And yet you continue to miss the most important point: not only are these measures unfair, they'll also leave the economy in the $h!tter. Job/pay cuts mean less money paid in tax by those people into the system, more unemployment benefits given to those people by the State, and less consumer buying because those people will have less money to buy products, ESPECIALLY as prices will be inflated by the VAT rise. The private sector is not ready to cover the shortfall needed to make up for the public sector cuts: this is simply fact, and to deny it is simply economic illiteracy. Therefore, as Newsnight say, the ONLY way Osborne's plans will work is if our export industry undergoes a miracle. Do you expect this to happen? And if so, how? I've asked this so many times, and you haven't answered.

Edited June 23, 201015 yr by Danny

No less a figure than the Institute for Fiscal Studies (no friend of Labour by any means) have come out and said this Budget will impact on the poorest the most. Are Phil and co really going to deny this, in favour of spurious surveys of public-sector pay by Tory thinktanks?

 

 

Budget is not progressive, declares IFS

 

Liberal Democrat and Conservative claims that the Budget was "tough but fair" and "progressive" have been blown apart by the independent Institute for Fiscal Studies.

 

 

Although the IFS agrees that the richest will pay proportionately more than the poor to repair the public finances, the institute's director, Robert Chote, said that "the Budget looks less progressive – indeed somewhat regressive – when you take out the effects of measures that were inherited from the previous government, when you look further into the future than 2012, and when you include some other measures that the Treasury has chosen not to model".

 

Mr Chote also pointed out that the cuts to public services, which don't appear in most assessments of the "fairness" of the Budget, "are likely to hit poorer households significantly harder than richer households".

 

Cuts in housing benefit and in disability living allowance, again much more likely to affect the most vulnerable, are not taken into account either by the IFS or the Treasury, another reason why the official and IFS figures may underestimate how hard the coalition Government's plans will penalise the poor.

 

Analysis of the Budget by the IFS reveals that the poorest tenth of society will lose about 2.5 per cent of their income, despite the removal of 880,000 low-paid workers from income tax when the threshold was raised by £1,000 to £7,475. Most of that loss was engineered by George Osborne, as they would have lost hardly anything under Alistair Darling's plans.

 

Mr Osborne has added to the burden on the rich, but only by about 1 per cent of their average income, bringing the total loss in their income as a result of current tax and benefit measures to about 7.5 per cent. Thus the Chancellor has placed about two-and-a-half times the burden on the poorest as he has on the richest – a loss of 2.5 per cent against one of 1 per cent.

 

The rise in VAT to 20 per cent will be a regressive move, though the IFS concedes that, once an individual's lifetime spending is taken account of, it is a more progressive form of tax than often assumed. Cuts in benefits through altering the way they are uprated will also hit those dependent on them hard, and the freeze in child benefit and cap on housing benefit will also add to the difficulties facing families on tight budgets. A rise in unemployment will also damage the Government's "progressive" credentials.

 

Mr Osborne did do some things to help protect the poor, the IFS agrees. An increase in the child element of the child tax credit by £150 above indexation next year will cost £2bn, and he is of course retaining such measures as the 50p rate on income over £100,000.

 

Pensioners, though, including poorer ones, do better under Mr Osborne's plans than younger people. The limit on housing benefit will not apply to them, for example, and neither will there be cuts to the equivalent of the disability living allowance, the attendance allowance. Most striking is the pledge to restore the earnings link from next year, or the rise in prices or 2.5 per cent, whichever is the greater. The winter fuel allowance, concessionary TV licences and bus passes are untouched.

 

The reforms to housing benefit could have far-reaching effects, the IFS also claims. Breaking the link between housing benefit allowance and actual rent rises, substituting CPI for future uprating, will eventually leave many expensive areas such as London out of reach. The decision to cut housing benefit for those out of work for more than a year was also criticised by the IFS, who suggested it was an inappropriately punitive way to get people into work again.

 

Though the IFS did not say so in stark terms, a rise in homelessness seems an inevitable consequence of the Budget, one of the more painful and graphic ways that society will become less equal in coming years.

