Public borrowing £20.3 billion in November alone!

Generali

kabayiri wrote: »

I'm curious on this growth issue.

What happens if other countries are better placed to come out of this recession before us, and have better foundations in place? Emerging economies such as the BRIC countries are demanding a greater say in future global economic matters.

Are we still pinning a lot of our future prosperity on these large banking institutions we have, like RBS?

Well growth is relative and developing countries since the Industrial Revolution in the UK (which at the time would have been France and the US) have tended to have higher levels of growth then the UK.

I guess the way to look at it is this. We'd all like a higher income but is it better to have an income of £5,000 per year that is increasing at 10% a year or one of £20,000 increasing at 3% a year?

Propping up failing companies has always been a recipe for disaster IMO. Their running becomes politicised (see the thread on this board about the HBOS conference for example) and Civil Servants generally aren't very good at running companies at it's not where their experience lies. Wind up the failed banks and sell on the assets IMO.

julieq

1984ReturnsForReal wrote: »

NHS is much much better than when the cons were in charge.

There is no doubt about it.

Well in the sense that it can do more because it has more money, that's arguably true. It's not difficult to buy improvements, the difficult thing is to get better performance without pumping new cash in, i.e. it's about efficiency.

Anyone who's been in an NHS hospital or used the system in any way will agree that the front line staff are usually good people, but the way they work is hopelessly inefficient. Just something as simple as meshing the system for tests in with the consultant round would save a hell of a lot of time, literally if your test results miss the round by 5 minutes you're stuck for another 24 hours (edit whoops, not years).

This is really a big problem with Labour, which is institutionally inclined to regard front line workers as above reproach, but won't draw conclusions regarding how they could be better managed or challenge the unions on working practices. "Management" is viewed with suspicion as a "fat cat" overhead in any organisation. It's essentially a very short sighted remnant of class war.

And I'm sick of regulation, of health and safety, of political correctness and of vacuous populism. I only fear that the reaction against Brown and co won't be enough to elect a strong government.

The_White_Horse

you don't understand. if there are two bare rooms, and i am given a billion pounds to improve one of the bare rooms, if you go in and you find a bed in it, that is obviously an improvement on it being bare, but is it worth the billion pound investment - not at all. in fact that room is now a vast cost and not much benefit. the bare room is better value.

just becaue the nhs "may" have improved doesn't mean it is good enough for the billions pumped in or that there is any value. perhaps a 1bn nhs that is ok is better than a 6bn nhs that is only very slightly better than ok, especially if that other 5bn could be invested elsewhere and get better results.

amcluesent

The last 11 disastrous years of Labour have been based on 'squander today, to hell with tomorrow'.

Blair realised that a 40% tax-take was the limit, Clown has abandoned that and wants to tax until the pips squeak with 50% plus a super-tax on bonuses.

In every way possible, Clown has squandered money today, rewarding idleness and the fecundity of chavs in their northern sink-estates, plus feather-bedding the islamist fifth-column. All so long as they dutifully voted for the conmen and fraudsters with the red-rosette!

Clown has left a legacy of debt in off balance-sheet PFI wheezes, gilts sales, stolen pensions, printed money etc. etc. which future generations will have to reckon with. Truly a financial scorched-earth.

He hasn't build 1m of new motorway, new runways, new power-stations or any infrastructure to renew what we had or provide for future growth. It's all been squandered on 'his people' so they can get their booze, ciggies, Sky Sports and spawn a menagerie of ferals who are the stupidest yoofs in Europe. Outside of the M25, England consists largely of obese cretins and their lowing brood-mares whose only conversation is "Shut it our Wayne!", "F*ck!" and "Engermerluuund!"

No wonder 2,000,000 educated, middle-class earners have fled the new-model socialist utopia Clown has created.

Wookster

Generali wrote: »

If the Government can strip out the foreign borrowers it would be pretty easy to force through more Gilt sales in the UK in the short term regardless of what basket case monetary and fiscal policies the Government is persuing - all they have to do is change the risk rules for pension funds thus forcing them to buy more Gilts. They already (AIUI) force you to invest the entirety of your annuity into a single asset class, Gilts.

Basically the Government would be confiscating a part of private pension schemes, ie confiscating savings. There is a history of doing things like this in Argentina amongst other places.

They are already doing this. I am very surprised that it hasn't been covered in greater depth in the mainstream media but the new FSA liquidity rules force institutions to hold a greater proportion of their liquidity in investment grade assets. A friend of mine who is a risk manager for a large bank wanders how they will remain profitable with this burden and as there is no specific guidance the FSA have a certain leeway when they enforce the new rules.

The UK government would really be screwed if they lost the AAA rating as all these institutions would be forced to swap their UK Gilts for other AAA rated investments. Roll on the French Bond (or whatever it is called) shock horror :eek:

markharding557

amcluesent wrote: »

The last 11 disastrous years of Labour have been based on 'squander today, to hell with tomorrow'.

Blair realised that a 40% tax-take was the limit, Clown has abandoned that and wants to tax until the pips squeak with 50% plus a super-tax on bonuses.

In every way possible, Clown has squandered money today, rewarding idleness and the fecundity of chavs in their northern sink-estates, plus feather-bedding the islamist fifth-column. All so long as they dutifully voted for the conmen and fraudsters with the red-rosette!

