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Osborne's austerity hasn't worked, so he proposes more austerity. watch

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    loving all the text book answers here ....... too bad uni professor's don't see recessions coming. they never do. they are all tucked up on their huge salaries even during times of austerity. but anyway keep on listening to them.
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    (Original post by Jamie S)
    Why do big corporations want more regulation? Corporate lobbyists always lobby for less regulation.
    Regulation that limits them = They want less.

    Regulation that limits their competitors = They want more.
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    (Original post by paul514)
    True enough but the argument was if the deficit had already been cleared I would want large borrowing for infrastructure spending for growth.

    Also it does provide short and medium term growth.

    Short from the jobs

    Medium from the company profits who built it and of course most growth comes gradually not at a distant point.

    Long is simply when the benefit of the infrastructure has already paid the cost and you just rake the money in.




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    If the deficit has been cleared there's no need to borrow. I'm sure there's a portion of the budget set aside for capital investment.

    Infrastructure isn't the guaranteed money maker people think it is.
    Especially in the UK, where it takes so long to build anything that it dilutes the economic impact. I'm talking about profit for the treasury- an increase in GDP doesn't in itself prove success.
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    (Original post by otester)
    Regulation that limits them = They want less.

    Regulation that limits their competitors = They want more.
    If they are part of the same industry with homogenous outputs, then any regulation that effects themselves will effect their competitors and vice versa.
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    (Original post by mangala)
    however, reducing public spending is actually damaging to the growth of the economy (one of the reasons why ours is recovering so much slower since 2008 than other countries)
    brb "fastest growing economy in the G7"


    http://www.ft.com/cms/s/0/95c6322a-1...#axzz43AYG4kHk
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    (Original post by pol pot noodles)
    If the deficit has been cleared there's no need to borrow. I'm sure there's a portion of the budget set aside for capital investment.

    Infrastructure isn't the guaranteed money maker people think it is.
    Especially in the UK, where it takes so long to build anything that it dilutes the economic impact. I'm talking about profit for the treasury- an increase in GDP doesn't in itself prove success.
    It's at 1.5% that is terribly low.



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    (Original post by paul514)
    It's at 1.5% that is terribly low.



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    If that's so then that is a tad low.
    I'm however arguing against an FDR new deal/1990s Japanese scale programme. I wouldn't be against further capital investment, however it should still be funded by government revenues rather than borrowing.
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    (Original post by ChaoticButterfly)
    So? Your ideology that you want to force everyone into is based around selfishness as well. You want everyone to only care about what is directivity in front to them to increase their lot in life (and maybe their family's).
    Nope, I want a productive economy that ultimately benefits everyone. Self-interest is not what the state is there to be used for - it should be dispassionate and neutral.
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    (Original post by Katty3)
    I'm anti austerity. I have seen the impact austerity has on those affected by it. I have seen the impact on services struggling to cope with the budget that they've been given.

    Austerity also doesn't make sense from a pragmatic perspective. If the government spends less, then they have less income from tax. The poor have less money due to cuts to benefits so they spend less so the government has less income from VAT. The poor spending less also means that businesses struggle because they are getting less money. The businesses then pay less tax and may ultimately go out of business because they're making a loss, thus putting people out of work.

    The increased unemployment also means that the government has to pay more money in benefits and so increases the defecit. This means that the government ends up making more cuts and the downward spiral continues and everyone ends up worse off than if they'd just left it be.

    From a selfish standpoint, I don't want austerity. It will mean that it's harder for me to get a job in my chosen career, and if I do, I will have worse pay and conditions.

    Posted from TSR Mobile
    This is exactly what people need to realise.

    Sweden and Denmark didn't do austerity and they have one of the highest standards of living in the world with far, far less poverty than the UK with it's "$2.6 trillion GDP". Who cares about how much GDP you have if there are people starving in your country.

