Corbynomics: A Dystopia

Thrugelmir

Rusty_Shackleton wrote: »

Well, recessions are mainly a lack of confidence in the economy, so I think cutting spending, cutting thousands of public sector jobs, ending Labours stimulus programmes, and generally telling the country that we were up !!!! creak economically might have had a lot to do with it?

In other words you don't actually have an answer to substantiate your comment. There's no prepared statement for you to debate with. Just the old party line rhetoric.

Worth pointing out that if the Government post 2010 hadn't of " cutting spending, cutting thousands of public sector jobs, ending Labours stimulus programmes," Then the borrowing requirement would have grown even further. Heaven knows what the international money markets would have made of such a policy. Puts your 70 year history into context. Selective commentary springs to mind.

Rusty_Shackleton

Thrugelmir wrote: »

If you deregulate credit markets, increase the public sector workforce by 500,000 and create increase welfare benefits then of course GDP will grow.

Trouble was the profits made by the banks in the boom era are now shown to be illusory. RBS has lost over £60 billion. PPI has cost another £25 billion. etc, etc. Hence my comment about using accounting principles. restating the banks accounts to what actually happened will post a very different picture.

The whole era can be summed up very easily.



Brown surfed the wave..........

... a wave started by.... definitely not Labour (and only continued by New Lab at that!) Presumably your stance puts you firmly in Corbyn's camp economically then?

Also if you want to talk about false accounting, lets discuss North Sea oil revenue and the flogging of state assets at grossly undervalued prices!

By the way, what's wrong with increasing welfare payments as a stimulus method? Ignoring the tabloid bile, if you want to stimulate the economy, when the poor get money they do spend it rather quickly!

Rusty_Shackleton

Thrugelmir wrote: »

In other words you don't actually have an answer to substantiate your comment. There's no prepared statement for you to debate with. Just the old party line rhetoric.

Worth pointing out that if the Government post 2010 hadn't of " cutting spending, cutting thousands of public sector jobs, ending Labours stimulus programmes," Then the borrowing requirement would have grown even further. Heaven knows what the international money markets would have made of such a policy. Puts your 70 year history into context. Selective commentary springs to mind.

Yes, what would the international money markets have made of borrowing a few hundred billion extra? Well, they didn't mind the £950 bn bailing out the banks, or another £325 bn of QE.

Fine, if you want a proper answer.. the actual recession in 2011/12 was down to a number of reasons, first the Eurozone crisis, although since we're not in the Euro this was obviously only an impact on our exports. Also our main trading partners in the Eurozone are not Greece et al. Beyond that, domestically, my reasons given above, although summarised rather quickly, are perfectly valid. You can't seriously think, regardless of whether you think it was right or wrong, that announcing the intention to cut public sector jobs by 40% and cap public sector pay by 1%, given the millions of pubic workers in the country, wouldn't have knocked confidence.

As for "There's no prepared statement for you to debate with. Just the old party line rhetoric. " - that's a pretty cheap shot, considering the level of knowledge you can see I've got, whether you agree with it or not. Hell, see above in my answer to Bobby, I openly admit when I'm coming up short!

... and on that note, this has been fun, but im off

Tromking

Fella wrote: »

Ironically it's the latter half who complain endlessly when their free public services aren't of a high enough standard.

For "High enough standard" read funded enough to be able to carry out their core function. The accusation at the last GE that the Tories were engaged in a 'managed decline' of the country and its public services had real resonance. The line that public services and its employees are a monstrous carbuncle on the nation finances is not working anymore for the Tories. That said, the slash and burn merchants masquerading as 'fiscal realists' still dominate on here it would seem.

bobbymotors

Rusty

Yes. I do get it, I very much get it.

My 'you can't borrow your way out of trouble' was far too sweeping.

A country / entity / business/ family / individual SHOULD borrow money: but NEVER for a depreciating asset, that is simply money down the drain. So, yes, have a mortgage, borrow to build an extension / hospital / new motorway / power station.

But never borrow for an intangible purpose or a depreciating asset. So no, no car on PCP, no borrowing to fund benefits, no borrowing to write off student loans.

