the snap general election thread

Joe_Horner

bobbymotors wrote: »

Ahh...economists, the eighth wonder of the world.

If someone OR a country owe lots of money then nobody, no where in the world should borrow money to fund any depreciating asset.

If you spend more than you earn, you'll go skint, personally or countrywide. It can be no other way.

But it really isn't hat simple, is it?

I run a business - part retail and part service.

Let's say for a minute that the drop in high street spending has hit my profits so hard that I'm going to struggle to meet my bills. I've already cut back expenses to the bone but it's still not enough. I can't increase prices because I'll lose customers and I'm already working as many hours as I can, so I can't drop prices to try to increase customers.

I essentially have 3 possibilities:

• I can close the business down before it fails and walk away. That's an option for me, but it's not an option for a country.
  
• I can borrow the minimum possible (within what I can afford) to provide cashflow and hope things improve.
  
• I can borrow more than I can afford at the moment in order to invest in growing the business to the point that I can afford what I borrow and more.

Out of those, option 2 is, effectively, "austerity".

Option 3 is likely to be the smart business decision. Yes, there's risk involved, but it's only the risk that every venture capitalist accepts every time they invest in a start-up or business expansion.

If the business plan is good and the projected growth from the borrowing is realistic then the risk is minimal and it's set against the likelihood of high returns.

Which is why businesses do it and why investors get such good returns as the business thrives. If it didn't work there'd be no such thing as investors.

wintersunshine

ThinkingOutLoud wrote: »

They did cost out a lot. Not everyone agreed the funding was correct.

And yet I can't find one single mention of sprinklers for tower blocks? Did I miss something?

Yet Labour will give the winter fuel allowance to rich pensioners.

At risk of being accused of a certain level of hypocrisy perhaps?

And bribes to middle class kids and their parents in the form of tuition fees - nothing for people on benefits and nothing for people in tower blocks.

Labour is a party for the middle classes.

And actually have a look at the manifesto a ton of spending on the military - I kid you not.

wintersunshine

And !!!!!! every member of the labour party now appears to be a cladding expert :mad::mad:

And every member of the labour party iis a critic of the instructions of the fire services...

We need to KNOW what happened - we don't need cheap point scoring.

Thrugelmir

Joe_Horner wrote: »

Which is why businesses do it and why investors get such good returns as the business thrives. If it didn't work there'd be no such thing as investors.

You are talking about borrowing. Not raising capital. Borrowing requires servicing. Capital doesn't.

Let's say for a minute that the drop in high street spending has hit my profits so hard that I'm going to struggle to meet my bills. I've already cut back expenses to the bone but it's still not enough. I can't increase prices because I'll lose customers and I'm already working as many hours as I can, so I can't drop prices to try to increase customers.

That's why businesses fail all the time. Somebody else in the market will simply pick up your customers trade. There's no sentiment in business. Dog eats dog as they say. To succeed you need to be better than your competitors. Borrowing to grow the business needs to be planned, not a reactionary afterthought. To obtain investment from external sources is not easy. Dragons Den is just a glimpse of the real world.

Joe_Horner

Thrugelmir wrote: »

You are talking about borrowing. Not raising capital. Borrowing requires servicing. Capital doesn't.



That's why businesses fail all the time. Somebody else in the market will simply pick up your customers trade. There's no sentiment in business. Dog eats dog as they say. To succeed you need to be better than your competitors. Borrowing to grow the business needs to be planned, not a reactionary afterthought. To obtain investment from external sources is not easy. Dragons Den is just a glimpse of the real world.

It's a loose analogy but makes the point that borrowing more than you can afford to pay at the moment isn't the cardinal sin that Maggienomics held it to be.

Even at the small business level "common sense family budget" principles break down.

By the time you get to national economies with control of their own money supply they're right out the window and "balancing the books" in that good old homespun wisdom way is like thinking your skill at removing splinters qualifies you to do an appendectomy.

