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How to get rid of the deficit for good watch

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    (Original post by DJKL)
    From where do you get your "fact" that the public sector is currently bigger than the "private" sector? Yes it is large, but bigger?

    From memory I thought that the public sector was circa 33% private sector 67%, however I would need to do some digging to check these rough guesstimates.

    Maybe someone better informed could post the real figures?
    Saw it in a documentry when my economic class was looking at dealing with the deficit its either the bbc or channel 4 documentry.
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    (Original post by Quady)
    From your learning of economics does that mean that increasing the size of the public sector does not change GDP (if the private sector remains the same size)

    From your learning of economics if schools and hospitals were privatised would they then create wealth? Does Lloyds Banking Group consume wealth since its a public sector organisation?
    Economically speaking schools and hospital are considered public goods or merit goods. Meaning that as a public good they expect it to be provided by the government, but it would be smart in the case of primary , etc schools but maybe for uni's. And hospitals should really, but obviously still giving some support to those who cant afford healthcare insurance. The reason they'll create wealth when privatised is that the money is coming from consumers or investment and not the government and which maybe taxed and same in case of hospitals. Plus private sector firms are more efficient in comparison to there public sector counterpart, but obviously it comes with some issues. Lloyds Banking group doesn't really consume wealth as the government has invested the money in the shares and just simply own a chunk of it and doesn' require constant taxpayer money to run it. As it uses it own money to pay for things, so it actually creates wealth.
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    - Legalise drugs
    - Legalise brothels
    - Withdraw from the EU (our EU contribution has doubled in the last couple of years)
    - Withdraw from Afghanistan
    - No more wars!
    - No foreign aid, but don't put tariffs up against developing nations
    - Simplify and cut benefits

    That ought to go a long way towards eliminating the deficit whilst keeping quite a lot of the public on side.
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    (Original post by Iqbal007)
    Saw it in a documentry when my economic class was looking at dealing with the deficit its either the bbc or channel 4 documentry.
    I think it is wrong, National Statistics figures Q4 2010 give public sector employment at 6.195 million private sector 22.962 million.

    Here is the link:

    http://www.statistics.gov.uk/pdfdir/pse0311.pdf

    Given the public sector is mainly paid for by taxes (and the deficit) it is somewhat unlikely that the public sector could be bigger than the private sector under any measure.(employment, Public sector spending as a % of GDP)

    A bit of digging gives GDP as circa £1,500 billion, public sector spending £696 billion, Government revenues £514 billion. Public sector spending comes close to half GDP but the public sector is not by any measure bigger than the private sector.
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    (Original post by DJKL)
    I think it is wrong, National Statistics figures Q4 2010 give public sector employment at 6.195 million private sector 22.962 million.

    Here is the link:

    http://www.statistics.gov.uk/pdfdir/pse0311.pdf

    Given the public sector is mainly paid for by taxes (and the deficit) it is somewhat unlikely that the public sector could be bigger than the private sector under any measure.(employment, Public sector spending as a % of GDP)

    A bit of digging gives GDP as circa £1,500 billion, public sector spending £696 billion, Government revenues £514 billion. Public sector spending comes close to half GDP but the public sector is not by any measure bigger than the private sector.
    http://www.telegraph.co.uk/finance/e...8trillion.html
    The deficit is nothing compared he debt thats been mounting up for decades.
    And also watch this http://www.channel4.com/programmes/b...rror-story/4od
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    Care to elaborate why you think that? Do you think we should just write off £500 billion?
    Do you have any idea how an economy works?

    You are about as qualified as George Osbourne...
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    (Original post by Iqbal007)
    http://www.telegraph.co.uk/finance/e...8trillion.html
    The deficit is nothing compared he debt thats been mounting up for decades.
    And also watch this http://www.channel4.com/programmes/b...rror-story/4od
    Enjoyed the channel4 programme you linked, thanks. Not sure I agree their 4.8 trillion for the debt, however any difference merely arises from definition. They also only get public sector spending being greater than private sector spending by again playing with definitions.However notwithstanding the foregoing I have no issue whatsoever with the central tenets of the programme's argument.
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    (Original post by DJKL)
    Enjoyed the channel4 programme you linked, thanks. Not sure I agree their 4.8 trillion for the debt, however any difference merely arises from definition. They also only get public sector spending being greater than private sector spending by again playing with definitions.However notwithstanding the foregoing I have no issue whatsoever with the central tenets of the programme's argument.
    I do agree with the debt, its just not the national government debt, but also all there public sector services debt e.g. NHS ,etc all added up.
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    (Original post by MagicNMedicine)
    Well the only countries which have decent fiscal positions are countries which have high oil exports (eg Saudi Arabia), high taxes (Sweden, Germany, Norway), or in Norways case, a combination of both oil revenues and high taxes which means despite having a very advanced welfare state and high standard public services, they can run a budget surplus which is a bigger proportion of their GDP than our deficit is of ours!. Then there are three other countries which have a good fiscal position despite relatively low taxes: Hong Kong, Singapore and Switzerland, although Singapore and Switzerland it must be said, do have deficits, just small ones and their rates of growth are higher.
    I was watching a program on 4OD yesterday about The Debt and Deficit and which mentioned about Hong Kong, a good program I have to say.
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    (Original post by Iqbal007)
    -The private sector creates wealth
    -The public sector consumes wealth
    Is it at all possible for the public sector to create wealth throw public industries say as energy?
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    Sorry, but the guy presenting that programme was chatting a lot of **** and it was presented in a very anti public sector, pro privatization biased manner with selective facts to shock. e.g. Scare tactics: Oooh look, we're more communist than China! Oh lord, not "communist" China! It didn't feel as though they explored more than one side of the argument and just selected facts to back up what they believed was the solution.

    e.g. arguments against the NHS/for private healthcare ignored the fact that compared with spending, we have relatively good healthcare outcomes compared to a number of other nations.