 

Source: The Indepedent

And yet you continue to miss the most important point: not only are these measures unfair, they'll also leave the economy in the $h!tter. Job/pay cuts mean less money paid in tax by those people into the system, more unemployment benefits given to those people by the State, and less consumer buying because those people will have less money to buy products, ESPECIALLY as prices will be inflated by the VAT rise. The private sector is not ready to cover the shortfall needed to make up for the public sector cuts: this is simply fact, and to deny it is simply economic illiteracy. Therefore, as Newsnight say, the ONLY way Osborne's plans will work is if our export industry undergoes a miracle. Do you expect this to happen? And if so, how? I've asked this so many times, and you haven't answered.

 

this is obviously basic Economics... when you cut spending and peoples jobs they pay less tax and this then multiplies through the economy. The BoE decided to keep rates on hold for this very reason as they understand that the fiscal tightening will be sufficient to rain in inflationary pressures. What sector do you work in?

 

Your last post says "doesn't just purely make stuff up to support his argument like you've done about 10 times here.". I give an independent report published 1 week ago proving the things I said was correct and still its insufficient. The public sector pay and benefits is massively out of sync with the real economy and needs to be brought back into line - thats a fact backed up by an independent published report.

 

Also on VAT it is zero rated for food and kids clothes so the very poor will not be affected unless they go out and like to buy a new TV every 3 years. Not to mention the increase in the tax free allowance, VAT is not taxed on all goods and services and the zero rating benefits the poor!

 

Dont get me wrong everyone will feel this but it has been weighted on the rich, as it rightly should be. We have a huge deficit which every year increases our national debt and desperately needs to be sorted out. On your export question which again is basic economics, if our country is going through structural reform this will most likely devalue sterling making it more competitive - hence driving exports. Also China deciding to remove the Yuan peg to the USD which will mean their own exports become less competitive. This will lead to a shift in world trade and with the reduction in the CT we should be well positioned to take advantage of this. Also to your point of 4% is nothing, its huge! A 4% reduction in tax for our biggest companies saves many millions of pounds. In addition something not mentioned is the tax on banks which will bring in another £2 billion. You cant constantly ignore these things and sound the drum on public sector pay and benefits - a study backs up the already agreed on information that these are far too generous and need to be cut back.

this is obviously basic Economics... when you cut spending and peoples jobs they pay less tax and this then multiplies through the economy. The BoE decided to keep rates on hold for this very reason as they understand that the fiscal tightening will be sufficient to rain in inflationary pressures. What sector do you work in?

 

Your last post says "doesn't just purely make stuff up to support his argument like you've done about 10 times here.". I give an independent report published 1 week ago proving the things I said was correct and still its insufficient. The public sector pay and benefits is massively out of sync with the real economy and needs to be brought back into line - thats a fact backed up by an independent published report.

 

Also on VAT it is zero rated for food and kids clothes so the very poor will not be affected unless they go out and like to buy a new TV every 3 years. Not to mention the increase in the tax free allowance, VAT is not taxed on all goods and services and the zero rating benefits the poor!

 

Dont get me wrong everyone will feel this but it has been weighted on the rich, as it rightly should be. We have a huge deficit which every year increases our national debt and desperately needs to be sorted out. On your export question which again is basic economics, if our country is going through structural reform this will most likely devalue sterling making it more competitive - hence driving exports. Also China deciding to remove the Yuan peg to the USD which will mean their own exports become less competitive. This will lead to a shift in world trade and with the reduction in the CT we should be well positioned to take advantage of this. Also to your point of 4% is nothing, its huge! A 4% reduction in tax for our biggest companies saves many millions of pounds. In addition something not mentioned is the tax on banks which will bring in another £2 billion. You cant constantly ignore these things and sound the drum on public sector pay and benefits - a study backs up the already agreed on information that these are far too generous and need to be cut back.

 

Indeed it is great to see someone else talk complete and utter common sense for a change.

 

I would like to announce that I am PERMANENTLY BOYCOTTING this forum as I feel zero motivation discussing my centrist social democratic views with a lot of left wing socialist posters who don't seem to have even a basic grasp of Economics.

 

Indeed it is great to see someone else talk complete and utter common sense for a change.

 

I would like to announce that I am PERMANENTLY BOYCOTTING this forum as I feel zero motivation discussing my centrist social democratic views with a lot of left wing socialist posters who don't seem to have even a basic grasp of Economics.

