Austerity Vs Growth

CLAPTON

Wookster wrote: »

What you have not considered at all is the risk of a gilt strike, leading to massive rises in interest rates which will trigger widespread corporate & house hold default.

Given the size of the UK's banking sector and the indebtedness of the country as a whole, the impact of that would be catastrophic.

Also, it is worth noting that bond markets have turned incredibly quickly on countries - in as little as 8-12 weeks in the case of Portugal & Ireland. Contrast the length of that period against the 5+ years it is taking for the UK to eliminate its budget deficit.

If you don't see a huge risk there then I'd suggest you blind fold yourself and try crossing a road at random.

a gilt strike might indeed occur but that doesn't change the fact that houshold accounting and national accounting are the same things.

being debt free for a household makes excellent sense; for the companies and countries to be debt free would mean we would still be hunter gathers as most investment would not exist.

in my view gilt markets would happily buy from a growing economy rather than one in deep recession with no sign of any improvement.

Indeed the debt of Italy is not awful; it's the fact that there has been no growth (or prospect of growth) for years that freaks out the market.

Wookster

CLAPTON wrote: »

a gilt strike might indeed occur but that doesn't change the fact that houshold accounting and national accounting are the same things.

being debt free for a household makes excellent sense; for the companies and countries to be debt free would mean we would still be hunter gathers as most investment would not exist.

in my view gilt markets would happily buy from a growing economy rather than one in deep recession with no sign of any improvement.

Indeed the debt of Italy is not awful; it's the fact that there has been no growth (or prospect of growth) for years that freaks out the market.

And you are moronically missing the point. government spending does not equal growth. Neither is there a magic wand that government can wave to make growth magically reappear.

Bond markets would seem to suggest that debt levels in Italy are awful and have almost withheld funding, infact it is only through LTRO that Italy has breathing space (i.e. Italian banks buying Italian Bonds financed by the ECB).

Generali

grizzly1911 wrote: »

Why do places like Australia not have free borders?

We do with New Zealand. New Zealand in turn (I think) has free borders with many of the Pacific Islands.

grizzly1911

Generali wrote: »

We do with New Zealand. New Zealand in turn (I think) has free borders with many of the Pacific Islands.

Is that a economic issue for them?

Is the influx endemic or is it more transient with other barriers to entry e.g. needing a costly visa of some description?

Recent TV programs docu./reality in the UK show it being quite tough to get in for "non locals". Key worker, self sufficency etc.

They also suggest that amassing the documentary evidence can be c.£5K+

crash123

Graham_Devon wrote: »

It's wholly unethical and immoral to spend the money of those not yet born to save ourselves.

This is what you do not seem to grasp. I feel the majority of the country would feel the same way as myself.

You may not have kids, and therefore your viewpoint may be limited by that. But most do, and most do not want to see their children suffer so that we don't have to suffer today.

I cannot really put it any more succinctly than that. If you truly believe we should sell our childrens future to make our immediate future better, then I really do feel you are one of the very few.

I agree Graham and I don`t have children but I have nephews and nieces. I would like them to have a decent standard of living and not have to pay for this mess that we are in.

vax2002

Society and taxation is a machine to force you to labour for someone who can not be bothered.

Generali

grizzly1911 wrote: »

Is that a economic issue for them?

Is the influx endemic or is it more transient with other barriers to entry e.g. needing a costly visa of some description?

Recent TV programs docu./reality in the UK show it being quite tough to get in for "non locals". Key worker, self sufficency etc.

They also suggest that amassing the documentary evidence can be c.£5K+

Skills shortages are the big problem for Aus. We'd love to have a load of Polish people or whatever that are skilled and motivated.

The problem is that Aus is in a generally poor part of the world so there are a lot of people that would like to come here that wouldn't be bringing skills that are needed.

Generali

Graham_Devon wrote: »

It's wholly unethical and immoral to spend the money of those not yet born to save ourselves.

Absolutely spot on.

If the Government borrows to spend on wages rather than to add to the productive capacity of the country then they are making future generations poorer.

CLAPTON

crash123 wrote: »

I agree Graham and I don`t have children but I have nephews and nieces. I would like them to have a decent standard of living and not have to pay for this mess that we are in.

as a generality 'our' children won't be paying anything for the current mess because any debts that are paid will benefit some-one else

one persons debt is another persons saving
one countries balance of payment deficit is another countries surplus

there may be a transfer of wealth from one section of society to another but no overall loss.

chucky

chewmylegoff wrote: »

Yes but as we all know public spending does not necessarily amount to investment, and the vast majority of uk govt public spending could not reasonably described as investment.

Quite. Do you mean like assisting with the Ellesmere factory where lots of jobs have been created for the new Astra to be built?