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    "Provided the economy performs in line with forecasts made by the independentOffice for Budget Responsibility, borrowing will be reduced to £41bn in 2016-17 and £14.5bn in 2017-18. By 2018-19, the plan is for the UK to be running a budget surplus of £4bn."

    By my calculations, the Tories are planning to slash expenditure by around £27bn in one year.

    In context, net borrowing was only reduced by £7bn in two years from 2012-2014.

    So they're going to almost quadruple the scale of cuts in half the time.

    Any thoughts?

    http://www.theguardian.com/politics/...atives-deficit
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    Over the last parliament £38.3bn of cuts were made. This guy is going to make £27bn of cuts in one year. Reckless?
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    Lots of people are happy to ride through the austerity so that we can live through the more prosperous times again. Of course, people probably worked more in the 90s/early 00s, but work only comes with stability.

    People spent, spent, spent for 15 years - credit cards, overdrafts, credit cards, mortgages, credit cards, personal loans, credit cards etc. etc. Labour deregulated the banking sector, borrowed so much so that those who didn't/couldn't work could advance as much as those who did. Very human of them but not economically viable.

    We need a return to wealth generation and to eradicate this idea that borrowing is sensible. One of the most important lessons I was taught as a kid was that you shouldn't borrow money you can't pay back. If we don't do this, we're only going to be screwing over our kids.
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    (Original post by AdamskiUK)
    Lots of people are happy to ride through the austerity so that we can live through the more prosperous times again. Of course, people probably worked more in the 90s/early 00s, but work only comes with stability.

    People spent, spent, spent for 15 years - credit cards, overdrafts, credit cards, mortgages, credit cards, personal loans, credit cards etc. etc. Labour deregulated the banking sector, borrowed so much so that those who didn't/couldn't work could advance as much as those who did. Very human of them but not economically viable.

    We need a return to wealth generation and to eradicate this idea that borrowing is sensible. One of the most important lessons I was taught as a kid was that you shouldn't borrow money you can't pay back. If we don't do this, we're only going to be screwing over our kids.
    Worth noting that the only reason Labour did that was because it has been politically impossible to raise taxes since the Thatcherite tax cuts (unsustainably funded by North Sea oil, and even then she ran large deficits) with the last opportunity for high tax being at the 1992 election. It will be austerity or borrowing from here on out unless we man up and take money off the rich.

    The Tory plans are preposterous. They assume a China style economic miracle will happen despite globally the business cycle heading for another recession and domestically strife over the union and Europe all entirely Tory created *******s we don't need. And that's before you factor in how austerity contracts the economy and chokes recovery, as it did 2010-2012.

    The OBR and/or IFS called it rollercoaster economics. Deep cuts (which like last time will not actually reduce expenditure as the same issues will pop up elsewhere in the system, but it will cause huge damage to the system that is there already) until 2019 and then magically a massive surplus. It's fairyland economics, when the crash hits the *******s are going to lose economic credibility for a generation.
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    when you owe money to someone, anyone, you pay it off. Thats what we need to do
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    (Original post by Smilin’ Knight)
    when you owe money to someone, anyone, you pay it off. Thats what we need to do
    What about when the country mainly owes it to itself or to people, institutions, organisations and businesses inside of the country, who would be hurt more by austerity than by slower repayment? 70% of UK government debt is held domestically so with austerity we are cutting off our nose to spite our face.

    There was this big lie put about in the 1980s, riffing off Thatcher's shrewd housewife image, that running the state finances was exactly the same as running household finances. It couldn't be more different. Your household doesn't have an entire internal economy depending on it and it can't print its own currency, more's the pity.

    When it comes to the European sovereign debt crisis, that's because they don't have enough control over their own currency or their borders in an economic sense. There was another big lie put about in 2010 that we were on the brink of ending up like Greece. It could never have happened.



