Recovery still five years away, Mervyn King warns

abaxas

HAMISH_MCTAVISH wrote: »

What do you think the consequences would be if say the government reduced spending by 20% tomorrow?

Some people who dont work would be out of work.

mystic_trev

Let's face it there's no easy option. Chewy sums it up nicely in a post earlier on another thread.

chewmylegoff wrote: »

so, presumably any sensible person can see that the only way of solving this is to cut spending, increase taxes AND stimulate economic growth.

any bright ideas on how to achieve this? thought not - if it was easy, then it would have been done.

Hantheman

ILW wrote: »

Would that not just take us back to spending levels of around 10 years ago?

Is it not true that the current monetary system has to keep expanding exponentially or the house of cards comes crashing down?

You can not spend less, every government has to spend more than the last to keep the ship afloat. They have to keep putting cards on top of the pile but very gently, like the last round of QE.

Every unit of fiat currency created and added to the supply has interest owed on it. Where does the interest come from? It also has to be created with interest on that.....

The system has to keep expanding for as long as possible, but it will collapse at some point. It is a mathematical certainty.

ukcarper

Wookster wrote: »

There wouldn't have to be huge cuts if Labour hadn't run up a massive deficit and let the state grow bigger than the tax take.

The idea that we can continue to spend £5 for every £4 taken in taxes indefinitely is pure fantasy, the results of which can be seen in Greece.

http://www.youtube.com/watch?v=bR_hfQU-4r0

homelessskilledworker

This message from Mr King today is as far as I am concerned the first signal that we are now entering the PROPER reccession, not the one where where we pretended to have one(or two even), and where we threw a load of stimilus at it in the hope we would escape pain free.

CLAPTON

Hantheman wrote: »

Is it not true that the current monetary system has to keep expanding exponentially or the house of cards comes crashing down?

You can not spend less, every government has to spend more than the last to keep the ship afloat. They have to keep putting cards on top of the pile but very gently, like the last round of QE.

Every unit of fiat currency created and added to the supply has interest owed on it. Where does the interest come from? It also has to be created with interest on that.....

The system has to keep expanding for as long as possible, but it will collapse at some point. It is a mathematical certainty.

no it's not true

maybe you could show the maths?

Thrugelmir

pqrdef wrote: »

Ooh goody. We can have more cuts.

That will put the recovery back another few years, so then we can have even more cuts.

Tory heaven!

The books are far from balanced. Doesn't matter who the Government of the day is.

luvpump

homelessskilledworker wrote: »

And of course house prices will hold up for that long:)

Hold on in there , Even HPI cheerleaders know that prices are only going one way ! DOWN ..

Thrugelmir

pqrdef wrote: »

Better collect some more taxes then.

What are they waiting for?

The worst time to raise taxes is in a recession.

purch

Hantheman wrote: »

Is it not true that the current monetary system has to keep expanding exponentially or the house of cards comes crashing down?

No.

That's just the rubbish you keep reading on the internet.

Go look at some !!!!!!. It will be of more use to you :eek: