The Austerity Disaster

ILW

StevieJ wrote: »

There may have been much belt tightening in the late 40's but wasn't that when the Welfare State was formed? and that in the face of a far higher public debt burden than today due to WW2.

When the welfare state was formed, it was nothing like the runaway monster it has turned into.

ash28

Conrad wrote: »

Canada bought in blitzkrieg austerity in the late 90's and got back to growth soonafter.

Also lets not forget the Keynesian model was all very well when mighty blighty didn't have Chinas and Indias to compete in the scramble to sell stuff to the world.

Are we not merely returning to 2007 Gov't spending levels? Was 2007 a miserable time to exist with such a level of spending?

Canada got back growth on the back of a booming US economy (it's biggest trading partner), the implementation of NAFTA, the stock market boom in the US, the plummeting CN$, the dot com boom etc.

In fact Canada's austerity programme probably hindered more than it helped get the country back on it's feet

Could the UK do the same today, IMHO, no they couldn't. Our biggest trading partners virtually imploding, global recessionary pressures etc. The circumstances are totally different.

Have you noticed Canada, rather than go down the austerity route this time around has implemented fairly hefty stimulus plans - wonder why?

StevieJ

setmefree2 wrote: »

http://www.bloomberg.com/news/2012-01-30/what-krugman-didn-t-say-about-the-u-k-s-austerity-plan-the-ticker.html

I think that the Italy and France credit deterioration has more to do with their exposure to the Eurozone debacle than any statement on austerity measures or not.

Graham_Devon

Blaming austerity measures....measures which it appears no one can actually state, seems to be largely a labour mantra...IMO anyway.

StevieJ

ILW wrote: »

When the welfare state was formed, it was nothing like the runaway monster it has turned into.

What has that got to do with it? welfare spending was far higher than it was before and in the face of a massive national debt, and what was that famous remark from Macmillan ten years later

nicko33

Graham_Devon wrote: »

Blaming austerity measures....measures which it appears no one can actually state, seems to be largely a labour mantra...IMO anyway.

Spending Review 2010: Key points at-a-glance
http://www.bbc.co.uk/news/uk-politics-11569160

don't know how much has changed since then

Mr_Mumble

tomterm8 wrote: »

Has there been any UK government in the last 100 years whose Nominal UK government spending actually fell for more than 2 consecutive years?

Yep,
(amounts in £bns)

1920 -- 5.975
1921 -- 4.907
1922 -- 4.458
1923 -- 4.254

and it hardly raced ahead after that with some falls:

1925 -- 4.508
1926 -- 4.349

1931 -- 4.316
1932 -- 4.223

Yep, government spent less, in nominal terms, during 1932 than 1923, quite a comparison with Generali's listing of current nominal spending!

When was the last time UK government's nominal spending fell even in a single year?

1944 -- 10.18
1945 -- 9.908

(numbers from the excellent ukpublicspending.co.uk)

StevieJ wrote: »

There may have been much belt tightening in the late 40's but wasn't that when the Welfare State was formed? and that in the face of a far higher public debt burden than today due to WW2.

It doesn't cost much to start a ponzi scheme

The British government could rearrange its spending because of a dramatically lower need for the military (which was responsible for 73% of government spending in 1943 compared to 6% now). The point I make when everyone bangs on about such high levels of debt to GDP back in the post WWII period is that Britain ran a surplus - not a deficit - for a few years and then never had a deficit above 4% until the early 1970s.

I think it's pretty offensive to people who lived through the early 20s and late 40s to abuse the word "austerity" as it has been by the sensationalist media. Britain is still running a humongous deficit and, in real terms, has a government that is spending 25% more than a decade ago.

Conrad

Mr_Mumble wrote: »

I think it's pretty offensive to people who lived through the early 20s and late 40s to abuse the word "austerity"

Really enjoying your posts, Mumble, you seem to posses decent domain knowledge.

What do you think of my thought that Europe must slash spending as the world has entered a new era where it no longer tolerates the current incarnation of the European social contract?

In effect an Indian has no desire whatsoever to pay the cost of featherbedding greedy westerners and as such wont buy thier products, afterall our Indian doesn't enjoy the paternity pay 'demanded' by a British or Portugese worker.

A 'courageous' western workerker protesting for a decent pension, in the end is in effect asking the rest of the wolrd to foot the bill, no?
At the same time this martyr to the cause of the working man does all he can to buy products produced by slave labour in Indonesia which by definition wont afford such workers the very demands the western worker is calling for.

All round greed by the Biob Crows of this planet, no?

tomterm8

Mr_Mumble wrote: »

Yep,
(amounts in £bns)

1920 -- 5.975
1921 -- 4.907
1922 -- 4.458
1923 -- 4.254

and it hardly raced ahead after that with some falls:

1925 -- 4.508
1926 -- 4.349

1931 -- 4.316
1932 -- 4.223

Yep, government spent less, in nominal terms, during 1932 than 1923, quite a comparison with Generali's listing of current nominal spending!

Yes, it is quite right that in 1920 and 1921, government spending contacted in nominal terms. Also, in 1920 in the UK, there was deflation of in excess of 10%, and the largest contraction in the economy recorded in a single year in modern british history happened in 1921.

Most people agree that the result of this recession was that the British naval fleet was gutted to such an extent that when Hitler rose to power, we almost lost the subsequent world war.

Many people also think that as a result of these policys, a labour movement was born that subsequently led to the destruction of the Liberal party, and the institution that became subsequently known as the Labour Party.

For a bonus point, do you think their policy was a good idea?

pqrdef

Conrad wrote: »

In effect an Indian has no desire whatsoever to pay the cost of featherbedding greedy westerners and as such wont buy thier products, afterall our Indian doesn't enjoy the paternity pay 'demanded' by a British or Portugese worker.

So you want European workers working like Indians.

I take it you don't include yourself in that.

What it's really all about is the middle classes maintaining and increasing their privileges and differentials. Austerity is so convenient, so long as the right people suffer and the right people don't.