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Why are so many people against cuts when... watch

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    (Original post by Fynch101)
    What the **** are you talking about? You don't get this at all.

    Wrong. If you had a deficit of £140bn, debt is at a minimum of £140bn. The deficit is part of the debt.

    That scenario is bull****, even another labour government couldn't **** it up that much. No debt then £43bn deficit - would never happen.

    The £43bn of debt doesn't come from the £140bn deficit, it comes from the £800bn deficit, of which £140bn is the current deficit.

    tl;dr: stop talking about this as if you have a clue whats going on. Study economics or finance before you study politics. Its so much more useful.
    I take it you didn't read the third line?

    'If you had no debt, by definition you couldn't have a deficit as if you did then youd be in debt.'

    Thats exactly what you've said.

    So if the UK had no debt, how would the Govt have £43bn more than today to spend? It would have the same tax revenue, £43bn less to spend on debt repayment but would have £140bn less coming in from the money markets.
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    (Original post by Quady)
    I take it you didn't read the third line?

    'If you had no debt, by definition you couldn't have a deficit as if you did then youd be in debt.'

    Thats exactly what you've said.

    So if the UK had no debt, how would the Govt have £43bn more than today to spend? It would have the same tax revenue, £43bn less to spend on debt repayment but would have £140bn less coming in from the money markets.
    That definitely isn't what I said, it definitely is what you said.

    Who gives a **** about "if?" especially with such a stupid scenario. What is the point you are trying to make here?

    No thats completely wrong. If the government had no debt and a deficit of around £140bn, the interest on the debt would be approximately £7bn I think.

    If we are talking about a one-year timeframe, deficit = debt. So therefore the point stands fine.
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    (Original post by T.I.)
    Which part of Cheshire are you from? e.g. North, south, etc. Dont want an actual place name or anything.
    mid =) literally the middle, lol, its also the middle of nowhere which isn't so great, my local towns pretty rubbish, unless you're a fan of charity shops and cafe's lol, though my local train station you can get to chester, manchester and altrincham which improves the situation, especially from a shopping perspective!
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    Media scaremongering at its very worst.

    The £1tn figure includes £200bn of quantitative easing (money that was printed by the Bank of England) and the total sum of savers' money guarenteed by the government in the event that more banks should go bust (£50,000 per saver IIRC) which they probably never will.

    Like I said, the nationalisation of the banks only cost £300bn.
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    (Original post by MagicNMedicine)
    Well think about what determines prices. Say you were selling an old car, three people put in bids for it, £1000, £1200 and £1300. You're going to sell it for £1300. Now lets say the total amount of money in the economy had doubled overnight and everybody just had twice as much as they had before. So now those same people are doubly cashed up they will big £2000, £2400 and £2600. You aren't going to sell it for £1300 now you will sell it for £2600. The guy who would have bid £1300 yesterday, maybe he was willing to offer you 5% of his total wealth and thats what £1300 was. But if he has double the cash then if he offers you 5% of his total wealth thats now £2600. This is what happens if the amount of goods is unchanged but the money supply is higher, it just means people are willing to pay more.

    The same process works in shops as well, even though they don't directly work on auctions, if shops realise that people have more money in their pockets, but they don't have more goods to sell, they will have to put up the prices, otherwise if they kept everything the same price, there would be shortages of supply compared to demand. Can you imagine if the money supply suddenly doubled, and Armani kept the prices of their jackets the same, every chav would be down the Armani store waving wads of cash, buy up all the jackets, they'd get a new delivery, and they'd sell out again the next day, and then the managers would actually realise, hmm something's not right here, we could be making more money on these, if everyone's so able to pay, put the prices up.

    If the government tried to impose price controls then what would happen is you would get shortages. The price mechanism is what regulates supply and demand so that there aren't shortages (ie more people wanting to buy something than there is supply of it). If everybody suddenly had more money in their pockets, and hence more ability to spend, and there wasn't an increase in goods, then it would just be first come first served at the shops and when it sells out, tough.
    I'm not saying I'm an expert now but your explanation has certainly helped a little bit! I think I get it mostly now Thank you so much! I always always wanted to know the answer but nobody ever explained it in a way I could understand!
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    (Original post by Fynch101)
    That definitely isn't what I said, it definitely is what you said.

    Who gives a **** about "if?" especially with such a stupid scenario. What is the point you are trying to make here?

    No thats completely wrong. If the government had no debt and a deficit of around £140bn, the interest on the debt would be approximately £7bn I think.

    If we are talking about a one-year timeframe, deficit = debt. So therefore the point stands fine.
    If you run a Govt with zero debt, you can't have a deficit so why do you keep saying there would be a deficit?
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    (Original post by Quady)
    If you run a Govt with zero debt, you can't have a deficit so why do you keep saying there would be a deficit?
    You came up with the "zero debt" idea, I merely approached it properly, I'm not getting into the debt and deficit difference which you clearly don't understand, despite having it explained to you about 5 ****ing times.

    You cannot run a government with zero debt, it is so unlikely - impossible in our country I dare say as the government is always issuing bonds to access money quickly. So this whole idea doesn't make any sense. I'll ask you again, where are you going with this point?
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    (Original post by Bookmark)
    Media scaremongering at its very worst.

    The £1tn figure includes £200bn of quantitative easing (money that was printed by the Bank of England) and the total sum of savers' money guarenteed by the government in the event that more banks should go bust (£50,000 per saver IIRC) which they probably never will.

