I imagine they'll also make further devolution, over and above the laughable Smith Commission, a firm condition also.

 

The SNP are the largest party campaigning for an end to Austerity, even if that's only contained to Scotland. If polls stay as they are the SNP will be the third biggest party in the Commons by my count.

Yeah, I'm now hoping for a hung, completely gridlocked Parliament (which a large SNP contingent would probably bring about) where spending cuts are literally unable to be passed.

..and surveys show that half the population believe in UFO's and a half in ghosts. People flipflop opinions based on how they think it's going to affect them personally, and frequently based on nothing logical. A family that earns 30k and lives beyond it's means, and borrows more and more until all of it's income goes in interest payments is not sustainable. Simplistic but nations are subject to the same basic principles, those that somehow think they are not subject to that are the ones that believe in ghosts and UFO's. Gordon Brown and Tony Blair believed in them, and also in Saskwatch, the Abominable Snowman, the tooth fairy, and Santa. Especially Santa, a jolly fat man who pops by every year and gives you something for nothing.

 

Of course, now we are already in virtual bankruptcy, what we are talking about is paying off the debt in a manner that doesn't kill us, either short-term or long-term, and that means looking at stuff we may think we need but don't really. Trident is an obvious one. Most nations get by without nuclear weapons quite happily. Attracting rich people to live here (when they contribute marginally to the economy in any positive way) is another. Society can function pretty well without the rich-serving London shops, most VAT cash and business rates comes from the rest of us, not them. They'll still have their businesses here (if they make money out of the UK) so why care if they live here or abroad...?

 

So, a longwinded way, as usual, in saying chasing polls and public opinion is not always the right way to manage the economy if everything goes tits up as a result.

..and surveys show that half the population believe in UFO's and a half in ghosts. People flipflop opinions based on how they think it's going to affect them personally, and frequently based on nothing logical. A family that earns 30k and lives beyond it's means, and borrows more and more until all of it's income goes in interest payments is not sustainable. Simplistic but nations are subject to the same basic principles, those that somehow think they are not subject to that are the ones that believe in ghosts and UFO's. Gordon Brown and Tony Blair believed in them, and also in Saskwatch, the Abominable Snowman, the tooth fairy, and Santa. Especially Santa, a jolly fat man who pops by every year and gives you something for nothing.

 

Of course, now we are already in virtual bankruptcy, what we are talking about is paying off the debt in a manner that doesn't kill us, either short-term or long-term, and that means looking at stuff we may think we need but don't really. Trident is an obvious one. Most nations get by without nuclear weapons quite happily. Attracting rich people to live here (when they contribute marginally to the economy in any positive way) is another. Society can function pretty well without the rich-serving London shops, most VAT cash and business rates comes from the rest of us, not them. They'll still have their businesses here (if they make money out of the UK) so why care if they live here or abroad...?

 

So, a longwinded way, as usual, in saying chasing polls and public opinion is not always the right way to manage the economy if everything goes tits up as a result.

Nations aren't subject to the same principles at all, and if anything it's economic illiteracy along the same lines of the UFO beliefs to say they are. A person will die eventually, hence banks aren't willing to lend them anything they want on the basis that it probably won't get paid back, as banks aren't really willing to lend if they think it'll be down to the borrower's children to pay it off. Nations don't die, hence the same principles don't apply (especially as productivity is constantly increasing, hence lenders aren't too worried about 'the kids paying it off' on a macro level. Indeed, the debt we pay now is debt racked up from generations before. Did you notice that it was when you paid your tax? I certainly didn't.).

 

Countries only don't get lending if they can't service their debt, which is absolutely not the case for the UK and almost certainly never will be. We're seen as such a reliable debtor that Asian investors are offering us loans at negative interest rents (i.e. they're basically paying us to borrow from them - offering us £1000 on the condition we pay them back £950) because we're seen as such a safe haven currently (and indeed always - there will always be demand for UK bonds from an investment perspective). Hence it would be ludicrous not to take advantage of that for investing in capital spending right now.

