molgrips – Member
In the paper today it said that they’d given up on the deficit target, but were sticking with austerity, so this:

Austerity was never an attempt to do anything about the deficit. It was purely an ideological attack on state provision of services and of the terms and conditions of those who work for the state.
.. would appear to be bang on.

On the contrary, its completely wrong as the facts tell us very clearly. But equally your headline is wrong.

Wobbliscott is closest – we still run an expansionary fiscal policy (gov spending > revenue) and this is more expansionary than many other developed economies (eg, France). That is the correct thing to do in the current climate. But we are less expansionary than in the past – hence the deficit is coming down as a % of national income and out total debt is not growing as fast as it was (but is still growing).

On the contrary, its completely wrong as the facts tell us very clearly.

Which bit? That austerity was politically motivated rather than economically?

Every bit.

Molgrips France kept spending and borrowing and the Economy kept shrinking. Suddenly you run into a debt limit and then you are really buggered. Yes I appreciate of your cuts shrink the economy that’s counterproductive but that’s not what the Trories did and we returned to economic growth.

BBC slant is rather different.

Hammond focuses on Housebuilding and Transport rather than deficit reduction. He hasn’t abandoned it he has just stepped away from Osbourne’s 2020 target date. In the light of new circumstances this makes perfect sense.

http://www.bbc.co.uk/news/uk-politics-37536943

Still not spending enough on healthcare, don’t get ill this winter folks

Could’t agree more, we need to have an adult conversation about how to raise spending 30% i.e. an NHS budget from £130bn to £170bn spent on healthcare (not necessarily just given to the NHS)

Molgrips France kept spending and borrowing and the Economy kept shrinking.

Would that have happened here?

Yes I appreciate of your cuts shrink the economy that’s counterproductive but that’s not what the Trories did and we returned to economic growth.

No – cuts retard economic growth. Other factors may have more than cancelled it out, which is why we’d still see surplus.

The other big problem with cuts is that they reduce services and hence quality of life for a lot of people. Do you agree it’s an issue?

Could’t agree more, we need to have an adult conversation about how to raise spending

Indeed, but how do you match up austerity and increasing NHS spending?

In the light of new circumstances the ludicrous act of financial self harm this makes perfect sense means a complete about face for Tory policy .

So is it just a case of bad execution of an ideology? Ditto Health

Health spending has experienced significant growth since 1949–50, at an average annual real rate of 3.7% up to 2014–15. After uneven growth between the 1970s and the late 1990s, the last Labour government oversaw an acceleration of the increases in spending on the National Health Service, pushing up health spending to around 7% of national income prior to the recession. While other departments have experienced budget cuts as part of the coalition government’s programme of austerity (sic), spending on health has been increased in real terms. This ‘protection’ nonetheless represents a tight funding environment for the NHS, not least as demographic pressure pushes up demand.
Source: IFS

Whilst funding has gone up the government also changed the National Insurance rules on the NHS so the treasury gets £5bn of the extra funding back.

Indeed, but how do you match up austerity and increasing NHS spending?

You cant – hence you are asking the wring question

According to newsnight they are going full Keynesian
It’s like Cameron & Osborne never existed

Heathrow expansion is a cert (soooo glad I’m no longer under the flight path, feel very sorry for those still there- apart from Zac the racist obvs)

It seems like they are aware austerity has divided the nation, but they won’t actually admit it, the question is will there be an investment in local services and education that are so desperately needed after years of cuts.

Will catch Newsnight later. Hammond was pretty clear in his speech, new circumstances and therefore a policy adjustment in the timing of budget surplus target. Without having made progress in geting the finances in order we would not have the flexibility to adjust policy now. If you saw the Andrew Neill show you’d see the majority of party members asked where still in favour of pressing ahead with balancing the budget – crack on vs ease off.

We know fiscal prudence is unpopular, of course it is people want to just keep on spendng. Paying back debt/reducing spending is painful whether this is personal or national. When Labour last made such a catastrophe of the public finances the IMF insisted on spending cuts as a condition for their loan. We can do this ourselves or we can spend, blow up and then have the IMF or others impose financial prodence on us.

Can any of the clever economists explain what this (Keynesian) means. I watched newsnight but could not understand what they were saying. What will be different now?

According to newsnight they are going full Keynesian

Only if you misunderstand what Keynesian is.

It’s like Cameron & Osborne never existed

Why? They did the same – just that the rhetoric did not match the reality of what they were doing

It seems like they are aware austerity has divided the nation, but they won’t actually admit it, the question is will there be an investment in local services and education that are so desperately needed after years of cuts.

