[creak]

(Original post by scriggy)
But the faster we've cut, the deeper the recession has gotten.

Labour left a recovering economy in 2010, then the Tories came in and started their austerity program, and look where we are now.

They don't give a **** though, because even while the economy's tanking they're still achieving their aim of using the crisis to push through ideological reforms that'll bring the country more in line with their small-state, pro-privatisation agenda. Which is what austerity's really about, rather than finding the best way to get the economy back on track and paying off the bankers' debts.

[wibletg]

(Original post by The_Great_One)
It shows that we need more cuts. We haven't cut deep enough or fast enough I've been saying It for ages and look where we are now.

We need to look at PFI, I believe it's already sent one NHS Trust to the brink of bankruptcy.

[jesusandtequila]

(Original post by scriggy)
But the faster we've cut, the deeper the recession has gotten.

Labour left a recovering economy in 2010, then the Tories came in and started their austerity program, and look where we are now.

http://cdn.hm-treasury.gov.uk/budget2012_complete.pdf

Go to page 107. Are the numbers going up or down?

[jesusandtequila]

(Original post by Llamageddon)
I do have to wonder how a party that oversaw the lions share of our longest period of economic growth since records began, that ran a number of surpluses and made dramatic improvements in the nations infrastructure and public services, that negotiated reduced pensions without strikes and so on can be almost universally regarded as economic incompetents by the british public. I myself typically veer to the right on economic issues and naturally favour the conservatives (though the wing of eurosceptic climate change deniers is putting me off somewhat), but data simply doesn't support the view that the last government couldn't organise a piss-up in a brewery.

It's called a bubble. The very thing that led to the big readjustment. Now that's not to say it would have been any better with anyone else in power (since none of the mainstream parties get it, and all are trying to re-inflate the bubble now). It wasn't real growth, but a bubble caused by ridiculously cheap credit (thank you, central banking!)

[bkeevin]

(Original post by jesusandtequila)
It's called a bubble. The very thing that led to the big readjustment. Now that's not to say it would have been any better with anyone else in power (since none of the mainstream parties get it, and all are trying to re-inflate the bubble now). It wasn't real growth, but a bubble caused by ridiculously cheap credit (thank you, central banking!)

The numbers may be going up but remember so is the interest to service our debt in the budget and the wages of the bulk of the public sector/pensioners who are very low paid. The aggregate is it big cuts in various departments and the economy as a whole taking inflation into account.

The economy of course is a bubble but the new labour lot have been better stewards of it compared to their counterparts. So what according to you is real growth if that one wasn't?

[jesusandtequila]

(Original post by bkeevin)
The numbers may be going up but remember so is the interest to service our debt in the budget and the wages of the bulk of the public sector/pensioners who are very low paid. The aggregate is it big cuts in various departments and the economy as a whole taking inflation into account.

Once you account for debt interest, and inflation then current expenditure goes like this: from 10/11-11/12, it goes up 0.3%. From 11/12-12/13 (the present period) it goes up 1.3%. It drops 2.7% over the period 10/11-16/17. To blame these so-called deep cuts (when spending is increasing currently) is absolutely barmy.

The economy of course is a bubble but the new labour lot have been better stewards of it compared to their counterparts. So what according to you is real growth if that one wasn't?

Re-inflating the bubble is NOT better stewardship. Having a hangover is not best treated by swigging down more vodka. We're only in this bloody double dip because we already tried to re-inflate it once in 09/10. Of course we're going to be in a bloody big recession because we were in a huge bubble, producing all the wrong things and with huge price distortions (all thank you, central banking). It's inevitable that we have a recession, the bubble-boom caused it. Re-inflating the bubble won't stop that happening, it'll just make the pain worse later on.

Real growth is that based on voluntary trade (which creates wealth) where money is sound - that is that the interest rate (price of time) is not distorted by some central authority.

[scriggy]

(Original post by jesusandtequila)
http://cdn.hm-treasury.gov.uk/budget2012_complete.pdf

Go to page 107. Are the numbers going up or down?

Not entirely sure what you're getting at here. Those figures are forecasting that the deficit will come down, yes. However the deficit forecasts are dependent on the growth forecasts being correct, and they've been shown up today as being a joke.

Budget 2012 predicted that the economy would grow 0.8% this year, like that's going to happen now.

