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Remember Austerity? Watch

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    That used to be a thing.

    "Chancellor ditches austerity programme in favour of a pragmatic approach to counter a ‘hard’ exit from the EU "

    https://www.theguardian.com/business...brexit-fallout

    All those dead disabled people for nothing :-/
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    Except he isn't dropping the austerity agenda, it's just a lighter one...

    Oh, and the "for nothing" statement implies that suddenly the £100bn wiped of the deficit is now back.
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    (Original post by Jammy Duel)
    Except he isn't dropping the austerity agenda, it's just a lighter one...

    Oh, and the "for nothing" statement implies that suddenly the £100bn wiped of the deficit is now back.
    Shame it won't cover the £555 billion added on to our national debt in the same period.
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    That word that Ed Milliband used to say 100 times a day in a really annoying voice that made me want to dig his eyes out? Yes, I remember.
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    (Original post by Bornblue)
    Shame it won't cover the £555 billion added on to our national debt in the same period.
    I forgot that adding £555bn is worse than adding £1tn, or are you saying you would have preferred the abolition of the NHS or welfare state, or large portions of both or something like that?
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    (Original post by Jammy Duel)
    I forgot that adding £555bn is worse than adding £1tn, or are you saying you would have preferred the abolition of the NHS or welfare state, or large portions of both or something like that?
    No I would have preferred a Keynsian approach.

    In the last 6 years, the Tories have added more debt than in the previous 13 years of Labour put together.
    Debt is the crucial figure and it has substantially increased.
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    (Original post by Jammy Duel)
    I forgot that adding £555bn is worse than adding £1tn, or are you saying you would have preferred the abolition of the NHS or welfare state, or large portions of both or something like that?
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    If the Tories can't even get the economy right what use are they?
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    (Original post by Bornblue)


    So you wanted a budget cut of 10% of GDP? Again, what cuts would you have preferred, you have a quarter of the 2010 budgeted spending to cut, or are you telling me that magically there can be a massive deficit to cut without actually increasing the debt by much, if you've found a way to run a massive deficit without increasing the debt you'r really on to something.
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    (Original post by Jammy Duel)
    Except he isn't dropping the austerity agenda, it's just a lighter one...

    Oh, and the "for nothing" statement implies that suddenly the £100bn wiped of the deficit is now back.
    Spending your way out does not sound like austerity to me :beard;

    Also lol at your response to my disabled comment :rofl:

    Didn't actually have a problem with the killing of disabled people, rather the notion it was "for nothing". Congratulations! You achieved Peak Tory :chaplin::hat2:

    I wonder why it is Tories are described as the nasty party. :iiam:
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    (Original post by ChaoticButterfly)
    That used to be a thing.

    "Chancellor ditches austerity programme in favour of a pragmatic approach to counter a ‘hard’ exit from the EU "

    https://www.theguardian.com/business...brexit-fallout

    All those dead disabled people for nothing :-/
    I'm sorry, but this is the height of ignorance. Not only are you peddling absolutely disgusting nonsense about the welfare system that protects the vulnerable - and people like you should be called out on that more often - you've completely misunderstood even the most basic economic principle at stake here.

    Investing for growth, essentially the Keynesian approach of addressing a downturn, is not about pouring money into welfare. Indeed, if anything welfare spending depresses economic activity. It is about spending in ways that promote such activity: infrastructure, building - in the longer term, things like education and innovation.

    Not to mention, of course, that "austerity" was always over-stated by both the Government and the opposition.

    (Original post by Bornblue)
    No I would have preferred a Keynsian approach.

    In the last 6 years, the Tories have added more debt than in the previous 13 years of Labour put together.
    Debt is the crucial figure and it has substantially increased.
    Debt is not the crucial figure when you're talking about how to address an enormous deficit. It is about paying down that deficit before you can tackle the debt. Borrowing peaked at over 10% of our national income in 2009-10. This was beyond all economic credibility: it was lunacy.