 

The main reason running a deficit is bad (from a national perspective - there are other reasons from a partisan perspective) is because lenders are then less willing to lend you the huge chunk required if you ever need stimulus funds during any future recession, which is disastrous as it affects your ability to service that debt (and also leads to huge poverty etcetcetc) - not because the UK's 'about to go bankrupt'.

Claiming that Labour thought they could borrow without limit is a gross distortion of what actually happened. For most of their time in office they were either paying off debt or borrowing modestly. That all changed in 2008 when

 

1) They had to bail out the banks which led to a colossal increase in the deficit. However, much of that will eventually be recovered as the government's shares in the banks are sold;

 

2) Tax receipts plummeted at a faster rate than most people envisaged.

 

That was compounded by the press constantly going on about the "credit crunch". Even people who weren't feeling the pinch could be forgiven for thinking they should be and reducing their spending. That led to a further decrease in tax receipts.

 

Of course Labour could - and probably should - have increased taxes on higher earners far sooner than they did. However, to claim that they acted irresponsibly for 13 years is just silly.

1) They had to bail out the banks which led to a colossal increase in the deficit. However, much of that will eventually be recovered as the government's shares in the banks are sold;

HRRRRRRRRRRRRRNK

 

The bailing out of the banks actually led to a big increase in debt but as a one-off payment made no difference to the deficit (and wasn't included in that year's figures for that reason as a one-off £300bn would've distorted the figures so much), which was primarily caused by the collapse in tax receipts mixed with increased stimulus spending http://www.moopy.org.uk/forums/images/smilies/david.gif

 

(though the rest of your point is correct. by international standards borrowing was very low and it didn't seem there'd be any reason growth would end - let's face it, if even the accountants of most of the big banks had no idea the subprime mortgage crisis was about to happen, what chance did governments without access to that knowledge have?)

 

(and before someone cites vince cable on this, it's all very well claiming prophetic powers when you've predicted twenty out of the last one crises, but we can't exactly run the economy on the basis of type 1 errors)

..and surveys show that half the population believe in UFO's and a half in ghosts. People flipflop opinions based on how they think it's going to affect them personally, and frequently based on nothing logical. A family that earns 30k and lives beyond it's means, and borrows more and more until all of it's income goes in interest payments is not sustainable. Simplistic but nations are subject to the same basic principles, those that somehow think they are not subject to that are the ones that believe in ghosts and UFO's. Gordon Brown and Tony Blair believed in them, and also in Saskwatch, the Abominable Snowman, the tooth fairy, and Santa. Especially Santa, a jolly fat man who pops by every year and gives you something for nothing.

 

Of course, now we are already in virtual bankruptcy, what we are talking about is paying off the debt in a manner that doesn't kill us, either short-term or long-term, and that means looking at stuff we may think we need but don't really. Trident is an obvious one. Most nations get by without nuclear weapons quite happily. Attracting rich people to live here (when they contribute marginally to the economy in any positive way) is another. Society can function pretty well without the rich-serving London shops, most VAT cash and business rates comes from the rest of us, not them. They'll still have their businesses here (if they make money out of the UK) so why care if they live here or abroad...?

 

So, a longwinded way, as usual, in saying chasing polls and public opinion is not always the right way to manage the economy if everything goes tits up as a result.

 

The deficit is not especially high by historic standards, as a % of GDP.

 

There's absolutely nothing wrong with running a modest deficit, in itself. The problems come with the "dynamics", by which I mean either that it's increasing rapidly - even I would draw the line at the next government massively increasing spending and letting the deficit grow at something like 50% a year, but keeping it broadly at the current level would be fine; or that the demographics of a country mean the debt burden is unsustainable, for example Japan where their population is getting on average "older" at such a rapid pace that they just can't keep up with the increased demands on their health and pensions systems with so relatively few healthy, working-age people contributing, so that the gap between public spending and the tax take rapidly widens even without "discretionary spending" being increased. That doesn't apply to the UK.

 

Even taking the deficit-hysterics on on their own terms, "the markets" will not care one jot about whether we keep the deficit at the same modest level that it currently is, as shown by the fact that RIGHT NOW they can't buy our government bonds quickly enough. That's even leaving aside whether it's even desirable to make satisfying "the markets" the top priority even if they had a different view ("putting the people of Britain before random, faceless investors in Shanghai" as any halfway-competent left-wing populist would put it).

