60 Economists support delaying cuts.....

moggylover

lemonjelly wrote: »

Couple of things,

firstly, I find it quite suprising that the current government have been pillioried throughout this downturn, with a borderline witch hunt on Brown & Darling.
Now I am not of any 1 particular political persuasion, however some of what has gone on is borderline shameful. In general, when the crunch first became apparent, the main viable option for major economies that was generally agreed to be viable, was put forward by the UK (ie Brown). World leaders heralded his understanding of the situation & plans. Everyone else went off & implimented his idea.

In the UK, the media, tory party etc tried to score points & delayed the implimentation of the plan, thus reducing its effectiveness, & also prolonging the misery for many. Well done them!

We've had various individuals over the past year or so saying we need to do this or that, but whatever it is, it must be severe.

We now have quite a collective of emminent experts, generally agreeing with the current policy of the government, who are saying "lets do this gradually & carefully".

Now, am I more likely to have faith in some pillock from the sun, or worse, the mail, or a large group of people who have dedicated the majority of their lives to studying economics...

Second point. It is unarguable that severe action, & cutting vast swathes of jobs from any sector would absolutely have a massive impact on the economy, & therefore the lives of most of us. The thing is, would this sudden action be beneficial, or not? My feling is it wouldn't.

First, local authorities are already making large scale cuts - birmingham, 2000 minimum, nottingham have announced another 1000 on top of over 500 already. I'm sure many other councils are doing the same.
Second, in times of hardship, it is the statutory sector which is relied upon by so many. The jobcentres will be needed. The homeless service will be required. More people will require access to benefits. As more people have no money, for days out they're going to be using local parks, art galleries etc, cos they're free!
Third, the loss of tax income from all these cuts, added to the short term cost of redundancy payments & the additional cost of benefits payable to thos out of work would be an additional drain on the public purse in the short term. I feel this would create additional hardship, for the vast majority.

If you have a patient, who is very weak, vulnerable, and the slightest little thing would cause major ripples or even extermination, you should not go ahead & do anything which is likely to cause the patient to go into shock, as that would kill them. Simple as...

Any change has to be gradual. Placing large impact policies into place now could cause massive rammifications in the same way as was seen in places like Argentina, Chile, Bolivia and the like in the 70's & 80's where the political powers decided that they were really gonna affect the economy. Sure enough they did, but the cost was absolutely massive, & the vast majority, as well as the countries in question ended up worse off.

Excellent post! :T:T:T:T:T:T:T

That is what my job is about: looking at the longer term picture that LJ has so clearly stated and "estimating" the longer term cost of sackings and redundancies and the domino effect it produces. It SHOULD be required of every single person wishing to call themselves an economist!

stueyhants

Haven't the benefits of cutting properly and timely been show to be successful, real examples such as Canada and Sweden ? By delaying the necessary structural changes till later are we not just delaying a proper recovery

abaxas

stueyhants wrote: »

Haven't the benefits of cutting properly and timely been show to be successful, real examples such as Canada and Sweden ? By delaying the necessary structural changes till later are we not just delaying a proper recovery

Exactly, we are 2 years behind the curve.

moggylover

abaxas wrote: »

The problem and answer is simple.

Slash and burn has worked before hence should work again. The softly softly approach has never actually worked. It's all theoretical.

Then I hope sincerely that you are one of the first to suffer dramatically from Slash and Burn! I find your post lacking in anything that remotely approaches a knowledge worth exploring.

Slash and Burn was basically what was done when the miners were ousted from work and no inward investment into those areas was undertaken. We are still paying the cost of that Slash and Burn, and the cost has already been FAR in excess of that which would have been involved in continuing production subsidy!

If only people could actually see their own granny being affected by slash and burn then they might actually see that the human cost (and the long term cost to Society) is far, far too high to go that route!

abaxas

moggylover wrote: »

Then I hope sincerely that you are one of the first to suffer dramatically from Slash and Burn! I find your post lacking in anything that remotely approaches a knowledge worth exploring.

Slash and Burn was basically what was done when the miners were ousted from work and no inward investment into those areas was undertaken. We are still paying the cost of that Slash and Burn, and the cost has already been FAR in excess of that which would have been involved in continuing production subsidy!

If only people could actually see their own granny being affected by slash and burn then they might actually see that the human cost (and the long term cost to Society) is far, far too high to go that route!

I'm sorry, but I beleive that everyone has a resposibility to look after themselves, not expect others to pay for them.

I agree that the cost to society is huge, but remind me why we should pay for those who dont help themselves?

Answer please.

stueyhants

moggylover wrote: »

. ....

Slash and Burn was basically what was done when the miners were ousted from work and no inward investment into those areas was undertaken. We are still paying the cost of that Slash and Burn, and the cost has already been FAR in excess of that which would have been involved in continuing production subsidy!
...

How far would you take the subsidy, surely its a slippery slope into a command economy. Once you start proping up failing industries can you actually stop ?

moggylover

abaxas wrote: »

I'm sorry, but I beleive that everyone has a resposibility to look after themselves, not expect others to pay for them.

I agree that the cost to society is huge, but remind me why we should pay for those who dont help themselves?

Answer please.

Abaxus, I will reply but I do have to go (just been reminded of an appointment) at the moment. It won't be a short reply because it isn't an easy subject.

If you want some idea of where I am coming from this was my comment on another thread earlier:

http://forums.moneysavingexpert.com/showthread.html?p=30066331#post30066331

which whilst not on entirely the same subject is pertinent.

GTG!

moggylover

stueyhants wrote: »

How far would you take the subsidy, surely its a slippery slope into a command economy. Once you start proping up failing industries can you actually stop ?

You keep up the subsidy whilst encouraging other inward investment to an area so that when the subsidy becomes too great there is another basket for your eggs!

We have seen the cost of smashing the basket without having another! We do not appear (or at least, a significant number of those old warriors of the "non-productive workers" league do not appear) to have learnt any lessons at all from it!

What is good for the super-rich, and for big business is VERY seldom good for the Country or its people in the long term (and purlease peeps - NONE of you are in the super-rich league so don't take it personally cos I find that pretentious;):D).

The_White_Horse

I would like to say that none of the 60 economists have been promised a peerage for supporting the Govt's clearly untenable stance.

sacking a few public sector cretins will not destablize the already very unstable recovery. There will be a double dip no matter what.

this is simply scaremongering.

CALL THE ELECTION YOU USELESS FILTH

abaxas

moggylover wrote: »

What is good for the super-rich, and for big business is VERY seldom good for the Country or its people in the long term (and purlease peeps - NONE of you are in the super-rich league so don't take it personally cos I find that pretentious;):D).

The problem is that the super-rich and big business built the country, or we'd all be using coal to heat our stone built homes and eating meat once a week.