    Like I said, the nationalisation of the banks only cost £300bn.
    You do realise QE doesn't actually involve printing new money, it's asset buying in exchange for electronic credit..

    I'd call nationalisation bar Northern Rock a value-judgement.

    Can you cite the source which breaks down the £1tn figure?
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    (Original post by GwrxVurfer)
    Correct - Printing money to excess causes inflation. That is why we need independent parliamentary regulation of the monetary system, to ensure that bankers don't simply print too much money, or alternatively reduce the overall supply too much.
    Well you said it didn't. You can't just change your tone now!
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    (Original post by wilson_smith)
    You do realise QE doesn't actually involve printing new money, it's asset buying in exchange for electronic credit..
    Yes, of course I know that. I didn't expect you to.

    I'd call nationalisation bar Northern Rock a value-judgement.

    Can you cite the source which breaks down the £1tn figure?
    http://news.bbc.co.uk/1/hi/business/8249411.stm

    Scroll down to 'Breakdown of UK bail-out' and click next.
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    (Original post by Fynch101)
    You came up with the "zero debt" idea, I merely approached it properly, I'm not getting into the debt and deficit difference which you clearly don't understand, despite having it explained to you about 5 ****ing times.

    You cannot run a government with zero debt, it is so unlikely - impossible in our country I dare say as the government is always issuing bonds to access money quickly. So this whole idea doesn't make any sense. I'll ask you again, where are you going with this point?
    You cannot run a government with zero debt, it is so unlikely - impossible in our country I dare say as the government is always issuing bonds to access money quickly. So this whole idea doesn't make any sense. I'll ask you again, where are you going with this point?

    Yes you can.
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    (Original post by Fynch101)
    You came up with the "zero debt" idea, I merely approached it properly, I'm not getting into the debt and deficit difference which you clearly don't understand, despite having it explained to you about 5 ****ing times.

    You cannot run a government with zero debt, it is so unlikely - impossible in our country I dare say as the government is always issuing bonds to access money quickly. So this whole idea doesn't make any sense. I'll ask you again, where are you going with this point?
    No, its the OP's idea not mine, I was challenging them on it and then you challenged me.

    I think we are in violent agreement, but you can't seem to see I'd arguing against the OP but pointing out the impact of what they are saying.

    If we didn't pay debt interest (and by implication didn't have any debt) then we couldn't increase the NHS budget, if anything i'd have to be reduced as there couldn't be a deficit to fund it.
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    (Original post by RDL445)
    The NHS budget could be increased by 50%
    Or if we follow Andrew Lansley's NHS reforms we could just sell it off...

    http://www.youtube.com/watch?v=Dl1jPqqTdNo
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    I wouldn't say the cuts are a good or bad things because I know in some way & by doing some Economic analysis it is of benefit to the economy, maybe not in the short run but certainly in the long run.

    I have to say though, that the speech from the Chancellor of Exchequer really pissed a lot of people off especially when he quoted 'We are all in this together'. I mean he personally has an estimated fortune of around £4 million and still has the courtesy to say something like that to the public with mostly working class statuses. Is that meant to make them feel better or something? He deserves one of this for even mentioning that :spank:

    For me personally, i think the cuts are reasonable but it's just too sudden for people to really cope with which is why most people are not that impressed with it. All in all, I think it would be of benefit to us all in a few years time.
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    There's very much a 'not in my back yard' attitude to austerity measures in this country. No thanks sir, I think it'd be better for the whole country if you excuse me and the services I personally use from these cuts.

    I've never embarked on an anti-private sector crusade, but it interesting to watch the reactions of businesses (especially bigger ones). Taking the new figures on fuel to make threats (shocker, isn't it?) and to pocket the difference in profit. Business loan? 7% interest thanks, we'll just sweep that 0.5% Bank of England base rate under the rug.

    I'm not overly angry as such, and I can understand (on the most part) where these organisations are coming from, but I'm just a little frustrated at this Catch-22 recovery setup.
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    (Original post by T.I.)
    You cannot run a government with zero debt, it is so unlikely - impossible in our country I dare say as the government is always issuing bonds to access money quickly. So this whole idea doesn't make any sense. I'll ask you again, where are you going with this point?

    Yes you can.
    Not in a realistic scenario you can't. Don't go splitting hairs.
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    (Original post by Fynch101)
    Not in a realistic scenario you can't. Don't go splitting hairs.
    I'm not splitting hairs. It is easily possible to run a country with a surplus, or breaking even.

    Look at our country, we have a lot of expendature in areas that other countries don't have.

    So at the end of the day, you are wrong.
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    (Original post by T.I.)
    I'm not splitting hairs. It is easily possible to run a country with a surplus, or breaking even.

    Look at our country, we have a lot of expendature in areas that other countries don't have.

    So at the end of the day, you are wrong.
    It absolutely possible to run a country on a surplus or deficit, but break even it is not. Never said it was difficult to run a country with a budget surplus. So no, I am not wrong.
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    (Original post by Fynch101)
    It absolutely possible to run a country on a surplus or deficit, but break even it is not. Never said it was difficult to run a country with a budget surplus. So no, I am not wrong.
    THAT MAKES NO SENCE!!

    If it is possible to run on a suplus of deficit than is is auto matically possible to run breaking even.
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    (Original post by T.I.)
    THAT MAKES NO SENCE!!

    If it is possible to run on a suplus of deficit than is is auto matically possible to run breaking even.
    In theory yes, practically no.
 
 
 
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