Tory cuts could be mighty unpleasant

moggylover

Generali wrote: »

Well Labour are planning to spend more than half the income the country generates (GDP) next year so I'm not sure exactly how deep you expect them to dig.

What proportion of the nation's output do you think it's reasonable for the Government to spend, out of interest?

Quite honestly, in the short term, I am happy to go as high as 2/3rds, and at the moment we must remember that Labour have had less time to re-build what the Tories destroyed than the Tories had to destroy it:D. I would actually prefer to focus on re-building the economy so that GDP grows than cut the green shoots off before they have had time to put in sufficient roots!

I would be most dissapointed in a Government that then went on to spend that high in the long time as sensibly maintaining what you have costs less than the major renovations in the longer term.

A simple analogy (because you seem to be missing the entire point - I suspect because it is one you would prefer not to grasp): when I bought my current house I had to replace all the windows, which had not seen much of a coat of paint in donkeys years. I have since painted them every two or three years and they remain in pristine condition with no rot or decay and very little work needed to repaint them each time. It costs a couple of tins of good quality paint and a couple of undercoat plus a bit of sandpaper and some time each year, not a great deal of expenditure. Now, they have been in for 20 years and so had I decided not to maintain them they would have rotted in most corners by now and be needing some major work if not replacement again (they cost over £4K last time so lord knows what they would be now).

I would also point out that vast numbers of council houses had been sold off during the last Tory reign and yet none of the money gained from this had been spent on repair and maintenance of the remaining housing stock and so we were eligible for EU grants for the repairs and renovations necessary to bring much of it back to habitable standards:eek:.

NO householder, or even private landlord or businessman would expect to neglect the fabric of his holdings in the way that the Tories repeatedly do without facing a day of reckoning when the cost of that neglect has to be met! Yet people repeatedly focus on the borrowing that others have to do to repair their neglect afterwards!


BTW - we are ALL doing it:D

http://www.cnbc.com/id/30308959?slide=14

kabayiri

Optimist is absolutely right.

Some people think we can ride out the recession, and return to an old world, the world of 2000-2007; a time of easy credit; and optimism that we could be the bankers of the world.

This is unrealistic in my view.

We will have major fiscal drag, limiting our ability to grow the economy. The appetite for many of our financial products may have evaporated or at least shrunk.

Lets just remember the interest repayment projected on our debt in 2013, a trifling 60bn. Its a disgrace, pure and simple. It will be a long time before I trust a Labour crowd again.

Wookster

Rochdale_Pioneers wrote: »

As previously discussed debt as a % of GDP went up 900 basis points to 44%. If UK debt was now 900 basis points lower than the 79% and rising that it currently is we would not be having a happy discussion about maintaining spending - you and the right would be banging on about debt. Brown did not spend so much money that we can't afford to spend it now. The money was spent stopping the financial system from collapsing completely.

Again, you are missing the point!

If Crash had been prudent from 2001-2007 state spending would already be lower as the state would be smaller. This means that the deficit today could be half of what it currently is (i.e. £90BN instead of the forecast £180BN).

This also means that a £40BN stimulus would have a much greater impact on the economic front than simply maintaining government spending now (the VAT cut isn't really a stimulus).

Do you understand my point?

mbga9pgf

StevieJ wrote: »

Lenin did know a lot about history do you?

No, Stalin. Read about the Purges. Socialist jealousy at its most deadly.

mbga9pgf

Rochdale_Pioneers wrote: »

There seems to be two utterly bonkers arguments put out by the right.

1. Labour spent money in boom years. Yes they did. Having been given three General Election mandates to fix the decaying infrastructure they did exactly that. But lets not get carried away with the level of spending. Brown's spending years post 2001 added 9% onto debt. If we had not spent that money and consequently could reduce our debt today by 9% would we be in the clear? The argument seems to be that in not trying to completely remove our debt that he did something criminal. Anyone know how many years in our history UK debt has been lower than it was in 2001?

