The Bank of England is set to severely revise down its economic growth forecasts, due to the government's slashing of the public sector. Meanwhile, they're also set to project that inflation will rise significantly - meaning that, combined with the VAT rise, prices for everyday items will skyrocket by next year. And yesterday we heard that a third of jobs at the Ministry of Justice are set to go, which is set to be reflected right across the public service, meaning the crisis for youth unemployment is only set to worsen. But hey - on the bright side, atleast we'll reduce the deficit, the big scary monster that's going to destroy us and eat our children!!!!!!!!!1111

The Bank of England is set to severely revise down its economic growth forecasts, due to the government's slashing of the public sector. Meanwhile, they're also set to project that inflation will rise significantly - meaning that, combined with the VAT rise, prices for everyday items will skyrocket by next year. And yesterday we heard that a third of jobs at the Ministry of Justice are set to go, which is set to be reflected right across the public service, meaning the crisis for youth unemployment is only set to worsen. But hey - on the bright side, atleast we'll reduce the deficit, the big scary monster that's going to destroy us and eat our children!!!!!!!!!1111

 

Reducing the deficit is the big priority

 

I don't believe that inflation will go up significantly, if anything it will go down as shops will have to discount heavily next year to attract sales as the cuts really start biting in, I think the picture you are painting is very much like the "we are all going to die of swine flu/bse/salmonella/foot and mouth disease" scare stories in the media.

 

Everyday items such as what ? by everyday I assume you mean food which is not subject to VAT anyways. If you mean plasma tv's and dvd players etc then they are a luxury item.

 

Next year will be tough but I don't see it as anything like the armageddon scenario you are predicting

 

 

Reducing the deficit is the big priority

 

Why? We've run a budget deficit nearly every year since the war - indeed, in the late 1940s, our deficit was proportionally MUCH higher due to our debts from fighting the war - but we didn't start slashing spending then, instead we invested in a new NHS and the universe didn't cave in. This deficit scare-mongering is a Tory figleaf, designed to hide the fact they've always ideologically wanted a reversion to the Thatcherite small-state model. No-one denies the deficit should be reduced, but there is absolutely no need WHATSOEVER to completely eliminate the whole deficit within 5 years like the Coalition is doing; halving it within that time would be more than adequate - and even then, it's right that the majority of it should come from higher taxes on the rich who haven't been pulling their weight, rather than the hard-working poor and less-fortunate.

 

Why? We've run a budget deficit nearly every year since the war - indeed, in the late 1940s, our deficit was proportionally MUCH higher due to our debts from fighting the war - but we didn't start slashing spending then, instead we invested in a new NHS and the universe didn't cave in. This deficit scare-mongering is a Tory figleaf, designed to hide the fact they've always ideologically wanted a reversion to the Thatcherite small-state model. No-one denies the deficit should be reduced, but there is absolutely no need WHATSOEVER to completely eliminate the whole deficit within 5 years like the Coalition is doing; halving it within that time would be more than adequate - and even then, it's right that the majority of it should come from higher taxes on the rich who haven't been pulling their weight, rather than the hard-working poor and less-fortunate.

 

Just the interest alone we are paying on the deficit would pay for several pence off income tax, new hospitals, more prisons, new schools etc, it is totally right to hammer the deficit, the interest we are paying on it is an evil that needs righting, Cameron will no doubt use his second term to cut taxes with the first term spent wiping out the deficit.

 

It is totally right to take all necessary steps with regards the deficit.

 

A small state is absolutely the right idea, after Labour's nanny state with complete lack of privacy, being watched everywhere we went, the British way of life being hampered by do gooders/elf n safety loonies, quangos taking our money like blood sucking leeches, speed cameras harrassing us it will be very refreshing to have more freedom, more privacy, less regulations, less do gooders etc, bring it on.

 

I want to see sweeping tax cuts but I know it will be 5 years before that can happen.

Just the interest alone we are paying on the deficit would pay for several pence off income tax, new hospitals, more prisons, new schools etc, it is totally right to hammer the deficit, the interest we are paying on it is an evil that needs righting, Cameron will no doubt use his second term to cut taxes with the first term spent wiping out the deficit.

