This Budget kills recovery at birth - David Blanchflower

Sir_Humphrey

Brown also appointed Andrew Sentance.

tomterm8

Hmph, there is one cut I think we can make without damaging the economy... get rid of golden goodbyes for ministers that lose their job because their party loses an election...

Ed Miliband is getting paid £20k, just because his party was kicked out of office.

Generali wrote: »

Why do people imagine the Irish Government slashed spending? Is it:

- To screw the economy
or
- Because they were running out of places to borrow money?

The Irish government is not a soverign government. They are much more like a state government in the US: they are allowed to borrow only so much. The market wasn't a determining factor. They slashed spending because as a member of the eurozone, they have agreed for political reasons to a fixed cap on borrowing.

Generali

Sir_Humphrey wrote: »

Brown also appointed Andrew Sentance.

TBH I don't think it's realistic to say that Brown did anything other than try to get the best people he could to sit on the MPC. That there are dissenting voices like 'Danny' Blanchflower and Andrew Sentance shows that I think. I'd be very suspicious of an MPC that voted 9-0 every time as economics just doesn't work that way.

My opinion is that the Tories are right to cut because the state takes too large a part of the GDP pot but also that they had very little choice. That Labour failed to produce a spending review to their own schedule shows that they were scared of bond market reaction possibly being adverse. You don't want to be calling in the IMF while going to the polls!

tomterm8

I am not so sure. But regardless of whether cuts are right economically or not, I think the way the conservatives and liberal democrats are going about them is wrong. Ring fencing the NHS, in particular, is a foolish move. There is a heck of a lot of waste in the NHS that can be cut out... just renegotiating contracts and freezing pay in the NHS could, I think, save the same kind of money that was saved by removing university funding.

The fact they have ring fenced so many budgets means that where the axe falls, it is bound to be draconian.

Generali

tomterm8 wrote: »

I am not so sure. But regardless of whether cuts are right economically or not, I think the way the conservatives and liberal democrats are going about them is wrong. Ring fencing the NHS, in particular, is a foolish move. There is a heck of a lot of waste in the NHS that can be cut out... just renegotiating contracts and freezing pay in the NHS could, I think, save the same kind of money that was saved by removing university funding.

The fact they have ring fenced so many budgets means that where the axe falls, it is bound to be draconian.

IMO it's dumb to state that there is waste in every part of the state other than the biggest department (by no of employees).

michaels

I wasn't saying that the Irish Govt had a choice, merely that in the short/medium term it wasn't necessarily making them any more credit worthy*




* based on the debt/GDP numbers alone, obviously the behaviour sends a signal to the market which may impact on perception.

Generali wrote: »

Why do people imagine the Irish Government slashed spending? Is it:

- To screw the economy
or
- Because they were running out of places to borrow money?

michaels

Although a real terms freeze in an industry where costs increase faster than inflation will require efficiencies to be made.

However we are back to the Kabayiri's point about whether it is all about cutting the deficit or also partly about redefining what the role of govt should be. So far fairly explicitly the role of Govt remains to provide universal health coverage hence the justification for not reducing the NHS budget whilst substantially cutting other departments that were providing services now deemed as out-with the remit of the state.

Generali wrote: »

IMO it's dumb to state that there is waste in every part of the state other than the biggest department (by no of employees).

michaels

Got to remember these are politicians foremost. I suspect that focus groups still show the T to be at best distrusted on health and no doubt the political calculation is that even the real terms freeze will be painful enough politically without giving the opposition an extra stick to beat them with. Even thought savings may obviously be efficiency savings it doesn't take many pictures of sick children waiting for them to be spun as savage cuts.

tomterm8 wrote: »

I am not so sure. But regardless of whether cuts are right economically or not, I think the way the conservatives and liberal democrats are going about them is wrong. Ring fencing the NHS, in particular, is a foolish move. There is a heck of a lot of waste in the NHS that can be cut out... just renegotiating contracts and freezing pay in the NHS could, I think, save the same kind of money that was saved by removing university funding.

The fact they have ring fenced so many budgets means that where the axe falls, it is bound to be draconian.

LauraW10

kabayiri wrote: »

Perhaps we are being a bit naive here.

The Tories (aided a little by the LibDems) may see this as a once in a generation chance to push back the Labour ideology implemented over the last dozen years.

They have the reins, and they have some powerful debt figures to support their arguments, so why shouldn't they? I know I would.

The structure of a lot of public spending is going to change significantly over the next few years. It will surprise no one that a few companies (like Crapita et al.) might do very well out of all this change.

Well at least that is an honest account of what is really happening to our economy. This isn't about what is the best course of action for UK plc, it's all about Tory ideology.

LauraW10

ash28 wrote: »

The New Statesman article is from June - and if I remember rightly the gov't have said that if the economy is adversely impacted the proposed cuts will be spread over a longer period - so perhaps "Slasher" has been listening.

He was saying the same thing this morning on that "Left Wing" TV channel Bloomberg

http://www.bloomberg.com/news/2010-10-18/blanchflower-says-u-k-economy-in-desperate-danger-of-renewed-recession.html

So I don't think his view has altered at all.

“We are desperately in danger of a double dip and the last thing you do in a recession is make things worse,” Blanchflower said in an interview today on Bloomberg Television.

“This looks like it’s going to turn the economy right down and I think it’s going to be a terrible, terrible mistake,” Blanchflower said, referring to the budget squeeze. “My fear is that” the first quarter of next year “is really going to look terrible.”
The CEBR’s forecast for economic growth in the first three months of 2011 is 0.1 percent, which implies there is almost a 50 percent chance the economy will contract during the quarter, according to the report yesterday.