Chrysalis

steampowered wrote: »

I think you need to wait until the report comes out before concluding that the government weren't to blame. It is entirely possible that the government were to blame.

The government has cut local authority budgets by 40%. And also frozen rent for social tenants, reducing the amount of money in social housing budgets.

It is entirely possible that the incredible strain local authority budgets have been put under has caused a breakdown in maintenance (e.g. no working fire alarms in a massive tower block) and failure to pay attention to fire safety in social housing (e.g. using cheap, highly flammable cladding).

If that turns out to be the case, the government will be directly to blame. In the same way that you would blame the government if it cut NHS funding by 40% and that resulted in more hospital deaths. But we'll have to wait and see what the report says the exact causes were.

In addition councils are diverting funds to discretionary housing payments to prevent an entire housing collapse as LHA is a long way from paying private rents, if they didnt do this the official homeless numbers would be skyrocketing.

No doubt baby boomers will say "but we cannot afford it".

Chrysalis

bobbymotors wrote: »

Where's the money coming from?

A question that was largely ignored in the GE campaign.

It's a question the left can never coherently answer. Where's all the money going to come from?

Not from the top 5%,nd not by putting up corporation tax by 40% either.

An not from amazon, vodafone, starbucks etc come to that...they can afford better tax barristers than the govt can, they'll never pay up.

So, where's the money?

Well first off, why are you making stuff up? yes its a serious question.

Because labour did say where the money comes from, it comes from tax increases.

However the tories did not say how their tax cuts are funded, yes tax cuts does = spending.

So the question is, why are you making stuff up?

When the bbc asked may how her manifesto was budgeted, after lots of evading the question she muttered "I will move money around". oooooookay.

Also I dont know what world you live in but its perfectly normal practice for consumers to borrow, business to borrow and most definitely for governments to borrow. Even large companies like BT borrow money as it makes economical sense with the low interest rates.

If no one borrowed we would be in a permanent recession, the 2009 recession was primarily caused by credit lines been shut. Capitalism cannot survive without borrowing.

These companies that you said would never pay up were paying up in the 2000s, corbyn was proposing a lower rate of corp tax then we have had for the past 2 decades.

The problem what you dont realise is if the government keeps caving in to wealthy individuals and large corporations the end result is inevitable, a 1% tax rate as these guys are never happy, tax always has to be lower than what it is.

One thing trump did in america that was clever was he told companies that moved out of america they would be slapped with a 35% import tax, governments do have the power to force companies to change their way of thinking, but it does need "balls" to carry it out. So all that would need to be done is to make a change to law to make it "unprofitable" for companies to avoid paying tax.

A government can afford more than someone like amazon, but often is governments simply dont try hard enough as they tend to see tax evasion as a lower crime than things like benefit fraud, so more effort always gets put into the latter.

CKhalvashi

hallmark wrote: »

It's the same Corbyn who's protested against everything for the last 30 years without ever yet suggesting something useful, like how we might actually pay for his wishlist of demands.

There was a costed document. Labour at least made an effort unlike Maybot, who obviously was running some form of software that didn't have a calculator installed.

I'm not sure what other point you're trying to make? The NHS at operational level is on its knees, its staff haven't had a pay rise for 10 years, same with the police service.

We need to raise taxes in this country, not lower them, to pay to actually protect the people that the government is supposed to represent. I'm not talking by a lot, just enough to close the gap between the deficit and any additional spending that needs to be done, and in a transparent way. How does 1% on PAYE sound?

ThinkingOutLoud wrote: »

They did cost out a lot. Not everyone agreed the funding was correct.

And yet I can't find one single mention of sprinklers for tower blocks? Did I miss something?

Yet Labour will give the winter fuel allowance to rich pensioners.

At risk of being accused of a certain level of hypocrisy perhaps?

From long before the election, but it was originally costed from non-central reserves, it seems. Once again I'll note that the Conservatives voted against the motion, Labour voted for.

GreatApe

Joe_Horner wrote: »

But it really isn't hat simple, is it?

I run a business - part retail and part service.