2. That poor Labour regulation is responsible for the scale of the crash. Doesn't stand up to scrutiny. Our banks with light touch regulation nearly collapsed. If its about regulation, how do you explain banks in Spain and Germany doing the same when they have very heavy regulation? And was not the argument put forward by the Conservatives that Labour were imposing too much regulation not too little? We all remember speeches by Cameron decrying Brown "the great regulator" strangling entrepreneurial spirit. Lets imagine that the Tories had won in 2005. Anyone seriously think that the Howard government would have increased City regulation? Would not have been telling the city that they were doing a good job?

So on both counts the Tory critique is a paper-thin fantasy. Its only because Brown is incapable of communicating that they have managed to implant such nonsense in the heads of certain people. The clear fact is that the Tories were dead wrong on the crash - about its cause, what to do about it, and now its effects. Serious economists in the city are reported to be deeply concerned about Osborne's utter lack of understanding of economics, and its no wonder why.

Want to add the personal debt stats to the above figures? Want to comment how brown let our nation borrow itself to the hilt? No, thought not. Compare our total debt to the Germans and you will see pretty quickly who will recover first. The national debt stats were on a downward trend well before Labour got in, if anything, I am surprised Labour managed to F*ck things up so badly in so little time.

There wasnt underinvestment. We were invested to the amount we could afford. You cant spend more than you can afford, nor can you continuously enjoy a quality of life above the level you can afford. I dont like it, thats the way it is. Time socialists grew a few more brain cells and realised the same thing.

Rochdale_Pioneers

mbga9pgf wrote: »

Want to add the personal debt stats to the above figures? Want to comment how brown let our nation borrow itself to the hilt? No, thought not. Compare our total debt to the Germans and you will see pretty quickly who will recover first. The national debt stats were on a downward trend well before Labour got in, if anything, I am surprised Labour managed to F*ck things up so badly in so little time

Does personal debt affect in the slightest bit the ability of national governments to borrow money in 25 year gilts? No? Lets move on then shall we?

However you raise some fascinating points of logic. "brown let our nation borrow itself to the hilt" in relation to personal debt. The Tories would of course not have let the financial services sector expand. Nor let people have credit cards. Nor let people borrow money to buy consumer electronics. A Tory chancellor would have said "we really can't afford these things, I am going to legislate to stop you the public spending money".

Because thats logically what you are advocating. Does that sound remotely like a Tory government to you? Can I refer you to the late 1980s, when a Tory government deregulated the financial sector, encouraged it to throw cheap loans at people, gave people big tax cuts to encourage them to spend and sat back as the economy overheated in half the time it took to do so under Brown.

So congratulations, thats point 3 on my list of stupid Tory arguments. Labour allowed personal debt to get too big - the flipside being that as we all know the Tories are the party of big state intervention to stifle the free market, business and entrepreneurialism, aren't they?

kennyboy66_2

Wookster wrote: »

the VAT cut isn't really a stimulus.

Why would you think that ?

Rochdale_Pioneers

kennyboy66 wrote: »

Why would you think that ?

Whatever gives you the impression that he thinks?

Wookster

Wookster wrote: »

Again, you are missing the point!

If Crash had been prudent from 2001-2007 state spending would already be lower as the state would be smaller. This means that the deficit today could be half of what it currently is (i.e. £90BN instead of the forecast £180BN).

This also means that a £40BN stimulus would have a much greater impact on the economic front than simply maintaining government spending now (the VAT cut isn't really a stimulus).

Do you understand my point?

Come on Rochdale, are you going to address this or is your head back somewhere the sun don't shine?

Proving your financial ineptitude again?

Rochdale_Pioneers

Wookster wrote: »

Come on Rochdale, are you going to address this or is your head back somewhere the sun don't shine?

Proving your financial ineptitude again?

So how much of our current debt do you think is part of the spending on public services, and how much was part of the spending on stopping the financial system collapsing?

Your notion that our debt level would be halved is laughable. Its not the stimulus that the money has been spent on, its keeping the cash machines working.