Precautions in case of a Labour win

Spreadsheetman

MaxiRobriguez wrote: »

.....
The Tories were elected on a promise that a short period of austerity would eliminate the deficit and allow us to pay down our debt. Ten years on, the debt has doubled, and despite making peoples lives harder most people have absolutely nothing to show for it.

.....

Has anyone got a source explaining why that is? Or is it simply that the magnitude of cuts to really recover the situation is not possible while keeping a (mostly) functional country?

MaxiRobriguez

Spreadsheetman wrote: »

Has anyone got a source explaining why that is? Or is it simply that the magnitude of cuts to really recover the situation is not possible while keeping a (mostly) functional country?

We managed it pretty well all the way up to 2009.

The thing with austerity is it's a bit of a catch 22, because reduced spending doubles up with reduced investment, which in turn reduces the ability to generate the money to pay down the debt.

I think the Tories learned that in their coalition government, as the cuts were initially much harsher which almost led to the double dip recession. Once they had that warning, they eased off somewhat.

jimi_man

MaxiRobriguez wrote: »

The Tories were elected on a promise that a short period of austerity would eliminate the deficit and allow us to pay down our debt. Ten years on, the debt has doubled, and despite making peoples lives harder most people have absolutely nothing to show for it.

Again a lack of understanding of how debt/deficit works has led to this erroneous statement.

I'll reiterate - all the while there is a deficit, the debt will continue to grow. To eradicate the deficit virtually instananeously, is just a ridiculous concept.

10 years on, of course the debt has increased, even though the deficit has been reducing year on year. The deficit has now reduced to virtually zero. So austerity has worked, albeit slower than most people would have liked. Sadly the pain of arresting previous bad financial habits is hard - just go and look at the Debt Free Wannabe forum.

jimi_man

MaxiRobriguez wrote: »

We managed it pretty well all the way up to 2009.

The thing with austerity is it's a bit of a catch 22, because reduced spending doubles up with reduced investment, which in turn reduces the ability to generate the money to pay down the debt.

I think the Tories learned that in their coalition government, as the cuts were initially much harsher which almost led to the double dip recession. Once they had that warning, they eased off somewhat.

The reverse to this is increased spending, ideally leading to increased investment and then increased tax receipts. This was what happened during the latter years of Brown's administration where he tried to spend his way out of the recession and was a massively flawed concept that didn't work and contributed in part to the issues that the Tories had to take on.

To my mind it would have been better to let Labour sort out that mess post 2010, however who knows where we would be now.

Of course most socialists will just blame the banks for everything..... perish the thought that they should shoulder responsibility for anything.

JoeCrystal

jimi_man wrote: »

10 years on, of course, the debt has increased, even though the deficit has been reducing year on year. The deficit has now reduced to virtually zero.

Well, it is not virtually zero. It is still £25.5 billion deficit in the last tax years. But yes, I agreed that it is a lot lower and hopefully it should be eliminated in a few years and have a balanced budget instead, barring Tories/Labour lavish spending plans whatever that be.

jimi_man

JoeCrystal wrote: »

Well, it is not virtually zero. It is still £25.5 billion deficit in the last tax years. But yes, I agreed that it is a lot lower and hopefully it should be eliminated in a few years and have a balanced budget instead, barring Tories/Labour lavish spending plans whatever that be.

Copied from www.ukpublicspending.com.uk

'the deficit has steadily declined, down to £1.9 billion in 2018. At the end of March 2019 the “current budget deficit” was a surplus of £19 billion.'

A lot depends on how you interpret the figures, which is why I said virtually zero.

JoeCrystal

jimi_man wrote: »

Copied from www.ukpublicspending.com.uk

'the deficit has steadily declined, down to £1.9 billion in 2018. At the end of March 2019 the “current budget deficit” was a surplus of £19 billion.'

A lot depends on how you interpret the figures, which is why I said virtually zero.

I got the number from the ONS in this case: https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicspending/bulletins/ukgovernmentdebtanddeficitforeurostatmaast/march2019

[Deleted User]

MaxiRobriguez wrote: »

I'm a leaver but I can't buy this, sorry.

The referendum result in 2016 was won with a lot of commentary about using the money saved to fund the NHS, an easy FTA, not paying the divorce bill, no custom checks etc etc.

What we have in front of now is very different to what was being discussed in 2016, so there is nothing unfair about a confirmatory vote, which outlines very clearly what the deal contains and what changes it will therefore have on the country.

If the 52% haven't changed their mind and like the proposed changes, they can vote it through again. If the majority has swung to a "actually prefer our current terms" then it was right to hold the vote as an exercise in finding out what the updated will of the people was.

I have sympathy with my peers who feel like it'll be a cop out, but the fault is not with the remainers or parliament, the fault was with holding an referendum in which the leave option wasn't defined.

So it's either that, or the softest of soft Brexits as a compromise option. Take your pick!

Agree. Just like buying a garment, a car or a house, we should have the opportunity to confirm. We have the option of staying in the EU on the terms we have now, thus avoiding the loss of at least 3.5% of GDP, but that is gone forever if this Govt is voted back in.

MaxiRobriguez

jimi_man wrote: »

Again a lack of understanding of how debt/deficit works has led to this erroneous statement.

I'll reiterate - all the while there is a deficit, the debt will continue to grow. To eradicate the deficit virtually instananeously, is just a ridiculous concept.

10 years on, of course the debt has increased, even though the deficit has been reducing year on year. The deficit has now reduced to virtually zero. So austerity has worked, albeit slower than most people would have liked. Sadly the pain of arresting previous bad financial habits is hard - just go and look at the Debt Free Wannabe forum.

What was erroneous about my statement?

I said "The Tories were elected on a promise that a short period of austerity would eliminate the deficit and allow us to pay down our debt. Ten years on, the debt has doubled, and despite making peoples lives harder most people have absolutely nothing to show for it."

if the deficit had been eliminated within that parliament like Osborn suggested, then an additional five+ years worth of surplus should have at least taken debt levels back to what they were when Labour left office, as Osborn was getting at.

Also, 8 years into their austerity programme and the deficit is simply back to where it was between 2002-2004, when Labour were apparently removing the purse strings, and now the Tories have given up the deficit elimination target and are having a public spending announcement frenzy of late.

So I state again: We've had a period of austerity which has left a lot of people in a bad way and we've got nothing to show for it, and furthermore looks like the change of policy within the Tory party is going to start pushing out that deficit again.

Edit: Was also taking my figures from ONS hence assertion still a deficit now not surplus.

[Deleted User]

The thing with austerity is it's a bit of a catch 22, because reduced spending doubles up with reduced investment, which in turn reduces the ability to generate the money to pay down the debt.

In other words “the more we spend, the lower our debt will be”? Very cool.