60 Economists support delaying cuts.....

aelitaman

chucky wrote: »

why did inflation rise? did it have anything to do with the VAT increase?

if prices didn't get lowered why would inflation increase?

Because companies that did not cut prices then put an extra 2.5% on justified as the vat being raised.

Also there is a stealth tax intorduced by Brown on petrol.

Graham_Devon

This is a rather bizzare story, and I'm not sure I get the gist.

Why did the radio today say that these economists have signed themselves out of a job if labour do not win the next general election?

Is this more party political stuff?

chucky

aelitaman wrote: »

Because companies that did not cut prices then put an extra 2.5% on justified as the vat being raised.

Also there is a stealth tax intorduced by Brown on petrol.

a question because i haven't bothered to check it - was that really the case?

surely it would have only happened to those selected products?

stueyhants

StevieJ wrote: »

Interesting, a great deal of the 12bn went into the pockets of UK businesses in reduced taxes handed over to the Govt, probably saved some from bankruptcy. Never had you down as a Keynsian maybe we could have not bothered with the VAT and done the opposite or increased corporation tax and built even more homes and power stations.

So the VAT may have had a small temporary benefit to some firms balance sheet, great for a year but then what. Building power stations provides jobs for those construction workers unemployed, helps with energy security and hopefully helps control future energy price rises.

As for Keynsian economics , Gordon is trying to spend like Keynes suggested but he forgot one of the fundemental premises behind the theory. Your meant to save up in the good times to fund the bad times. You can't spend more than you earn when its good and bad :rotfl:

StevieJ

stueyhants wrote: »

So the VAT may have had a small temporary benefit to some firms balance sheet, great for a year but then what. Building power stations provides jobs for those construction workers unemployed, helps with energy security and hopefully helps control future energy price rises.

I probably would agree if it didn't take years to plan and construct, the problem was rather more pressing,

nembot

60 economists who know the UK is screwed.

Don't we have to be out of recession, before we go back in?

abaxas

StevieJ wrote: »

I probably would agree if it didn't take years to plan and construct, the problem was rather more pressing,

Well if we go with the labour idea.. Three years from it starting to actually thinking about sorting it out!

That has to be a record!

StevieJ

nembot wrote: »

60 economists who know the UK is screwed.

Don't we have to be out of recession, before we go back in?

We are technically out of recession unless you know something we don't.

amersall

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.

well said. perfect xx

StevieJ

abaxas wrote: »

Well if we go with the labour idea.. Three years from it starting to actually thinking about sorting it out!

That has to be a record!

Not sure what you mean? first negative GDP was Q32008 and recession wasn't confirmed until Jan 2009. So they started to take action before we were officially in recession.