    That Hong Kong is a miracle story - yeah there are many very wealthy and successful tycoons there, but they failed to mention that there's almost no welfare and no minimum wage and the standard of living for the elderly and the poor is abysmal. It's a fine place to live if you're earning a decent wage, but otherwise you're pretty ****ed.

    And the "oh we British made Hong Kong what it is" smug pat on the back. :rolleyes:
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    (Original post by SFsucks)
    Just curious what peoples views on getting rid of the deficit would be, i've been doing research into it recently and man its bloody scary how much debt this country is in at the moment.
    Increase demand in the economy, by investment, increasing Demand pull inflation. Inflation reduces the overall REAL value of the debt.

    Also expand the productive capasity of the economy, SSP's reduce JSA and other benefits, reduce other welfare benefits and invest it all in research and development, education and increasing the Qty and Quality of the Factors of production.
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    (Original post by Mr Inquisitive)
    Any viable options, anyone?
    Those are viable options.

    Cannabis is less harmful to health than alcohol.

    Legalizing and regulating the sex industry would make it safe for the prostitutes, clients and wives of the clients.

    The tax revenues raised from both would help.
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    (Original post by Iqbal007)
    Economically speaking schools and hospital are considered public goods or merit goods. Meaning that as a public good they expect it to be provided by the government, but it would be smart in the case of primary , etc schools but maybe for uni's. And hospitals should really, but obviously still giving some support to those who cant afford healthcare insurance. The reason they'll create wealth when privatised is that the money is coming from consumers or investment and not the government and which maybe taxed and same in case of hospitals. Plus private sector firms are more efficient in comparison to there public sector counterpart, but obviously it comes with some issues. Lloyds Banking group doesn't really consume wealth as the government has invested the money in the shares and just simply own a chunk of it and doesn' require constant taxpayer money to run it. As it uses it own money to pay for things, so it actually creates wealth.
    And the public sector doesn't contribute to GDP?
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    (Original post by Iqbal007)
    http://www.telegraph.co.uk/finance/e...8trillion.html
    The deficit is nothing compared he debt thats been mounting up for decades.
    And also watch this http://www.channel4.com/programmes/b...rror-story/4od
    That would also mean the 'true tax rate' is all the tax the people currently alive will pay between now and their deaths (in real terms).
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    (Original post by pol pot noodles)
    Get the Americans involved. If the Europeans pay us back then we can pay them back to the tune of around $300 bn. Obama might hate the British, but he loves money.
    Well it was the US that called for the hiatus in the first place...

    And if the US call for it they should be paid first, why would they be paid last if they are the ones demanding the money? (I presume its not only the UK who owes them)
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    (Original post by crazycake93)
    Increase demand in the economy, by investment, increasing Demand pull inflation. Inflation reduces the overall REAL value of the debt.

    Also expand the productive capasity of the economy, SSP's reduce JSA and other benefits, reduce other welfare benefits and invest it all in research and development, education and increasing the Qty and Quality of the Factors of production.
    Exactly. We need long term solutions rather than increasing government spending wildly without considering consequences.
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    (Original post by Mr Inquisitive)
    Exactly. We need long term solutions rather than increasing government spending wildly without considering consequences.
    Exactly, it's a really good experiment - what's happening either side of the Atlantic.

    We're trying to budget for a balanced budget (eventually). Whereas the USA is budgeting for a defecit, government spending will increase and tax relief will also increase.

    In the Short Run the USA will be better off, untill there commes a time when the debt servicing starts to take a large proportion of their budget (also China holds most of the USA's debt). From then on The USA would have to balance their budget, and they cannot do this by an increase in tax revenue from businesses, as they took the demand route rather than the supply route. The productive capacity of the US economy will not grow without Investment and SSP's which don't seem to be taking place.

    Over here though, it can be argued that were in favour and against SSP's since we cut benefits but then we raised tuition fees.
    Our budget should be balanced within 5 years (i think, correct me if im wrong). From then on we should be in surplus, and able to pay back debt. We've also widened the possibility of investment into smaller businesses and enterprises (a government scheme) so this in theory should increase the productive capasity, Another point to mention is that we have a steady rate of immigrants into the country - they will work and increase the Real output....


    However all of these points about the UK will only work in the Long run, and if the Tory government of thrown out at the next election, it will be of no suprise to me if labour tries expansionary Fiscal policy.
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    (Original post by SFsucks)
    Is it at all possible for the public sector to create wealth throw public industries say as energy?
    Yes, its possible if they started to sell services and goods, but Government makes very low profit margins or nothing at all, as citizens would be annoyed as its paid by the taxpayer.
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    (Original post by Quady)
    And the public sector doesn't contribute to GDP?
    The public sector does contribute to GDP, however the problem is the public sector is paid for through taxation, which gets taxed back to the government at a smaller rate so the government has less to spend on the budget as a result causes a deficit.
 
 
 
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