Ed Balls... Jesus wept

Thrugelmir

Ilya_Ilyich wrote: »

you could invest for a return of 4% then you'd stand to gain from borrowing.

By doing what precisely?

PaulF81

Ilya_Ilyich wrote: »

If growth outstrips our borrowing costs then borrowing to increase growth makes our debt burden lower. If your credit card let you borrow at 2% over the next decade and you could invest for a return of 4% then you'd stand to gain from borrowing.

How does "investing" in unemployed baby factories ad other social engineering projects assist growth?

Cut all maternity allowance and child tax credits and pump it into industrial research and investment. That would help growth. It would also help the country through a reversal in the number of children spawned from the weaker parts of the countries gene pool.

ukcarper

I don’t know what the answers I don’t think cutting VAT will do much but then things seem only to be getting worse using ConDem policies.

Thrugelmir

ukcarper wrote: »

I don’t know what the answers I don’t think cutting VAT will do much but then things seem only to be getting worse using ConDem policies.

Things will get worse before getting better. That's what happens in a recession. The Government of the day would make no difference.

chewmylegoff

Thrugelmir wrote: »

By doing what precisely?

well the proposal is for a VAT cut - so presumably the plan is to stimulate GDP growth by encouraging people to circulate money more within the economy, buy a few more things from each other, hopefully imported, that sort of thing. an excellent form of wealth creation which will leave us well placed to pay back all the extra debt.

IronWolf

I dont know anyone that changed their spending habits due to the last VAT cut, or even the VAT rise for that matter.

Seems like a good way to just throw away money to me.

ukcarper

Thrugelmir wrote: »

Things will get worse before getting better. That's what happens in a recession. The Government of the day would make no difference.

I tend to agree if the Tories had been in power for the last 10 years we would still be in the same state we are now in and if Labour had won or at least got enough votes to form a government with the LibDems we would probably still be in the same position. The only difference being the LibDems would be arguing the opposite way they are now after all that’s what they were saying before the election.

CLAPTON

IronWolf wrote: »

I dont know anyone that changed their spending habits due to the last VAT cut, or even the VAT rise for that matter.

Seems like a good way to just throw away money to me.

I'm surprised

so you are saying that as a result of the VAT rise absolutely everyone continued spending exactly as before?

so we could solve the debt problem by raising VAT to say 40% and people would continue to spend exactly as before?

presumable the same applies to fuel prices or elecrticity or gas or water or transport too?

CLAPTON

Thrugelmir wrote: »

Yes. As difficult as it is to comprehend. In the West we are overpaid and value our assets too highly. Much of our wealth comes from historical sources. We did not earn it as such.

Eire and Greece are just the forerunners for an era of fundamental change.

My question, however was whether Say's Law was working in Ireland or Greece?

ILW

Ilya_Ilyich wrote: »

If growth outstrips our borrowing costs then borrowing to increase growth makes our debt burden lower. If your credit card let you borrow at 2% over the next decade and you could invest for a return of 4% then you'd stand to gain from borrowing.

Chances are though that the increased borrowing would not increase growth. Governments are not much cop at that sort of thing.