 

This is a nonsensical argument. You suggest that, by eliminating the deficit we'll be able to build more hospitals and new schools, and so you think to get this, we should... scrap the planned building of hospitals and schools, so that we can arbitrarily eliminate the deficit and then start building hospitals and schools? It's circular logic Craig.

 

Nope - the second part of your statement gave the game away - the Tories' real reason for wanting to eliminate the deficit within 5 years isn't because they think it's necessary, it's because they want to cut taxes, thus helping their rich friends and keeping a US-style small state. Although I think it's very optimistic on yours and their part to assume they'll even fulfill their first term, nevermind winning a second term - I still am atleast 80% certain we'll get another election within the next two years (autumn 2011 is my bet), which Labour will win.

 

 

A small state is absolutely the right idea, after Labour's nanny state with complete lack of privacy, being watched everywhere we went, the British way of life being hampered by do gooders/elf n safety loonies, quangos taking our money like blood sucking leeches, speed cameras harrassing us it will be very refreshing to have more freedom, more privacy, less regulations, less do gooders etc, bring it on

 

Agreed that Labour's fetish for eroding civil liberties was ridiculous, and good on the Coalition for repealing much of it - although I notice they're about to give credit agencies the power to snoop around to see if benefits claimants are genuine, which flies in the face of any genuine civil liberties agenda.

 

Plus, you think this government will take away "do gooders"? This "Big Society" crap is basically about empowering village busybodies right across the country! :lol:

This is a nonsensical argument. You suggest that, by eliminating the deficit we'll be able to build more hospitals and new schools, and so you think to get this, we should... scrap the planned building of hospitals and schools, so that we can arbitrarily eliminate the deficit and then start building hospitals and schools? It's circular logic Craig.

 

Nope - the second part of your statement gave the game away - the Tories' real reason for wanting to eliminate the deficit within 5 years isn't because they think it's necessary, it's because they want to cut taxes, thus helping their rich friends and keeping a US-style small state. Although I think it's very optimistic on yours and their part to assume they'll even fulfill their first term, nevermind winning a second term - I still am atleast 80% certain we'll get another election within the next two years (autumn 2011 is my bet), which Labour will win.

Agreed that Labour's fetish for eroding civil liberties was ridiculous, and good on the Coalition for repealing much of it - although I notice they're about to give credit agencies the power to snoop around to see if benefits claimants are genuine, which flies in the face of any genuine civil liberties agenda.

 

Plus, you think this government will take away "do gooders"? This "Big Society" crap is basically about empowering village busybodies right across the country! :lol:

 

I am stating personal opinions in a lot of what I would like done, the government thinks differently so the new hospitals, new schools, new prisons etc are things I would LIKE to see happen as opposed to there being any likelyhood that they will happen.

 

I am totally against cuts in essential services like police, prisons, hospitals, schools, there is a hell of a lot of scope for cutting administrative waste in those areas though.

 

Tax cuts are an essential for a prosperous economy, I want to see small government and people trusted with more and more of their money as opposed to big government spending people's hard earned.

 

The credit agency thing I think is a good idea, if I go and get a mobile phone I am credit referenced, if I take out a broadband contract or Sky tv contract I am credit referenced, the only people that have to worry about credit reference agencies are those with something to hide.

Tax cuts are an essential for a prosperous economy

 

Explain then why Germany and Scandinavia, with much higher tax rates than the UK and the US, coped with the financial crisis much better than us.

Explain then why Germany and Scandinavia, with much higher tax rates than the UK and the US, coped with the financial crisis much better than us.

 

Less banks there to bail out and Scandanavia is not a global economic powerhouse like we are.

 

We are tied at the umbilical cord to America, what happens with them happens with us, Germany is much more aligned to the likes of France

Less banks there to bail out and Scandanavia is not a global economic powerhouse like we are.

 

We are tied at the umbilical cord to America, what happens with them happens with us, Germany is much more aligned to the likes of France

And explain why Germany were doing better than us before the crisis...the small state is only a way of ensuring that the richest are better off, it's a fig-leaf for making us think the whole nation's better off.

Oh, and going for the jugular with the deficit rather ironically can end up increasing our interest payments, if we look and learn from Ireland and Spain:

 

 

Sometimes, the most urgent truths are rolled up and hidden away in the most apparently trivial news. So if I tell you that Moody’s, the leading credit rating agency, has downgraded Ireland’s debt, it sounds pretty irrelevant. In fact, if you unwrap and decode this story, you’ll discover the reason why you are going to be more likely to lose your job or your home soon – and how David Cameron is rapidly ramping up the risk.

