The lunatics are back in charge of the economy and they want cuts, cuts, cuts

[montmorencyt2w]

The lunatics are back in charge of the economy and they want cuts, cuts, cuts

http://www.guardian.co.uk/business/2010/jun/14/lunatics-economy-cuts-frankin-roosevelt

 

[Trader333]

The Guardian is always full of left wing views. The reality is that you cannot continue to spend money that you don't have. The consequence of continued spending would have repercussions for those not yet born right up to and including their retirement and beyond.


Paul

 

[shadowninja]

Yep. Do they think Greece should be allowed to borrow more?

 

[montmorencyt2w]

The Guardian is always full of left wing views.

"Left wing" By the standards of Trade2win perhaps, where the norm is somewhere to the right of Atilla the Hun.

The reality is that you cannot continue to spend money that you don't have. The consequence of continued spending would have repercussions for those not yet born right up to and including their retirement and beyond.

Well another reality is that with everyone in Europe cutting furiously, further recession then depression is more or less a certainty.


There is still enough money left for completely unusable nuclear weapons, apparently.
Here's another "left winger":

http://www.guardian.co.uk/commentisfree/2010/jun/08/cuts-armed-services-fantasy-enemies

 

[Trader333]

Well another reality is that with everyone in Europe cutting furiously, further recession then depression is more or less a certainty.

So how would you solve it then ?


Paul

 

[Shakone]

Agree with Trader333, you can't spend more than your income year after year. I'd go further. A country like England, should never be in this kind of debt in the first place. The country should be running surpluses most years, and then when something disastrous like the credit crunch occurs, you have plenty. The amount of money the government has wasted and continues to waste is shameful.

 

[scose-no-doubt]

They obviously haven't seen "the biggest game in town" have they montymercy

I also suggest watching this http://en.wikipedia.org/wiki/Let's_Make_Money. It's easy enough to find online. It has a section about thatcherist and equivilent policies throughout europe, the real underlying goals behind them and the real impact on the populus.

It's not a tin-hat movie I promise.

 

[barjon]

The Guardian is always full of left wing views. The reality is that you cannot continue to spend money that you don't have. The consequence of continued spending would have repercussions for those not yet born right up to and including their retirement and beyond.


Paul

It's no big deal. A big chunk of the debt is is in the banks and the Government will make a nice fat profit on that in due course.

It's the cost of servicing the debt that counts, not the actual debt. After all, if no-one spent more than they had in terms of taking on debt then not many would own their own houses.

Mind you, Governments should salt it away in the good times so they've got plenty to play with in the bad times. Unfortunately they mostly behave like the worst young gurus who always see a "paradigm shift" when the good times roll and the end to "boom and bust" (where have I heard that before ) whilst wiser heads know that to be a triumph of hope over experience.

We do, of course, have a consumer led economy and if the cuts centre on reducing the income of consumers then montmorency's fears have credence.

jon

 

[Trader333]

I agree that implementing any measures that stop the growth of business will be counter productive. Not addressing the debt situation though will lead to hyperinflation. That, in my view, means we would soon be following the Zimbabe model where you take a wheel barrow of money to the shops in order to buy a loaf of bread. It would also lead to large increases in interest rates which in turn would see thousands default on mortgages etc. This is a real possibility if debt is not addressed.

I am looking forward to Monty explaining how the problem should be solved.


Paul

 

[Shakone]

Barjon, when an individual gets a mortgage, (i) it is usually because there is simply no way they can afford to buy it outright, and they need somewhere to live (rent may be a comparable cost) and (ii) at the end of the debt repayment they will have something to show for it, a shiny new house which is very valuable.

To compare the government getting in debt in a similar way makes a lot less sense. Because neither of (i) or (ii) applies. Of course it could be afforded, if it was important enough, by less spending on other things, or by higher taxes. A large % of spending is not essential. Also what will the UK have at the end of paying off this debt?

 

[Jon Doe]

The Guardian is always full of left wing views. The reality is that you cannot continue to spend money that you don't have. The consequence of continued spending would have repercussions for those not yet born right up to and including their retirement and beyond.


Paul

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[scose-no-doubt]

To compare the government getting in debt in a similar way makes a lot less sense. Because neither of (i) or (ii) applies. Of course it could be afforded, if it was important enough, by less spending on other things, or by higher taxes. A large % of spending is not essential. Also what will the UK have at the end of paying off this debt?