Edited December 9, 201410 yr by Danny

The deficit is not especially high by historic standards, as a % of GDP.

 

There's absolutely nothing wrong with running a modest deficit, in itself. The problems come with the "dynamics", by which I mean either that it's increasing rapidly - even I would draw the line at the next government massively increasing spending and letting the deficit grow at something like 50% a year, but keeping it broadly at the current level would be fine; or that the demographics of a country mean the debt burden is unsustainable, for example Japan where their population is getting on average "older" at such a rapid pace that they just can't keep up with the increased demands on their health and pensions systems with so relatively few healthy, working-age people contributing, so that the gap between public spending and the tax take rapidly widens even without "discretionary spending" being increased. That doesn't apply to the UK.

 

Even taking the deficit-hysterics on on their own terms, "the markets" will not care one jot about whether we keep the deficit at the same modest level that it currently is, as shown by the fact that RIGHT NOW they can't buy our government bonds quickly enough. That's even leaving aside whether it's even desirable to make satisfying "the markets" the top priority even if they had a different view ("putting the people of Britain before random, faceless investors in Shanghai" as any halfway-competent left-wing populist would put it).

And one reason why we have less of a problem with an ageing population is immigration. Sadly, very few politicians seem to be willing to say that.

Wow that stimulated long replies!

 

I would argue just cos UK has a good rep at the mo so that Chinese investors are willing to give uk cash doesn't mean it will always be so. China has problems of its own on the horizon and investors are sheep. As we have just seen.

 

Immigration yes true but the popchartfreak law number one is that there are always consequences to all actions. One consequence to that is a housing shortage and competition for jobs increasing. You don't get owt for nowt.

 

Bailing of banks as a one off. That assumes it wasn't predictable when it was and a responsible government would allow for the predictable. The Labour gov. Whatever good it did in some areas failed most comprehensively on its biggest one: the economy. Labour actively encouraged banking behaviour in its hands off self arrogance.

 

I don't care about statistical analyses too much and debates about how much debt the nation needs or can tolerate. There us no magic number or every country would pursue the same policies ratios and percentages. Economists I would suggest don't always agree....and frequently are catastrophically wrong.

 

Clearly current politicians feel we have too much debt. So stack up a convincing argument to the contrary....? 10 years ago they didn't. Politicians flip flop even more than opinion polls....?

 

 

I am fully expecting a hung parliament, there is about a 50-60% chance of us getting that outcome now. Alex Salmond pretty likely to be the kingmaker for the Labour party too. :o

I am fully expecting a hung parliament, there is about a 50-60% chance of us getting that outcome now. Alex Salmond pretty likely to be the kingmaker for the Labour party too. :o

 

I hope not. I'd rather that the short-lived re-imagining of Yes Prime Minister they showed on Gold last year wasn't right about anything.

Wow that stimulated long replies!

 

I would argue just cos UK has a good rep at the mo so that Chinese investors are willing to give uk cash doesn't mean it will always be so. China has problems of its own on the horizon and investors are sheep. As we have just seen.

 

Immigration yes true but the popchartfreak law number one is that there are always consequences to all actions. One consequence to that is a housing shortage and competition for jobs increasing. You don't get owt for nowt.

 

Bailing of banks as a one off. That assumes it wasn't predictable when it was and a responsible government would allow for the predictable. The Labour gov. Whatever good it did in some areas failed most comprehensively on its biggest one: the economy. Labour actively encouraged banking behaviour in its hands off self arrogance.

 

I don't care about statistical analyses too much and debates about how much debt the nation needs or can tolerate. There us no magic number or every country would pursue the same policies ratios and percentages. Economists I would suggest don't always agree....and frequently are catastrophically wrong.

 

Clearly current politicians feel we have too much debt. So stack up a convincing argument to the contrary....? 10 years ago they didn't. Politicians flip flop even more than opinion polls....?

 

Erm...yes. :lol: That's not exactly a surprise.

