Will Gordon Brown send UK economy over the edge?

CLAPTON

The_White_Horse wrote: »

Yes, but it was all built on lies and borrowing. If we put it in a personal context, all they have done is gotten a credit card with a high limit and lived the high life for a year or so. Going for nice meals, long holidays, buying cars.

But none of it was built on real wealth. it was just a show. a mockery. lies.

Now the credit card is maxed out, and no more credit can be obtained. But rather than cutting back and paying the card back, this lot have found some dodgy loan shark to lend them even more so they can keep the lavish lifestyle. they have even resorted to printing money in their garage to keep the lavish lifestyle going. now isn't the time to stop the idiotic spending, its time to continue.

When the tories get in, they will start having to clean up the mess. Yes, of course they will be unpopular. Why wouldn't they be - who prefers a stingy person to a generous maniac with a big credit limit????

we just have to hope the middle class majority accept the pain as they should because deep down, they know it has to happen, they know the credit cards have to be paid back.

There is in fact a large and very significant difference between a personal budget and a country budget.
what makes sense for an individaul person does not always make sense for the whole.
If you wish to learn more you may wish to get a book on economics where such apparent paradoxes are explained

You may wish to ponder what is 'real wealth too' .. houses, cars, diamond rings, gold, health, fitness, warmth, education, memories, happiness

Rochdale_Pioneers

Generali wrote: »

I preferred and continue to prefer the most up to date statistic, using the most relevent choice of those available.

I was using pre-crash and post-crash. I'm not sure that the biggest financial event of the last 50 years was a date "plucked out of the air" as you put it. If we're talking about UK borrowing then it is logical to look at normal borrowing - pre-crash - and abnormal borrowing post crash.

Generali wrote: »

Do you believe there's a finite limit to sovereign debt or do you think debt can continue to be serviced to an unlimited level by the UK Government?

I think you understand the question and so can't answer.

Of course there is a finite limit. The point being that with UK sovereign debt substantially lower than the sovereign debt of nations with similarly sized economies, we quite simply haven't reached that point yet. Debt is relative to income - our economy can shoulder far more debt than we have as demonstrated by France, Germany, Italy et al.

I am still waiting for someone to explain to me why the buckaroo moment for the UK economy is so much lower than any other developed country. Noone seems to have an answer. Then again with Devon trying to redefine what bankrupt means I am not surprised that the frothers struggle with this rather basic point.

kabayiri

Rochdale_Pioneers wrote: »

I am still waiting for someone to explain to me why the buckaroo moment for the UK economy is so much lower than any other developed country. Noone seems to have an answer. Then again with Devon trying to redefine what bankrupt means I am not surprised that the frothers struggle with this rather basic point.

I'm like a few of us on here who are unable to answer this question.

My primary concern is our ability to respond to external (world) events. It is by no means clear that the financial crisis is over, and some of our banks are heavily exposed to these markets. What ammunition do we have left to respond to a new crisis?

Perhaps this is where we differ from France and Germany, which have an economy with a wider base.

Imagine if Italy or France did come under severe financial pressure, where they had to turn to the world bank for help, don't you imagine the markets would be looking for the next hot spot, notably us?

What struck me about the markets collapse a year ago, was the total absence of contingency planning.

kabayiri

CLAPTON wrote: »

There is in fact a large and very significant difference between a personal budget and a country budget.
what makes sense for an individaul person does not always make sense for the whole.
If you wish to learn more you may wish to get a book on economics where such apparent paradoxes are explained

I'm sorry, but this reply reflects an arrogance which I think was commonplace amongst the finance community before the crash.

I remember asking on a different forum before the crash about CDO's and other things. I was met with similar arrogance that mere members of the general public could not fully appreciate these new world tools.

Well, as it turns out, after the crash, neither did many investment experts!

Can't you understand why some people on here want to exercise fiscal prudence? The events of the last 18 months have challenged the confidence of many.

purch

and Queen's 'Bohemian Rhapsody' reached number one in the charts.

You see......this is why Wikipedia should be banned. :mad:

Bohemian Rhapsody was released in 1975, reachged number 1 in 1975, stayed there for 9 weeks and was the Chrismas Number 1 in 1975.

