Postpone some of the cuts?

Wookster

Sir_Humphrey wrote: »

Businesses borrow money to make money - are they not very bright either?

Businesses can create wealth. Governments recycle wealth.

Can you spot the difference?

Sir_Humphrey

Wookster wrote: »

Businesses can create wealth. Governments recycle wealth.

Can you spot the difference?

You really need to start knowing what you are talking about.

ILW

i fail to see why Sir Humphrey who is not that thick, continually fails to see the difference between creating wealth and and just spending it. I think it is probably just down to years of living in a public sector bubble where money just appears out of nowhere.

wolvoman

LauraW10 wrote: »

Looking at the polls, that is the most likely outcome at the moment.

So, surely what you meant to say is that people needed to be reminded every 13 years just how incompetent the Conservatives really are at managing the UK economy.:)

Laura, serious question.

Where will the money come from to balance the books?

DervProf

wolvoman wrote: »

Laura, serious question.

Where will the money come from to balance the books?

Prediction : "It will come from economic growth, which the conservatives are preventing by making cuts."

My reply (as I said before) : But if labour have got all the answers, why have we such large public debts and defecits, after a period of economic growth under New Labour ?

Here's a possible explanation - the economic growth under New Labour was largely fuelled by borrowing. If that borrowing had been spent wisely, the tax income from the economic growth would be enough to lower the increased debt.

I'm no economics expert, but if you borrow to invest, you want to be quite sure that the return on that investment will be enough to pay back the debt. Borrowing large amounts to fund an increased public sector is all very well, but I would have thought that investing heavily in the public sector is not going to create much "new wealth" as far as the taxpayer is concerned. I'd only invest heavily in the public sector if I knew there was enough money to fund it. To get the money to fund it, you need a healthy private sector. Looks like New Labour thought that the private sector was healthy, but as we know, a large part of the tax reciepts from the private sector came from the financial sector. A sector which New Labour decided was best regulated by the FSA. The same FSA that allowed NR to offer 125% mortgages, funded by "funny money". Halifax, Bradford and Bingley, RBS etc were all playing fast and loose, while the FSA sat by and did nothing. I could see trouble ahead, way before the credit crunch. When you have a small building society (Northern Rock) expanding rapidly to become one of the major players in the mortgage market within a few years, you do have to wonder how they managed it. And now the taxpayer has had to bail the banks out at much expense. OK, the taxpayer may eventually get the money back, but if the FSA had been doing a better job of regulating the banks, the damage done by the credit crunch may not have been so bad. And New Labour would not have racked up such huge debts on the promise of a "never ending" credit/property boom.

Wheezy_2

ILW wrote: »

i fail to see why Sir Humphrey who is not that thick, continually fails to see the difference between creating wealth and and just spending it. I think it is probably just down to years of living in a public sector bubble where money just appears out of nowhere.

Tell us how to measure wealth created by a NHS nurse? What about a HMRC employee? Or is that just 'spending money' ?
What about a fireman, a police officer or a bin man? Do they create wealth?
You seem to confuse wealth with profit.

Graham_Devon

wolvoman wrote: »

Laura, serious question.

Where will the money come from to balance the books?

We borrow it.

Then we borrow more to pay for the interest on the borrowing.

ILW

Why does cutting public sector spending stop growth in the private sector?

ILW

Wheezy wrote: »

Tell us how to measure wealth created by a NHS nurse? What about a HMRC employee? Or is that just 'spending money' ?
What about a fireman, a police officer or a bin man? Do they create wealth?
You seem to confuse wealth with profit.

Al the above are an expense. They are necessary but waelth needs to be created elsewhere to fund the expense.

Bit like a business that has many expenses not directly related to profitability, they will all attempt to keep these costs to a minimum.
Any business that has expense costs which are higher than gross profit will eventually fail. Pretty simple really.

Hereward

ILW wrote: »

i fail to see why Sir Humphrey who is not that thick, continually fails to see the difference between creating wealth and and just spending it. I think it is probably just down to years of living in a public sector bubble where money just appears out of nowhere.

To be fair some of what the government spends money on does create wealth. If it didn't then they're wouldn't be anything to privatise.