 

Though I highly doubt that most Labour politicians privately feel it really matters whether the deficit is reduced or not.

Bailing of banks as a one off. That assumes it wasn't predictable when it was and a responsible government would allow for the predictable.

Like I said, it wasn't predictable at all. When even the people with access to the accounts don't see the crash coming, what hope does a government without the access have?

Wow that stimulated long replies!

 

I would argue just cos UK has a good rep at the mo so that Chinese investors are willing to give uk cash doesn't mean it will always be so. China has problems of its own on the horizon and investors are sheep. As we have just seen.

 

Immigration yes true but the popchartfreak law number one is that there are always consequences to all actions. One consequence to that is a housing shortage and competition for jobs increasing. You don't get owt for nowt.

 

Bailing of banks as a one off. That assumes it wasn't predictable when it was and a responsible government would allow for the predictable. The Labour gov. Whatever good it did in some areas failed most comprehensively on its biggest one: the economy. Labour actively encouraged banking behaviour in its hands off self arrogance.

 

I don't care about statistical analyses too much and debates about how much debt the nation needs or can tolerate. There us no magic number or every country would pursue the same policies ratios and percentages. Economists I would suggest don't always agree....and frequently are catastrophically wrong.

 

Clearly current politicians feel we have too much debt. So stack up a convincing argument to the contrary....? 10 years ago they didn't. Politicians flip flop even more than opinion polls....?

As I've said before. Labour should hold their hands up and admit that they should have done more to regulate the banks. At the same time they would be perfectly within their rights to remind people who deregulated them in the first place and that Osborne was saying that they were over-regulated even while they were collapsing all around us.

Immigration yes true but the popchartfreak law number one is that there are always consequences to all actions. One consequence to that is a housing shortage and competition for jobs increasing. You don't get owt for nowt.

The way that non-immigrants are choosing to live (more single person households etc.) would be massively increasing the demand for housing even if it weren't for immigration.

 

(basically I'm skirting around the economics debate and picking up on something I have a vague grasp of, I don't think anyone will notice)

The way that non-immigrants are choosing to live (more single person households etc.) would be massively increasing the demand for housing even if it weren't for immigration.

 

(basically I'm skirting around the economics debate and picking up on something I have a vague grasp of, I don't think anyone will notice)

 

True, and I'm not blaming immigrants, there are many pressures on housing - can just as easily argue politicians should have prepared for the situation worsening year on year and built more houses.

Like I said, it wasn't predictable at all. When even the people with access to the accounts don't see the crash coming, what hope does a government without the access have?

 

well, apparently I must be a genius of macro economics and housing bubbles and studies of banks behaviour. Cos I spotted it happening in the early 2000's, and wittled on about it coming to anyone willing to tolerate my moaning. As individuals my own bank (Lloyds) a young yuppie rep tried to get me to invest in the packaged crap they were selling, but couldn't list a single company of what exactly I'd be buying. I wanted a list. They wanted 2 grand and "trust in me I know what I'm doing" bollocks. It was blatantly obvious nobody in banking selling crap (and turning me down wanting to open a savings account (HSBC) - not enough profit in it!) had any idea what they were doing.

 

Or, alternatively, the politicians knew it was coming and just kept on putting it off so the crash didn't happen on their watch. As I've said before, Newsnight had several features on exactly these sorts of issues building up years before the crash, so it was hardly a major shock when it happened. Politicians just ignored all of the warning signs, it wasn't that they weren't there. So I'm not letting any of them off the hook at all that's a convenient get-out-jail-free card.

As I've said before. Labour should hold their hands up and admit that they should have done more to regulate the banks. At the same time they would be perfectly within their rights to remind people who deregulated them in the first place and that Osborne was saying that they were over-regulated even while they were collapsing all around us.

 

 

Yes, amen to that. People need to remind politicians of their own embarrassing opinions and predictions...

In his latest ingenious political strategy, Ed is going to endorse Tory policies while simultaneously opposing the inevitable consequences of such policies:

 

http://www.newstatesman.com/politics/2014/...ding-line-state

I don't know how many times I can say this, but pledging to close the deficit =/= reducing state spending at the same level as the Tories.