P.S. It is also the only single ever to be Xmas #1 twice

The_White_Horse

CLAPTON wrote: »

There is in fact a large and very significant difference between a personal budget and a country budget.
what makes sense for an individaul person does not always make sense for the whole.
If you wish to learn more you may wish to get a book on economics where such apparent paradoxes are explained

You may wish to ponder what is 'real wealth too' .. houses, cars, diamond rings, gold, health, fitness, warmth, education, memories, happiness

it doesn't matter who you are or what you are. you cannot spend out more than you get in for sustained periods of time, without suffering the consequences.

when the govt is increases national debt by 14 bn a week (or whatever it is) that is bad news for all. only a fool would think differently.

Rochdale_Pioneers

The_White_Horse wrote: »

when the govt is increases national debt by 14 bn a week (or whatever it is) that is bad news for all. only a fool would think differently.

Noone thinks that the level of debt or current account deficit is good news. But like all things in life its not black and white but shades of grey. The debate isn't debt bad surplus good, its debt bad vs less debt no stimulous worse. I for one would much rather the UK and the rest of the developed world not to have spent trillions on banks. But the alternative was the utter collapse of the global banking system. We had that one day last October where America nearly went under due to the mass demands of creditors all wanting their money back at the same time. Economies literally collapsing is worse than running up high but manageable levels of debt.

Some of you seem to still be in the pretend world where the UK is on its own and there was no global catastrophic crash. Not borrowing was not an option.

carolt

purch wrote: »

You see......this is why Wikipedia should be banned. :mad:

Bohemian Rhapsody was released in 1975, reachged number 1 in 1975, stayed there for 9 weeks and was the Chrismas Number 1 in 1975.

P.S. It is also the only single ever to be Xmas #1 twice

Thank you so much for that. I was going to exclaim in astonishment at that very point!

I mean, I remember singing Bohemian Rhapsody as a toddler, when it was in the charts, and that wasn't 1976.

1976 was the year of the Sex Pistols, for goodness' sake!

Can you imagine Freddy's get up in the video co-existing with Jonny Rotten in his safety pins?

It's just not possible.

CLAPTON

kabayiri wrote: »

I'm sorry, but this reply reflects an arrogance which I think was commonplace amongst the finance community before the crash.

I remember asking on a different forum before the crash about CDO's and other things. I was met with similar arrogance that mere members of the general public could not fully appreciate these new world tools.

Well, as it turns out, after the crash, neither did many investment experts!

Can't you understand why some people on here want to exercise fiscal prudence? The events of the last 18 months have challenged the confidence of many.

I think maybe you have mis-understood what I was meaning.
I wasn't taking about he financial markets but about understanding basics of economics (by which I mean economics as a 'academic subject);
for example do you understand what is often called the 'paradox of thrift'?

I wasn't referring to the CDOs etc etc and I do understand why some people here want to exercise prudence.

I also understand that that point of view was widely held during the 1930s and lead to the worst depression we have ever had. I also believe that the measures taken (including borrowing and QE ) have helped avoid the likes of that recession. ... obviously I would prefer that our level of debt was less (both public and private) and give the choice of a 30's style depression and a large debt then the large debt is vastly more preferrable.

Whilst it doesn't prove of course that this course of action is correct, even the 'right wing' press, Telegraph, Economist, Times etc support the current economic policies and warn against too early cutting government spending. (cf todays telegraph ).. OK the front pages praise Cameron calls for cuts and 'efficeiency savings but the financial pages tell a different story.

In any event I would still recommend to you that you read a book on economics and then you can hold the same views fully understanding full pros and cons.

kabayiri

CLAPTON wrote: »

In any event I would still recommend to you that you read a book on economics and then you can hold the same views fully understanding full pros and cons.

I thought the internet was about holding views and sprouting off without any foundation

It's a good point. I borrowed a book on economics once, it was a 'dry' subject lets say, best skimmed.

If I lack economics knowledge, I am in the company of millions in the UK I reckon. For many of us, its hard to square our need to adopt personal financial prudence with the perceived extravagance of the state.