Where will the cuts fall

michaels

The economy goes in cycles, running a small deficit in the good times quickly becomes a 10% deficit in the bad times...just when the economy is shrinking so the dbt to GDP ratio is becoming more unsustainable. Just look at Greece to see what happens if you let that debt to gdp ratio get a big big....

Plus there are the financing costs, that 3% probably only covers the interest on a 75% gdp deficit in normal times so actually the extra spending is just paying the interest on what was borrowed before not getting you anything extra.

Deficit = deferred taxation, simples

cells

michaels wrote: »

Deficit = deferred taxation, simples

Well if we can defer it indefinitely, which it seems we can, wht not defer it?

Thrugelmir

cells wrote: »

Is there really a need to get the deficit down to zero?

If the economy was growing at say 3% then running a 3% deficit would keep debt to gdp flat.

3% of UK GDP is some £50B

Who is going to lend the UK the money? With debt comes comes the cost of servicing the interest.

Why is the UK's economy going to grow at 3% indefinately? The banks aren't going to pump PPI compensation into consumers pockets for ever.

There's the problem of the trade deficit as well. There's only so many banks, airports, ports, motorways, office blocks, luxury homes to sell. Eventually the UK will be owned by international investors.

Generali

cells wrote: »

Is there really a need to get the deficit down to zero?

If the economy was growing at say 3% then running a 3% deficit would keep debt to gdp flat.

3% of UK GDP is some £50B

IMHO it is necessary to get the deficit to below 0 i.e. into surplus. The UK's debt is worryingly high with very little spare for when things get bad again, especially given the fact that an aging population will put an increasing (intolerable?) strain on the UK's public finances.

Jack_Johnson_the_acorn

Generali wrote: »

In the private sector you don't get endless pay rises without being promoted either. If you are an admin clerk you're going to get sub-£20k regardless of how excellent you are.

Strawman much? Ben is a forecasting and resources planner, if Ben was an admin clerk he would be very happy with £24,000 gross. I'm not even complaining about pay as the pension makes up for it.... but your argument fails when you simply look at how good the pension is without understanding full pro's and cons, and as for endless pay rises, nice fairytail nobody had presented such a scenario.

fordcapri2000

After yesterdays election gun went off it was clear to me that the politicians are quite clearly not going to give any indication of their welfare cuts, which I find unforgivable.

People need to know, but their thinking seems to be "well if we tell them they might not vote for us", Duh!! yes, is the not the idea of a democracy.
I would for example vote against for anything hitting elderly or the REAL ill and handicapped and vote for anyone reducing the housing benefit bill by at least 50%.

cells

Jack_Johnson_the_acorn wrote: »

Strawman much? Ben is a forecasting and resources planner, if Ben was an admin clerk he would be very happy with £24,000 gross. I'm not even complaining about pay as the pension makes up for it.... but your argument fails when you simply look at how good the pension is without understanding full pro's and cons, and as for endless pay rises, nice fairytail nobody had presented such a scenario.

I know of this chap who used to constantly boast about how skilled he was and that if he left he would easily get a £80-100k job as his skills were in high demand. (He was paid £45k and didn't want to move home/town but was sure he was worth a lot more)

I always thought him to be very up himself and his 'skills' were a bunch of easy courses the company sent him on**

Anyway he got made redundant in 2008 along with a few hundred others.


his £80-100k job didn't appear and he wss unemployed for 4 years slowly eating away at savings and his generous redundancy payment

When he did get a job it wasn't even at what he was on before but for about half that


moral of the story is, and it goes for everyone, chance determines your life and job more than anything else. He had good fortune in that he was pulled up the company as he had pals higher up. Once he lost that he found his true worth was about the same as everyone else

cells

fordcapri2000 wrote: »

After yesterdays election gun went off it was clear to me that the politicians are quite clearly not going to give any indication of their welfare cuts, which I find unforgivable.

People need to know, but their thinking seems to be "well if we tell them they might not vote for us", Duh!! yes, is the not the idea of a democracy.
I would for example vote against for anything hitting elderly or the REAL ill and handicapped and vote for anyone reducing the housing benefit bill by at least 50%.

Why should the armchair experts decide the future budget of the nation rather than the workers at the treasury who presumably make it their job to throughly look through everything before coming to decisions

Also we don't have a democracy. We have a representative democracy.

Doubt anyone thinks a x-factor like vote for the public would do the nation more good than harm

N1AK

stator wrote: »

Oh I think the boomer generation are the perfect candidates. I would apply it to all current pensioners.

I think that's a little harsh. Personally as people are always saying you can't touch pensioner benefits because they can't do much to adapt to the change, I'd return all pensioners to the benefits they were told they'd received when they retired. That way they'd be getting what they were told they would be getting when they were young enough to do something about it.

How anyone can look at Tory policy for the last 5 years and see it as austerity, when all we've done is shift £7 billion from working poor benefits to retiree benefits (for rich and poor, but who as a group are richer than average) is beyond me.

antrobus

cells wrote: »

Is there really a need to get the deficit down to zero?

If the economy was growing at say 3% then running a 3% deficit would keep debt to gdp flat.

3% of UK GDP is some £50B

The point would be that it isn't. The deficit is 5.5% of GDP and growth is 2.5%. If debt is growing faster than income then sooner or later you're going to run out of income. So, funnily enough, there is a need to further reduce the deficit by 3% to make things sustainable. As they say.

michaels wrote: »

The economy goes in cycles, ....

And you have to look at things in terms of where you are in the economic cycle.

Generali wrote: »

IMHO it is necessary to get the deficit to below 0 i.e. into surplus. The UK's debt is worryingly high with very little spare for when things get bad again, especially given the fact that an aging population will put an increasing (intolerable?) strain on the UK's public finances.

Given that we are (a) on the upswing of the economic cycle and (b) we have a big pile of debt, the plan really should be move into a surplus sometime in the forseeable future.