Joined: Jul 31 2003 Posts: 36786 Location: Leafy Worcester, home of the Black Pear
Anakin Skywalker wrote:No one can be THAT thick surely?
Have you checked out his educational achievements and relevant experience for the job? Laughable. And remember that this is the guy who was saying that we should be emulating the Irish economic model just before it sank without trace.
Mind you, my personal opinion is that both of your options apply.
Hold on to me baby, his bony hands will do you no harm It said in the cards, we lost our souls to the Nameless One
Chris28 wrote:A private (if regulated) industry bailed out by the public purse. So, the cause of the increase to the "lower" deficit, rather than other "ludicrous" public spending?
How many other private companies have been bailed out by government/the public? How many haven't?
And people wonder why bankers are hated.
Just the same as the car industry, British Steel, etc pre-Thatcher.
The big banks had to be bailed out, sadly. However, that was no excuse for not winding up the likes of Northern Rock. The government should split (not just ring-fence) retail and investment banking. Mortgage lending should be more tightly regulateed - already we're creeping back to high LTV, which is ridiculous.
Mintball wrote:In 2008-09, the deficit was lower than it had been since before 1979.
That is a fact.
Thats an exaggeration but you are correct that what the Tories often tell us that Labour made the deficit the worst its ever been etc, is wrong. The figure usually used as the 'deficit' is net borrowing, which is the second column on the table below (taken from the HM Treasury pocket databank: http://www.hm-treasury.gov.uk/d/pdb.pdf). Although the column heading is "net borrowing" it is, for simplicity's sake, written as a 'net surplus' so a negative figure indicates borrowing and a positive figure indicates surplus - otherwise its misleading to the reader. This is just government revenue minus government expenditure. The data here only goes back to John Major's day but you can see that the deficit was larger through Major's era than it was until the end of 2007/08, it only rose above that when we fell into recession in 2008/09. So Major's Tory government was borrowing more as a percentage of GDP than Blair's Labour government ever did, and than Brown's government did till we fell into recession.
The other relevant figure here is the first column, "current budget" which is government revenue minus government spending on 'current spend' rather than 'capital spend', the difference being current spend is stuff like public sector wages, capital spend is costs of investment in infrastructure. This is relevant because it gives a guide as to the sustainability of the deficit. If you have a high deficit on current budget then it's unsustainable. If you have a balanced current budget and a high net borrowing figure that means you are spending more than you are receiving at the moment on capital projects, but once those capital projects are completed, the costs are done with and they should start to yield revenues in the future by increasing GDP and tax revenues (eg building roads, schools etc should improve the productive capacity of the economy).
Mintball wrote:In 2008-09, the deficit was lower than it had been since before 1979.
That is a fact.
Thats an exaggeration but you are correct that what the Tories often tell us that Labour made the deficit the worst its ever been etc, is wrong. The figure usually used as the 'deficit' is net borrowing, which is the second column on the table below (taken from the HM Treasury pocket databank: http://www.hm-treasury.gov.uk/d/pdb.pdf). Although the column heading is "net borrowing" it is, for simplicity's sake, written as a 'net surplus' so a negative figure indicates borrowing and a positive figure indicates surplus - otherwise its misleading to the reader. This is just government revenue minus government expenditure. The data here only goes back to John Major's day but you can see that the deficit was larger through Major's era than it was until the end of 2007/08, it only rose above that when we fell into recession in 2008/09. So Major's Tory government was borrowing more as a percentage of GDP than Blair's Labour government ever did, and than Brown's government did till we fell into recession.
The other relevant figure here is the first column, "current budget" which is government revenue minus government spending on 'current spend' rather than 'capital spend', the difference being current spend is stuff like public sector wages, capital spend is costs of investment in infrastructure. This is relevant because it gives a guide as to the sustainability of the deficit. If you have a high deficit on current budget then it's unsustainable. If you have a balanced current budget and a high net borrowing figure that means you are spending more than you are receiving at the moment on capital projects, but once those capital projects are completed, the costs are done with and they should start to yield revenues in the future by increasing GDP and tax revenues (eg building roads, schools etc should improve the productive capacity of the economy).
