Corbynomics: A Dystopia

Rusty_Shackleton

Mrginge, thats not what im saying. What im saying is that national debt doesnt matter as long as that money is doing sonething. If the govt borrows money to give a tax cut to the rich (what the torys have effectively done) that money isnt being used in the real economy. Whereas if borrowed money is ised to build (investment) or given to poor people (gets immediately spent in the real economy), then that stimulates economic growth. Economic growth allows the debt to be repaid, and we society gains the utility of what the money was spent on, whether a new hospital or people not going hungry or homeless. It doesn't matter that overall, the debt is never repaid, because all of the individual loans are. People are always willing to loan the UK money because its completely safe, because the BoE can always create more money. If I was wrong, then printing billions and billions (as we have done) would put people off buying gilts and other vessels, it hasnt.

Im not trying to tell you how the world should work, im telling you that what the tabloids and the tories have told you about how the world works (economically) is false. And I know youve got it from the tabloids or the tories (or someone else who has) because economists don't say things that are so easily disproved. Im not asking you to take my word for it, nor am I claiming ito be an expert, im just trying to give you some starting points and a direction of where to learn more because the British public have been repeatedly lied to by billionaire non-dom newpaper owners, bankers and their friends in the Tory party to steal from all of us.

Would you agree that its worth people attempting to learn more? If you think im wrong, isnt it worth checking? If im right, you and millions of others are being taken for a ride - surely youd want to know so you can vote the thieves out next time around?

bobbymotors

'have never banged on about national spending and debt? Because it really doesn't matter.'

Exactly what idiots think when they run up £15,000 of credit card debt thinking that next year's wage bonus will pay it off...so 'it doesn't matter'....and it doesn't, until the one year where the bonus doesn't happen Then the house of cards falls down.

Exactly what happened to Brown.

Unless the books are balanced you have no fall back position.

It's so simple that even Ray Charles an Stevie Wonder could see it on a dark night.

But the left never can, and the left never will.

As for a new car on PCP so you can get to work? Nope. Buy a £1500 runabout, save up, buy a £5000 runabout, save up some more, buy a £15000 runabout that you own.

Because if you fall ill on a PCP ad can't pay it, not only are you ill, you've got no car to get to the doctors.

But fall ill when you own it, then you can sell it if you want to, to tide yourself over till you're better.

That's the whole problem you see, when you borrow it takes away plan B. And you need a plan B for when plan A goes tits up.

Eric_the_half_a_bee

Rusty_Shackleton wrote: »

Haha Eric, sorry, it wasnt meant to sound arrogant. Simply that, while Im not an expert by any measure, I have studied the subject and read a lot around it, and the arguments Im putting forward are based on decent sources. Many (but not all) of the arguments against what Im saying could be taken almost directly from a tabloid. e.g above talking about economy like a household budget, literally no economist (even those in favour of austerity) would seriously make the comparison (ignoring when they use it as an illustration for those who dont have a good understanding of econ).

You dismiss Friedman's opinion that deficits and debt matter as idiotic because you have done a bit of reading.

And then you say you don't mean to sound arrogant.

bobbymotors

'People are always willing to loan (GREECE) money because its completely safe, because the (BOG)can always create more money. If I was wrong, then printing billions and billions (as (the greeks) have done) would put people off buying gilts and other vessels, it hasnt. (HAS)'

Yep, you're right after all...erm...hang on....no, no you're not.

If I were you I'd quit reading those fancy books and start living in the real world.

Rusty_Shackleton

bobbymotors wrote: »

Exactly what idiots think when they run up £15,000 of credit card debt thinking that next year's wage bonus will pay it off...so 'it doesn't matter'....and it doesn't, until the one year where the bonus doesn't happen Then the house of cards falls down.

Exactly what happened to Brown.

Unless the books are balanced you have no fall back position.

Where to start with this?! A NATIONAL ECONOMY IS NOT THE SAME AS HOUSEHOLD FINANCES! there is no national credit card. Household finances are limited because you operate within the confines of a currency. A country controlling it's own currency defines the limits. This is only a problem for country's that lack credibility, which we do not.