Actually, a fair chunk of Labour spending was cap expenditure related. New hospitals, schools, industrial and enterprise zones, etc don't grow out of the ground? Plus a lot of private sector activity was subsidised too.
Longer term benefits of these decision will benefit coming governments in real economic terms as well as giving an apparent reduction in expenditure for deficit reduction purposes as they are one time expenditure items.

 

[montmorencyt2w]

Three more "left-wingers", one from Cambridge, one from Princeton, one from Dartmouth College:

http://www.guardian.co.uk/business/2010/jun/14/economists-on-spending-cuts

Perhaps Melanie (Atilla the Hen) is more to your taste:

http://www.guardian.co.uk/books/2010/jun/14/melanie-phillips-digested-read

(For the humour-impaired (like Melanie), that is a satirical piece).


Meanwhile, the real villains of the piece?

http://www.guardian.co.uk/business/2010/jun/13/banking-commission-report-alistair-darling

 

[Trader333]

Three more "left-wingers", one from Cambridge, one from Princeton, one from Dartmouth College:

So what ? Still from The Guardian so nothing new.

I am still waiting for your answer to solve the current crisis.


Paul

 

[scose-no-doubt]

So what ? Still from The Guardian so nothing new.

I am still waiting for your answer to solve the current crisis.


Paul

Kill all politicians and let bill gates and richard branson and nouriel roubini take the helm

 

[ha0dho]

I cant find any stories like this in the telegraph

 

[barjon]

I am still waiting for your answer to solve the current crisis.

Paul

Aw, Paul, cummon, it's all a permanent three card trick anyway.

A guy walked into our local hostelry and plonked down £50 as security while he went to inspect the master suite to see if it was suitable for a week-end romp with his young lady. The Landlord promptly whipped round to the local off-licence with the £50 and paid his outstanding bill for a few bottles of scotch he'd bought in an emergency. The off-licence guy whizzed with the £50 to his dentist and paid off his outstanding bill with it. The dentist owed his receptionist £50 so he gave it to her. The receptionist doubled as an "escort" and nipped round to the local hostelry to pay the Landlord her outstanding bill for a room she had hired for the afternoon. Just as she left the guy came down from the master-suite saying it wasn't suitable and the Landlord gave him his £50 back.

Nobody had done anything or produced anything but, VOILA, suddenly no-one was in debt anymore and everyone went their merry way.

jon

 

[montmorencyt2w]

http://www.guardian.co.uk/business/2010/jun/13/europe-embraces-cult-of-austerity

Last week the message from the US Treasury department was clear: too much austerity, too fast, could damage the word's fragile economic recovery. Treasury officials circulated comments made by the US treasury secretary, Timothy Geithner, at last weekend's G20 meeting. Geithner had made clear that the US did not want to see big European countries, such as Germany, slashing spending too much lest it damage domestic demand. "The core nations of Europe, the strongest, richest countries in Europe, [should] keep active to help support recovery," Geithner said.

[...]

Even on the American right, there is broad sympathy for Geithner's suspicion of austerity and backing for the Obama administration's desire not to follow Europe's lead. "I have sympathy for Geithner. It just seems to make no sense at all in having all countries engage in severe budget tightening at the same time when the recovery we are having is anaemic," said Desmond Lachman, a scholar at a conservative Washington think tank, the American Enterprise Institute. "For Germany to be engaged in attempting to balance its budget right now just seems nuts," Lachman added.

In this country, too, as Cameron and his chancellor, George Osborne, prepare to announce more details of cuts in next week's emergency budget, there is real concern among economists as to whether the Con-Lib coalition has chosen the right course. The eminent Financial Times columnist Martin Wolf has questioned the wisdom of the strategy in recent articles, asking whether the government has a plan to sustain demand, as well as impose painful cuts. On Friday he published an open letter to Osborne.

"I have been fascinated – if appalled – by the pre-Keynesian approach you and the prime minister have taken to the UK's fiscal challenges," he wrote. "What Keynes called 'the Treasury view' that fiscal policy has no effect on activity, even in a deep recession, is alive and well in Downing Street." Wolf ended by saying: "So remember this: the imposition of futile misery is not an act of wise policy, but rather a sign of folly."

(My emphasis)

 

[the blades]

Actually, a fair chunk of Labour spending was cap expenditure related. New hospitals, schools, industrial and enterprise zones, etc don't grow out of the ground?

Sadly, because of the need to grab headlines like "we'll rebuild all schools by 2030", lots of money has been spent rebuilding things that didn't need it. Same with council housing.

Labour have squandered billions. It was well intentioned, but they poured money into a wasteful system without reforming it. And I voted for it!

UTB

 

[wistundra]

My bet is in Stagflation