We don't seem to have a basic grasp of Economics and yet we're implicitly being backed by Robert Peston, David Blanchflower and Paul Krugman (Nobel Prize winning economist)?

 

On the other hand it is YOU that doesn't have a basic grasp of economics. GDP is made up of four constituent factors: Consumption, Government Spending, Investment and (Exports minus Imports). We are currently on 0.0% GDP growth as of last quarter.

 

Government Spending has just been cut by anywhere between 20 and 25%. Consumption will be damaged by the slashing of benefits and the fact that huge amounts of jobs will be lost in the public sector. The private sector is not yet strong enough for Investment to make up for those losses, regardless of a 4% cut in Corporation tax (but again, who will these people be selling the products that come from Investment to with the fall in Consumption?). Unless we get an Export miracle (bearing in mind we don't have that much to Export and foreign spending will be down thanks to like-minded cuts), we're going back into recession.

 

Additionally, the 2% fall in the FTSE 100 after the Budget announcement (to illustrate, the collapse of Lehman Brothers precipitated a 5% fall in the FTSE 100) shows that your claims that this was to 'appease the markets' was ridiculous. We need strong growth to show we can meet this deficit.

 

Tell me what fails to grasp basic economics there? Stop being ridiculously childish and argue your point properly. There is nothing centrist and socially democratic about cutting all governmental departments by 25% when we're on 0.0% growth.

George Osbourne has done fantastically well with that budget, in redressing the balance between the private and public sectors and cutting the obscene welfare state. The only major criticism I have is that Health spending should be cut by 25% in real terms over the next four years too, with more emphasis on private healthcare solutions.

 

This country is going to be amazing after >10 years of (conservative) libertarianism... ^_^

I'm not sure if it's a typo for liberal-conservatism but the budget was not a libertarian budget. Libertarian is about reducing(and possible abolition) of the state and the taxes. An increase in VAT should in no way be associated with libertarianism.

 

I didn't think the budget was good. The increase in VAT is concerning, as doesn't target any problems. The figures on 2011 growth of 2.3% seem like a fairy tale, for those to be correct there would have to be massive increase in exports or a devaluation of the currency. The former looks unlikely due to a struggling situation in the US and Europe, the latter currency devaluation would be problematic for debt repayment - which was the whole idea of the budget. So in short the government published growth figures seem politically motivated fiction, no doubt as dubious and fictional as the Labour party figures previously.

the old C + I + G + X - M... takes me back to my first Economics classes :D. not at work right now so cant get something off bloomberg so the below will do:

 

http://www.businessweek.com/news/2010-06-2...g-s-p-says.html

 

Britain requires a “sustained” effort to keep its top credit rating, even after the government announced the steepest cuts in spending in a generation, said Moritz Kraemer, head of sovereign ratings for Europe, Middle East and Africa at Standard & Poor’s....

Moody’s and Fitch have already endorsed the June 22 budget, in which Osborne announced the deepest spending cuts in a generation, a bank levy and an increase in value-added tax. Moody’s said the plan is “supportive” of an Aaa rating, while Fitch said it ensured Britain would maintain its AAA grade.

 

We are in a terrible situation right now with unsustainable public sector spending (already discussed above) and if people look and hear the language coming out of rating agencies they would have downgraded Britain if the budget was not like it was - cut spending but give business tax breaks. I have no time or wish to explain the consequences on sovereign debt and our economy but just to say it would be extremely serious. Also who are people kidding that a 2.5% increase in VAT but a 1k increase in the lower band (to offset) of income tax is going to destroy consumption? For a middle income family these cancel each other out - havent done a calc but seems logical? For me this budget starts to hit people with incomes > 40k and over those levels I still believe you can maintain continued consumption. Maybe buy less luxury goods but that wont kill an economy.

 

The biggest concern for me centres around what's now happening in Spain and other areas of the EU. Everyone is pursuing austerity and no one will drive growth when everyone else is cutting belts (prisoner dilemma). Nothing you can do about that apart from get our own shop in order. I believe there is a review of the US banking system later today which will be interesting for direction.

Also on VAT it is zero rated for food and kids clothes so the very poor will not be affected unless they go out and like to buy a new TV every 3 years. Not to mention the increase in the tax free allowance, VAT is not taxed on all goods and services and the zero rating benefits the poor!