[jesusandtequila]

(Original post by scriggy)
Not entirely sure what you're getting at here. Those figures are forecasting that the deficit will come down, yes. However the deficit forecasts are dependent on the growth forecasts being correct, and they've been shown up today as being a joke.

Budget 2012 predicted that the economy would grow 0.8% this year, like that's going to happen now.

What I'm getting at is that these so called 'spending cuts' don't exist. Slower growth will only mean even higher spending than planned, and that's not even falling.

[scriggy]

(Original post by jesusandtequila)
What I'm getting at is that these so called 'spending cuts' don't exist. Slower growth will only mean even higher spending than planned, and that's not even falling.

So, all these 'cuts' are just holding public expenditure steady, because of inflation and such? I was not aware of this.

It could be argued though that had they not 'cut,' then we may have had positive growth and have been able to deal with the deficit that way instead, but then they'd be running the risk of the deficit getting out of control I guess...

Baah, I don't even know where I stand on this anymore.

[James82]

(Original post by Llamageddon)
I do have to wonder how a party that oversaw the lions share of our longest period of economic growth since records began, that ran a number of surpluses and made dramatic improvements in the nations infrastructure and public services, that negotiated reduced pensions without strikes and so on can be almost universally regarded as economic incompetents by the british public. I myself typically veer to the right on economic issues and naturally favour the conservatives (though the wing of eurosceptic climate change deniers is putting me off somewhat), but data simply doesn't support the view that the last government couldn't organise a piss-up in a brewery.

Umm, because history shows us that every time Labour come to power they inherit a growing economy from the Tories, every time they leave power it is because they have dicked up the economy. Regarding the strikes, I would have thought the answer to that was obvious, a Labour Government run by the unions which constantly increases public sector jobs, meaning more money for the unions is hardly likely to advocate strikes.

It's also very hard to compare this current left wing sympathising conservative party with the real conservative party of the past. I was hoping Labour would win the last election, just so the country could see how bad they would have been at clearing up their economic mess and real conservatism would have had an opportunity to return by the next election when they would have absolutely annihilated Labour.

The best thing that can happen now is for Labour to convincingly win the next election and for the conservative party to split, the left leaning side will leave to join the Lib Dems and the conservatives can get back to being conservatives meaning then they will be able to get back most of the votes they've lost to UKIP over the last few years.

[jesusandtequila]

(Original post by scriggy)
So, all these 'cuts' are just holding public expenditure steady, because of inflation and such? I was not aware of this.

It could be argued though that had they not 'cut,' then we may have had positive growth and have been able to deal with the deficit that way instead, but then they'd be running the risk of the deficit getting out of control I guess...

Baah, I don't even know where I stand on this anymore.

Pretty much, the huge % cuts you hear are cuts on previously planned increases. It's barmy!

As it is, if we look at the breakdown of GDP figures, then we see that "other than electricity & gas (boosted by cold) biggest positive contribution to GDP figure came from "government and other services" (0.3%)."

It's not government cuts causing this. It's the inevitable consequence of the 10 years of bubble-boom we had. We have to let it adjust, otherwise we just push it further and further down the line for a triple, quadruple etc. dip.

[The_Great_One]

Their is no left leaning party in the UK because we dont vote for them look at the greens or the socialist party nobody votes for them. Labour, Tory and the Lib Dems have all promised more cuts at the next election so for people voting labour that must suck.

[Foghorn Leghorn]

(Original post by Democracy)
Is it any worse than the Tories constantly going on about "the mess that Labour left this country in"? For over two years now? Seriously, you could play a drinking game at PMQs: a shot of vodka/tequila/whatever everytime DC says that in righteous indignation. You'd get pretty drunk within 30 minutes (though admittedly at a socially unacceptable time of day).

tl;dr: Politics is about point scoring. Always has been, always will be.

Exactly. Every two minutes the coalition especially the tories are banging on about "what mess labour left us in". Yeah well when are they going to clean the mess labour made like they said they would, because so far all I can see is them ****ting on the pile of crap that is already there!


#OsborneExcuses!!!!!!!

[James82]

(Original post by scriggy)
So, all these 'cuts' are just holding public expenditure steady, because of inflation and such? I was not aware of this.

It could be argued though that had they not 'cut,' then we may have had positive growth and have been able to deal with the deficit that way instead, but then they'd be running the risk of the deficit getting out of control I guess...

