Britain's Trillion Pound Horror Story

Hank_Rearden

ILW wrote: »

The gist of the programme seemed to be that for the last 50 years, governments have been constatly spending more than they were taking in taxes. This was funded by ever increasing borrowing. It seems pretty obvious to me that that cannot go on forever, or have I missed something?

Seems obvious to me (although real vs notional tends to confuse the commentary, if not the facts)
[/quote]

It also made the point that the public sector is now nearly as big as the private sector

true - unless it's bigger... ;-)

which needs to create the wealth to pay the bills,

over-simplification - there is no reason why public sector can't produce wealth - it's just traditionally not very good at direct wealth creation. Private sector is better, and while we live in a competitive world, then "to come second is to come last", eventually.
The public sector does also indirectly help generate wealth - for instance better education leading to better R&D (or professional services for intangible products). But arguably it can also erode wealth - for instance the health service keeping people alive. Which points to the key fact that the public sector exists to a large part to achieve those governmental objectives that are not focused on wealth, but are still desirable. Put another way, money isn't everything!

at some point it all has to fall down and it appears we are fast approaching that point.

Probably true.;)

ILW

Hank_Rearden wrote: »

Seems obvious to me (although real vs notional tends to confuse the commentary, if not the facts)

true - unless it's bigger... ;-)

over-simplification - there is no reason why public sector can't produce wealth - it's just traditionally not very good at direct wealth creation. Private sector is better, and while we live in a competitive world, then "to come second is to come last", eventually.
The public sector does also indirectly help generate wealth - for instance better education leading to better R&D (or professional services for intangible products). But arguably it can also erode wealth - for instance the health service keeping people alive. Which points to the key fact that the public sector exists to a large part to achieve those governmental objectives that are not focused on wealth, but are still desirable. Put another way, money isn't everything!

Probably true.;)[/QUOTE]

But surely if the public sector is spending more overall than the private sector is paying in taxes, it cannot continue indefinately.

tomterm8

The problem I have with the premise of the show is that UK government debt to GDP in 1950 was well over 240%, and last year was under 60%, which means that after fifty years of apparently unsustainable government spending according to the show, where government always apparently spends more than it gets in tax, we owe much less debt as a proportion of our GDP than we did fifty years ago.

Hank_Rearden

ILW wrote: »

But surely if the public sector is spending more overall than the private sector is paying in taxes, it cannot continue indefinately.

Yes it could, if the deficit between private sector taxation receipts and public sector spending was covered by public sector taxation receipts.

The problem is that "public sector spending vs private sector wealth creation" is a very attractive, but flawed, perspective.

Look at China et al, before they adopted pseudo-capitalism. Government spends lots. Employs lots. Takes some of the wages back through taxation. Spends lots. That cycle is arguably sustainable, and would generate growth.

Just not as quickly as a mixed economy with a strong private sector.

ILW

tomterm8 wrote: »

The problem I have with the premise of the show is that UK government debt to GDP in 1950 was well over 240%, and last year was under 60%, which means that after fifty years of apparently unsustainable government spending according to the show, where government always apparently spends more than it gets in tax, we owe much less debt as a proportion of our GDP than we did fifty years ago.

Our GDP in 1950 was much lower than it is now, and we were still paying for a war.

Mr_Mumble

Superlative stuff :T

tomterm8 wrote: »

The problem I have with the premise of the show is that UK government debt to GDP in 1950 was well over 240%, and last year was under 60%, which means that after fifty years of apparently unsustainable government spending according to the show, where government always apparently spends more than it gets in tax, we owe much less debt as a proportion of our GDP than we did fifty years ago.

There was genuine fiscal restraint for 25 years after WWII (deficit was at most 2-3% throughout the fifties and sixties). Not so now.

The big mistake people make when looking at post WWII (or Napoleanic wars for that matter) debt to GDP is the huge surpluses garnered from the peace dividend. The military accounted for 74% of government spending in 1943 and fell to 20% by 1950. To make that kind of cut in the current budget you'd have to privatise the NHS, education and scrap all non-retirement benefits.

A._Badger

Sir_Humphrey wrote: »

I do not think most Americans who claim to be RWL are anything of the sort. People like Ron Paul yes, because they think things they do not approve of should be allowed. I disagree with that sort of RWL view in the same way that I disagree with Trotskyism, but it is a genuine and honest position.

However, a lot of American RWLs of the Tea Party variety seem to think it is okay for them not to have pay taxes/carry guns etc, but seem to have a problem with other people being homosexuals, or unmarried mothers etc.

Thinking that other people should be free to do things provided you agree with them is not libertarianism but bigotry.

Whatever you may have been led to believe about American Tea Party supporters by the Guardian and the BBC, your claim that they were share a common Whig-like belief in 'progress' is simply wrong.

The religious element, clearly, could not hold such a view, neither could the 'true' libertarians. The rest? Some perhaps - but in either case, as I said before, you're spreading the marge far too freely.

Which makes the charge of 'bigotry' a bit rich.

nomoreboomandbust

suburbanwifey wrote: »

I'd like to know how it was factually untrue also - it sounded spot on to me and explained why Hong Kong is thriving and the UK is sinking.

I hope the PM watched this and reduces all our taxes so we all have more money to invest, spend, create jobs and get this country back on its feet. Hiking taxes and NIC payments like is happening, tax on heating and lighting (the most awful thing the Govt. ever did) and increasing VAT to 20% is going to cripple us all, reduce our spending, which will result in even more job losses.

I thought the program was fantastic, its showed exactly how easily we could get out of this mess...why don't the Govt. do it?

Greedy money snatchers...even then, they throw it away creating useless Govt. jobs and funding benefit lifers....if tax was removed from minimum wage earners, it would PAY to work for the masses of benefit claimants who point out they are better off on benefits...should someone on 12K a year lose 7K of it via all the taxes we are stung for?

No wonder rich people leave this country...I would if I was a millionaire.

I don't think the people sleeping in the cages would agree, or are they the equivalent of Britain's workshy scroungers so it doesn't matter :mad:

FTBFun

A._Badger wrote: »

Whatever you may have been led to believe about American Tea Party supporters by the Guardian and the BBC, your claim that they were share a common Whig-like belief in 'progress' is simply wrong.

The religious element, clearly, could not hold such a view, neither could the 'true' libertarians. The rest? Some perhaps - but in either case, as I said before, you're spreading the marge far too freely.

Which makes the charge of 'bigotry' a bit rich.

Any group of individuals that holds Sarah Palin up to be their leader needs sectioning in my opinion.

ILW

FTBFun wrote: »

Any group of individuals that holds Sarah Palin up to be their leader needs sectioning in my opinion.

She is rather attractive though.