 

George Osborne visited Ireland a few years ago to say it was a “shining example” for Britain to mimic. When the recession hit, the country’s government immediately applied the medicine Cameron and Osborne are now imposing on Britain. They argued that when the economy withers, the government needs to react like any responsible family and cut spending to pay down its debt. They warned that if they didn’t do it fast, the international bond market would charge Ireland more for its liabilities, and the debt burden would become intolerable. Better to purge now, so you can get back to fiscal health as soon as possible. “Look and learn from across the Irish Sea,” Osborne said.

 

So they have brought this vision home. During the election campaign, Cameron promised that his cuts wouldn’t be “swingeing” – but in power he is ordering cuts of 25 to 40 percent in almost all departments. To give you a sense of how drastic this is: Margaret Thatcher actually increased public spending by 1.1 percent in real terms per year.

 

We are in a strange hush while the axe is suspended in the air above us. If you read the small print, you see the spending plans put forward by this government of inheritee-millionaires will hit the poor first and hardest. The National Housing Federation says the number of homeless people will double as a result of their slashing of housing benefit. Half a million children living below the poverty line are having free school meals – the only nutritious meal of the day for many – cancelled. The unemployed are having £6.50 knocked off the £65 a week they have to live on. Ian Duncan Smith says “tons of elderly people” are going to be forced out of their “underoccupied” council homes. The list is long enough for a dozen columns. One minister recently told the Times the rationale behind it off-the-record: “The undeserving poor,” he said, “are undeserving.”

 

Meanwhile, a recent Financial Times headline summarised the situation at the other end of the economic heap: “Well-paid breathe collective sigh of relief.”

 

Before power, Cameron promised his cuts would not affect “frontline” services, but only the “backroom” and “waste”. Now NHS bosses have drawn up plans to slash hip operations, cataract surgery, and the number of acute hospital beds. All frontline services are facing similar shut-downs. When David Cameron promised he wouldn’t get rid of free bus passes, who knew it was because he would get rid of the bus instead?

 

A detailed study for Oxford University led by Dr David Stuckler calculates that there will be 38,000 premature deaths over the next decade as a result of all this – due to the reduced healthcare, dismantled services for the elderly and vulnerable children, increased suicides, and so on.

 

The Cameroons say – yes, this is rough, yes, it hurts, but it is for a necessary purpose. If we don’t do it, the bond markets will downgrade our debt and we will be even worse off. Only austerity can hold off the prospect of a debt crisis.

 

So let’s return to the truth buried in that little story on the financial pages. Ireland has been doing exactly what Cameron and Osborne urge, with a two year headstart. What are the results? Last week, a study by the International Monetary Fund – nobody’s idea of a left-wing pressure group – found that country’s economic collapse now “exceeds that being faced by any other advanced economy, and matches episodes of the most severe economic distress [anywhere]in post-World War Two history.”

 

Why? During a recession, ordinary consumers quite sensibly cut back and spend less. But if the government does the same, it means nobody is spending. This is bad enough for all the people who suffer immediately: the swelling army of the unemployed, the repossessed, the abandoned. But it turns out it makes its original goal – paying off the debt – impossible too. As the Nobel Prize-winning economist Joseph Stiglitz explains: “If you introduce austerity measures, the amount you can raise in tax falls, and welfare payments go up – so you don’t have enough money to pay your debts anyway.”

 

That’s why the bond markets have turned on Ireland. The country introduced austerity to pay off their debts – and the austerity killed their economy, making it impossible to pay off their debts in any case. It was self-defeating. So introducing all these cuts doesn’t only inflict misery: it doesn’t even achieve its professed goal.

 

Why choose this as a model to copy? Another Nobel Prize-winning economist, Paul Krugman, writes this deficit hawkery “isn’t based on either evidence or careful analysis… What sounds like hard-headed realism actually rests on a foundation of fantasy.” Krugman points out that they incessantly warn us “invisible bond vigilantes” will beat us up if we don’t cut, cut, cut – when the real bond market is beating up the people who have cut and left their economies to bleed out.

