Best thing I have heard on Newsnight yet

Graham_Devon

Just watching it right now, and a commentator is stating extremely clearly....

....Borrowing and spending for the short term is fine. But you have to remember, it's also quite immoral, borrowing today for our short term future at the cost of generations behind us.

A commentator from NIESR is opposing this view, suggesting we borrow large amounts today, to give to the generation of tommorow through spending....suggesting that all the warnings of foreign investors getting the jitters have so far failed to materialise.

The other commentator just picked up on this and basically suggested "yes, so far, but we know they WILL get the jitters at some point....we just don't know that point, and we shouldn't purposely keep testing it".

Really good interview...probably because it didn't include politicians!

CLAPTON

As I understand it, the vast majority of our major businesses and major employers and wealth producers have funded their businesses by debt; although most have now paid this off by the fruits of the investment in their businesses.

what does that say about the legacy for our children?

Graham_Devon

CLAPTON wrote: »

As I understand it, the vast majority of our major businesses and major employers and wealth producers have funded their businesses by debt; although most have now paid this off by the fruits of the investment in their businesses.

what does that say about the legacy for our children?

If we isolate the success stories, you can build any picture you like.

Quite a few of our major business and employee's have also drowned in debt, and wouldn't still be viable without the support of the taxpayer through further debt.

MacMickster

We now EXPECT our children to get into debt as an investment for their future through student loans. That debt is not seen as a bad thing as it is expected to enhance their future earnings by far more than the amount of the initial debt.

We complain that our children can't get access to debt in the form of mortgages, as again that debt is seen as a means to an end which will improve their future.

As Clapton points out, there is barely a successful business anywhere that has not relied on debt at some time to set-up/expand or to invest in better facilities/machinery etc in order to be able to compete.

Debt, in itself, is not bad - nor is further debt even though our current debts are considerable BUT any new borrowing must be for specific infrastructure projects designed to make UKplc more competetive in the future (and not to keep the neighbourhood lesbian drop-in centre open for another year).

Infrastructure projects that create significant numbers of jobs are particularly important to both cut the benefits bill and to drive growth. We are currently having to borrow more and more, as seen by the latest figures, without this borrowing producing any benefit to the country as austerity lite clearly isn't working.

Now is the time for plan B!

wymondham

MacMickster wrote: »

Debt, in itself, is not bad - nor is further debt even though our current debts are considerable BUT any new borrowing must be for specific infrastructure projects designed to make UKplc more competetive in the future (and not to keep the neighbourhood lesbian drop-in centre open for another year).

Sorry but I have to ask, are these particularly expensive to run?

MacMickster

wymondham wrote: »

Sorry but I have to ask, are these particularly expensive to run?

Not when they are completely fictitious.

The point really is that plan B must be a combination of real austerity, getting rid of all of the spending on projects which, although nice to have in some sort of Utopian society, are not necessities at a time when or economy is in the mire. Much deeper cuts are needed in the area of "nice to have but not essential" discretionary spending.

At the same time, there should not be a dogmatic refusal to spend (and if necessary borrow) on projects which should, in the long run, effectively pay for themselves.

If, on a personal austerity drive, you decided not to redecorate the house for a few years, you may still be wise to borrow money to replace the leaky roof rather than continually pay to patch it up.

Wookster

John Molton is a very bright chap and I think he is utterly correct when he says that the status quo of drawing out the pain just won't work. Infact it is a recipe for failure, either you do the short sharp cut get it over with, taking the pain or you provide "stimulus" and hope the markets allow it, but this is the worst of all solutions.

abaxas

His point was debt being used to fund government today, not investment.

Ie the future paying for the current, not the future investing in the current.

Huge difference.

moneyinmypocket

Every generation has its own problems to deal with, I'd bet most couldn't care less about the next generations debt

abaxas

moneyinmypocket wrote: »

Every generation has its own problems to deal with, I'd bet most couldn't care less about the next generations debt

So you dont plan to retire?

homelessskilledworker

I probably made the same point in a differnet way already this morning on another thread. Todays generation are stuffing the future generations, but the biggest joke is that these selfish policies are only helping less than 10% of the UK population, the rich and priviledged, the friends and comrades and equals of the 500 plus crooks in the houses of parliment.

There is still huge wealth in the top 10% of the UK, austerity is just a word they have heard on the news, it has not effected them one little bit.