Clown has left a legacy of debt in off balance-sheet PFI wheezes, gilts sales, stolen pensions, printed money etc. etc. which future generations will have to reckon with. Truly a financial scorched-earth.

He hasn't build 1m of new motorway, new runways, new power-stations or any infrastructure to renew what we had or provide for future growth. It's all been squandered on 'his people' so they can get their booze, ciggies, Sky Sports and spawn a menagerie of ferals who are the stupidest yoofs in Europe. Outside of the M25, England consists largely of obese cretins and their lowing brood-mares whose only conversation is "Shut it our Wayne!", "F*ck!" and "Engermerluuund!"

No wonder 2,000,000 educated, middle-class earners have fled the new-model socialist utopia Clown has created.

people in work is not limited to london you know and aren't most londoners imigrants these days?
you have just called 50 million people approx obese cretins.
as a resident of conservative conrolled staffordshire i am neither obese or a cretin ok cretin:rolleyes:
i gather london has more muslims than any whaere else.

kabayiri

amcluesent wrote: »

He hasn't build 1m of new motorway, new runways, new power-stations or any infrastructure to renew what we had or provide for future growth. ...

Whilst over in the US the transport man in government was talking the other day about how they were investing $48bn dollars in road and rail infrastructure.

JP45

Graham_Devon wrote: »

One question though as I see the "inflate the debt away" argument used quite a lot. Could we realistically do this when we rely on a "global" economy to survive?

According to Edmund Conway of the Telegraph, "Britain's historic strategy of letting inflation rip will simply not work":

....What is far more likely, or so investors fear, is that Britain will inflate the deficit away by debauching the currency: as inflation rises alongside the money supply, every pound we owe will be worth that little bit less. This is what we did in the 1970s – and most other times we have faced a debt crisis. So suspicions that a repeat performance is on the cards are not difficult to understand: the pound has already fallen by around a quarter since the start of the crisis; the Bank of England has embarked on a quantitative easing scheme that involves printing enough money to buy the annual economic output of Denmark; and inflation is threatening to leap well above the Bank's 2 per cent target.

Might history repeat itself? You can understand why the market thinks so: we are facing not only the debts from the current crisis (equivalent to those incurred in the Second World War) but a looming bill of almost double the size from the ballooning health and pension costs of an ageing population. Plus, one of the peculiarities of the British debt market – that the Treasury issues bonds that take far longer to mature than most other countries' – has historically made it easy for profligate governments to create the odd burst of inflation without being punished as badly as the Italians or French, whose bonds are short-term, and so need to be rolled over more often.

Yet however much today's politicians may be tempted to try to inflate away their debts, this avenue is in fact far more difficult than it was in the 1970s. First, it would mean throwing away the 2 per cent inflation target that the Bank of England has kept to for more than a decade. Second, investors are far more mobile than 30 years ago: one of the by-products of globalisation is the speed with which capital can be withdrawn from a country. That means, according to the International Monetary Fund, that inflation in single digits – say 6 per cent – would "not make much of a dent in the real value of the debt", because investors would charge the governments higher interest rates if they got even a sniff of impending inflation. Which implies that only inflation in the high double digits – 1970s style – would do the trick.

Third – and perhaps most importantly – governments have, largely unwittingly, sewn safeguards into the debt market which make an inflation strategy pointless. Since the 1970s, we have issued an increasing amount of debt in the form of index-linked bonds, which now account for a quarter of the debt market. These are inflation-proof: the debts increase automatically alongside inflation. Then there are the country's other liabilities: public sector pensions (circa £800 billion), the state pension (£1.4 trillion) and the costs of private finance initiatives (£140 billion), all of which are tied to inflation.

In fact, around four fifths of the state's debt bill is inflation-proof. The only way ministers and mandarins could inflate their way out of the crisis would be to rip up all the contracts that tie these debts to inflation: possible in the case of the state pension (which is one reason why Gordon Brown's pledge to link it to earnings is probably doomed), difficult for all the rest.

And a good thing, too. As tempting as it is for profligate governments, permitting double-digit levels of inflation inflicts a baleful cost on households and companies. If we have forgotten this lesson from the 1970s – where the cost of the strategy was economic chaos and an IMF bail-out – it is just as well that these restrictions ought to prevent, or at least impede, the Government from taking that approach. No, the solution to today's fiscal crisis is the same as it has always been: to cut spending, reduce the deficit and learn to live within our means.

http://www.telegraph.co.uk/finance/comment/edmundconway/6830938/Theres-only-one-escape-from-our-debt-trap.html
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Rochdale_Pioneers

I still struggle with why frothers keep on about our 60% debt like the sky is going to fall in. We're still in less debt than half of Europe, and as Generali pointed out we have a fraction of what Japan has.

High debt is clearly bad and our deficit is of far more concern. But its completely manageable and in the context of the rest of the developed world also borrowing like crazy not that unusual.

The question should be how much money does the west collectively owe to the "developing" world. A big rumpus in Copenhagen over the notion of China as a developing country - we would have had to pay them cash had they been classed that way. Developing? How much of the west does China now own?

Generali

Rochdale_Pioneers wrote: »

High debt is clearly bad and our deficit is of far more concern. But its completely manageable and in the context of the rest of the developed world also borrowing like crazy not that unusual.

TBH RP I don't think the deficit is completely manageable. The UK was running a budget deficit at the height of a massive boom.