There is never a time where the 'bonus' doesn't come in to repay our debts, because if we think we'll have growth this year and we don't, we borrow a bit more to cover it until there is growth. There has never been a time in modern history where a country fails to grow in the long run. Do you know what happens when that eventually happens? That's the fall of a civilisation. At any rate, when the creditors realise the government/society can't repay, it doesn't matter, because that government/society have just ceased to exist because of whatever calamity destroyed it, so there's nobody even trying to borrow anymore. This is of course taking things to extremes, but for a country such as the UK to not grow in the long run would take a serious disaster that would end the current economic system anyway (think, global pandemic wiping out a large amount of the population or similar).

bobbymotors wrote: »

'People are always willing to loan (GREECE) money because its completely safe, because the (BOG)can always create more money. If I was wrong, then printing billions and billions (as (the greeks) have done) would put people off buying gilts and other vessels, it hasnt. (HAS)'

Yep, you're right after all...erm...hang on....no, no you're not.

If I were you I'd quit reading those fancy books and start living in the real world.

Greece hasn't printed any money... at all, for nearly 20 years. You see Greece is in the Eurozone, and so does not have full control of it's currency. Greece is also not the UK, we're a far wealthier country with better governance, which gives markets confidence in us that they don't have in Greece. Hence why the UK can borrow more and at lower interest rates. We're a safe bet. Remember as well that borrowing from markets is only ever relevant when it comes to accessing other currencies, for anything in sterling we have absolute control via the BoE and so domestic confidence is all that matters (as you don't want a black market evolving that uses bartering or a proxy... that's what happens when hyperinflation collapses a currency)

If I were you I'd start reading some books so you understand a bit more about the real world

bobbymotors wrote: »

It's so simple that even Ray Charles an Stevie Wonder could see it on a dark night.

But the left never can, and the left never will.

Ignoring the irrelevance of your comment about Stevie Wonder (soundbite much?), lets address this idea that what I'm talking about is 'left' politically. Its not. See posts above from sources such as the IMF, World Bank, and world leading economists. These aren't lefties, a lot of them are neoconservative... they just have a clue what they're talking about, and limit the discussion to economics, not politics.

bobbymotors wrote: »

As for a new car on PCP so you can get to work? Nope. Buy a £1500 runabout, save up, buy a £5000 runabout, save up some more, buy a £15000 runabout that you own.

Rusty_Shackleton wrote: »

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).

I'm glad you agree on my earlier point about PCP being a bad idea, but getting a cheap car to get to work is a good idea. I'm assuming you agree it is acceptable to borrow a minimal amount of money to get the car if it allows you to get that job? Not that this has any relevance whatsoever to national finances, because again, household finances and governments finances are exactly nothing alike.

Eric_the_half_a_bee wrote: »

You dismiss Friedman's opinion that deficits and debt matter as idiotic because you have done a bit of reading.

And then you say you don't mean to sound arrogant.

I dismiss Friedman because its outdated - Reagan and Thatcher tried it, a lot of Latin America tried it, and it has produced some truly disastrous results. Contemporary economists discount his opinion because we now have more information... it's been tried and tested, and has failed. Keynesian economics on the other hand works time and time again. That's not arrogance, that's recognising new information and acting on it.


I'm assuming that you all work in some profession or have some skill or another - if an outsider came along as told you how to do your job, you rightly wouldn't take much notice. Since none of us are economists, why are you so reluctant to go and read about these things which you seem to care about? Go and read things from the experts, not newspapers. Unless you'd be willing to accept an outsider coming along to tell you how to do your job, why the hell do you think your opinion on something as complex as economics is worth a damn over people with expertise in it? (referring to people in sources, not to myself btw)

bobbymotors

It's EXACTLY the same as running a business or household.

Debt has to be repaid at some point.

