US Government Spending Like a Sailor in a Brothel

sabretoothtigger

It will be his glorious legacy, like with Clinton some of his actions could be drawn through to the results we see today
You could say it was the guy before Clinton who allowed for the positives to appear under his term.

Democracy is flawed like this, everyone wants it all to be ok on their watch and the people dont help.

Same thing happens over here, alot of the new labour wonder years was really down to prudence of previous actions.
Ive thought that for years going back to Lawson and if we consider labour has been around long enough now to have a long term influence it kinda supports the argument they aint much cop



http://en.wikipedia.org/wiki/Chancellor_of_the_Exchequer#Chancellors_of_the_Exchequer_of_the_United_Kingdom.2C_1902-present


Bit like that joke that they removed all the W's from the white house keyboards when Bush won, you could assume they do tend to screw over the next set of guys.
Alot of crap usually needs sorting out as soon as office is taken and this is why Obama seems no good to me, apart from gitmo he isnt changing the previous set of crap whatever that might be.
He is getting right down to shoveling more of the same old crap

vivatifosi

sabretoothtigger wrote: »

Ive thought that for years going back to Lawson and if we consider labour has been around long enough now to have a long term influence it kinda supports the argument they aint much cop

In hindsight, maybe we should follow the US example, where you can only be in power for a max of 8 years (as a leader) and that to change leader you need to have an election. Both Maggie and Blair seemed to go ever so slightly bonkers once they'd passed that point, whatever you thought of their policies.

sabretoothtigger

No I prefer our system mostly. :laugh: I think they were always bonkers, with greatness comes great burdens or something

Best thing for usa is if obama cant or wont admit / correct mistakes made, that he is out in 1 term but its likely he'll stick for two like most do.
With our system it seems they can go at any moment and they are more likely to listen hard because of this, election or not


Usa I think is worse off in captialism and democracy but they do come from a position of lower taxes so they can at least suffer a more normalised system for a while to pay off that debt, maybe it'll work.
From what I hear they will start paying taxes on petrol like we do, that'll be a nasty shock to the system but very profitable for government
This all adds up to lower growth imo

Count_Dante

In contrast to the OP, savings are already being made to the bloated military budget:

'Obama Axes Pentagon Plan To Build Billion Dollar Tank In Shape Of Dragon'
http://www.theonion.com/content/video/obama_axes_pentagon_plan_to_build?utm_source=a-section

sabretoothtigger

Generali

CLAPTON wrote: »

If indeed crowding out is a major factor then presumably interest rates should start to rise ..maybe there is some evidence of this

The main symptoms of crowding out caused by Government borrowing are:

- higher interest rates
- companies unable to borrow as much as they need
- consumers unable to borrow

Well the spread of retail interest rates over the base rate is as high as I can recall, especially given the increase in competition since the mid-80s. So I think we have one symptom there.

Companies unable to borrow? Well that seems to be happening annecdotally at least. Presumably that's why the Government keeps calling on the banks to lend to businesses.

Consumers unable to borrow? Net repayments of debt are happening for the first time since the early 1990s (the last time the Government ran a huge deficit - presumably not a coincidence).

It looks to me like there is compelling evidence of crowding out. All the symptoms are there certainly.

Generali

vivatifosi wrote: »

In hindsight, maybe we should follow the US example, where you can only be in power for a max of 8 years (as a leader) and that to change leader you need to have an election. Both Maggie and Blair seemed to go ever so slightly bonkers once they'd passed that point, whatever you thought of their policies.

You don't need an election in the US to change leader. LBJ became president after JFK was shot and no election was held until the next scheduled time.

Gerald Ford became President when Nixon resigned having not even been on the ticket when Nixon was re-elected. Ford replaced Agnew as VP when Agnew was forced to resign (over campaign finance I think?).

vivatifosi

Generali wrote: »

You don't need an election in the US to change leader. LBJ became president after JFK was shot and no election was held until the next scheduled time.

Gerald Ford became President when Nixon resigned having not even been on the ticket when Nixon was re-elected. Ford replaced Agnew as VP when Agnew was forced to resign (over campaign finance I think?).

Sorry Gen, didn't word my comment correctly. I meant that you need an election after 8 years. I did my other post on my little netbook and can't always read what I've typed - put "that" instead of "then". Thanks for pulling me up.

CLAPTON

Generali wrote: »

The main symptoms of crowding out caused by Government borrowing are:

- higher interest rates
- companies unable to borrow as much as they need
- consumers unable to borrow

Well the spread of retail interest rates over the base rate is as high as I can recall, especially given the increase in competition since the mid-80s. So I think we have one symptom there.

Companies unable to borrow? Well that seems to be happening annecdotally at least. Presumably that's why the Government keeps calling on the banks to lend to businesses.

Consumers unable to borrow? Net repayments of debt are happening for the first time since the early 1990s (the last time the Government ran a huge deficit - presumably not a coincidence).

It looks to me like there is compelling evidence of crowding out. All the symptoms are there certainly.

As I've aleady said there may be some evidence of crowding out although I a bit surprised that you find the evidence quite so compelling.
Consumer debt repayment may well be explained by the very unique situation that many lucky tracker mortgage holders are experiencing.. just by maintaining their monthly payments they are actually repaying on a substantial scale.

Generali

CLAPTON wrote: »

As I've aleady said there may be some evidence of crowding out although I a bit surprised that you find the evidence quite so compelling.
Consumer debt repayment may well be explained by the very unique situation that many lucky tracker mortgage holders are experiencing.. just by maintaining their monthly payments they are actually repaying on a substantial scale.

Perhaps. The reality will be that there are conflicting forces at work and it's never going to be possible to tease them apart.

My belief is that counter-cyclical spending can easily become self-defeating and that we're fast reaching that point in many countries. The most compelling evidence to me is the gap between base rates and retail rates. I bet that the M4 measure of money supply is falling in many countries too (I've not checked).