Is it possible to become a millionaire (or near to) through investments?

_CC_

BananaRepublic wrote: »

Your analogy bears no relation to the reality since 'investment' in government speak means spending, and the public spending is largely for services such as healthcare, policing and pensions. Clearly services such as education do bring about an economic return, but over a very long time period, and it remans to be shown what result a 5% increase in spending would bring as an 'economic return'. Clearly it has a social return, but that was not the point made in your post.

The point made in my post was that it's not only inflation that can reduce the debt burden but also growth of the economy and in that way it's akin to a mortgage holders earning power increasing over the mortgage term.

I don't think anyone is arguing that spending a large deficit on day to day spending is wise, but the notion that deficits are always inherently "bad" is flawed.

BananaRepublic

_CC_ wrote: »

The point made in my post was that it's not only inflation that can reduce the debt burden but also growth of the economy and in that way it's akin to a mortgage holders earning power increasing over the mortgage term.

I don't think anyone is arguing that spending a large deficit on day to day spending is wise, but the notion that deficits are always inherently "bad" is flawed.

Perhaps, but I view the current deficit as bad, especially if we have another prolonged downturn. I'd rather not predicate current spending on the basis of a sunny future.

BananaRepublic

coastline wrote: »

Looking at the following links the public finances wouldn't have been any different today whoever had been in power 10 years ago.
In 2007 just months before the financial crash the Tories were backing Labours spending plans despite Labour running a budget deficit in a growing economy.

http://conservativehome.blogs.com/torydiary/2007/09/tories-will-mat.html

http://news.bbc.co.uk/1/hi/uk_politics/6975536.stm

The area highlighted in red represents Labour borrowing around £150-£180Bn during a period where they could have ran a balanced budget.

http://3.bp.blogspot.com/-u_6bLBEcvus/VIL2bc4et6I/AAAAAAAAB70/hmWudWtqETU/s1600/Deficit,48-.png

On this link it shows there's hardly been a balanced budget since the early 1970's.
Even when the Tories had been in power from 1978 things turned against them in the early 1990's and the budget deficit climbed again.
Their forecasts in 2010 highlighted in green again have been way out as the downturn has proved difficult.

https://www.flickr.com/photos/hmtreasury/5260056945/

You simply cannot say that the Tories would have done the same as Labour, just as you can't predict what Labour would have done had they won last time. What was the Tory manifesto in 1997? And in the following elections?

The 2007 example is a case of the Tories desperately trying to gain popularity, just as in 1997 Blair had tried successfully to gain confidence in his party's economic policies. Labour successfully set an agenda whereby we - the electorate - supported significant spending increases.

It does seem to me odd that we have had posts in this thread accusing Thatcher of destroying UK industry (no mention of overseas cheap labour for example) and blaming Osborne for the deficit. None of those posts attracted criticism, whereas my posts did. There seems to be a lack of willingness to ascribe blame to Blair and Brown for the events during their watch, and a willingness to attack Osborne et al.

This has some interesting analysis including the debt and the shocking increase around 2007:

http://www.telegraph.co.uk/news/general-election-2015/11576801/Did-New-Labour-spend-too-much-in-government.html

We had greatly increased spending, as if all would be rosy, which left us in trouble when bad times arrived.

By the way, here's some pro-Labour analysis (since I was wrongly accused of being anti-Labour):

http://blogs.lse.ac.uk/politicsandpolicy/uk-growth-and-productivity-1997-to-2008/
http://www.economicshelp.org/blog/5326/economics/government-spending/

coastline

BananaRepublic wrote: »

You simply cannot say that the Tories would have done the same as Labour, just as you can't predict what Labour would have done had they won last time. What was the Tory manifesto in 1997? And in the following elections?

The 2007 example is a case of the Tories desperately trying to gain popularity, just as in 1997 Blair had tried successfully to gain confidence in his party's economic policies. Labour successfully set an agenda whereby we - the electorate - supported significant spending increases.

It does seem to me odd that we have had posts in this thread accusing Thatcher of destroying UK industry (no mention of overseas cheap labour for example) and blaming Osborne for the deficit. None of those posts attracted criticism, whereas my posts did. There seems to be a lack of willingness to ascribe blame to Blair and Brown for the events during their watch, and a willingness to attack Osborne et al.

This has some interesting analysis including the debt and the shocking increase around 2007:

http://www.telegraph.co.uk/news/general-election-2015/11576801/Did-New-Labour-spend-too-much-in-government.html

We had greatly increased spending, as if all would be rosy, which left us in trouble when bad times arrived.