    Also although it has been climbing since the recent recession, and that needlessly extended by Osborne's economic mismanagement (debt up from 67% to 83% I believe), UK government debt is still low by historical standards,



    we managed to get things done quite happily after the war when debt was over 200% of GDP. It's very simple: we just don't need to pay it off, and even if we had to/wanted to, we couldn't, because government debt finances much of the capitalist economy. We might have to pay it off, or be bullied for not paying it off, if we were some crappy no-name third-world country with an outstanding World Bank commercial loan and no confidence in the markets but we've been around in our present form for over 300 years and have only been threatened militarily twice since the early modern period.
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    Its not the short term effects that bother me to be honest, well they do but not in the way they bother you, long term we will be much better set to be completely out of any debt as a country with a surplus pa. It will leave us in a much better position to lead the next global boom and ride that wave to keep the economy high, money breeds money and all. plus it will be good for the tories to get rid of all the debt, that way when labor get back in they have something to spend
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    (Original post by Smilin’ Knight)
    Its not the short term effects that bother me to be honest, well they do but not in the way they bother you, long term we will be much better set to be completely out of any debt as a country with a surplus pa. It will leave us in a much better position to lead the next global boom and ride that wave to keep the economy high, money breeds money and all. plus it will be good for the tories to get rid of all the debt, that way when labor get back in they have something to spend
    It is logically, not to mention fiscally, impossible to "get rid of all the debt". Sovereign debt is backed essentially by the internal cohesion and global clout (diplomatic and economic) of the state. See the graph above for the history of UK government debt since the beginning of the modern era.

    You really need to do about three or four years of reading about economics before you can participate in these sorts of debates, I don't want to single you out but it's quite frightening that you can vote and all the others who don't know anything about economics and think Labour ruined the economy and the Tories are fixing it.

    You are mixing up surplus with debt. Surplus is the opposite of deficit. Since neo-liberalism we have only seen two surpluses, a tiny one after the Lawson boom and a slightly larger one under Brown in 2000-02. Since the markets will more than tolerate states running a deficit in perpetuity, a surplus is generally an indication that you are not investing your spare/free money wisely - not just the surplus itself, but also down to the "permitted" deficit. Especially with borrowing costs at lows not seen since the 1950s we really ought to be investingrather than obsessively counting our pennies while public services slide back into the third world.

    Also "next global boom" lol, there is almost certain to be a large recession in the next three years and we will be hit hard due to our financialised economy, our housing bubble and the general chaos surrounding the EU referendum/Scottish independence, all generated by Tory incompetence and economic illiteracy. Most other countries learned their lesson last time, particularly on the houses, but not us.
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    (Original post by scrotgrot)
    What about when the country mainly owes it to itself or to people, institutions, organisations and businesses inside of the country, who would be hurt more by austerity than by slower repayment? 70% of UK government debt is held domestically so with austerity we are cutting off our nose to spite our face.
    That link shows that oversees investors were the biggest group of holders of gilts and that the second biggest was the Bank of England at 25%. It doesn't tell the tale you think it does.
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    (Original post by The_Mighty_Bush)
    That link shows that oversees investors were the biggest group of holders of gilts and that the second biggest was the Bank of England at 25%. It doesn't tell the tale you think it does.
    Yes but that's only because the data for domestic holders of gilts is subdivided by type. The point is that 70% are held domestically and 30% overseas. I suppose you could argue that banks, insurance and financial services are usually multinational and thus class them with overseas, but the fact that London is along with NYC (and we are US vassals anyway) the biggest financial centre in the world makes that rather disingenuous.
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    (Original post by scrotgrot)
    Yes but that's only because the data for domestic holders of gilts is subdivided by type. The point is that 70% are held domestically and 30% overseas. I suppose you could argue that banks, insurance and financial services are usually multinational and thus class them with overseas, but the fact that London is along with NYC (and we are US vassals anyway) the biggest financial centre in the world makes that rather disingenuous.
    But it still says that over 50% is held by oversees investors or by the Bank of England (which just creates money to buy government debt).
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    (Original post by The_Mighty_Bush)
    But it still says that over 50% is held by oversees investors or by the Bank of England (which just creates money to buy government debt).
    Well that is devaluation by the back door, same as how we used to cope with this years ago when we were more protectionist with a more diversified economy and could get away with straight-up devaluation. It doesn't matter because all the other countries are doing it too so it's not really a disadvantage. You might say but where's the money coming from, but the thing is none of this is actually real money as such, it all depends on whether people have the confidence that the state will survive and its assets will be well husbanded by whatever government we put in. Like I say when it gets down to it we've managed to avoid being invaded or having a revolution or whatever for over 300 years now, and even then we invited them in and disruption was kept to a minimum. This is far better going than, well, any other country in the world as far as I can think of.
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    (Original post by scrotgrot)
    Worth noting that the only reason Labour did that was because it has been politically impossible to raise taxes since the Thatcherite tax cuts (unsustainably funded by North Sea oil, and even then she ran large deficits) with the last opportunity for high tax being at the 1992 election. It will be austerity or borrowing from here on out unless we man up and take money off the rich.