While I agree with you in concept you seem to be making an oversight here. Zero rated items still have a small element of VAT in them due to the distribution process, for example kids clothing will be shipped from the supplier with VAT transportation cost, both the capital outlay on say a lorry or a van plus the additional VAT on the fuel and the cost of any packaging/boxes also with extra VAT, then it arrives to be stored in shop requiring heating/lighting with VAT and business rates for the building also additional VAT, so this zero rated items still will increase although somewhat less then other items.

While I agree with you in concept you seem to be making an oversight here. Zero rated items still have a small element of VAT in them due to the distribution process, for example kids clothing will be shipped from the supplier with VAT transportation cost, both the capital outlay on say a lorry or a van plus the additional VAT on the fuel and the cost of any packaging/boxes also with extra VAT, then it arrives to be stored in shop requiring heating/lighting with VAT and business rates for the building also additional VAT, so this zero rated items still will increase although somewhat less then other items.

 

yes sure but 2.5% on this value is hugely small... even negligible as cost of heating/ lighting is spread over many items, same as transportation. And even then this small marginal cost is only increasing by 2.5%. Still believe for a couple with kids the increase in the tax free amount by 1k will offset all of this... was having a discussion the other day with someone and this will prob effect the people in the 40k - 55k bracket (in London) the most as this is the level just above where the support drops off.

We don't seem to have a basic grasp of Economics and yet we're implicitly being backed by Robert Peston, David Blanchflower and Paul Krugman (Nobel Prize winning economist)?

 

Don't be ridiculous, why on earth should we listen to people who foresaw the recession years ago....? No, it's far better if we listen to credit agencies and big businesses and the Bank of England (who would OBVIOUSLY call for big tax hikes on the rich if they thought it was necessary) who thought everything was fine right up until the Lehmans staff were carrying stuff from their desks out in boxes...

 

As Phil says, as long as Moody's and Fitch are supportive of the Budget, then who cares about the millions out of work?

Edited June 24, 201015 yr by Danny

Vince Cable looks rightly ashamed on Question Time right now.

Indeed it is great to see someone else talk complete and utter common sense for a change.

 

I would like to announce that I am PERMANENTLY BOYCOTTING this forum as I feel zero motivation discussing my centrist social democratic views with a lot of left wing socialist posters who don't seem to have even a basic grasp of Economics.

Well, I'm actually finding the discussion greatly refreshing from the usual tripe. At least Tyron and Danny are putting up well reasoned points with researched data. I don't mind discussion anything with someone who is informed and open to consideration as they are.

the old C + I + G + X - M... takes me back to my first Economics classes :D. not at work right now so cant get something off bloomberg so the below will do:

 

http://www.businessweek.com/news/2010-06-2...g-s-p-says.html

We are in a terrible situation right now with unsustainable public sector spending (already discussed above) and if people look and hear the language coming out of rating agencies they would have downgraded Britain if the budget was not like it was - cut spending but give business tax breaks. I have no time or wish to explain the consequences on sovereign debt and our economy but just to say it would be extremely serious. Also who are people kidding that a 2.5% increase in VAT but a 1k increase in the lower band (to offset) of income tax is going to destroy consumption? For a middle income family these cancel each other out - havent done a calc but seems logical? For me this budget starts to hit people with incomes > 40k and over those levels I still believe you can maintain continued consumption. Maybe buy less luxury goods but that wont kill an economy.

Independent studies have confirmed that the majority of those now covered by the new lower band have had the gains offset by the increase in VAT! Regardless, I don't think that'll be the main thing that kills consumption (that's just a niggle I have with the claim that the Budget is 'progressive' - it would be a bit nicer if they just admitted that they didn't care!) - the huge public sector job losses that will be incurred from the slashes in government spending will be the main Consumption killer I reckon.

I have to be honest - personally the budget isn't going to affect me that much but I am still concerned about it as a whole. I think Tryon - I agree if they'd have stuck a big notice on it saying 'we don't give a sh/t we're making these cuts because we want to' at least I'd have applauded them for their honesty.

