Postpone some of the cuts?

moggylover

Thrugelmir wrote: »

But you endlessly quote him as it supports your view.

I'm not aware of seeing anyone brave enough to quote someone who condemns their view: not on either side of the theological divide;)

The way I see it (after 30 something years of working in it and studying it) is that the entire question of "economics" is really only theories and there are no "facts" or "scientific absolutes".

During the Thatcher era, swingeing cuts in public services, wholesale sell-offs of public utilities, withdrawal of public subsidy and yet more cuts in public services occurred. This resulted in hospitals with closed wards, schools with holes in the roofs and rising damp, roads with pot holes big enough to loose an artic in and massive unemployment. The net effect of this "saving money" (and indeed "making money from the sell-offs") was that net borrowing INCREASED instead of reducing. It increased because the economy was struggling and revenues were reduced. The only time that net borrowing can be reduced (certainly that I can see) is when the economy is solid enough that cuts can be instigated gently but surely and then it needs to be done with sufficient forethought that a pause is taken should the economy start to flounder.

What that period of economic experiment left us with was a huge unemployment problem which was never resolved by the private sector because automation, computerisation and globalisation of jobs was getting under way and they had other venues which were more lucrative in which to invest. Anyone who thinks that the private sector will step in to take up the slack this time needs to be informed that Father Christmas doesn't really exist either.

We were also left with our "hardware" assets (i.e. the buildings and solid matter) in ruins. Hospitals and schools and roads where the repair costs alone for the neglect of their fabric were going to be huge, let alone the "software" cost of getting people back into work.

We also had a generation of young people who had never known work and who in many cases have never seen work since. Each new generation has left youngsters at the wayside, and now we want people to work longer because we cannot afford pensions for them: but this further disadvantages the youngsters due each year to leave school or university (who are also now disadvantaged by the fact that women are not particularly encouraged to leave work and raise their children) who look likely to face even an even more difficult task in ever getting into work.

One other thing, I do get a bit tired of those that keep repeating that "we wouldn't run our own homes like it" because home economics is absolutely nothing like World economics as the variables are far smaller. The cut, cut, cut and be damned way to go always feels to me like someone starving their 16 year old to death to pay off the credit card bill instead of going out there and getting another job to sort it;)

This isn't about my theology of whether capitalism or socialism is best: it is simply based on common sense and looking back at similar "experiments with theories" and judging them on their merits. If I felt that a particular Tory experiment had actually worked to the benefit of the largest number of people at any time in the past I would be quite able to say so. Certainly I am big enough to know that Labour haven't got it entirely right so far either: but I will admit that for me, a political ethos that has more to do with a fair deal and equal empowerment for the small guy appeals more than one to do with making exceptionally rich (so no-one on here then:D) people richer. Nu-labour failed miserably in this in many ways, because they were only monetarists in disguise and not socialists.

IronWolf

moggylover wrote: »

During the Thatcher era, swingeing cuts in public services, wholesale sell-offs of public utilities, withdrawal of public subsidy and yet more cuts in public services occurred. This resulted in hospitals with closed wards, schools with holes in the roofs and rising damp, roads with pot holes big enough to loose an artic in and massive unemployment. The net effect of this "saving money" (and indeed "making money from the sell-offs") was that net borrowing INCREASED instead of reducing. It increased because the economy was struggling and revenues were reduced.

Thats not true, tax revenue never decreased before 2008.

moggylover

IronWolf wrote: »

We can quote economists all day, thats not evidence, if you want to back up your case against cuts you need to provide some solid facts

TBF Wolfie: I could just as easily find you 20 other economists who would be willing to dissagree with that (and not because I paid them to;):)) because at the end of the day it is all about "theories" and also about the "ethos" behind those theories.

Mr_Mumble

Would the coalition government be hurt if they lost money on the sale of RBS/Lloyds shares?

US politicians didn't have much political pushback for selling GM shares at a loss. Current expectations are for a $19bn loss for 'rescuing' GM, Chrysler and GMAC.

It isn't healthy to have the government stuck with a huge notional, debt to GDP ratio thanks to the illiquid nature of mortgage paper. Politicians are artificially incentivised to keep house prices up as long as they own RBS and Lloyds equity (along with Northern Rock and Bradford & Bingley).

LauraW10 wrote: »

Mr Mumble there may be some good points in here but I find this post unreadable.

Sorry Laura, I've no idea how html tags got into the post.

StevieJ

Thrugelmir wrote: »

What makes you think that?

No institution is going to pay more for a share than its current market value. Share placings are often make at significant discount to make the offer a success.

No rush, as long as it is before the next election, although Cameron is PR man and may find it worth a few billion to the country for a one liner at the despatch box attacking Labour:)

blueboy43

IronWolf wrote: »

Thats not true, tax revenue never decreased before 2008.

are you sure about that ?

I thought total UK tax receipts fell in 1992/93 in nominal terms and there would be plenty of years when they fell in real terms (after inflation).

Thrugelmir

moggylover wrote: »

I'm not aware of seeing anyone brave enough to quote someone who condemns their view: not on either side of the theological divide;)

Quoting theory alone to support a view provides no answers or solutions to the actual problem. That was the direction of my comment. As I doubt the individual quoted has little to no understanding of the UK economy. George Sovos admitted likewise at the Davos summit. Yet disagrees with coalition economic policy.

StevieJ

blueboy43 wrote: »

are you sure about that ?

I thought total UK tax receipts fell in 1992/93 in nominal terms and there would be plenty of years when they fell in real terms (after inflation).

I shouldn't imagine it was too healthy in 1939-1945 either

StevieJ

moggylover wrote: »

TBF Wolfie: I could just as easily find you 20 other economists who would be willing to dissagree with that (and not because I paid them to;):)) because at the end of the day it is all about "theories" and also about the "ethos" behind those theories.

The irony is it will still be theories even after it has happened, 'it happened because' 'No it didn't'

moggylover

Thrugelmir wrote: »

Quoting theory alone to support a view provides no answers or solutions to the actual problem. That was the direction of my comment. As I doubt the individual quoted has little to no understanding of the UK economy. George Sovos admitted likewise at the Davos summit. Yet disagrees with coalition economic policy.

Well, I don't think I entirely agree with that because whatever one does in economics it is really only "testing a theory". Some have been tried before, admittedly not with all the variables in exactly the same places, and others have been touted around for years without ever really being put to the test.

We can often judge from past such "experiments" what might happen if all the variables stay the same (and those are often World variables not just domestic ones) but since this a theoretical game and not a physical science it isn't as easy as saying "if we do this, this will definitely happen":)

Any economist that tells you they can predict every eventuality and absolutely every scenario from a particular course of action should be given an armless jacket and somewhere soft to lay down;)