than economic ones – taxes are less important to me than civil liberties and freedoms.

I should probably also point out that, as evidenced by the current recession, the British *way of doing things* is far from perfect. Our economy is heavily dependant on financial services so this recession is predicted to hit us hard.

On the other hand, there are a few things that we do differently to the Yanks, where I think they could learn a thing or two.

healthcare

Oooh, the big taboo issue amongst personal finance bloggers. My friend David at My Two Dollars has seriously been vilified for his wish – based on his own experiences – for healthcare reform. I don’t agree with him about everything, but I think he’s quite right to point out that if you have a socialized fire service then – ideologically speaking – a socialized health care system is no worse.

Now, I’m not exactly proposing that Obama institute a version of the NHS. But, the issue that I have with American healthcare is that it’s anti-entrepreneurs. The question that comes up most when an American says that they are planning to become self-employed is “What about health insurance?”. Do you know what? The most common answer is that their spouse has good health insurance. If you can’t see why that’s not good enough…

The great thing about the British system is that in that sense, healthcare is a non-issue. It should not be prohibitively expensive to get healthcare if you are self-employed. How do businesses start? They start small, usually by someone taking a risk with their own money. I don’t know where taking a risk with your health should also be coming in to it.

tax

In the UK there’s an organisation called the Campaign for Plain English. There mission is for information to be provided clearly, and in a way that most people will understand. As a result of their work, all government departments have guidance and require that public documents are written in plain English.

Now, what does this have to do with taxes? Well, I’ll just ask if you’ve ever had to fill in an American tax return? I have.

Several years ago I spent a summer as a J1 exchange visa student working in North Carolina. In order to get back the taxes I was owed, I had to fill in a 1040EZ NR. It’s a good job that I pronounce “Z” as “zed” because I wouldn’t have described it as particularly easy. And I do know that it’s the easiest one.

Having the tax stuff easier to understand would, on average, save people money. If it was easier to understand, more people would be able to complete their tax returns without paid assistance. They would also be more likely to file the right taxes and earlier, saving potential penaties.

Maybe in the great scheme of things, this is not all that big a money saver. But I’ve seen what’s happened over here. When you make government documents easier to understand, people feel empowered – it’s almost like the government serves the people rather than the other way round.

but, don’t do this…

Well, we don’t do it as much as we used to, but the British government has had a terrible habit of buying up failing companies – particularly car manufacturers – and then not performing miracles on their balance sheets. I’d advise against anyone else doing this either.

Sure, a well managed decline is better than a sudden bankruptcy but what on earth makes anyone think that a bunch of politicians are good at interfering in stuff that they don’t know anything about?

Apparently 3m Americans are indirectly employed by the big three *auto manufacturers* – about 1% of the population. No matter what Obama or anyone else does, I bet this proportion is going to decline. Any money would probably be better spent helping people re-skill themselves than in propping up failing companies.

remaining unsaid…

As I said earlier, I vote on social rather than economic issues.But I was asked to write about economic issues, and so I have.

I’m a values voter and I value non-discrimination, ending poverty, promoting peace, preventing torture and not wrecking the entire planet for future generations. In some of those areas, I think the Americans really could learn a little from the British.

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