 

The cutbacks in the public sector are of a particular concern as a large proportion of private sector jobs rely on the public sector (the place I work for at present for a start.) Also people seem to assume that people on benefits spend their money on expensive foreign holidays and 1,250 inch TV screens! Yes ... there are the few that The Sun tweaks out to put on display so we can all recoil in horror at their extravagances at our expense - but it really is a minority. There will always be a few people like this who know how to milk the system (whichever government is in) and will always get money for nothing. They are just hard-faced bast*rds who will always get on in the world. Most however, live simply within their means and spend whatever benefits they have in their local community - thus at least ensuring the survival of whatever employment there is in their area.

 

Norma

Independent studies have confirmed that the majority of those now covered by the new lower band have had the gains offset by the increase in VAT! Regardless, I don't think that'll be the main thing that kills consumption (that's just a niggle I have with the claim that the Budget is 'progressive' - it would be a bit nicer if they just admitted that they didn't care!) - the huge public sector job losses that will be incurred from the slashes in government spending will be the main Consumption killer I reckon.

 

sure this balances out for the very poor... so this is progressive in that the richer you are the more it hurts.

 

For the economy sure there is concern but to put it in context it will be 5 years of THIS budget to even balance the books - never mind starting to reduce the deficit and the interest we pay on this. 5 years just to ensure what we spend is in line with what we receive, thats astounding and points to terrible management before this. I cant see what else could have been done apart from this, I still feel the poor will be no worse off and public sector spending needs to be reigned in. Cant start taxing the rich over 50% they have introduced now as they will just leave to places new which will be even worse for the economy (people are already leaving for this reason). The only additional thing I would add is there should be a tax levied on OTC derivatives which are off balance sheet financial instruments. Not sure why the size of your balance sheet should matter for tax it should be how you run your business.

For the economy sure there is concern but to put it in context it will be 5 years of THIS budget to even balance the books - never mind starting to reduce the deficit and the interest we pay on this. 5 years just to ensure what we spend is in line with what we receive, thats astounding and points to terrible management before this. I cant see what else could have been done apart from this, I still feel the poor will be no worse off and public sector spending needs to be reigned in. Cant start taxing the rich over 50% they have introduced now as they will just leave to places new which will be even worse for the economy (people are already leaving for this reason). The only additional thing I would add is there should be a tax levied on OTC derivatives which are off balance sheet financial instruments. Not sure why the size of your balance sheet should matter for tax it should be how you run your business.

The majority of the deficit comes from bailing out the banks - it was a deficit of £33bn prior to the recession, one of £176bn after the recession. We don't need a Budget this harsh - most of the deficit will be dealt with when we sell our shares in the banks!

We don't seem to have a basic grasp of Economics and yet we're implicitly being backed by Robert Peston, David Blanchflower and Paul Krugman (Nobel Prize winning economist)?

 

On the other hand it is YOU that doesn't have a basic grasp of economics. GDP is made up of four constituent factors: Consumption, Government Spending, Investment and (Exports minus Imports). We are currently on 0.0% GDP growth as of last quarter.

 

Government Spending has just been cut by anywhere between 20 and 25%. Consumption will be damaged by the slashing of benefits and the fact that huge amounts of jobs will be lost in the public sector. The private sector is not yet strong enough for Investment to make up for those losses, regardless of a 4% cut in Corporation tax (but again, who will these people be selling the products that come from Investment to with the fall in Consumption?). Unless we get an Export miracle (bearing in mind we don't have that much to Export and foreign spending will be down thanks to like-minded cuts), we're going back into recession.

 

Additionally, the 2% fall in the FTSE 100 after the Budget announcement (to illustrate, the collapse of Lehman Brothers precipitated a 5% fall in the FTSE 100) shows that your claims that this was to 'appease the markets' was ridiculous. We need strong growth to show we can meet this deficit.

 

Tell me what fails to grasp basic economics there? Stop being ridiculously childish and argue your point properly. There is nothing centrist and socially democratic about cutting all governmental departments by 25% when we're on 0.0% growth.

 

Spot on Tyron...

 

To Richard, - fine, if you wanna go and chuck your toys out of the pram, do so, you're frankly beginning to sound like a Daily Mail editorial anyway (and seem to be formulating political views which make Peter Hitchins look like Tommy Sheridan...). You seem incapable of dealing with the very real probability that this budget is a HUGE error, funny how you seemed to have no problems with us crucifying the Nu Labor Govt over the MANY things it got wrong, but now are acting like a little spoiled kiddie when we point out the short-comings of the "Coalition" :rolleyes: ... And, as Tyron points out, we have the 'Big Guns' backing up our points, whereas you and Phil just seem to get your information from a bunch of Right Wing "Think Tanks" who have a vested interest in ruining the public sector....