The economy has to grow in order to pay off the QE

It's EXACTLY like saying next years wage bonus / next years increased profits will pay xyz off: most of the time, they do: but when they don't, there is no plan B, because all the money's gone.

I can see it, you can't, that's fine I will agree to differ.

antrobus

Rusty_Shackleton wrote: »

Where to start with this?! A NATIONAL ECONOMY IS NOT THE SAME AS HOUSEHOLD FINANCES!...

Straw man fallacy.

Rusty_Shackleton wrote: »

.there is no national credit card. ...

Yes there is. The Debt Management Office runs it. There is a very large outstanding balance.

Rusty_Shackleton wrote: »

...Household finances are limited because you operate within the confines of a currency. A country controlling it's own currency defines the limits.

Plain nonsense.

Rusty_Shackleton wrote: »

...This is only a problem for country's that lack credibility, which we do not....

We would soon lose "credibility" if we went back to running a deficit of 10% of GDP.:)

Rusty_Shackleton wrote: »

...There is never a time where the 'bonus' doesn't come in to repay our debts, because if we think we'll have growth this year and we don't, we borrow a bit more to cover it until there is growth. There has never been a time in modern history where a country fails to grow in the long run.

In the long run we are all dead. In the short run we can always be forced into bankruptcy. Modern history has recorded a number of countries who have defaulted on their debt. Google 'Sovereign defaults'.

Hoping that some magic bonus is going to turn up and save your bacon is not a rational basis for fiscal policy.

Rusty_Shackleton wrote: »

...I dismiss Friedman because its outdated - Reagan and Thatcher tried it, a lot of Latin America tried it, and it has produced some truly disastrous results.

Were exactly?

If you were looking for "truly disastrous results", wouldn't you start with Venezuela?

Rusty_Shackleton wrote: »

..If I were you I'd start reading some books so you understand a bit more about the real world

I would suggest that you take your own advice.:)

Fella

bobbymotors wrote: »

It's EXACTLY the same as running a business or household.

Debt has to be repaid at some point.

The economy has to grow in order to pay off the QE

It's EXACTLY like saying next years wage bonus / next years increased profits will pay xyz off: most of the time, they do: but when they don't, there is no plan B, because all the money's gone.

I can see it, you can't, that's fine I will agree to differ.

Exactly. Nobody's claiming the details are the same. It's the principles that are the same.

Debt is expensive at the best of times & ruinous at the worst of times. There are occasional times when it's a necessary evil or a sensible risk. Most times aren't those times.

Rusty_Shackleton

bobbymotors wrote: »

It's EXACTLY the same as running a business or household.

Debt has to be repaid at some point.

The economy has to grow in order to pay off the QE

It's EXACTLY like saying next years wage bonus / next years increased profits will pay xyz off: most of the time, they do: but when they don't, there is no plan B, because all the money's gone.

I can see it, you can't, that's fine I will agree to differ.

Bobby I'm not trying to argue with you but it really isn't the same, this isn't about opinion, it's a matter of fact. This is simply because household budgets are a zero sum game, whereas government finances are not. That's not subjective, it's absolute fact. When money was first invented and it was backed up by gold or some resource at a fixed rate, then money was (more or less) a zero sum game, but the modern economy is nothing like that.

Yes, the economy has to grow to pay off debts, but it doesn't matter when it grows as long as it grows, and it does always grow in the long term. Whether that's through technical innovation, improving productivity or efficiency, population growth (organic or by immigration) or competitive advantage over other economies, it doesn't matter. Even war or natural disaster can have a stimulus effect. Simply put, when the markets have faith that the economy will grow in the long term and the country is stable, we will always be able to borrow more money.

Plan B is always, borrow from someone else over a longer period to pay off the original loan... you just keep pushing it forward. Best of all, with interest rates so low during periods of low growth, the cost of said borrowing is cheaper than usual as well!

mrginge

Oh what a surprise. It's all the media and the tories fault.
Honestly, this patronising drivel from some halfwitted gimboid who's read a few opinion pieces and turned it into some revolutionary economic strategy is pure comedy gold.