 

In 2010, to preach austerity as the solution to depression is the equivalent of drilling holes in your head to cure your migraine, while dismissing aspirin as for wusses. It’s a dogma, chosen because it fits with the slash-the-state instincts they learned as privileged young men in their 1980s champagne-dream.

 

Krugman, like most economists, says there is only one real way out. When consumer spending collapses, governments need to borrow and spend to prevent a depression – and then pay off the debt from the proceeds of growth once we have brought the good times back. It’s revealing that the countries that have done this hardest and fastest – like South Korea, which spent a fortune on employing people to green the country’s infrastructure – have been the first to pull out of this recession, while the countries glugging Cameron-juice have sunk deeper into the gloop.

 

Yet few people outside economics are making a full-throated defence of stimulus spending as an urgent moral cause. We need to say it loud: the choice today is between a deficit and a depression. It is immoral not to borrow and spend when it could revive the economy and prevent all these lives being written off. I remember what happened to some of my relatives in the eighties. The children who are supposedly being protected from the cost of the debt a generation from now need, in reality, to be protected today – from their parents becoming jobless and depressed, their homes being repossessed, and their schools and hospitals being chronically underfunded.

 

None of this has to happen. The more fuss the British people make – the more we demand the axe is put away, and replaced with jump-leads for the economy – the less leeway the government will have for self-defeating cuts. Protest needs to be focused on the Liberal Democrats in particular: they are mostly good people who do not want to be part of a Thatcher-on-mephedrone crusade. They have the power to pull the plug at any time. The more we spook them, the more likely that act of national self-preservation becomes.

 

Oh, and here’s a financial tip to leave you with. If you hold any bonds in Cameronomics, sell. They are about to slip from the AAA standard accorded by the right-wing press to junk status in the real world. To borrow a phrase from Osborne: look and learn from across the Irish Sea.

And explain why Germany were doing better than us before the crisis...the small state is only a way of ensuring that the richest are better off, it's a fig-leaf for making us think the whole nation's better off.

 

Do you have any figures that show they were doing better than us ?

 

From memory Germany was up $h!t creek thanks to the Euro and also the integration with E Germany cost billions.

 

 

Typical Tories looking to cut public services! <_<

Oh, and going for the jugular with the deficit rather ironically can end up increasing our interest payments, if we look and learn from Ireland and Spain:

 

Ireland has been badly hampered by being in the Euro as has Spain.

 

Our weaker pound is helping exports ATM and the export market is absolutely booming, we have much more flexibility with what we can do as we are not in the Euro,

 

I would personally like to see a long term where income tax is abolished, where vat taxation is increased and where state spending is at the bare bones and people are trusted to use their money as they see fit, I would like to see everyone have private health insurance, everyone take out insurance against losing their jobs so that their benefits come from insurance companies as opposed to the state etc, all that stuff will take decades if it was ever bought in though

Edited August 11, 201014 yr by I ❤ JustinBieber

Less banks there to bail out and Scandanavia is not a global economic powerhouse like we are.

 

We are tied at the umbilical cord to America, what happens with them happens with us, Germany is much more aligned to the likes of France

 

 

Maybe it's time to cut the umbilical cord then, and throw in completely with the EU and the Commonwealth (Australia and Canada also never had any such problems with THEIR banks), fukk America, pull out our troops from Afghanistan and Iraq, declare that we are no longer interested in the "special relationship" which has ruined our economy and led us into a situation where we are targets for every Jihadi nutter out there with a grudge; time to be more like France and Germany I think.....

 

You say you're against cuts in "essential" services, but, sorry mate, I would say that cutting 25-30% in all depts is gonna involve cutting a lot more than "unnecessary administration", and there's very clear evidence of this already, we've already seen the Govt scrap the school buildings plan in favour of funding more elitist academies, which has put effectively put many ordinary schools in a state of limbo, I think I'd call school buildings an "essential service" wouldn't you...? How very "Thatcherite" of them, help the elite and fukk the poor, AGAIN.....

 

There are many economists out there, experts in their field, who have categorically stated that the Public Sector bloodbath is not necessary, and have said the Tories had options available to them which did not involve unfairly targeting the working classes and lower-middle classes in a totally punitive and unjust way.... Make those responsible pay, make the bosses pay, make the banks pay, make the City pay... It was THEIR MESS, not ours.... <_<

From memory Germany was up $h!t creek thanks to the Euro and also the integration with E Germany cost billions.