Baah, I don't even know where I stand on this anymore.

Public expenditure has just been diverted from public services to deficit reduction, they're spending more than Labour did, but they are spending it on paying down debt rather than public servants. It doesn't really matter that you are having to borrow more new money as long as you are paying off even more old money, especially given how low the cost of government borrowing is at the moment. If they hadn't made the cuts to public services then we most likely would have a growing economy, but also a growing deficit negating the economic growth.

[jesusandtequila]

(Original post by James82)
Public expenditure has just been diverted from public services to deficit reduction, they're spending more than Labour did, but they are spending it on paying down debt rather than public servants. It doesn't really matter that you are having to borrow more new money as long as you are paying off even more old money, especially given how low the cost of government borrowing is at the moment. If they hadn't made the cuts to public services then we most likely would have a growing economy, but also a growing deficit negating the economic growth.

Uh, what? We're not paying down debt at all. Debt is increasing. We still have a deficit. When we start running a surplus, then you can talk to me about paying down debt.

In fact, this is just a load of buzzwords strung together. What are you trying to say? Bullet points might be helpful.

[James82]

(Original post by The_Great_One)
Their is no left leaning party in the UK because we dont vote for them look at the greens or the socialist party nobody votes for them. Labour, Tory and the Lib Dems have all promised more cuts at the next election so for people voting labour that must suck.

On economic policy that has been the case for the last 50 years, even if the Tories are leaning less right than they ever have before, but in most other aspects of politics it's definitely not the case.

[James82]

(Original post by jesusandtequila)
Uh, what? We're not paying down debt at all. Debt is increasing. We still have a deficit. When we start running a surplus, then you can talk to me about paying down debt.

In fact, this is just a load of buzzwords strung together. What are you trying to say? Bullet points might be helpful.

Obviously we still have a deficit, as I implied in the first line of the post you quoted, which obviously means the debt is still increasing, but it is increasing slower than it would be without the cuts. We are still paying down debts even if we are replacing them with new larger debts, but the new debts are a lot cheaper than the old ones. Think of it as the Tories playing a massive credit card tarting game.

[jesusandtequila]

(Original post by James82)
Obviously we still have a deficit, as I implied in the first line of the post you quoted, which obviously means the debt is still increasing, but it is increasing slower than it would be without the cuts. We are still paying down debts even if we are replacing them with new larger debts, but the new debts are a lot cheaper than the old ones. Think of it as the Tories playing a massive credit card tarting game.

But that's not where the public sector current expenditure after debt interest and inflation (which is what we're talking about) is going. That's affecting the debt interest. And indeed, what they're doing (replacing expensive debt with cheaper debt) should lower the expenditure figures more than the amount they spend on services, since debt is costing less. Yet you seemed to imply the opposite before?

[Llamageddon]

(Original post by James82)
Umm, because history shows us that every time Labour come to power they inherit a growing economy from the Tories.

Yeah, everything was going swimmingly under Heath. How Wilson/ Callaghan managed to screw that one up is beyond me.

The best thing that can happen now is for Labour to convincingly win the next election and for the conservative party to split, the left leaning side will leave to join the Lib Dems and the conservatives can get back to being conservatives meaning then they will be able to get back most of the votes they've lost to UKIP over the last few years.

Err yeh mate. Having an unopposed labour majority with a fatally addled conservative opposition is going to do wonders for the right in this country.

[thegaffer91]

(Original post by bkeevin)
The fact is the cost of borrowing fell following the US being downgraded. Japan with a massive debt over 200% of their GDP is paying less than half of what we pay for their 10year bond and even witnessed a 4% growth thanks government borrowing and spending last year. Japan's credit rating is about 3 notches below AAA. Keeping this elusive AAA will not serve us one bit if our economy remains in the duldrums.

In Japan, the vast majority of government bonds are purchased domestically. With such an ageing population in Japan, the demand is very very high, hence the low borrowing costs.

America is seen as the safest of havens because, even if they don't have enough money in the coffers to pay their debts, they can quite easily print more money to pay it all off. Yes, Britain can do the same, but you saw the outrage at the high levels of inflation we have had over the past couple of years (coming down now as most people in the know predicted), so doing something like that is seen as less of an option here compared to America. The reason the yields went up was because people saw the downgrade as an opportunity to buy - it *should* mean the price falls, meaning a better deal for investors, which obviously didn't happen.