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As I see it to cut the unsustainable deficit and still growing debt (which HMG are currently failing to do, despite being their flagship policy) there is a combination of options:
- raise taxes - raise tax take through economic growth - cuy government spending
How would you go about it and why?
I'm not saying there should be no cuts. But not on the scale that Osbourne has introduced them. Darling's budget -bring down the deficit in an orderly fashion without too much damage. The problem the Tories have is that their measures have nothing to do with economics and everything to do with politics. The idea was to get the pain over early - then in 2014, a few tax cuts, a bit of feel good then an election in 2015. The prescription as administeed by Nigel Lawson. The fly in the oinment is that Osbourne was counting upon the Europeans to pull his chestnuts out of the fire - his solution would have worked if everyone else wasn't trying the same solution at the same time he was. Brown tried to get the rest of the world to agree to gradual deflation. But he failed. Brown was good at the policy but bad at the politics. The popluar wisdom is Labour caused the deficit and as far as it goes it's true because they were in power when the recession occurred. But the recession shrank the GDP and with it tax receipts, thus causing the deficit. Our public deficit has been higher in the past without all this panicking, but Clegg etc needed a fig leaf to cover reneging on their voters and the deficit was it. Cameron and Osbourne needed no fig leaf, they'd have cut regardless because that's what Tories do. Shrink the state. That's what they believe in. But the deficit gave them the ideal opportunity. Problem is, it aint working.
Joined: May 25 2002 Posts: 37704 Location: Zummerzet, where the zoider apples grow
Anakin Skywalker wrote:I only managed D in maths and an E in economics and I still find it pretty obvious
That's where Gideon failed at school then, he couldn't grasp economics
The older I get, the better I was
Advice is what we seek when we already know the answer - but wish we didn't
I'd rather have a full bottle in front of me than a full-frontal lobotomy ------------------------------------------------------------------------------------------------------------ kirkstaller wrote: "All DNA shows is that we have a common creator."
cod'ead wrote: "I have just snotted weissbier all over my keyboard & screen"
------------------------------------------------------------------------------------------------------------ "No amount of cajolery, and no attempts at ethical or social seduction, can eradicate from my heart a deep burning hatred for the Tory Party. So far as I am concerned they are lower than vermin." - Aneurin Bevan
Advice is what we seek when we already know the answer - but wish we didn't
I'd rather have a full bottle in front of me than a full-frontal lobotomy ------------------------------------------------------------------------------------------------------------ kirkstaller wrote: "All DNA shows is that we have a common creator."
cod'ead wrote: "I have just snotted weissbier all over my keyboard & screen"
------------------------------------------------------------------------------------------------------------ "No amount of cajolery, and no attempts at ethical or social seduction, can eradicate from my heart a deep burning hatred for the Tory Party. So far as I am concerned they are lower than vermin." - Aneurin Bevan
Last edited by cod'ead on Thu Apr 26, 2012 9:34 pm, edited 1 time in total.
The Chancellor doesn't need to be an economics graduate if he has the right people around him, however Osborne has surrounded himself with a cabal of 20something year old socialites from upper class backgrounds that are his 'special advisors':
There's no way these kids who have no real lifetime experience of the real world are the best and most experienced people for a job at this level, they have just networked their way into jobs which will look great on their CV and are totally out of their depth directing a country's economic policy in such difficult circumstances.
The Chancellor doesn't need to be an economics graduate if he has the right people around him, however Osborne has surrounded himself with a cabal of 20something year old socialites from upper class backgrounds that are his 'special advisors':
There's no way these kids who have no real lifetime experience of the real world are the best and most experienced people for a job at this level, they have just networked their way into jobs which will look great on their CV and are totally out of their depth directing a country's economic policy in such difficult circumstances.
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