Let's say for a minute that the drop in high street spending has hit my profits so hard that I'm going to struggle to meet my bills. I've already cut back expenses to the bone but it's still not enough. I can't increase prices because I'll lose customers and I'm already working as many hours as I can, so I can't drop prices to try to increase customers.

I essentially have 3 possibilities:

• I can close the business down before it fails and walk away. That's an option for me, but it's not an option for a country.
  
• I can borrow the minimum possible (within what I can afford) to provide cashflow and hope things improve.
  
• I can borrow more than I can afford at the moment in order to invest in growing the business to the point that I can afford what I borrow and more.

Out of those, option 2 is, effectively, "austerity".

Option 3 is likely to be the smart business decision. Yes, there's risk involved, but it's only the risk that every venture capitalist accepts every time they invest in a start-up or business expansion.

If the business plan is good and the projected growth from the borrowing is realistic then the risk is minimal and it's set against the likelihood of high returns.

Which is why businesses do it and why investors get such good returns as the business thrives. If it didn't work there'd be no such thing as investors.

A business if it can earn a positive return on investment should be doing that anyway. If they only consider investing to grow once the business is in trouble I would suggest at that point they are grasping at straws and will throw good money in after bad money.

I knew one such lady who did just that lost everything her savings her house and her marriage. I had advised her about mid point to not double down she didn't listen and wasted so much capital and heartache. Its the gambler addiction to think just more money would solve the problem of a non viable business.

A heathy part of a strong economy is having lots of business failures but critically doing so with the least possible losses. I've had multiple business in the past which I started up and closed down in less than a month as it was clear to me once we started it was non viable. While they lost me Money they lost me much less than they would have had I pushed on for a year or more.


Regarding an economy its not a household budget but nor is there magic that can increase the production of goofs and services. Right now we are at full employment so I don't think it makes sense to increase government spending at this point in time. However during a recession it should be done. I think the left lose a lot of credibly continuously crying wolf. Not all points in time can be spend more. If they said OK under criteria x we will spend more and under y we won't then let's talk. But not to spend 7 years crying we should spend more and go into an election for another 5 years crying more spending.

GreatApe

CKhalvashi wrote: »

There was a costed document. Labour at least made an effort unlike Maybot, who obviously was running some form of software that didn't have a calculator installed.

I'm not sure what other point you're trying to make? The NHS at operational level is on its knees, its staff haven't had a pay rise for 10 years, same with the police service.

We need to raise taxes in this country, not lower them, to pay to actually protect the people that the government is supposed to represent. I'm not talking by a lot, just enough to close the gap between the deficit and any additional spending that needs to be done, and in a transparent way. How does 1% on PAYE sound?





From long before the election, but it was originally costed from non-central reserves, it seems. Once again I'll note that the Conservatives voted against the motion, Labour voted for.

You don't know if the sprinkler system in common areas would save lives, in this fire it looks like it wouldn't have

The £500k budget for 12 blocks looks a great underestimated considering this block that burnt was supposedly £200k for the single block

There is a very real risk vs cost calculation and hindsight investment is easy to do. Mostly sprinklers are not cost effective which is why home owners don't install them in their own homes

You then have very important secondary considerations for communal installs. I used to live on a council estate and I'm certain in my estate any communal sprinklers would have been set off by the kids and young gang members for laughs. Either with fires or breaking the glass. How much would it cost the council to repairs flood damage to the flats a few times a year when the kids decide to have some 'fun'? How long until the residents ask the council to remove the system for sheer anger of being flooded every few weeks/months?

So yes with hindsight this particular block should have had its own firefighters stationed right outside and a sprinkler system in every flat and an additional fire escape and a heliport on the top and emergency parachutes and each flat should have had a dozen gas masks and lots more. Because that's hindsight investment its easy to justify any and all spending because we know it happened here. The more realistic adult job of assessing risk vs cost and implementing workable solutions is too messy to bother with let's just rile up people morning their dead against the right that's easier....