Postpone some of the cuts?

ILW

Hereward wrote: »

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.

That is true, but I would suggest very little and would be interested to hear some examples.

Generali

Hereward wrote: »

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.

Correct. However, the vast majority of Government spending produces a small amount of output for the amount of money spent on it.

Hereward

ILW wrote: »

That is true, but I would suggest very little and would be interested to hear some examples.

Here are the ones off the top of my head:

1. Royal Mail
2. the Royal Mint
3. Ordnance Survey
4. The Forestry Commission
5. The Bank on England

I'm quite sure that there are plenty of others.

DervProf

ILW wrote: »

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

Unemployed ex public sector worker can't afford night out at local restaurant/pub ?

There is a knock-on effect.

Wheezy_2

ILW wrote: »

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.

Government is not a business and shouldn't be viewed as one. If it was, forget about getting cancer treatment on the NHS because it's not cost effective. Libraries maybe? Nope, can't do...not profitable. Free schooling? You must be kidding...where's the shareholder value in that?
Government should be there to provide services the private sector can't/won't do for various reasons and although it doesn't create profit it surely does create wealth.
By all means, make it more efficient where needed though.

Graham_Devon

Hereward wrote: »

Here are the ones off the top of my head:

1. Royal Mail
2. the Royal Mint
3. Ordnance Survey
4. The Forestry Commission
5. The Bank on England

I'm quite sure that there are plenty of others.

They are all creating wealth....BUT it costs the government more more than the wealth it creates.

The car scrappage scheme created wealth. But it costs us, the taxpayer a lot more than the treasury got back.

Hereward

Generali wrote: »

Correct. However, the vast majority of Government spending produces a small amount of output for the amount of money spent on it.

I agree. Lots of money is spent on creating policies that encourage the right environments for wealth to be created. It's difficult to calculate the value of these policies...

Hereward

Graham_Devon wrote: »

They are all creating wealth....BUT it costs the government more more than the wealth it creates.

If we are using the definition of profit to mean wealth, then these organisations make more than they cost.

DervProf

Hereward wrote: »

I agree. Lots of money is spent on creating policies that encourage the right environments for wealth to be created. It's difficult to calculate the value of these policies...

True, getting an accurate figure on how much wealth is created by expanding the public sector is difficult. However, you can get a clue by looking at where government spending is coming from. If it comes from tax reciepts, and you aren't taxing the population to death, then your policies are working. If you are having to borrow to spend, then you policies are not working, or your taxes are too low.

Graham_Devon

Hereward wrote: »

If we are using the definition of profit to mean wealth, then these organisations make more than they cost.

Even the royal mail?

Last I saw, they were riddled with debt?