I assure you I perfectly understand how it works, with a growing economy etc...effectively spending next year's wage rise today, which is all ok as long as the economy grows (or you actually get the wage rise)

It's when it all goes wrong that you need balanced books: and need them we certainly do: and get them we certainly will (in the end)

It can't be any other way.

Rusty_Shackleton

But Bobby you're highlighting points against your argument.

Borrowing to fund benefits, i.e giving money to the poor means that money gets spent in the real economy... Those people buy things with it. Writing off student loans, again, would lead to that money being spent.

The car on PCP is a little odd when talking about macroeconomics, but as an example, borrowing to buy a car so you can get a job would be fine! (though, less PCP and more get a second hand car with a bank loan, at most haha).

All of your examples, while not the ideal case for borrowing, are not a problem. Especially not in terms of the scale of what they actually cost... Even writing off student debt would only cost 100bn... Make the b*stard banks pay for it as pennence for the disaster they caused last decade.

But instead of actually borrowing nuch less, or instead of actually getting money moving through the economy, or properly funding services, or stimulating the economy, what have tory governments done? What they always do, hand tax breaks to the rich. The same people who dont spend the money, they just hoard it. Quite often offshore, hidden from HMRC, never to be seen again.

Do you think that's acceptable governance?

mrginge

I thought we'd all got past this nonsense that there is no downside to endless increasing borrowing, but apparently not.

The idea that when it all goes pear shaped you just print off a massive cheque, crack on as normal and start another great pile of debt is beyond ridiculous.

Thrugelmir

Rusty_Shackleton wrote: »

... a wave started by.... definitely not Labour (and only continued by New Lab at that!)

Northern Rock, Bradford Bingley, HBOS and RBS all commenced on their roads to ruin in the latter part of the 90's. All were frequent visitors to no 11. Therefore had the close ear of the then Chancellor. There was a Treasury Report in 2004 that highlighted the weakness in NR's business model. This was totally disregarded. Sometime by association is enough.

Thrugelmir

Rusty_Shackleton wrote: »

Yes, what would the international money markets have made of borrowing a few hundred billion extra? Well, they didn't mind the £950 bn bailing out the banks, or another £325 bn of QE.

Brown didn't save the banks. He just stopped the entire UK financial system crashing on the that weekend in October 2008. In When both RBS and HBOS as was the case with Northern Rock, found to be illiquid. RBS was partly nationalised and HBOS merged with Lloyds. Though no one told the markets at the time that LLoyds were given a Treasury loan of £25 billion to keep HBOS solvent.

QE was to maintain stability in the money markets. That's all. Financial engineering of the highest degree. To allow time for the banks to trade their way out of their mess.

Looking back one wonders how it was ever allowed to happen. We'll never know I suspect. As Brown is unlikely to ever tell the tales of what was said with his mates. .

The UK enjoyed illusory boom times on the back of the tax receipts. Will that period of time be restated to show the inconvenient truth. No it won't. As the statistics won't make good reading .

Rusty_Shackleton

mrginge wrote: »

I thought we'd all got past this nonsense that there is no downside to endless increasing borrowing, but apparently not.

The idea that when it all goes pear shaped you just print off a massive cheque, crack on as normal and start another great pile of debt is beyond ridiculous.

Well economists would fundamentally disagree with you. The only people repeating this rubbish are the tabloids and the Tory party, who have found it a useful political tool to further the ideological dismantling of the state and to put down the opposition. The state that belongs to all of us and is supposed to serve society.

Without the uneducated masses being complicit in acting against their own interests, they would never get away with scale of what they've done to this country.

Do you ever stop to wonder why previous governments, lab or con, have never banged on about national spending and debt? Because it really doesn't matter. See here look at the graph of UK total govt. Debt as a percentage of GDP. Granted its only previously been (much) higher due to the wars and the recession in the 30s, but lets not play down the significance and scale of the 08 crash. The point is that our current debt is neither uncharacteristic or unmanageable. Its only a problem because youre looking at in the short term, macroeconomics is all about the long term.