Labour: Borrow more now, Spend more now, Cut more later

Graham_Devon

Labour bloke on TV suggested the answer to the current situation is to raise spending today, bring forward infrastructure and projects and create projects today.

I.e. Start a new school building programme to create jobs. Bring forward current plans to create jobs etc.

The borrowing required for this, will be offset by the tax take on the extra jobs (apparently).

The downfall of course, was put bluntly by another economist, who simply said "what happens after that then".

Well at that point, we'll apparently be able to cut deeper, as the economy will be back on track and we will have created growth. You can then cut, and also pay back the extra borrowing caused by the extra spending today.

So, my question is....is this credible? I don't personally think it is. But do others? As obviously labour think it's perfectly credible.

My problem is exactly what was stated...once you have bought forward all the spending, what happens after it's spent? We simply hit 2007 all over again, but this time with no future infrastructure (as it's all completed) and higher debts.

Thoughts? Is it really credible, as it's all over the TV today.

A._Badger

Of course it's not credible. But it's the only tune Labour knows, so that's the one it whistles.

chucky

It's a Labour policy. It can't be credible, no wait.

DervProf

I seem to remember, pre 2007, that Labour were borrowing/spending freely (while allowing individuals to do the same), and telling us that they had created a strong economy. I don't know the figures, but I expect they weren't paying off the national debt, only increasing it.

Here we are today, with Labour calling for more spending. Now, it doesn't take an economic genius to work out that a short term increase in spending (via borrowing) is going to help the economy. If labour were back in power today, and they did this, do you really believe that at some point they would reduce borrowing/spending and start to reduce the debt they had built up ?

I don't.

With one eye on the next election, they'd continue. The only thing that would stop them is another financial crisis, and it would probably be one that they really did create themselves, and there would be no Americans to blame.

coastline

You can say what you like when you're not in power...they've got to feed the potential voters....the Tories would say exactly the same...ones as bad as the other...
Since 1978 when the Tories came to power we've had 6 balanced budgets...in 35 years...both parties continued to add to the national debt...
National debt was £100bn in 1978...then when the Tories were booted out it stood at £350bn...since then Labour lifted it to £800bn...and the Tories to 1 trillion since...never ending..

worried_jim

Letting Ed Balls into the treasury would be like letting Gary Glitter babysit your kids.

HAMISH_MCTAVISH

Well you'd have to be on drugs to think the current economic policy is a good idea...

Oh wait....



Actually that would explain a lot.

worried_jim

Coke and !!!!!s- A good night out.

moneyinmypocket

I don't think it would work.

The "west" is too addicted to consumerism and better living - I wouldn't be surprised if they come up with some kind of number trick/scam where by they spend fake money/credit like mad for next 50-100 years - nobody will be around then to clean it up from this generation and that's part of the point

Graham_Devon

HAMISH_MCTAVISH wrote: »

Well you'd have to be on drugs to think the current economic policy is a good idea...


Actually that would explain a lot.

So do you agree with the path labour suggest then?

HAMISH_MCTAVISH

Graham_Devon wrote: »

So do you agree with the path labour suggest then?

Labour would spend too much money on the wrong things.

The Tories don't spend enough on the right things.

Difficult to say which one is worse. They're both wrong.