 

Germany weathered those storms without having to massively cut public services though.... WE haven't, that's the difference.... And why would that be, do you think..? Oh, could be that when we were destroying our manufacturing and engineering base, West Germany, as it was then, was strengthening theirs and made themselves a world economic powerhouse which COULD integrate a financially and economically weaker other half without any danger of its economy collapsing, going into economic depression and possibly needing IMF aid.....

 

Unlike this country, which now exports practically FUKK ALL, has no manufacturing base, and is heavily reliant on imports from places like, Germany, Japan and China..... :rolleyes:

 

Do you have any figures that show they were doing better than us ?

 

From memory Germany was up $h!t creek thanks to the Euro and also the integration with E Germany cost billions.

Uh, they had a higher GDP than us in 2007! They were 4th, we were 6th...

Ireland has been badly hampered by being in the Euro as has Spain.

 

Our weaker pound is helping exports ATM and the export market is absolutely booming, we have much more flexibility with what we can do as we are not in the Euro,

 

I would personally like to see a long term where income tax is abolished, where vat taxation is increased and where state spending is at the bare bones and people are trusted to use their money as they see fit, I would like to see everyone have private health insurance, everyone take out insurance against losing their jobs so that their benefits come from insurance companies as opposed to the state etc, all that stuff will take decades if it was ever bought in though

Yes, but we have fuck all exports! Manufacturing in the UK is tiny (plus, it doesn't seem to have hampered Germany all that much given their export base - they've just been sensible and gone for 8% cuts despite having a similar deficit to us) - being in the Euro has only hampered Ireland to the extent that they can't reduce interest rates, the massive cuts are still having the exact same effect.

 

Riiight. If you look at America, you see what happens when everyone's expected to rely on insurance - the poor get f***ed over because they can't afford it as tacit cartels spring up to raise the prices as there's no alternative. Bingo, 40 million without insurance!

 

A privatised state doesn't work Craig. Ever heard of a negative externality?

From memory Germany was up $h!t creek thanks to the Euro and also the integration with E Germany cost billions.

 

:mellow:

 

I always knew you had ridiculous political views, but I never realised until this thread how STUPID you are. I don't understand how a businessman can have so little knowledge of the basics of economics.

 

 

Our weaker pound is helping exports ATM and the export market is absolutely booming, we have much more flexibility with what we can do as we are not in the Euro,

 

How exactly do you think our export market is booming? In June, British imports outstripped our exports by a margin of seven-to-one.

 

We DO need to boost our export industry, which is why I'm encouraged by some of the Labour leadership candidates (most notably Ed Miliband) stressing the need to rebuild our industrial base. Throwing treats at the financial/banking sector like the Coalition is doing will do NOTHING for our exports.

Edited August 11, 201014 yr by Danny

Craig, do you atleast accept that unemployment will skyrocket if this Coalition has it's way?

 

The supposedly independent Office of Budgetary Responsibility admits it expects 1.1m public-sector jobs to be axed - but, to offset this, it expects the private sector to create 2.5m jobs. This in spite of the fact that, between 2000 and 2008, when the economy was booming as opposed to now, the private sector only created 1.6m new jobs in that entire period. The mind boggles.

Riiight. If you look at America, you see what happens when everyone's expected to rely on insurance - the poor get f***ed over because they can't afford it as tacit cartels spring up to raise the prices as there's no alternative. Bingo, 40 million without insurance!

 

A privatised state doesn't work Craig. Ever heard of a negative externality?

 

Precisely....

 

Craig - ever hear of the HMOs?? Where millions of Americans DID do the right thing by their families, paid into private medical care, only to be turned down by these scum-bags when they did actually need help..... Yeah, great idea, turn the UK into the 51st State of America, because the US economy has worked out really well for the vast majority of its people hasn't it.....? You may wanna check out the last two documentaries Mike Moore has made to see how the "American Dream" has become an out and out fukkin' disaster for ordinary Americans in the past five years or so.....

 

Us joining the Euro is not gonna be the big problem you and the other Euro-sceptics claim it is, that is a fallacy....