Is the recession really Brown's fault?

Generali

Sir_Humphrey wrote: »

It is proportion of GDP that counts. Everything has increased in nominal terms since 1997, it's called inflation.

The fact of the matter is that Labour has done what the Tories did in the 1980s - a fact illustrated by the IFS report you kindly posted the other day. This obviously does not excuse Brown's stewardship.

Both are important. GDP can fall as well as rise as we are finding out with great pain at present.

FWIW, I'm no cheerleader for the Tories and it's clear to me that much more debt should have been repaid in 1986 and 1987 and wasn't because of the General Election. There should have been a presumption that privatisation receipts were used to pay down debt.

Cannon_Fodder

StevieJ wrote: »

Tories would have made mincemeat of interferring Brown, refer Redwood quote :rotfl:

I thought Mr Brown was led by his moral compass, so doing the right thing would be more important than whether the Tories tried to ridicule him or not.

Besides, whilst Chancellor, Labour had a majority that would get pretty much anything through, so if he believed in it, why not just do it?

Its totally spurious to say what the Tories would or would not have done differently - because we do not know what the Tories would have done the SAME...

i.e. would they have setup the Tripartite Authorities?

Would there have even been a need to try to fill the gaps between the 3 organisations, that even this year AFTER all the hoo-haa of their incompetence and lack of coordination, still do not talk to each other...

http://www.guardian.co.uk/business/2009/jan/22/darling-fsa-short-selling

"A rift has opened up between the government and the financial authorities after a furious Alistair Darling was kept in the dark over the lifting of the ban on short-selling"

chewmylegoff

Rochdale_Pioneers wrote: »

!!!!!! we have gone over this repeatedly. Debt was lower in 2007 than in 1997 - yes it increased from 2003 but ended lower. In suggesting that Labour increased debt you are either being deliberately dense or are deliberately lying. Which is it?

You cannot keep stating that black is white and have any credibility. We can debate the pros and con's of Brown's borrowing binge in the second term all you like, but to suggest that this increased UK debt vs when Labour took office is plain wrong. Deal with it and move on.

well it all really depends on whether you use the pretend public sector debt figures, or the real ones which include PFI and the unfunded public sector pension liability.

Sir_Humphrey

Generali wrote: »

Both are important. GDP can fall as well as rise as we are finding out with great pain at present.

FWIW, I'm no cheerleader for the Tories and it's clear to me that much more debt should have been repaid in 1986 and 1987 and wasn't because of the General Election. There should have been a presumption that privatisation receipts were used to pay down debt.

That is a reasonable argument, unlike Wookster's. The problem with worrying too much about government debt is that it ignores the fact that some of the debt is being piled on to prevent private debt defaults.

Debt deflation must be a greater worry rigth now than govt debt (which is still low compared to other developed economies). For the long term to be a worry, you have to get past the short term first when in a crisis.

mbga9pgf

Rochdale_Pioneers wrote: »

Go look at the Eurostat figures which includes PFI and other off-books liabilities. Above 40% yes, but they clearly show that the UK debt fell between 1997 when Labour took office and 2007 when the sample stops. Any attempt to manipulate the figures showing that Labour increased debt in the 10 years they had growth is an outright lie.

And yes our debt is shooting up now. In 1990-1993 it increased from the low 30s to the low 50s% - and that recession had no bank bailouts or fiscal stimuli.

And how does our debt compare to most of our neighbours? Lower! A lot lower! So when Cameron says we are the most indebted government, can afford to borrow no more and need the IMF that is also an outright lie.

Is debt a good thing? Of course not. Can the UK sustain higher levels of public debt? Of course - how do Greece and Italy manage?

You have sidestepped my original point entirely. Without consumer debt, GDP growth would have been negative since 2002. Debt as a percentage of GDP would therefore have been much higher than it currently is without the Brown debt boom. This is not a good thing. Not only have we got to pay back all that money that was borrowed for consumer tat, we have also got to deal with an economy correcting back to where it should be. Want to comment on debt to GDP when we see 10% wiped off GDP as a result of this recession? Including PFI and the bank bailouts.

