UK 'must cut spending or raise taxes,' say experts

Rochdale_Pioneers

tomstickland wrote: »

Thanks for finding this and posting it - I've even thanked you formally!

How fascinating. All the screaming and hollering about Labour running up debt, then you see the figures for 1990 - 1995. Our debt level went up by 2000 basis points - what did we have to show as a result? What major infrastructure projects did we get? What part of national infrastructure did we renew? And how many billions came in from Privatisation during that period?

You want to look at financial mismanagement, look at the early 90s. Look how a recession which was uniquely made in Britain - unlike this one - made us blow such a vast amount of money. Even with the bank bailouts and the fiscal stimulus we've still not managed to add 2,000 basis points onto debt - according to those OECD figures we still haven't risen above the levels Labour inherited.

So, what was it you Tories were saying about debt? You'd know all about it wouldn't you? No wonder Cameron is so exercised by it - he was there at the coal face when such vast sums were burned last time.

Wookster

tomstickland wrote: »

Why did it rise from 2002 to 2007? Keynes said that during a boom debt should be reigned in.

That's Crash being prudent for you. Planning for the future and all that.

Rochdale_Pioneers wrote: »

Because (a) Labour weren't following Keynes and (b) they were investing it in the NHS and schools. Still lower than 1997 isn't it?

They weren't investing money, they were throwing money at the NHS and schools. For the kind of money they've thrown the NHS should be pretty close to fault free, which of course it isn't.

Thank you Crash.

dervish

Wookster wrote: »

http://www.independent.co.uk/news/business/news/uk-must-cut-spending-or-raise-taxes-say-experts-1519074.html



Apparently the experts are all wrong according to Sir Humphrey, Rochdale and Crash.

If thats the choice then we must CUT SPENDING.

I think if there was a refererndum then that would be the option chosen buy the British public.

bubblesmoney

Rochdale_Pioneers wrote: »

Don't talk about other countries! We are the only country with debt....

The reason why I quote Eurostat figures ad not UK government is that they include off-books liabilities like PFI. The difference between their figures and the kinds of cooked ones quoted by some posters is that Eurostat understands the difference between theoretical debt and actual. For example, if you assume Northern Rock's entire mortgage book to be worthless, our "debt" shot through the roof. If you don't count our PFI payments and instead assume that the contract will default leaving us to foot that bill as well, then debt shoots up even more. And assume that pensions are worth nothing and again we are suddenly 1 billion% in debt or whatever stupid made-up figure they choose to quote.

The nice thing about the Eurostat figures is that the same methodology is applied to everyone. Its a fair comparison. Some posters here don't understand fair. They just desperately want to find some numbers - any numbers - to back up Cameroon's absurd clam that we are the most indebted nation on earth.

the market makes the FAIR actual valuation come buying time for a house not some RICS sort of chap who just 'bakes' some calculations in the clouds.

similarly i wonder why the market is rating the uk as below compared to the other countries in G7

G7 Industrialised Countries CDS:p
http://www.markit.com/information/news/commentary/cds.html

further credit is going to be very expensive - already the market rates HMG's credit worse than any other G7 government bar Italy (todays 5y credit default insurance rate HMG debt is more than twice the French and German rates). this coupled with the pound devaluation will decrease what we can buy with our pounds.

tomstickland

Rochdale_Pioneers wrote: »

Because (a) Labour weren't following Keynes and (b) they were investing it in the NHS and schools. Still lower than 1997 isn't it? And much lower than at the end of the last recession when it was over 50%.

a) Which is exactly the point I originally made. Brown has recently converted to Keyne's method, but forgot to save during the boom.

b) Exactly. The cash was being spent by "rich uncle Gordon" with no one questioning where it was coming from or whether we'd have to pay for it in the future. Don't mention money, it's vulgar. Just concentrate on all the wonderful things being done with it.

Furthermore, debt was lower at the start of the last recession.

How fascinating. All the screaming and hollering about Labour running up debt, then you see the figures for 1990 - 1995. Our debt level went up by 2000 basis points - what did we have to show as a result? What major infrastructure projects did we get? What part of national infrastructure did we renew? And how many billions came in from Privatisation during that period?

What major infrastructure projects have we now got?
Plenty of quangoes all claiming to oversee excellence. Plenty of pet projects, be it tackling domestic violence or diversity or engendering community cohesion. I'm sure someone could go and find some suitable examples on the guardian jobs site.

What about our impending energy supply crisis? Loads of warnings on that.
Any major civil engineering like railways?
One bit of motorway, privately funded (Birmingham relief road).

What about telecommunications. Oh, recent report says that we should strive for 2MB/s ADSL, well behind the curve.

Must be some more, I can't think of anything.
I have not seen any improvment in my daily life over the last 10 years.

Oh, there was a new tri-service centre built at great cost. But the fire service are supposed to decant 80 miles away to Taunton some time soon. To a building that is being paid to be kept ready right now.

Edit: oh yes, sorry, the wonderful National Identity Database. Jacquibook Smith says that people keep asking her when the wonderful ID cards will be ready. Cheap project this one, and good to see that every UK citizen can see what a wonderful surveillance tool it will be.

The current government have sunk into the classic tax and spend mentality.
Empty commercial property no longer exempt from rates. New coroporate taxes about to introduced. Punative and retrospective taxation on cars.
Oh, that was a Green tax.

Good job that the 3rd runway is totally non-polluting then.

tomstickland

Hey, first article I see on the Times:
http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article5636437.ece

Some of Whitehall’s biggest computer projects have spiralled out of control, with total cost overruns of more than £18 billion, an investigation by The Times can reveal.
Plans for new computer systems are years behind schedule and have ballooned in cost; others have been scaled back or even scapped. Yet companies continue to make hundreds of millions of pounds in profit, with £102.3 billion forecast to be spent on government IT projects over the next five years.

bubblesmoney

tomstickland wrote: »

Hey, first article I see on the Times:
http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article5636437.ece

one of the biggest money wasters is the NHS IT project going into billions along with the NHS spine project. bottomless pit with very little to show for it.

Generali

bubblesmoney wrote: »

the market makes the FAIR actual valuation come buying time for a house not some RICS sort of chap who just 'bakes' some calculations in the clouds.

similarly i wonder why the market is rating the uk as below compared to the other countries in G7

G7 Industrialised Countries CDS:p
http://www.markit.com/information/news/commentary/cds.html

further credit is going to be very expensive - already the market rates HMG's credit worse than any other G7 government bar Italy (todays 5y credit default insurance rate HMG debt is more than twice the French and German rates). this coupled with the pound devaluation will decrease what we can buy with our pounds.

The CDS market for sovereign debt is pretty undeveloped and CDS pricing should be seen as reflecting supply of and demand for CDSs rather than reflecting underlying credit risk.

tomstickland

I read a very interesting article about that on the Independent web site. Loads of comments from people who work in IT. Some of the them said that it was doomed to failure because it tried to use the classic "specifiy, design, implement" project management method on a problem that is too large and complicated. It's a subject I have strong opinions on because I work on much quicker, adaptive and ad-hoc development that regularly produces better results than the document monkeys who follow procedure.

Top quote was "if you want a complicated system that works then start with a simple system that works".

bubblesmoney

Generali wrote: »

The CDS market for sovereign debt is pretty undeveloped and CDS pricing should be seen as reflecting supply of and demand for CDSs rather than reflecting underlying credit risk.

learnt one more new thing today. thanks generali