    The Tory plans are preposterous. They assume a China style economic miracle will happen despite globally the business cycle heading for another recession and domestically strife over the union and Europe all entirely Tory created *******s we don't need. And that's before you factor in how austerity contracts the economy and chokes recovery, as it did 2010-2012.

    The OBR and/or IFS called it rollercoaster economics. Deep cuts (which like last time will not actually reduce expenditure as the same issues will pop up elsewhere in the system, but it will cause huge damage to the system that is there already) until 2019 and then magically a massive surplus. It's fairyland economics, when the crash hits the *******s are going to lose economic credibility for a generation.
    I won't pretend to be an economist but I know the difference between socialism and economic liberalism, and I know which party provides more of the most desirable of the two, liberalism. Equally, I don't think politicians are competent at all at healthcare, why should I think that they're any different at economics?

    The socialist Scottish regime tried to argue independence off the back of the North Sea oil, it wasn't only Thatcher who got it wrong. Thatcher, however, came BEFORE a huge surge in global demand for oil as opposed to before a huge DIP in demand. Her errors pale in comparison to theirs. People make political decisions based off of economical possibilities all the time, it's a gamble you have to take. In fact, it's a gamble you're currently taking by predicting a recession. Yes, there is an EU crisis, yes, we're in a bad place to be if it all goes tits up. All the more reason to disassociate ourselves from the EU's economical unity by re-negotiating the terms of our membership.

    On the subject of increasing tax, I'd direct you to the case study of France and their 75% rate. That ended well, didn't it? £14bn lost in tax revenue per year, IIRC. You talk about how market confidence is important, how governmental husbandry is key to national economic stability. How is this achieved by attacking those who a) pay (I think this is right) 27% of tax (the top 1%) and those who b) run business to give people jobs? I don't disagree with sensible tax increases, but you have to be VERY sure that you aren't hitting your middle-class hard in the face. That is what Labour repeatedly did and intended to do if they got into power. What's worse is that they didn't seem to have any publicly-touted policies in place to help SMALL businesses, the very things we need to encourage to help people, both working and middle-class.

    The public and, more importantly, the traders didn't trust Labour. The 100-business letter which hit the papers a couple of months back showed this. How would voting them in been sensible?
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    Just make sure you aren't poor, disabled or elderly and you'l be fine
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    (Original post by AdamskiUK)
    I won't pretend to be an economist but I know the difference between socialism and economic liberalism, and I know which party provides more of the most desirable of the two, liberalism. Equally, I don't think politicians are competent at all at healthcare, why should I think that they're any different at economics?

    The socialist Scottish regime tried to argue independence off the back of the North Sea oil, it wasn't only Thatcher who got it wrong. Thatcher, however, came BEFORE a huge surge in global demand for oil as opposed to before a huge DIP in demand. Her errors pale in comparison to theirs. People make political decisions based off of economical possibilities all the time, it's a gamble you have to take. In fact, it's a gamble you're currently taking by predicting a recession. Yes, there is an EU crisis, yes, we're in a bad place to be if it all goes tits up. All the more reason to disassociate ourselves from the EU's economical unity by re-negotiating the terms of our membership.

