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    (Original post by Teaddict)
    If we follow Labour's plan this is what happens:

    Our debt goes up due to the deficit. The debt interest payments then go up because we have more debt. The deficit thus goes up because we have to borrow money to pay interest on debt. Thus the debt goes up even more. The debt interest payments then rise again. The deficit thus goes up again because we have to borrow money to pay interest on the debt.

    It's a deadly little cycle. It means that Labour will have to make savage cuts in public services to purely off set the debt interest payments. It means Labour could make tens of billions of pounds of cuts that achieve nothing in terms of reducing the deficit.

    Then you of course have the added problem that investors and the markets will think things are getting out of hand. They will demand higher returns for their investment, thus costing us more... our credit rating will be put under threat and the economy will be unstable.

    Both the Coalition and Labour are gambling - Labour are taking the far more risky gamble though.
    My point being that you can make these cuts to the public sector because, by then, the private sector will be growing sufficiently to take the excess of individuals in the public sector and offer them jobs - rather than them sitting unemployed. Less public sector spending on both jobs and the unemployed etc. Meanwhile, private business is able to contribute more in revenue to the government, thereby removing the deficit and servicing the debt.

    If I can direct you towards my other thread I explain my argument in a little more clarity. But I do believe the investor/market situation has been blown out of proportion; the idea of us losing our triple A credit rating is little short of scaremongering.

    Of course, like you say, there's a delicate balance to be found between the approach of the government and the opposition (not necessarily even Labour) but I favour the long term approach to deficit/debt reduction simply because we're dealing with real people rather than just numbers on a spreadsheet.

    (Original post by CyclopsRock)
    That seems unlikely, though. I mean, without cuts. We had a strong private sector, and strong growth, in the 12 years before the recession, and yet that's when we built up our structural budget deficit. It seems bizarre to assume that, given more public spending, the private sector could eventually power us to to the same level of public services with no spending cuts. If we had to borrow in 1997-2007, why does he think we won't have to cut to get back there now?

    And that's without thinking about the interest we would then be paying. We currently pay £45bn a year in interest alone. By 2015, even with the coalitions "drastic" cuts, we'll be paying £60bn. How high would it be before we finally got the deficit under control with Balls (and, of course, that wouldn't solve the problem, as getting the deficit under control just means you're no longer adding to the debt, not that you're lowering it.)

    Basically, the guy's a mental.
    I'm not denying there's a need for spending cuts, but that they should be introduced when the private sector is genuinely strong enough to pick up the slack of extra workers from the public sector. As above.
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    (Original post by dannymccs)
    My point being that you can make these cuts to the public sector because, by then, the private sector will be growing sufficiently to take the excess of individuals in the public sector and offer them jobs - rather than them sitting unemployed. Less public sector spending on both jobs and the unemployed etc. Meanwhile, private business is able to contribute more in revenue to the government, thereby removing the deficit and servicing the debt.

    If I can direct you towards my other thread I explain my argument in a little more clarity. But I do believe the investor/market situation has been blown out of proportion; the idea of us losing our triple A credit rating is little short of scaremongering.

    Of course, like you say, there's a delicate balance to be found between the approach of the government and the opposition (not necessarily even Labour) but I favour the long term approach to deficit/debt reduction simply because we're dealing with real people rather than just numbers on a spreadsheet.



    I'm not denying there's a need for spending cuts, but that they should be introduced when the private sector is genuinely strong enough to pick up the slack of extra workers from the public sector. As above.
    Well the private sector lost a ton more jobs in the last 2 years than the public sector - indeed, there are now more people on the public payroll than there were in 2008 - and they're (the private sector are) hiring more and more every month. I think it's a fairly blurry line to try and define when the private sector is "ready", and I think one of the big things that'll help coax it is lowering taxes that affect businesses abilities to hire people (the most obvious being business-side national insurance, but also cutting red tape around hiring policies). The Coalition aren't really doing that much here, but I think this is their attempt to limit the extention of the debt whilst still promoting growth.

    Eitherway, I think we probably basically agree on the idea, just exactly where the line is drawn.
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    (Original post by Will Lucky)
    As a Politician he is skilful there is no doubt, but what he proposes would definitely make us far worse off due to the cuts we would have to implement a t a later date in order to accommodate what he wants implemented.

    As much as I believe him a skilful Politician I personally hoped there wouldn't be a Portillo moment and that he would hold his seat because I believe over the next four years he will not be an asset to the Labour Party.

    During the Labour leadership contest, I saw a number of Tories on Twitter supporting Ed Balls, says it all really. I even knew of some people who joined Labour just so they could vote for him.
 
 
 
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