Much of this could have been avoided! Brown chose to ignore it!

Sir_Humphrey

chewmylegoff wrote: »

well it all really depends on whether you use the pretend public sector debt figures, or the real ones which include PFI and the unfunded public sector pension liability.

Either way, it is lower than that of supposedly 'prudent' Germany IIRC.

FairyElephant_2

Everything goes in circles. We were 'due' another recesssion (anyone read JM Keynes?). It is a global problem and far too large to be laid totally at the door of any one man or organisation, or even country.

Personally I'm not finding this recession as bad for me as the previous one. The people who are suffering the most seem to be those who bought into the 'have it now' culture, which I am afraid the Tories fostered & encouraged last time they were in power. I was not immune - I fell into the trap too (credit cards, loans, negative equity etc, etc) although not as deeply as many, but I saw the light in time and dug myself out, so this time I am prepared and able to weather the storm much better. Sorry if that sounds smug - it's not meant to be - I've been there and I know it hurts, but I also know that it'll pass.

Could do without the media hyping it up all the time though!!!!!!!

Generali

Sir_Humphrey wrote: »

That is a reasonable argument, unlike Wookster's. The problem with worrying too much about government debt is that it ignores the fact that some of the debt is being piled on to prevent private debt defaults.

Debt deflation must be a greater worry rigth now than govt debt (which is still low compared to other developed economies). For the long term to be a worry, you have to get past the short term first when in a crisis.

That we need to get through the current crisis is undeniable. My feeling is that the wrong thing is being done, even using the logic of the left.

So you use deficit spending to prop up demand and prepare for the future: using it on increased pay for Government employees and on employing smoking cessation counsellors doesn't really do that.

Better surely to spend the money on improving the road network or retraining clever and motivated finance workers to do something different and more worthwhile. I always felt the terrible waste of the City was that so many talented people were employed to do something so mundane. I worked with a London-Chinese girl with a PhD in maths (not sure of the details beyond that) who was doing a boring and simple back office job because it paid so much better than doing something a bit more worthwhile.

Wookster

Generali wrote: »

Better surely to spend the money on improving the road network or retraining clever and motivated finance workers to do something different and more worthwhile. I always felt the terrible waste of the City was that so many talented people were employed to do something so mundane. I worked with a London-Chinese girl with a PhD in maths (not sure of the details beyond that) who was doing a boring and simple back office job because it paid so much better than doing something a bit more worthwhile.

Exactly, but that would require intelligence and an understanding of what's gone wrong. Neither of which our government has, so they just spend then money instead.

The only difference with the Tories imo is that they simply wouldn't spend the money, which is better (just).

Rochdale_Pioneers

JayScottGreenspan wrote: »

There seem to be a bunch of posters (Rochdale Pioneer, BackFromTheEdge, StevieJ) reasoning as follows:
"The Tories would have been at least as bad" => "It's not Brown's fault"

Quite simply, this is bad logic. The job of the Labour government wasn't to ruin the economy in a slightly-less-bad way than the Tories. The chief task of the government was to manage the economic cycle correctly, which they patently failed to do.

Slag off the Tories all you want. But please open your eyes and see past your big red rosettes for a moment and recognise the mistakes of the current government.

Your 'Tories bad', 'Labour good' world is a simple one, and easily understood by the feeble minded, but it is one that I do not wish to share.

hang on, thats not ehat I am saying at all. If anything its "Labour Bad, Tories Bad. Be clear, I think Brown has screwed things up badly. We know that the regulatory system he introduced in 1997 has failed in a catastrophic way.

But what has the Tories complaint been about it? is it that its lax and a failure and allowed banks to grow catastrophically big? No, its that Brown "the great regulator" was imposing too MUCH regulation, not too little.

So yes, Brown has presided over a disaster. Had we listened to the Tories we would have had even less regulation - what would things have looked like then?