    On the subject of increasing tax, I'd direct you to the case study of France and their 75% rate. That ended well, didn't it? £14bn lost in tax revenue per year, IIRC. You talk about how market confidence is important, how governmental husbandry is key to national economic stability. How is this achieved by attacking those who a) pay (I think this is right) 27% of tax (the top 1%) and those who b) run business to give people jobs? I don't disagree with sensible tax increases, but you have to be VERY sure that you aren't hitting your middle-class hard in the face. That is what Labour repeatedly did and intended to do if they got into power. What's worse is that they didn't seem to have any publicly-touted policies in place to help SMALL businesses, the very things we need to encourage to help people, both working and middle-class.

    The public and, more importantly, the traders didn't trust Labour. The 100-business letter which hit the papers a couple of months back showed this. How would voting them in been sensible?
    Tax agreements need to be transnational in this era of global capital. All the grown up countries in Europe are trying to tackle tax havens and to be fair this is one area where Osborne has done well. But the point is if everyone (by which I mean all the major Western economies) taxes people hard at once then they will have nowhere to go that's a safe haven.

    The 100 business letter was a sordid and transparent publicity stunt organised by CCHQ and lots of the people in it were tax avoiders or Tory created peers or donors and so on. With the 1000 small business letter they didn't even tell them what the survey was going to be used for.

    If anything the government "the traders" don't like is the one we want, because that means that government will be less likely to take money off us and give it to "the traders". Do you really think we and "the traders" are on the same side?

    Your stuff about socialism and liberalism is barely worth comment. Labour for example have not been socialist since 1985 maybe 1994 if you want to be generous. And the Tories, kings of crony capitalism and an economy based on rent-seeking, are not economically liberal by any means.

    Btw the SNP leadership know independence is fiscally unviable. They are gradualists which is why they have been making so many noises about working with Labour for a settlement and even wistful indications of standing in the north of England. But they have to do the referendums and the tough talk to please the supporters.

    You certainly can't criticise the SNP for getting the oil predictions wrong after the way Maggie spunked it all up the wall in the 80s. Especially when the only reason the oil price came down was because of OPEC pressure on Russia and on Western moves to energy independence with shale. It's not a dip in demand at all, why would everyone just suddenly decide to stop using oil? It's a glut in supply, though artificially created.
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    (Original post by scrotgrot)
    What about when the country mainly owes it to itself or to people, institutions, organisations and businesses inside of the country, who would be hurt more by austerity than by slower repayment? 70% of UK government debt is held domestically so with austerity we are cutting off our nose to spite our face.

    There was this big lie put about in the 1980s, riffing off Thatcher's shrewd housewife image, that running the state finances was exactly the same as running household finances. It couldn't be more different. Your household doesn't have an entire internal economy depending on it and it can't print its own currency, more's the pity.

    When it comes to the European sovereign debt crisis, that's because they don't have enough control over their own currency or their borders in an economic sense. There was another big lie put about in 2010 that we were on the brink of ending up like Greece. It could never have happened.



    Also although it has been climbing since the recent recession, and that needlessly extended by Osborne's economic mismanagement (debt up from 67% to 83% I believe), UK government debt is still low by historical standards,



    we managed to get things done quite happily after the war when debt was over 200% of GDP. It's very simple: we just don't need to pay it off, and even if we had to/wanted to, we couldn't, because government debt finances much of the capitalist economy. We might have to pay it off, or be bullied for not paying it off, if we were some crappy no-name third-world country with an outstanding World Bank commercial loan and no confidence in the markets but we've been around in our present form for over 300 years and have only been threatened militarily twice since the early modern period.
    UK government debt is low by historical standards.

    It's always been higher when we've been in open warfare with somebody else. Napoleaonic war, 1st world war and 2nd world war always threw national debt to higher levels.

