PSBR going the wrong way

michaels

On phone so no link but figure for.October is 8bn cf 5.9 last year.

l was surprised that expenditure was up 7.2 percent vs last year but I guess benefits and possibly other expenditure was Index rated 5.2 percent.

Expect more cuts rhetoric in the autumn statement with more overspend In reality as fiscal policy follows monetary where what is announced is a lot tighter than what is delivered.

HAMISH_MCTAVISH

michaels wrote: »

l was surprised

Why?

That's what happens when you cut your way back into recession, and then the increase in benefits costs and reduction in tax revenue create a bigger deficit.

See "Greece", "Ireland" or "Spain" for details....

Georgie boy will use accounting trickery to mask it this year, with the royal mail pension wheeze, but the fact remains that austerity alone will not work. We need growth to return to fix the problem.

grizzly1911

HAMISH_MCTAVISH wrote: »

Why?



Georgie boy will use accounting trickery to mask it this year, with the royal mail pension wheeze, but the fact remains that austerity alone will not work. We need growth to return to fix the problem.

And QE interest "refund"?

grizzly1911

michaels wrote: »

On phone so no link but figure for.October is 8bn cf 5.9 last year.

l was surprised that expenditure was up 7.2 percent vs last year but I guess benefits and possibly other expenditure was Index rated 5.2 percent.

Expect more cuts rhetoric in the autumn statement with more overspend In reality as fiscal policy follows monetary where what is announced is a lot tighter than what is delivered.

Not that surprising we are slowly sinking and nothing has changed in the real world, in government positive spin land, I am sure they will think up some reason why it is nothing to do with policy.

PaulF81

Hamish, we need international growth to return to fix this.

Long way to go until that happens. Until then, we need to streamline UK business and industry to put us in the best position possible to benefit from the boom once it eventually comes.

Spending cash we dont have will not solve anything. Cut benefits and cut taxation on new enterprise. 2 ways great value can be returned to the UK.

Graham_Devon

HAMISH_MCTAVISH wrote: »

That's what happens when you cut your way back into recession, and then the increase in benefits costs and reduction in tax revenue create a bigger deficit.

We haven't, in reality, cut much at all.

The real reason borrowing keeps increasing is people are going backwards, not forwards, meaning more and more people have to claim housing benefit (for example) with 10,000 extra claimants PER MONTH being added to the figures.

These additions are due to rents going up, and pay staying flat, or indeed, in many cases, people unable to replace a full time job with another full time job, meaning tax credits too, are on the rise.

As we haven't really dealt with any of the problems we have, rather we keep trying to grow from them, not tackle them, we just get further and further into debt, and that will just keep happening until we sort things out.

Thrugelmir

michaels wrote: »

Expect more cuts rhetoric in the autumn statement with more overspend In reality as fiscal policy follows monetary where what is announced is a lot tighter than what is delivered.

Government spending in cash terms is still rising. So the "cuts" made so far aren't enough.

So expect net tax increases.

MacMickster

The time for significant spending cuts is when the economy is strong.

We should be borrowing to invest in infrastructure projects which will put us in a position to be competetive when the economy picks up.

Nuclear power to ensure our future energy needs are met. A major housebuilding programme to make housing more affordable and so protect against upward pressure on wages. Repair our crumbling road network so that less time is lost by business with goods and staff stuck in traffic jams. High speed internet.

In short, get Britain building and let the construction industry lead us out of this stagnation.

Thrugelmir

MacMickster wrote: »

We should be borrowing to invest in infrastructure projects which will put us in a position to be competetive when the economy picks up.

There's a structural hole that needs addressing. Government spending won't fill it alone. Given that borrowing will merely make the PSBR worse and increase the servicing cost.

For the economy to be competitive. Input costs such as wages need to fall in real terms.

paso11

HAMISH_MCTAVISH wrote: »

Why?

That's what happens when you cut your way back into recession, and then the increase in benefits costs and reduction in tax revenue create a bigger deficit.

See "Greece", "Ireland" or "Spain" for details....

Georgie boy will use accounting trickery to mask it this year, with the royal mail pension wheeze, but the fact remains that austerity alone will not work. We need growth to return to fix the problem.

For growth to return the economy needs to finish the deleveraging process. Private debt levels need to return to sustainable levels, this could take years. Growth financed through debt isn't really growth, its accelerated consumption.

MacMickster

Thrugelmir wrote: »

There's a structural hole that needs addressing. Government spending won't fill it alone. Given that borrowing will merely make the PSBR worse and increase the servicing cost.

For the economy to be competitive. Input costs such as wages need to fall in real terms.

For the cost of wages to fall in real terms the cost of housing and energy must first be addressed.

We already have a large proportion of the jobs in this country being subsidised through in-work benefits to help people to meet the cost of these essentials. Wages, as a very minimum, must be sufficient for workers to afford shelter, food, heating and clothing.