    You talk about a Keynesian approach. What you seem to have overlooked is that we had a continuous period of being the fastest growing major developed economy in the world. If you wanted to grow our way out of a deficit, the Government clearly did quite a good job of it.

    Of course, in my experience when the far-left talk about Keynes, they seem to confuse his principles as promoting a reckless orgy of spending, increasing deficits and punting our public finances on whatever suits them.
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    (Original post by L i b)
    I'm sorry, but this is the height of ignorance. Not only are you peddling absolutely disgusting nonsense about the welfare system that protects the vulnerable - and people like you should be called out on that more often - you've completely misunderstood even the most basic economic principle at stake here.

    Investing for growth, essentially the Keynesian approach of addressing a downturn, is not about pouring money into welfare. Indeed, if anything welfare spending depresses economic activity. It is about spending in ways that promote such activity: infrastructure, building - in the longer term, things like education and innovation.

    Not to mention, of course, that "austerity" was always over-stated by both the Government and the opposition.



    Debt is not the crucial figure when you're talking about how to address an enormous deficit. It is about paying down that deficit before you can tackle the debt. Borrowing peaked at over 10% of our national income in 2009-10. This was beyond all economic credibility: it was lunacy.

    You talk about a Keynesian approach. What you seem to have overlooked is that we had a continuous period of being the fastest growing major developed economy in the world. If you wanted to grow our way out of a deficit, the Government clearly did quite a good job of it.

    Of course, in my experience when the far-left talk about Keynes, they seem to confuse his principles as promoting a reckless orgy of spending, increasing deficits and punting our public finances on whatever suits them.
    So how come George Osborne borrowed more in five years than Labour did in 13. If Labour's spending was so reckless then why in 2007 did Osborne pledge to back Labour's spending plans, pound for pound?

    I'm most certainly not far left. Kenysian economics is not about pouring endless buckets of money into the welfare state. It's about the government intervening during economic downturns and investing in projects to kick start the economy, rather than stripping the state down.

    It's also about investing in fiscal multipliers. Take flood defences for example. For every pound we spend on flood defences, we save £7 in repairs after a flood. So why was money on flood defences cut?


    The great irony about people complaining about welfare is that when we spend money on welfare, it gets reinvested back into the economy, as poor people tend to spend pretty much everything they have.

    You're a good poster in general but when it comes to the last government, you seem unable to show any sort of balance and instead turn into a cheerleader. Just one last point, do you disagree with Theresa May removing the requirement for chronically ill and disabled individuals to be retested every six months?
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    (Original post by Bornblue)
    No I would have preferred a Keynsian approach.

    In the last 6 years, the Tories have added more debt than in the previous 13 years of Labour put together.
    Debt is the crucial figure and it has substantially increased.
    Debt is what the politicians talk about to the uneducated, Japan and Italy have not collapsed so it's hard to see how its the most important metric (and in a QE world it's questionable whether its important at all from the point of view of the left).

    The most important figure for government is the fiscal deficit to GDP figure because it is that all other things being equal should dictate bond yields in the market. Whether you liked his approach or not, Osbourne cut that from 11% to 4%.

    Nominal debt is simply the accumulated deficit each year. Since Labour planned to cut the deficit by half anyway what your doing here is bashing the Tories for doing exactly what Darling intended.
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    (Original post by Rakas21)
    Debt is what the politicians talk about to the uneducated, Japan and Italy have not collapsed so it's hard to see how its the most important metric (and in a QE world it's questionable whether its important at all from the point of view of the left).

    The most important figure for government is the fiscal deficit to GDP figure because it is that all other things being equal should dictate bond yields in the market. Whether you liked his approach or not, Osbourne cut that from 11% to 4%.

    Nominal debt is simply the accumulated deficit each year. Since Labour planned to cut the deficit by half anyway what your doing here is bashing the Tories for doing exactly what Darling intended.

    Eventually we are going to have to pay that debt back. Osborne plonked another £555 billion on top of it.
    I always supported reducing the deficit, the problem is that Labour were described as reckless for only wanting to cut the deficit in half when that's what the tories did. It's not simply cutting the deficit people opposed, it's how you go about doing it and there are certainly ways to cut the deficit without the devastating impact that government cutbacks had.