Odd that something that doesn’t exist has divided the nation especially at a time of lower income inequality, rising employment and economic recovery? The government has continued to spend more than it earns – which is the appropriate thing to do at the moment – and has been more aggressive in this that most developed nations.

jambalaya – Member
Will catch Newsnight later. Hammond was pretty clear in his speech, new circumstances and therefore a policy adjustment in the timing of budget surplus target.

In reali there is no policy adjustment. It’s a mirage and Hammind pretending to be different.

Without having made progress in geting the finances in order we would not have the flexibility to adjust policy now.

😯

If you saw the Andrew Neill show you’d see the majority of party members asked where still in favour of pressing ahead with balancing the budget – crack on vs ease off.

They are ignorant. If the household and corporate sector are running surpluses, the last thing that governments should do is to do the same. Surpluses and deficits have to match each other. The whole fiscal debate has been shaped by people who don’t understand how the economy works.

Paying back debt/reducing spending is painful whether this is personal or national.

We have done neither at the national level

Doc – there is a tendency to equate Keynesian with higher levels of government spending. This is lazy, ignorant or both. Quite simply it is wrong.

So what is it then, thm?

well im certainly economically lazy /ignorant

but as i understand it keynsian ,means spending to invest and grow the economy

THM, our definitions of austerity differ the label ‘austerity’ has been used as a pretext by the last 2 governments to …
close 100s of libraries
close 100s of sure start cnetres
biggest ever cuts to police numbers and funding
biggest ever cuts to council spending (and all the infrastructure they support)
huge programme to move schools out of LA control
top down reorganisation of the NHS
benefits and DLAs severley restricted
house prices and rents still soaring waaaay above salaries
created thousands of non-jobs, that means work doesnt pay and the productivity gap is soaring
etc etc
all of these cuts have damaged our society and the legacy will be a poorer educated less cohesive and even less productive population
leaving those with the least in a far crapper place than they were pre 2008, hence the easy ‘blame immigrants EU ref result’

while child benefit cap was a good thing a statistical reduction in the gini coefficient means fk all to the 1/2 million people who’ve used food banks to eat this year.

To oversimplify, JMK believed that the state could play a role iin managing aggregate demand and in smoothing the natural economic cycle. To do this he advocated that governments should build up surpluses (spend < earn) in good times (and therefore depress the upside) in order to allow them to run deficits (spend > earn) during bad times (and therefore limit the downside). In essence he believed in counter-cyclical government policy

He was responding to persistent high unemployment at the time.

His basic argument was sound except for the fact that governments are very bad at doing this – hence the UK had a period of what became known as the “stop-go” cycle as governments mismanaged/misjudged the economic cycle. The unfortunate result was that Keynesian economics got an undeserved bad name and went out of favour. It was replaced by a different school that was also misapplied and misunderstood – there is a trend here, which makes Auntie Theresa’s comments about the role of government yesterday all the more perplexing

the least in a far crapper place than they were pre 2008, hence the easy ‘blame immigrants EU ref result’

The first half is patently false. The second isn’t. Hence the grotesque positions that politicians are now adopting. Sickening.

The first half is patently false.

really?

because people living in deprived areas were more likely to use libraries- especially unemployed, obviously needed sure start centres, more likely to use the NHS and now much more likely to use food banks etc

Yes really

Go check which is the only segment of the population that was better off at the end of last year than at the time of the crisis.

Sorry that facts dont match the narrative – in more ways that one

Ok thanks for the explanations kimbers and thm.
I think I get it now.
It’s a weird feeling be for someone such as me working in the NHS to be thinking about investing to grow, as in the NHS the only investment that is happening is to try to save money.
The rhetoric about increasing spending in healthcare etc is all a smokescreen to hide the continuous drive to reduce spending.

Sorry that facts stats dont match the narrative equate to personal happines – in more ways that one

Obvs I have no measure for peoples contentment, and tbh ive just moved from a not so nice part of London to a much nicer part of bucks, so my experience of life at the crap end is based only on going back to my home town, so Im taking ref result (and those I know voted out and their reasoning) as a national poll 😉

Go check which is the only segment of the population that was better off

Some segment had more libraries?

Contentment does not equate to economic well being does it? I always believe that true wealth is having/enjoying the things that money cannot buy

Contentment does not equate to economic well being does it?

I think they are strongly correlated at the lower end of things, aren’t they?