    Iceland lost so much in the global recession, but they let their banks go and didn't do any austerity measures and they still have the highest HDI in the world and are one of the most equal societies on Earth. As the UK, we should take some lessons from the Nordic countries, as they are clearly doing far better than we are at everything.
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    (Original post by pol pot noodles)
    If that's so then that is a tad low.
    I'm however arguing against an FDR new deal/1990s Japanese scale programme. I wouldn't be against further capital investment, however it should still be funded by government revenues rather than borrowing.
    It is 1.5% even the oecd average is 3%


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    (Original post by paul514)
    It is 1.5% even the oecd average is 3%


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    Have you got a link? Having trouble finding one.
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    (Original post by pol pot noodles)
    Have you got a link? Having trouble finding one.
    No I don't have one they are always on about it on the daily politics.


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    (Original post by LordMallard)
    If we're using this analogy shouldn't we get rid of some of the weight from the cart, by reducing government spending? Also the horses would be private sector companies, as they're what lead a recovery. Shouldn't they be helped by providing tax cuts allowing them to prosper?
    Middle class spending leads a recovery. Not private companies

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    (Original post by L i b)
    Nope, I want a productive economy that ultimately benefits everyone. Self-interest is not what the state is there to be used for - it should be dispassionate and neutral.
    Britain doesn't have a productive economy. It has a speculative economy based on shuffling money and investment in land and property. Real productive industries like manufacturing and engineering are declining and hardly anybody in the establishment and the media think that they are worth saving.
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    (Original post by homeland.lsw)
    Oh I see...But why aren't rich people just taxed more than poor people? That seems like the most logical thing to do.
    If you place high taxes on burdens it makes the country a less attractive prospect for businesses to come here to invest, when they can invest in enterprises elsewhere with much lower taxation. This of course has negative implications for competition, for jobs etc
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    (Original post by pol pot noodles)
    If that's so then that is a tad low.
    I'm however arguing against an FDR new deal/1990s Japanese scale programme. I wouldn't be against further capital investment, however it should still be funded by government revenues rather than borrowing.
    Personally i'm all for significant capital spending (primarily since i also support high immigration rates so demand would never be an issue) but i agree with yourself in terms of how it should be paid. Ideally we'd take the knife to much of government spending and divide the savings between tax cuts and capital spending while ensuring a larger surplus (once the surplus reaches about 3% i'd start funneling the savings made each year into a sovereign wealth fund).

    (Original post by HucktheForde)
    Middle class spending leads a recovery. Not private companies

    Posted from TSR Mobile
    Private firms employ people which provides the middle classes with the money with which to spend. If your point is that government policy panders to the rich too much then i agree (they consume abroad often and have a propensity to save) but we need private firms thriving to fuel the middle class and the wider economy.

    (Original post by Arran90)
    Britain doesn't have a productive economy. It has a speculative economy based on shuffling money and investment in land and property. Real productive industries like manufacturing and engineering are declining and hardly anybody in the establishment and the media think that they are worth saving.
    The fact that the UK has a service sector economy does not mean that we have an economy based on capital speculation at all. Services encompass everything from accounting and law to hairdressing and your local sandwich shop.

    Granted, i agree that we need a larger focus on manufacturing.
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    (Original post by Rakas21)
    Personally i'm all for significant capital spending (primarily since i also support high immigration rates so demand would never be an issue) but i agree with yourself in terms of how it should be paid. Ideally we'd take the knife to much of government spending and divide the savings between tax cuts and capital spending while ensuring a larger surplus (once the surplus reaches about 3% i'd start funneling the savings made each year into a sovereign wealth fund).



    Private firms employ people which provides the middle classes with the money with which to spend. If your point is that government policy panders to the rich too much then i agree (they consume abroad often and have a propensity to save) but we need private firms thriving to fuel the middle class and the wider economy.



    The fact that the UK has a service sector economy does not mean that we have an economy based on capital speculation at all. Services encompass everything from accounting and law to hairdressing and your local sandwich shop.