    My other issue, is that the government completely abandoned the concept of micro economics. If the economy is growing, but real term wages are falling while the cost of living is rising, then what's the point?

    The brexit vote was largely a protest against just this. Against elites going on about how great it is that the economy is growing while they see their wages fall, their job become less secure or their job given to an immigrant for less money.
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    Austerity and the surplus target was just a political thing to use against Labour.

    However it had run its course in terms of political usefulness, Labour don't look like challenging now anyway, so Osborne's constant mantra about cuts and austerity were starting to become a millstone around the government's neck. Also there was always the risk that recession (which always pushes up a deficit) could have left the Conservatives open to ridicule if they had banged on about deficit reduction for 10 years and then were unlucky enough to go in to a recession a year or two out from an election, that could have pushed the deficit right back up in one year. With Osborne having gone it gives an ideal opportunity to ditch the policy.

    I don't expect Hammond will suddenly go on a spending spree. I expect he will be a fairly managerial Chancellor. I don't see him as personally ambitious as Osborne and is unlikely to be May's successor so unlike Osborne's Budgets he's not trying to position himself for the leadership. He will probably tinker a bit here and there, try to keep the ship steady during Brexit and find a bit of money from somewhere to address some of the bigger shortages of infrastructure, which would at least be welcome. The deficit will probably continue to fall but more slowly.

    Also I think the welfare cuts will stop now. Not saying they will restore things that have already gone, but I don't see Theresa May looking to make political capital out of cutting welfare in the way that Cameron and Osborne did, trying to paint Labour as "the party for scroungers".
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    (Original post by Bornblue)
    So how come George Osborne borrowed more in five years than Labour did in 13. If Labour's spending was so reckless then why in 2007 did Osborne pledge to back Labour's spending plans, pound for pound?
    Because, rather obviously, the UK's deficit peaked in 2009-10.

    Osborne borrowed more because he had an enormous deficit to tackle. You cannot simply run a surplus after running a deficit that's over 10% of national income: it would destroy your economy. The levels of borrowing under the Coalition were unacceptably high, but they were entirely the responsibility of what that government inherited.

    I'm most certainly not far left. Kenysian economics is not about pouring endless buckets of money into the welfare state. It's about the government intervening during economic downturns and investing in projects to kick start the economy, rather than stripping the state down.

    It's also about investing in fiscal multipliers. Take flood defences for example. For every pound we spend on flood defences, we save £7 in repairs after a flood. So why was money on flood defences cut?
    Largely because your figures don't actually stack up: returns depend on targeted spending. There's also a law of diminishing returns there: it's worth noting that revenue spending on flood defences was increased, it was capital spending that fell - for the obvious reason that after you build a range of effective flood defences, you need less capital investment.

    The great irony about people complaining about welfare is that when we spend money on welfare, it gets reinvested back into the economy, as poor people tend to spend pretty much everything they have.
    This would pretty much be an argument for doubling people's taxes and handing it back to them in a grant. If I was to treat that proposition seriously for a second, I'd call it inefficient - but ultimately it is far, far more than that.

    More importantly, however, increased welfare spending has the effect of reducing productivity, employment and economic output.

    You're a good poster in general but when it comes to the last government, you seem unable to show any sort of balance and instead turn into a cheerleader. Just one last point, do you disagree with Theresa May removing the requirement for chronically ill and disabled individuals to be retested every six months?
    We'd have to see what it actually means beyond a press release first. I think it's wrong to assume there was ever any direction that the most serious cases had to be regularly reassessed - that judgement was made based on the abilities and issues they presented with.