 

And let's make this VERY FUKKIN' CLEAR on pensions, apart from bloody MPs and the Top Civil servants, there is no such sodding thing as a "Gold Plated" pension for about 99% of Public servants, what, is 5k a year a fukkin' King's Ransom now...? Because it was established on Question Time last night by Ed Balls that this is what the vast majority DO get, and no one exactly rushed to try and dispute that, certainly not Vince Cable, for example.... "Gold Plated" Public Sector pensions are a myth and a whole lot of Right Wing, "Daily Mail" claptrap, oh, but of course the Fib Dems have fallen for it haven't they? I mean, just look at Nick Clegg making that ridiculous claim. Obviously he's making assumptions based upon his OWN no doubt very generous Pension provisions and is assuming that teachers, nurses, local govt workers, etc, are all gonna be leaving work with the same provisions he is....

 

Free travel on BA flights for cabin crew should not be considered a "perk" anymore than free travel for drivers on London Buses is.... BA employs a lot of overseas staff Phil, so, er, how exactly are they supposed to get home to Paris or Dublin if their shift ends in London or Glasgow.....? Take the tube...? Also, you cant employ people to do the same job as existing employees on different remuneration, that's just outrageous, and you cant expect existing employees to take a massive pay cut when they signed up for a job on a certain wage-scale and benefits which they reasonably assumed they'd get.... You simply have no idea of the complex issues of what the strike is about, and thank fukk SOMEONE in the Private Sector has the guts to stand up for themselves, who'd've thought it would be the "Trolley Dollys" working for an airline.... :rolleyes: BA would simply not be able to get away with the bullying and intimidation tactics they are getting away with if they were a French or German company, because, again, French and German workers stand up for their rights and aren't afraid to take on the bosses (in fact in Germany, you know not exactly an "ultra Left-wing" society, it's enshrined in LAW that the bosses have to run fundamental changes by the unions and negotiate with workers on pay and conditions every year in collective bargaining agreements enforced by law; here, they just seem to dictate terms and workers are just expected to like it or lump it, that's a shift back to the dark ages of the Industrial Revolution that is, where factory and mill owners treated workers in this manner..), and they generally speaking have better standards of living than the majority of UK workers in the private sector....

 

The ConDems are banking on the Private Sector rushing in to pick up the pieces when they commit their Public Sector bloodbath... Errr, aint gonna happen guys, THERE'S some "economic facts" for you.... Nor are we gonna become some sort of German or Chinese-style Export super-state... Unlike Germany, Japan and China, we've got practically fukk all TO export, we IMPORT most of our goods, from, errr, China these days :lol: :lol: :lol: ...

 

Why's that..? Well, could be the fact that the last Tory govt destroyed the manufacturing base in this country, which the Germans, Japanese and others rushed in to replace......

 

Still, I guess we can just have Corporate Sponsorship of our schools and colleges couldn't we....? The Coca Cola Academy? The McDonalds 6th Form College.....? Sounds great dunnit....? :rolleyes:

this is obviously basic Economics... when you cut spending and peoples jobs they pay less tax and this then multiplies through the economy. The BoE decided to keep rates on hold for this very reason as they understand that the fiscal tightening will be sufficient to rain in inflationary pressures. What sector do you work in?

 

Your last post says "doesn't just purely make stuff up to support his argument like you've done about 10 times here.". I give an independent report published 1 week ago proving the things I said was correct and still its insufficient. The public sector pay and benefits is massively out of sync with the real economy and needs to be brought back into line - thats a fact backed up by an independent published report.

 

Bollocks, all that means is that people in the Private Sector (particularly retail, hospitality, bar-work, agency workers, etc) are chronically UNDER paid and basically treated like cattle.... How many people can seriously survive on £5.80 an hour in a city like London or Edinburgh.....? And, oh, surprise, surprise, who is it that tends to have the worst levels of worker's representation or unionisation...? That would be bar staff, hotel/catering staff, temps and Tesco/Asda Shelf-stackers innit? -_-

 

The only thing that has been constant over the past 30+ years of CONservative and NU Labor rule has been that the rich have gotten richer and the poor have gotten poorer.... And that is set to continue with this budget, on an even more massively Socially divisive scale.... <_<

 

ConDem-ned? Bloody right we are....