By the way, here's some pro-Labour analysis (since I was wrongly accused of being anti-Labour):

http://blogs.lse.ac.uk/politicsandpolicy/uk-growth-and-productivity-1997-to-2008/
http://www.economicshelp.org/blog/5326/economics/government-spending/

The main point to the post was the Tories were backing Labours spending plans from 2007 and as a result the National Debt would have been the same today.
Why didn't they say reduced spending was required and give a detailed plan from 2007-2010 instead.? There's no doubt they matched Labours plans to get elected as the general public wouldn't vote for cuts.
They even made a movie but to me there's very little between them all really.

https://www.youtube.com/watch?v=bR_hfQU-4r0

talexuser

BananaRepublic wrote: »

You simply cannot say that the Tories would have done the same as Labour

This is very true, they would probably have de-regulated the banks even more, and Osbourne was clearly on record as saying the Irish financial boom was the example to follow.

BananaRepublic

coastline wrote: »

The main point to the post was the Tories were backing Labours spending plans from 2007 and as a result the National Debt would have been the same today.
Why didn't they say reduced spending was required and give a detailed plan from 2007-2010 instead.? There's no doubt they matched Labours plans to get elected as the general public wouldn't vote for cuts.
They even made a movie but to me there's very little between them all really.

https://www.youtube.com/watch?v=bR_hfQU-4r0

Firstly you did not prove that, since you have not quoted from the manifesto. Secondly it sounds like you are trying to avoid pinning any responsibility for this on Labour, or us. Do you not recall Michael Howard, when leader of the opposition, warning about the boom? He did so often, and was derided for it, by Labour and others.

BananaRepublic

talexuser wrote: »

This is very true, they would probably have de-regulated the banks even more, and Osbourne was clearly on record as saying the Irish financial boom was the example to follow.

Clearly many here including you are pro-Labour. You seeem to forget Blair's love affair with the City which he saw as his golden goose. And you do and others seem to forget that Labour were fiercely against the Tories proposals to make cuts come the 2010 election, saying they would destroy the country. They said they would spend our way out of trouble. So there was a very real difference in the outlook between the two parties.

However, one real issue that has not been touched on here is that the underlying cause that burst the bubble was junk debt, and the use of complex financial instruments which meant that no-one knew if a bank was financially stable or not, since no-one knew who owned bad debt. None of the parties saw this, and it could be argued that the Treasury should have foreseen this. That is not an attack on Labour, since the Treasury is supposed to be staffed by clever civil servants. I recall saying for years that the bubble would burst, but like most people I could not see how.

No doubt none of the problems were Labour's fault in your view, they just happened to be the government, nothing to do with them.

coastline

BananaRepublic wrote: »

Firstly you did not prove that, since you have not quoted from the manifesto. Secondly it sounds like you are trying to avoid pinning any responsibility for this on Labour, or us. Do you not recall Michael Howard, when leader of the opposition, warning about the boom? He did so often, and was derided for it, by Labour and others.

The manifesto would have been 3 years later surely in 2010...they were saying clearly in 2007 that if they had the power they would be spending the same as Labour despite a £30bn budget deficit.
Then in 2008 they made a U turn after the crash but we all know its a bit late after the event.
I'm not bothered who's in power that's the way I see it as they are politicians and the general public aren't too happy with them all.
Just wait until this European vote gets going in the next few weeks and will we get straight answers despite its importance.?

http://www.telegraph.co.uk/news/politics/conservative/3477235/David-Cameron-scraps-Labour-spending-plan-to-avoid-borrowing-bombshell.html#

talexuser

BananaRepublic wrote: »

Clearly many here including you are pro-Labour.

Wrong again, I hate the labour party because they are too stupid to even make themselves electable, let alone convince competent to run the economy. Do not have the arrogance to ascribe views to others they do not have just because you don't agree with them, it is a very cheap tactic. However it is easier than actually responding to the perfectly valid point that Osbourne was just as spectacularly clueless in his pre-crisis economic analysis.

BananaRepublic

coastline wrote: »

The manifesto would have been 3 years later surely in 2010...they were saying clearly in 2007 that if they had the power they would be spending the same as Labour despite a £30bn budget deficit.
Then in 2008 they made a U turn after the crash but we all know its a bit late after the event.
I'm not bothered who's in power that's they way I see it as they are politicians and the general public aren't too happy with them all.
Just wait until this European vote gets going in the next few weeks and will we get straight answers despite its importance.?

http://www.telegraph.co.uk/news/politics/conservative/3477235/David-Cameron-scraps-Labour-spending-plan-to-avoid-borrowing-bombshell.html#

It seems to me that you are being selective. What if the Tories had got in back in 1997, 2001 or 2005? What would their policies have been? In 2007 they were forced to promise to copy Labour, so as not to frighten people, who were fearful of huge cuts. I happen to think Labour should take blame for the deficit, for overspending and in part for the financial crisis, just as I am happy to blame Thatcher for high interest rates that caused many people to suffer, and doubtless many lost their homes. I don't accept that they can shrug off all responsibility, which is what you seem to think.

As for politicians, we get the ones we elect, and often we prefer not to be told the truth, as Michael Howard proved. I was fooled by Blair in 1997. I suspected Cameron was another Blair. Thankfully not.