    That however still doesn't justify feckless spending.
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    (Original post by MatureStudent36)
    UK government debt is low by historical standards.

    It's always been higher when we've been in open warfare with somebody else. Napoleaonic war, 1st world war and 2nd world war always threw national debt to higher levels.

    That however still doesn't justify feckless spending.
    Yep and also rebuilding after the wars. I wouldn't advise that debt go above 100% but bless him, Georgie boy is doing his best!

    You will see that until the recession, (which let's not forget was the worst since 1929), spending under Labour was almost exactly the same as it had been since the mid-1970s, i.e. the neo-liberal era.

    So I guess Thatcher too was a feckless spender. I'm sure she'd clock you one with her handbag if she was still around for implying that.
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    (Original post by scrotgrot)
    Yep and also rebuilding after the wars. I wouldn't advise that debt go above 100% but bless him, Georgie boy is doing his best!

    You will see that until the recession, (which let's not forget was the worst since 1929), spending under Labour was almost exactly the same as it had been since the mid-1970s, i.e. the neo-liberal era.

    So I guess Thatcher too was a feckless spender. I'm sure she'd clock you one with her handbag if she was still around for implying that.
    Thatcher inherited a country that was in the process of a slow death and needed radical modernising.

    One of the reasons I think for the conservative vote was quite simply, people look around and think what austerity.
    I can't think how it's impacted me. Neither can most.
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    (Original post by MatureStudent36)
    One of the reasons I think for the conservative vote was quite simply, people look around and think what austerity.
    I can't think how it's impacted me. Neither can most.
    It's interesting that you can't see austerity. I haven't felt it personally but I can certainly see it.

    Certain departments in our school have had their budgets cut in order to save money generally. This has meant that the history department, for example, frequently runs out of money for photocopying towards the end of the financial year. I don't know how much of that is due to austerity but it's still underfunded.

    I'm involved with my local Youth Parliament group. We often have meetings with various council departments who, guess what, are having to hack at their budgets to try and find every saving they can. Services have been reduced, people have been laid off, and there is generally a feeling that doing all of this is harshly impacting people somewhere across the borough. Indeed, my borough has one of the most deprived areas in Europe and they have seen most of their community buildings closed down in order to save money. There is nothing to do there and transport costs are very high. It's not good.

    Health care has also suffered, in particular mental health. Financial cuts are not what those services need in order to get people the help they need - especially mental health which is underfunded anyway.

    I could go on and on, but I'll just say austerity has definitely had an impact. I don't know where you live to not see it. And I don't know why the electorate haven't opened their eyes to see it.
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    (Original post by AdamskiUK)
    Lots of people are happy to ride through the austerity so that we can live through the more prosperous times again. Of course, people probably worked more in the 90s/early 00s, but work only comes with stability.

    People spent, spent, spent for 15 years - credit cards, overdrafts, credit cards, mortgages, credit cards, personal loans, credit cards etc. etc. Labour deregulated the banking sector, borrowed so much so that those who didn't/couldn't work could advance as much as those who did. Very human of them but not economically viable.

    We need a return to wealth generation and to eradicate this idea that borrowing is sensible. One of the most important lessons I was taught as a kid was that you shouldn't borrow money you can't pay back. If we don't do this, we're only going to be screwing over our kids.
    1) Tories wanted further deregulation than what labour did...
    2) Labour rebuilt schools and hospitals up and down the country, we don't face an infrastructure crisis like the US. Saying labour overspent is a silly blame game as they would have had to been rebuilt sooner or later. It's not like the money was thrown in the air.
    3) Is that why the tories haven't commited to an £8 minimum wage? loool
    4) A country is not run like a household that is the analogy the Tories have used, austerity merely limits growth, productivity and hits the poorest.

    One way they could raise money is by scrapping non-dom's and reintroducing 50p tax rate and committing to tackling tax evasion via banning UK controlled tax havens. It won't happen though as they protect their own...........
 
 
 

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