The majority of the deficit comes from bailing out the banks - it was a deficit of £33bn prior to the recession, one of £176bn after the recession. We don't need a Budget this harsh - most of the deficit will be dealt with when we sell our shares in the banks!

 

the real reason the deficit is so high is the massive fall in tax revenues. I find this article very interesting: http://www.parliamentarybrief.com/2010/03/...ficit-reduction.

 

It’s not the cost of supporting the financial system that does the damage, either in general or in the case of the UK today. In this year’s Budget, the Treasury said it thought the net cost of supporting UK banks was only £6bn, a tiny fraction of the overall increase in debt (close to £500bn in the three years to March 2011). Indeed, if you use more up-to-date equity prices, and net off some receipts that the Treasury has ignored (the fees banks have had to pay to issue government-guaranteed bonds, for example), our guess is that the taxpayer is already in the black on these investments.

 

Now we can define the context of the discussion its clear that this will not be solved simply by selling shares in banks! Now coming back to my original point on public sector pay and benefits the article also states:

 

What did grow very strongly, however, was government consumption — current spending on public services. From 18 per cent of GDP in 1998 this rose to 22 per cent a decade later and, with nominal GDP falling last year, to 24 per cent at the end of 2009 (Chart 3). Converted at underlying (PPP) exchange rates, per capita current spending on public services is now 17 per cent higher than in the main economies in the Eurozone.

 

This article states it, the independent paper of only 1 weeks ago states it and its time lefties understand that you need a balanced economy to be successful not one which is top heavy on public expenditure! Labour built the economy to be like this but when there is a significant drop off in the economy (recession) then your expenditure is nakedly exposed. We need to alter the fundamental basics and dependancies of the economy and that is going to be harsh for everyone.

This article states it, the independent paper of only 1 weeks ago states it and its time lefties understand that you need a balanced economy to be successful not one which is top heavy on public expenditure! Labour built the economy to be like this but when there is a significant drop off in the economy (recession) then your expenditure is nakedly exposed. We need to alter the fundamental basics and dependancies of the economy and that is going to be harsh for everyone.

 

Riiiight Phil, well you tell me what possible sense it makes to cut the numbers of policing on the streets of major cities like London and Manchester (which is certainly what London Mayor Boris Johnson has been talking about), has crime suddenly stopped or gone away....? What sense is there in cutting funding for teacher training or nursing, do less kids need educated, are less people gonna be sick...? Because again, this is what is involved in the ConDem cuts, no matter how much these fukkers try to deny it, this IS gonna happen, we're not stupid, and it's certainly not "Lefties" that are the only ones who are saying this...

 

So, Phil, why so keen to denigrate the public sector eh... Oh, hang on, dont you work in The City or something....? Well, I guess that explains it, trying to deflect responsibility when it was maggots in YOUR Industry sector (banking and Finance) like Goodwin and Applegarth who believed in "Greed is Good", and fukked us all over so they could make short-term gains and feather their own nests, yeah, Phil, that's right, we're in a hole because of the modest incomes of teachers, nurses, uni lecturers, firemen and police officers who actually work to make this country a better place, and it's nothing to do with the ludicrous sums of money demanded by the greedy few who still expect to be paid these ludicrous sums even when their plans fail.... <_<

 

You talk about a "balanced economy", but the country was over-reliant on the banking sector to the detriment of manufacturing... And, it was the BANKING sector that failed and caused the recession not the PUBLIC sector, we bailed out BANKS to the tune of hundreds of billions in one fell swoop (which we shouldn't have had to do anyway, not if we supposedly live in a "free market economy" where companies sink or swim; funny how that went out of the window and Northern Rock, RBS, et al, BEGGED for Govt intervention innit...? They all wanted "Keynsian" economic policies and pretty much Socialist Nationalisation then didn't they?), not universities or schools...

 

Sorry, but, come on mate, who you trying to kid.....? Trying to project blame on the public sector for the stupidity, incompetence and greed of the Bankers and the Wall St/City types is both disingenuous and frankly insulting to the intelligence....