Tory Economic Competence Myth?

ukcarper

Cyberman60 wrote: »

The rate of BORROWING has fallen dramatically, by 70 Billion a year since 2010, from 160 Billion a year to 90 Billion a year.

That is a major achievement. :T

Just 90 billion less than Osborne promised.

antrobus

Spidernick wrote: »

Is Osborne a 'lucky' Chancellor? Michael Meacher (who can also be Orwellian in his criticism of the Left, as well of the Right) certainly seems to think so....

Bear in mind that Michael Meacher is a complete whackjob who believes in the whole 9/11 conspiracy thing. It was the New Pearl Harbor ya know.:)

antrobus

ukcarper wrote: »

Just 90 billion less than Osborne promised.

And about exactly what Darling promised.:)

chewmylegoff

mgdavid wrote: »

suggest you read up on the economic difference between state public spending (wastage) and private sector spending (investment).
You really think employing someone in a non-job on £100k pa is productive? God help us.

No, I don't think that it is "productive". GDP doesn't measure quality of spending. If the government increases spending, GDP increases.

chewmylegoff

Generali wrote: »

Not really.

If the Government borrows £100,000 then that's £100,000 that someone else can't borrow.

Maybe it's that Dave and Chlamydia can't borrow a bunch of cash to fund an unsustainable lifestyle. Maybe it's that Steve McJobs can't borrow the money to start his mCPhone company.

The Government doesn't just pull money out of the air (yup, QE I know). Each pound the Government spends is a pound someone else doesn't spend.

The technical term for it is crowding out and it is generally assumed that when the economy is growing that crowding out happens at a 1:1 ratio, i.e. each pound the Government borrows is a pound that business cannot borrow.



Government spending almost always (QE excepted) comes from taxation. Government borrowing is just spending tomorrow's tax today.

All taxation causes a loss to the economy and to people living in the economy due to what's called the deadweight loss. Clearly there is a gain to be set against the deadweight loss in that the Government will spend that money. Generally speaking if the Government spends the money on something the market can't provide (e.g. street lighting) then there may be a net gain from the Government spending.

If the Government spends the money on something the market can provide perfectly well whilst guided by the price system then the deadweight loss is a real loss to the economy. Indeed there may well be a second loss to the economy as the subsidised firm puts a more efficient one out of business.

Doesn't his all assume that (I) someone else would have borrowed the money if the government hadn't - which hasn't really been happening as the banks don't really want to lend and (II) there is no QE...

Thrugelmir

ukcarper wrote: »

Just 90 billion less than Osborne promised.

Yet even then people are complaining about austerity. :whistle:

The hardest part is yet to come.

cells

The economy (jobs wealth health) is just demand

demand depends on if the squeeze is worth the juice

Taxes effects the amount of squeezing you need to do

Plus there are cultural differences to juice and squeezing


Thousands of such interacting loops