Osborne's plan to spend his way out of trouble

HAMISH_MCTAVISH

Plans for a £30bn infrastructure programme will be a key element in the Chancellor's Autumn Statement as he seeks ways of staving off recession.

It also emerged yesterday that the Government would underwrite loans of up to £40bn to small businesses trying to keep afloat and that it would increase the levy on the banks' balance sheets.

http://www.independent.co.uk/news/uk/politics/osbornes-plan-to-spend-his-way-out-of-trouble-6268865.html


Tory Rhetoric = You can't spend your way out of a debt crisis.

Economic Reality = You can't cut your way out of a recession.

Political Necessity = Avoiding a double dip or there will be no second term.


It's certainly interesting to watch......:)

vax2002

Old Gideon will be slashing working families tax credits after Christmas by eye watering levels.
A lot of people are really going to drop in the brown stuff.

Road_Hog

HAMISH_MCTAVISH wrote: »

http://www.independent.co.uk/news/uk/politics/osbornes-plan-to-spend-his-way-out-of-trouble-6268865.html


Tory Rhetoric = You can't spend your way out of a debt crisis.

Economic Reality = You can't cut your way out of a recession.

Political Necessity = Avoiding a double dip or there will be no second term.


It's certainly interesting to watch......:)

And erm, whose money is it that he's going to be spending.

oldvicar

No extra spending on the government's accounts overall:

£5bn of the 'extra' spending to come from a further £5bn cuts elsewhere (tax credits etc)

The rest to come from 'the private sector' ... private sector pension funds to build roads etc. I can just imagine 'the Equitable Life by-pass':rotfl:

Of course, renting all the infrastructure back from the pension funds will cost twice as much in future years as compared to just borrowing the money from them by issuing the Gilts they are desperate for at record low yields. But a small price to pay to keep spending out of the national accounts (just like the squillions already squandered by Labour on PFI hospitals and schools etc).

When PFI was started (by Tories) is was mainly on the alleged premise that the private sector can do things better. Since 1997 under the brilliant leadership of Gordon Brown its just a massive fiddling of the national accounts. This looks like more of the same, but maybe with a new name.:D

wotsthat

Looks like a lot of the infrastructure spending will come from the Chinese and pension funds.

Most of the money is expected to come from the big British pension funds, as well as Chinese investment.

However, £5bn will be paid for by further cuts in the present spending round.

http://www.bbc.co.uk/news/uk-15914145

HAMISH_MCTAVISH

Road_Hog wrote: »

And erm, whose money is it that he's going to be spending.

Some from pension funds, some from elsewhere in the private sector, and some from raiding other parts of the budget, but that's not really the point.

The reason this is so amusing is that economic reality is starting to interfere with the Tories rhetoric, and the latest set of polls show the country is (rightly) tired of hearing the same old excuses from the govt as to why they're not fixing the problems.

The time of being able to blame Labour and have the public believe it is over. This is now a Tory problem. Yes, we all know the contribution Labour made to creating the problem, but they're not the ones running the country and failing to hit their own growth targets.

Growth is falling far behind the govt projections, and this will inevitably either lead to more borrowing, or more half-baked PFI schemes to keep stimulus spending off balance sheet.

Cameron and Osborne are worried, and rightly so. Because if we do double dip, this won't be an inherited recession, it will be seen by voters as a Tory recession, and the result of Tory cuts.

Which is absolutely not a tenable position to be in just 3 years away from the next election.

And that, above all else, is what will guide government policy over the next 12 months.

Hence why this is so entertaining to watch.

StevieJ

HAMISH_MCTAVISH wrote: »

.

Which is absolutely not a tenable position to be in just 3 years away from the next election.

And that, above all else, is what will guide government policy over the next 12 months.

Hence why this is so entertaining to watch.

It does seem to chime the early 80's, I wonder where we are going to invade next :eek:

Generali

HAMISH_MCTAVISH wrote: »

Hence why this is so entertaining to watch.

