Conservative government

lemonjelly

The coalition's strategy is, broadly speaking, based on the premise that the state needs to shrink in order that the private sector can enter the emptying space. This has the effect of reducing public spending in the short and long term assuming that the private sector delivers. Labour's strategy is, broadly speaking, based on the premise that the state needs to shrink in order that the private sector can enter the emptying space. This has the effect of reducing public spending in the short and long term assuming that the private sector delivers. The difference with Labour's approach is the pace at which this happens.

heathcote123

lemonjelly wrote: »

A student of GCSE economics could have told Cameron that austerity wouldn't work.

You have a choice. It's Austerity now or Greece later. Or discover an orchard full of magic money trees.

I'm assuming you got a gcse in economics?

heathcote123

chewmylegoff wrote: »

Labour's alternative of borrow and spend then cut deeper later is no less an ideological position, and I'm sure you could find quite a few GCSE student who would tell you that wouldn't work either, and a number of ratings agencies who might well agree with them.

It never ceases to amaze me the amount of people on this board that go around telling everyone how to save 2p off their electric bill, or use a little less toilet paper, but seem to think that govt spending more money than they get in is somehow a magical way of reducing debt.

It's not even a case of gcse economics. A 5 year old should be able to figure it out.

lemonjelly

heathcote123 wrote: »

You have a choice. It's Austerity now or Greece later. Or discover an orchard full of magic money trees.

I'm assuming you got a gcse in economics?

I'd suggest reading my post (#81 - posted before you put this one up) for a detailed rebuttal of your point.

chucky

lemonjelly wrote: »

I'd suggest reading my post (#81 - posted before you put this one up) for a detailed rebuttal of your point.

You'll probably be labelled a Labour card carrying member just because you've dared criticise the beloved conservative party.

lemonjelly

heathcote123 wrote: »

It never ceases to amaze me the amount of people on this board that go around telling everyone how to save 2p off their electric bill, or use a little less toilet paper, but seem to think that govt spending more money than they get in is somehow a magical way of reducing debt.

It's not even a case of gcse economics. A 5 year old should be able to figure it out.

The current levels of debt were not caused by public sector spending of the type you infer. the notion about public sector jobs "buying votes" betrays the political bias so many posters try to hard (but fail) to conceal.

Spending on public services for much of the 2000s was lower as a proportion of GDP than at any time since the 1960s. The last Labour government did increase public sector spending but this was hardly a surprise given it was a Labour government inheriting a state sector where spending was at very low levels.

In 2007, the UK's debt as a proprtion of GDP was less than Canada, US, Germany, France and Japan.

The last Labour Government had cut off the spending on the public sector in the years leading up to the financial crisis - a move that drew critcism from Tory & Lib Dem opposition. On that basis of their own statements, had the Tories and/or Lib Dems been in power in the years leading up to the financial crisis our debt would have risen rather than fallen as it was under Labour. I also believe that history will judge the Brown/Darling response to the financial crisis kindly even if they are forever blamed for causing it in the first place. George Osborne disagreed with Brown's handling of the financial crisis and would not have taken many of the decisions that the Labour government did. As we have seen, Osborne is no economic magician and it is quite concievable that, had he been in power, his handling of the economic crisis, coupled with his increased public spending in the years leading up to it would have seen the UK's current debt levels well in excess of what they currently are - or the country on it's knees.

The overwhelming primary cause for the current debt levels is the UK's over reliance on the financial sector - a situation that would have been exactly the same or worse under a Tory government because it was a cash cow. It was not a result of irresponsible public spending. That is a myth peddled to soften up voters for a significant contraction in the size of the state and they would have got away with it if it wasn't for the fact that it isn't working. Shrinking the state is inhibiting growth, plan A isn't working and there is no plan B.

lemonjelly

chucky wrote: »

You'll probably be labelled a Labour card carrying member just because you've dared criticise the beloved conservative party.

Shame. At least I can't be accused of being a lib dem carrying member, as I believe they don't do cards cos it hurts the trees innit?:)

Thrugelmir

IronWolf wrote: »

Easy, you legislate that banks and insurance companies need to increase their reserves of capital, and most are then forced to buy more AAA bonds.

Reserves from where?

Reserves are built from profit, shareholders finds or deposits.

None of which will happen if institutions are forced to invest in investments offering a 2% return.

We live in a world of free movement of capital. Us banks have retrenched from Europe. This is why the ECB was forced to step in. Everybody is looking after themselves.

Thrugelmir

lemonjelly wrote: »

It's a fairly simple situation.

Not at all. Its very complex. Where any decision the UK Government makes can be blown off course in a second by world events.

Labour make it sound simple. As they don't have the answers either.

Whether you like it or not plan A has so far worked.

heathcote123

lemonjelly wrote: »

I'd suggest reading my post (#81 - posted before you put this one up) for a detailed rebuttal of your point.

Nope, I've looked, and post 81 appears to be a lot of waffle.

It doesn't seem to address the fundamental point that spending more money than you have will eventually lead to people stop lending you money. (See for example many of our european allies, downgraded and now paying higher interest rates - they thought like you)

You can dress it up by stating that you don't think we were close to that level, but regardless of how close or not we were, the simple fact is that we will get there if we carry on the same trajectory. Which we will if we continue to spend more money than can be raised via taxes.

It seems hard to fathom just how anyone can not grasp this after the last decade or so of 'investing' in deficit spending.