Did the Labour Party really "overspend" in office?

It does but it's not quite that simple.

For instance although highly unpopular the bailouts did actually lead to a better outcome for tax payers * than letting them suffer their deserved fate. In some cases then this is a ethical argument rather than a strictly economic/ political one.

The answer is to break up the banks and not let any banks become so big that if they crash the whole economy comes down with them.

Problem with that is that banks will have less incentive to take on more customers, and customers that are considered more of a risk (namely, people who are poorer) may well be denied service.

It is more cruel to lend to someone you know can't pay you back and that you'll end up taking their house from them.

Banking should be more like it was in the 1970s. Back then it wasn't an industry people went into to make huge sums, but rather they were respectable and sensible. They wouldn't lend money to people who couldn't pay it back. Mortgage defaults were very low. It was hard to borrow money.

Now pretty much anyone can borrow unlimited amounts which just creates a massive cycle of debt in the economy.

I support Government schemes to support poor people, but easy credit is not one of them.

I guess there's truth to that.



I'll have to read up on this.



That seems eminently sensible.

Labour overspend for their second and third term, that's a fact.

They also pissed money up the wall on pfi infrastructure to look good even though the numbers were terrible.

It's not really the biggest of deals though it's just bad government.

The big deal was the lack of regulation of the banks which made our debts so big when the crisis hit.

It's not something you can beat them with though as the conservatives wanted looser regulations too


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Absolutely. If you let a bank fail then thousands upon thousands of people will lose all their savings and potentially their pensions and homes. The bank doesn't take the hit, ordinary people do.


The answer is to break up the banks and not let any banks become so big that if they crash the whole economy comes down with them.

That's the problem though. The losses are spread out amongst the taxpayer yet the benefits are so concentrated in the hands of a relatively small number of individuals. Why can the benefits not be shared like the losses are?


That's what really irks me. It's apparently ludicrous and the politics of envy to suggest that wealth should be redistributed more evenly, yet those people have few issues with spreading the losses...

In the lead up to the 2008 financial crash the banks were giving $720,000 mortgages to people earning about $25,000. They were giving mortgages to people with no income, they were giving mortgages without even asking for proof of income. They were giving out 'teaser rate' mortgages which meant that a person initially had low payments but after a few years they increased massively.


The banking sector used to be a respectable sector, where people would make sensible decisions. It wasn't the 'make as much money as you can' environment it is now. It wasn't sleazy salesman and gamblers. It was a sector built on sustainability and stability.

No that's a bad idea I think for numerous reasons which I can go into if you want (decreasing tax revenue, lack of competition, investment, innovation etc are a few to name)

I think there are many non partisan ways in which to solve this problem- for instance;


I think parliament select committees are an excellent thing and should be given a degree of greater powers, and there should be tougher laws on Lobbying as well as wilful negligence.

I know you may recoil in horror at the authorship of this but you may find this insightful

https://ari.aynrand.org/blog/2017/03/01/free-markets-didnt-create-the-great-recession

Anyone who is going to claim that the banks are not to blame for the crash isn't worth my time. In the same way that I wouldn't waste time arguing with someone who claimed that grass was blue. They're past the point of reason.

Don't know how economically right wing you are but do you not think that if there had been no regulation in banking that big banks would not have been as reckless as they were as they knew they would be bailed out?

I

I agree that the PFI deals were bad deals. Spending the vast amount on the new Scottish Parliament building and the Welsh Assembly one, not to mention the vile one the London Mayor has are other examples of wasteful expenditure.

That's remarkably close minded of you, 😕.

Innovation? Like the innovation of giving mortgages out to people who couldn't pay them back?

Who encourage that and signed the communities reinvestment act?
Who encouraged them to lend to the poor?
Who proposed to roll back Frannie's and Freddie's? Who supported it?

Sigh.

The banks were always able to refuse to grant a mortgage. They chose not to for their own gain.

Sigh.

The banks were always able to refuse to grant a mortgage. They chose not to for their own gain.

They overspent 02-08.
They used the tory budget till 01 and eradicated the deficit.
They also inherited a good economy from Major.
Should have ran a surplus between 02 and 08 as we were in a boom.