Public finances: The chickens coming home to roost

Wookster

(The Independent)

Hamish McRae: The chickens have come home to roost for our public finances

It is the moment of truth. Tax revenues have collapsed, creating a catastrophe for this Government and a disaster for the next one. They will have to get used to the idea that tax revenues will go down, maybe sharply down, not just this year and next, but probably for longer.

If they don't take this into account and adjust spending, the markets will force them to do so. The UK will almost certainly lose its AAA credit rating this summer as the deterioration in public finances become evident, and while it is unrealistic to talk of the country defaulting on its debts – it can and will print the money to pay them – it will face a decade of retrenchment, rather as it did in the 1980s, as it strives to get borrowing back under control.

http://www.independent.co.uk/news/business/comment/hamish-mcrae/hamish-mcrae-the-chickens-have-come-home-to-roost-for-our-public-finances-1627085.html

Some painful choices will have to be made. Who is going to make them?

ad9898_3

What's grim about this is January is normally a good time for the government coffers, typical of a Labour government, everytime they get power it always ends in disaster, although I admit there are mitigating factors this time, still they don't help themselves. This could have been stopped in 2003 when the liar loans for mortgages were exposed, then maybe a phone call to Greenspan to explain what was happening could have at least averted some of the catastrophe.

But their heads were firmly buried in the trough, only to come up to announce and end to boom and bust.:rolleyes:

Wookster

ad9898 wrote: »

But their heads were firmly buried in the trough, only to come up to announce and end to boom and bust.:rolleyes:

Exactly and you can't imagine any tough decisions made on public spending until after the election.

Will the public finances survive that long?

Old_Slaphead

Wookster wrote: »

Some painful choices will have to be made. Who is going to make them?

Whoever's in charge after the next election.

Anything goes except for 'sacred cows' ie public section pay being held at just below inflation and continuing public sector FS pension provisions.

Wookster

Old_Slaphead wrote: »

Whoever's in charge after the next election.

Anything goes except for 'sacred cows' ie public section pay being held at just below inflation and continuing public sector FS pension provisions.

Public sector pensions are one of the biggest unfunded blackholes of them all! The UK is facing a pensions crisis and something will have to be done to address this. Its going to involve tough decisions and unhappy people.

ad9898_3

Wookster wrote: »

Will the public finances survive that long?

Oh yes, they will survive, Clown will continue to borrow, then when they lose the next election he will be on the 'American lecture curcuit', telling them all about is fiscal wisdom for $50,000 a pop.:rolleyes:

Wookster

ad9898 wrote: »

Oh yes, they will survive, Clown will continue to borrow, then when they lose the next election he will be on the 'American lecture curcuit', telling them all about is fiscal wisdom for $50,000 a pop.:rolleyes:

Let me guess, his trade mark phrase being "fiscal prudence" and the "golden rule".

Suddenly something stinks here...

furndire

Where are all benefit payments going to come from when more people lose their jobs, so therefore there are less people paying taxes to fund them? There is going to be **** hitting the fan when people find out that councils have a cap on the rent that they will pay.
I really am starting to feel that we are in for a very grim time in this country.

It certainly seems that Gordon has had a huge limit on his credit card, and now maxxed it out.

purch

Some painful choices will have to be made. Who is going to make them?

Not the politicians...........you can be sure of that.

As usual it will be the general public who will be forced into making the painful choices........and those furthest down the wealth ladder will have the most painful one's to make.

So much for progress !!!!!

ad9898_3

Wookster wrote: »

Let me guess, his trade mark phrase being "fiscal prudence" and the[strike]"golden rule"[/strike] "golden shower"

Suddenly something stinks here...

I swore you made a typo, so I fixed for you.:D

Wookster

furndire wrote: »

It certainly seems that Gordon has had a huge limit on his credit card, and now maxxed it out.

It didn't have to be this way: if Crash had been prudent during the good times, there would be a great deal more headroom to cushion the fall now.