£16 billion in savings needs to be found

grizzly1911

wotsthat wrote: »

Maybe there's a compromise. To save money why don't we buy Sky Sports subscriptions for benefit claimants instead of football season tickets. Actually that might be dangerously close to just a basic level of existence so maybe they should get movies too.

Heard a commentator call it council telly due to the high incidence of dishes on certain styles of property.

thescouselander

There seems to be some confusion here between money and wealth generation.

Let's say there is a business that sells imported widgets from China. Said business sells the widget to a local punter who pays some amount of cash. Some of that cash goes off to china to pay for the widget while the rest goes in pay, taxes and bills and will eventually be recycled into the rest of the economy.

Now a transaction has occurred and money flows round the system supporting other activities (private and public) but the UK system has leaked money and our overall wealth has decreased. From a macro point of view we might have been better off if this transaction never happened at all.

On the other hand there are business that export goods and services and bring in wealth from other countries. This compensates for the money leaking out and with any luck might provide a bit extra. It is this sort of business that is supporting the rest of the economy.

So, we have:

1) Enterprises (public and private) that lose wealth to other economies,
2) Enterprises (including most of the public sector) that just cause money to go round and round
3) And finally other businesses that actually bring in wealth to the economy.

The interesting thing is that if the public sector operated in group 2 there would probably be no problem as money would be spent in the UK and ultimately find its way back to the start position. Unfortunately money is escaping by enterprises operating in group 1 and income from group 3 isn't big enough to plug the gap which means the government has to run a deficit.

In essence, the problem isn't about the public/private sector ratio but more to to with the trade balance. If you're not working in group 3 then your part of the problem (even if you work in the private sector).

Also if you are working in the private sector in group 1 you haven't paid for !!!! - you're just making things worse.


There are only a few ways to try and sort this out:

1) Increase exports (as per the governments stated aim)
2) Reduce the amount of money flowing round the system so we don't spend it on foreign goods - That means reducing public sector spend (with a corresponding contraction in the private sector) and increasing taxes - making us ALL poorer ultimately. Meanwhile the government is happy to allow people in the public and private sectors fight to distract from the reality of the situation.

globalds

Our trade in fuel, if not so ludicrously one sided would more than likely bring most things into a manageable balance.

And not only for us

http://uk.reuters.com/article/2012/03/27/uk-iea-oil-bills-idUKBRE82Q10C20120327

We talk as if shifting a few bits and bobs would right things when there is such an imbalance in one sector we will never stand a chance of success.

You buy a TV once every 5 years and fill up every week.