    Granted, i agree that we need a larger focus on manufacturing.
    there wouldnt be private firms if no one is buying their stuff. send the private firms and them only to mars, see if they can thrive there. the middle class can be self employed.
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    Austerity has no basis in economics, and anybody who thinks it does (Osborne included) should go and read a macroeconomics textbook. The notion that austerity is necessary stems from the myth that the household budget is equivalent to the national budget, something no economist believes.

    Austerity stifles growth, as has been empirically demonstrated across the world. In general, the more austerity imposed on the economy, the more growth is stagnated, and the extreme case, of course, is Greece, where austerity literally collapsed the economy. Martin Wolf, perhaps the Western world's most respected economic commentator, writing in the Financial Times, analysed the link between cumulative GDP growth and fiscal contraction between 2008-2012, and concluded: “In all, there is no evidence here that large fiscal contractions [budget deficit reductions] bring benefits to confidence and growth that offset the direct effects of the contractions. They bring exactly what one would expect: small contractions bring recessions and big contractions bring depressions.”

    We had a similar, but less harsh, experience in Britain, but the Conservatives still took an economy that grew by 2.1% in Labour's final year and stagnated it: the Office for Budget Responsibility found that the Conservatives' austerity measures, before they were postponed in 2012 to get the growth needed in time for the election, stifled growth by 2.2% between 2010 and 2012, but many economists believe this to be a substantial underestimate.

    Growth for the future has been revised down, meanwhile, and growth even this year has been lacklustre.

    The tried-and-tested method of reducing deficit-to-GDP ratios is to invest-to-grow in the economy, as the Nobel Prize-winning economist Amartya Sen points out. Invest in the economy, create jobs, get living standards rising, and increase tax revenues. This both reduces deficits and boosts growth. This is precisely what Labour are advocating, as part of their overall economic strategy shaped by some of the world's leading economists, at least two of whom predicted the global financial crisis while the pseudo-economists that the Conservatives admire were saying that more deregulation of the financial sector was needed. The OECD and the IMF have both admitted their mistakes in supporting austerity, and are now advocating for much more investment in the economy, which this Government is failing to provide.

    So, Osborne, as usual, is continuing to pursue an ideological austerity policy as opposed to looking at the evidence.
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    (Original post by Arran90)
    Britain doesn't have a productive economy. It has a speculative economy based on shuffling money and investment in land and property. Real productive industries like manufacturing and engineering are declining and hardly anybody in the establishment and the media think that they are worth saving.
    This seems to be going back to the "if you're not making something with your hands, it's not real work" mentality. In terms of shuffling money, we are the global capital for financial services, yes - I don't think that's a bad thing.
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    (Original post by viddy9)
    Austerity has no basis in economics, and anybody who thinks it does (Osborne included) should go and read a macroeconomics textbook. The notion that austerity is necessary stems from the myth that the household budget is equivalent to the national budget, something no economist believes.

    Austerity stifles growth, as has been empirically demonstrated across the world.
    The problem with this logic, despite it being rather woolly (something having "no basis in economics" is a strange assertion; it's rather like saying something has "no basis in politics" - we are not dealing in simplistic facts here) is that is caricatures your opponents arguments.

    Firstly, very few politicians would ever describe their policies as "austerity". I sincerely doubt George Osborne ever has at any point. Indeed, his policies have involved, at various times, greater or lesser degrees of fiscal restraint. Both have had quite different outcomes, despite all of them attempting to reduce spending as a way of reducing the deficit.

    By saying something as been "empirically demonstrated" in economics is also pretty questionable stuff. You can cite examples, but in any one of them there are numerous other factors and considerations. The same circumstances cannot be reproduced, you cannot factor in a control group and you certainly can't remove other factors that might tend towards a different outcome.

    I'm not sure if this morally self-righteous certainty of Krugmanites and others is a new thing, or something that has come along with with every economic fad of modern times. Either way, be in no doubt that it is a position as ideological as the ones you oppose.

    Growth for the future has been revised down, meanwhile, and growth even this year has been lacklustre.
    Has it? Despite this austerity you rail against, the UK has been the fastest growing major advanced economy for several years.
 
 
 
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