The problem is, voters across Europe and the US seem to think that there's a nice easy solution to this if only someone else will pay for it: the Bankers, the 1%, the welfare scroungers, the Baby Boomers, the overspending Gen Yers. Everyone has a different group to blame for what's going on which doesn't include them.

In reality, the problem is that for the last 2 and a bit generations, voters have consistently voted to run deficits and to accrue massive future liabilities with no interest at all in how they will be paid or indeed bothering about accounting for them at all. They've voted for politicians that will bring home the pork, pushing through their pet special interests. The same criticisms apply to the main 7 or 8 parties in the UK at least.

Examples of Government funded bodies (via the London Councils Grants Scheme's stated spending over £500 for October 2011-link):

http://www.akademi.co.uk/
'A cutting-edge organisation working to enhance the practice, understanding and appreciation of South Asian dance in the UK.'

http://www.rota.org.uk/pages/default.aspx
'To be a BAME-led social policy think tank that focuses on race equality and issues affecting Britain's BAME communities, and creates an environment for the equalities third sector to flourish.' Apparently one equal opportunities body funded by the Government isn't enough as you also need these too:
Roma Support Group
Irish Travellers Movement in Britain
Jewish Womens Aid
Aanchal (Online magazine for Pakistani women)
Casa de la Salud Hispano Americana
Organisation of Blind African and Caribbeans
Refugee & Migrant Forum of East London
Refugees in Effective and Active Partnership (REAP)
Samafal Somali Women's Association
Southall Black Sisters Trust
Southwark Refugee Project Ltd
Tamasha Theatre Company (Indian Theatre Company)
The Asian Health Agency
ELBWO (East London Black Women's Organisation)
Ethnic Alcohol Counselling In Hounslow
Imkaan (The collective voice for Black, Asian, Minority Ethnic & Refugee Women's sector)
Refugee Action Kingston
United Anglo Caribbean Society (white, brown and yellow homeless not welcome apparently)

This is just one small part of an obscure part of Government and you have to work pretty hard to find where the money's going. I'm sure that many or even all the above organisations do sterling work and I have nothing against an online magazine for Pakistani women or helping out blind people of whatever racial background. The problem is that there will be massive amounts of duplication, waste and probably fraud going on. Most of the grants are between about £7,500 and £40,000 a month. That's an average of perhaps quarter of a million a year each and the list of grants and payments to keep the office running (excluding staff) runs to 8 pages of close type.

No matter how you slice and dice this, it can't continue. This stuff is dragging the British economy down and will take the rest of you with it.

chewmylegoff

StevieJ wrote: »

It does seem to chime the early 80's, I wonder where we are going to invade next :eek:

i was going to suggest scotland to save on the cost of a foreign campaign. the only problem with this is that half the army is scottish.

kabayiri

Generali wrote: »

...
In reality, the problem is that for the last 2 and a bit generations, voters have consistently voted to run deficits and to accrue massive future liabilities with no interest at all in how they will be paid or indeed bothering about accounting for them at all. They've voted for politicians that will bring home the pork, pushing through their pet special interests. The same criticisms apply to the main 7 or 8 parties in the UK at least.
...

This suggests that the second law of thermodynamics really does apply to society --> everything will tend to disorder (particularly if politicians are involved).

What I don't get is how Norway managed to sell a different approach to their electorate for over 2.5 decades now. Nobody comes back from Norway crowing about how it is such a cheap place to live; yet they seem to have found a sustainable economic footing even in difficult times.

Were their electorates easily seduced into tough policy? Perhaps they are intrinsically more intelligent than us ?

I guess it's all academic now - we are where we are.

kabayiri

Generali wrote: »

...
No matter how you slice and dice this, it can't continue. This stuff is dragging the British economy down and will take the rest of you with it.

I'd wager it will continue.

I've been reading Private Eye since the mid 80s, and the articles about local and national government remain depressingly consistent. It's just the names at the top of the page which changes.

Now, if you will excuse me, I have a class on Tibetan-Throat-Warbling to provide to our socially deprived NEETs