Given the collapse of the western economy and associated problems is there anyone who seriously believes that we can carry on as before and there is no deficit or need to control public spending?

[Digs in]

Psst, in your eagerness to start trolling you’ve accidentally posted in the wrong forum.

Just thought I’d mention it.

…..dagnamit

what collapse of the western economies? Seems to be plenty of food and money around 🙂

its all smoke and mirrors – yes we have debt but its easily affordable and there are many ways of dealing with it – austerity measures so beloved by tories are making it worse.

TJ – affordabilty has very little to do with it. Credibility is much more important.

indeed it is – and our government has none

I agree with TJ.

Our debt is nowhere near as bad as those countries at the bottom of the pile. Yet the Tories are determined to slash the budget for everything. Anyone notice how we were actualy growing before the election and now that seems to have stopped arround the same time the budget was cut?

The deficit needed reighning in a bit but the debt was fine, and the system should have worked as it was for another few years untill growth meant bigger tax returns and the deficit dissapeared that way.

The credibility of UK government policy – as measured by the spread of ten year government bond yields against the Bund appears sound. 0.48%at present.

The key word is not credibility or affordability. It is sustainability. The country has been living beyond its means for some times and this requires actions.

1. To restore and maintain creadibility in the nations ability to pay.
2. To pay down the deficit at a sustainable rate.
3. To provide a platform for sustainable public expenditure at long term growth levels.

This will require firstly a reduction in public expenditure to elimitate the structural deficit that cannot be eliminated by growth and secondly by transforming the public services auch that they can be funded sustainably for the long term.

Its really not rocket science.

2. To pay down the deficit at a sustainable rate.

And this is where I bit the troll’s hand….

You do know the difference between debt and deficit, right?

Just’ checking….

Frodo

there is no need to cut public expenditure at all. we could simply increase the tax take by increasing tax rates and by growth

Cutting stops growth and reduces the tax take making the situation worse. This is already happening

The cuts are an ideologically led choice not a necessity. A bad choice at that which will damage the country both financially and socially.

TJ – Yes your right you could use tax increases instead of cutting public expenditure. However putting up taxes also has a negative impact on growth.

There is an argument on idealogy however the sensible way is to use both tools and targetting expenditure in a way that promotes growth, for example investing in infrastructure rather than services.

OMITN – Touche, noted.

So you agree frodo taht this

This will require firstly a reduction in public expenditure to elimitate the structural deficit that cannot be eliminated by growth and secondly by transforming the public services auch that they can be funded sustainably for the long term.

is actually a load of bobbins

No I don’t.

I do agree that I should have included tax rises into the mix.

Ireland cut spending but left tax the same and are doing OK compaired to other PIGS, which is quite handy for us in the UK.

Greece messing about with their cuts and ramping taxes

Italy messing about with their planned cuts.

I know what I’d rather my goverment do

Shoot all the economists and put a primary school arithmetic teacher in charge of the budget?

there is no need to reduce expenditure. we tax and spend far less than most other european countries – remember we get most of our healthcare from taxes and they do not.

there is no need to reduce expenditure. we tax and spend far less than most other european countries – remember we get most of our healthcare from taxes and they do not.

except that ….raising taxes hinders growth. We did NEED to reduce public spending and continue to control it.

except that ….raising taxes hinders growth. We did NEED to reduce public spending and continue to control it.

We have some of the lowest taxes in Europe once you remove helthcare from the equation. If you include what people pay private companies abroad for healthcare in the total ‘tax’ we come out pretty well.

Yes taxation hinders growth, but so does not spending. Otherwise we’d have no tax and no spending!