    I've often thought that the knee-jerk anti-welfare reform has actually made it very difficult for policymakers to find genuine cases where the system is failing. I'd very much like to see what evidence that Damian Green had while coming to this decision. I'd love to think this was more than a populist bone thrown by a new Secretary of State to give him something to say during conference season, but in the end changed little.
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    (Original post by Bornblue)
    Eventually we are going to have to pay that debt back. Osborne plonked another £555 billion on top of it.
    I always supported reducing the deficit, the problem is that Labour were described as reckless for only wanting to cut the deficit in half when that's what the tories did. It's not simply cutting the deficit people opposed, it's how you go about doing it and there are certainly ways to cut the deficit without the devastating impact that government cutbacks had.

    My other issue, is that the government completely abandoned the concept of micro economics. If the economy is growing, but real term wages are falling while the cost of living is rising, then what's the point?

    The brexit vote was largely a protest against just this. Against elites going on about how great it is that the economy is growing while they see their wages fall, their job become less secure or their job given to an immigrant for less money.
    We pay the debt back when we reach surplus. If we run a 2% surplus and growth is 3% then debt to GDP falls 5% in one year and by more than half over a decade. Remember again that a trillion pound debt does not matter.. it's the debt to GDP which does (our economy is getting on for two trillion).
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    (Original post by L i b)

    I've often thought that the knee-jerk anti-welfare reform has actually made it very difficult for policymakers to find genuine cases where the system is failing. I'd very much like to see what evidence that Damian Green had while coming to this decision. I'd love to think this was more than a populist bone thrown by a new Secretary of State to give him something to say during conference season, but in the end changed little.

    Seems like May is intent on taking the tories back to the 1960s. She's gone more authoritarian socially and seemingly now more interventionist and protectionist economically.
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    (Original post by Bornblue)
    My other issue, is that the government completely abandoned the concept of micro economics. If the economy is growing, but real term wages are falling while the cost of living is rising, then what's the point?
    A fall in incomes should've been expected as a result of the downturn, but median income growth was positive from 2012-13 onwards. We have also enjoyed a period of relatively low increases in the cost of living, with inflation being exceptionally low.

    There was also a question of sustainability: income growth was most noticeable among the poorest. As a result, employment income makes up a substantially larger portion of the overall income for the poorest in our society. That's a question of self-reliance.

    The brexit vote was largely a protest against just this. Against elites going on about how great it is that the economy is growing while they see their wages fall, their job become less secure or their job given to an immigrant for less money.
    Except, of course, that incomes have been rising. There's also a more fundamental point here - a generational one. Real disposable incomes have increased hugely in the past few decades. People are by far wealthier than ever before - and as for job security, there are more people in work than ever before. To suggest we're somehow in some sort of economic crisis that is being hushed-up simply isn't accurate.
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    (Original post by MagicNMedicine)
    Austerity and the surplus target was just a political thing to use against Labour.

    However it had run its course in terms of political usefulness, Labour don't look like challenging now anyway, so Osborne's constant mantra about cuts and austerity were starting to become a millstone around the government's neck. Also there was always the risk that recession (which always pushes up a deficit) could have left the Conservatives open to ridicule if they had banged on about deficit reduction for 10 years and then were unlucky enough to go in to a recession a year or two out from an election, that could have pushed the deficit right back up in one year. With Osborne having gone it gives an ideal opportunity to ditch the policy.

    I don't expect Hammond will suddenly go on a spending spree. I expect he will be a fairly managerial Chancellor. I don't see him as personally ambitious as Osborne and is unlikely to be May's successor so unlike Osborne's Budgets he's not trying to position himself for the leadership. He will probably tinker a bit here and there, try to keep the ship steady during Brexit and find a bit of money from somewhere to address some of the bigger shortages of infrastructure, which would at least be welcome. The deficit will probably continue to fall but more slowly.

    Also I think the welfare cuts will stop now. Not saying they will restore things that have already gone, but I don't see Theresa May looking to make political capital out of cutting welfare in the way that Cameron and Osborne did, trying to paint Labour as "the party for scroungers".
    A few weeks ago at a housing talk, the regulator from the HCA told us that already it is clear that Theresa May is running a far more centralised government.

    Cameron was more than happy to leave large chunks of policy to the treasury. It seems like everything now is going through May. So you're right, Hammond won't be doing anything particularly noteworthy.
 
 
 
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