Tory Economic Competence Myth?

Thrugelmir

BobQ wrote: »

But had GE2010 resulted in a stable Lab/LD coalition we would have had a different form of austerity. But I think we ended up with the very worst solution. Instead of more belt tightening with the aim of growing the economy, we ended up with politically motivated austerity that has just created poverty for some while others have prospered.

Please enlighten me as to what other forms of austerity exist.

PS. Shame we don't use the word save more often.

Loughton_Monkey

Thrugelmir wrote: »

Please enlighten me as to what other forms of austerity exist.

PS. Shame we don't use the word save more often.

Austeriy means 'strict spending'. Anyone who wants a government to be other than 'strict' in what [and how] it spends our money is an idiot.

Anyone who believes that every penny spent by Government [including on NHS and Education] is spent "wisely" and that there is no waste is an even bigger idiot.

[Deleted User]

Thrugelmir wrote: »

Brown inherited a perfectly good economy and trashed it over a period of 13 years.

he stuck to ken clarkes spending plans for 2 years
but to maintain that we had a perfectly good economy pre 97 is plainly wrong

BobQ

Loughton_Monkey wrote: »

To call anything deriving from the LSE as "left leaning" is like calling the Pope 'slightly catholic'. The LSE is a full blooded hive of neo-communism, who probably look on Miliband as a middle class campaigner to bring back Thatcherism.

CFM is "from the LSE"? It is chaired by someone from the LSE.

Try playing the ball and not the men.....

Advisory Board

Chairman:


Ben Broadbent [PDF] - Deputy Governor, Monetary Policy Committee, Bank of England.

Members:

Silvia Ardagna [PDF] - Executive Director, Goldman Sachs.

Robert Chote [PDF] - Chairman of the Office for Budget Responsibility, Office for Budget Responsibility.

John Driffill - Professor of Economics, Birkbeck University of London.

Andrew Gurney [PDF] - Deputy Director for Macroeconomic Analysis, HM Treasury.

Jens Larsen [PDF] - Macroanalyst, Wellington Management International.

H!lène Rey [PDF] - Professor of Economics, London Business School.

Beatrice Weder di Mauro [PDF] - Chair of International Macroeconomics, Johannes-Gutenberg-University of Mainz.

One of those consulted was Prof Andrew Mountford (Royal Holloway

Question 1: Do you agree that the austerity policies of the coalition government have had a positive effect on aggregate economic activity (employment and GDP) in the UK?

Answer: Strongly Disagree

Confidence level: Extremely confident

Comment: The coalition's austerity policies have had a significantly negative effect on the UK economy relative both to the best potential policy and to the lower bar of what alternative governments would have done. The biggest shortcoming in the coalition is their failure to invest in public capital while being able to borrow at close to 0% interest. The productivity of the UK both now and in the future is consequently significantly below potential. What are these public capital projects? Well one can argue about which gives most bang for buck (I would argue for education, science and public housing) but when interest rates are 0% any project only needs to cover its costs and surely there is no shortage of projects that do this. For an accessible discussion of some public investments that would increase future growth see http://blogs.lse.ac.uk/politicsandpolicy/productivity-the-elephant-in-the-room Another big problem is the housing crisis which the coalition has exacerbated. Their failure to invest is in my view linked to their austerity agenda although their failure to tax housing may be something separate. Too much of UK savings is currently spent on housing and real estate lending is far too large a proportion of UK banks' balance sheets. This means that not enough is being lent to the productive economy which again reduces growth. This also has a direct result on people's well being as their living costs are higher than they need be. House prices are too high and should be taxed much more with the proceeds spent on a huge investment in public housing. See The Economist's recent article for the scale of the problem http://www.economist.com/news/britain/21645735-david-camerons-housing-policies-are-all-posturing-weak-foundations

Thrugelmir

Loughton_Monkey wrote: »

Anyone who believes that every penny spent by Government [including on NHS and Education] is spent "wisely" and that there is no waste is an even bigger idiot.

Government itself is not in control of how the money actually gets spent. It allocates the budgets. The real decisions are made are far lower levels. That's where the money gets wasted the most.

Thrugelmir

woodbine wrote: »

Thrugelmir wrote: »

Brown inherited a perfectly good economy and trashed it over a period of 13 years.

he stuck to ken clarkes spending plans for 2 years
but to maintain that we had a perfectly good economy pre 97 is plainly wrong

With typical Brown aplomb he raided the UK's pension funds for £5 billion a year starting in 1997. So he raised the money via the back door. A tactic that he used repeatedly during his term in office.

In 1997 Brown inherited a budget that was in balance.

Thrugelmir

Too much of UK savings is currently spent on housing and real estate lending is far too large a proportion of UK banks' balance sheets. This means that not enough is being lent to the productive economy which again reduces growth. This also has a direct result on people's well being as their living costs are higher than they need be. House prices are too high and should be taxed much more with the proceeds spent on a huge investment in public housing.

Horse bolted years ago. With light touch regulation. Period 1999-2007 to be precise.

BobQ

Thrugelmir wrote: »

Please enlighten me as to what other forms of austerity exist.

PS. Shame we don't use the word save more often.

Is that a serious question? Faster or slower austerity, what base debt levels you think is acceptable/tolerable, where the austerity impacts.

If their were no choices we could just make arbitrary cuts. Like privatising the NHS and Schools entirely and stopping all state benefits. Let people sort their own health and education and deal with their own problems. Or is that a step too far?

Loughton_Monkey

BobQ wrote: »

CFM is "from the LSE"? It is chaired by someone from the LSE.

Exactly. That's what I was alluding to.

Chaired by LSE’s Nobel Prize-winning economics professor, Christopher pi$$arides.

It would be far more credible if chaired by someone who works at a proper university. And preferably by someone who's name doesn not imply being drunk all the time.

Loughton_Monkey

Thrugelmir wrote: »

Government itself is not in control of how the money actually gets spent. It allocates the budgets. The real decisions are made are far lower levels. That's where the money gets wasted the most.

Whilst I don't disagree, I would like to think that the relevant Minister, together with [guessing] 4 or 5 ministers of state, would at some point be getting their "Sir Humphry" to supply quite detailed budgets and expenditure broken down to quite a low level....

There is nothing like a substantial "cut" to focus the minds on where the waste might be. If you don't cut, or just inflation-link, then the culture all the way down is "Great. So it's just business as usual....." and the same paradigms carry on.