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Ernie, TJ: you two are a lost cause 🙂
Thanks for correcting yourself, Ernie.
Edit: Changed my mind, don't have the energy to argue.
Usa, Germany. UK all followed similar policies until the tories got in when no more stimulus only cuts applied by the tories
OK TJ where do we get the money for the economic renaissance that will be started by your infrastructure projects etc?
Raise taxes? Good way to kill off demand and snuff out any smidgeon of recovery
Raise government borrowing. Well if you are the USA and have the world reserve currency then yes you could get away with it. If UK tried it bond yields would increase and mortgages with them taking money out of the pockets of the few people in this country who might have some, again killing off demand. Really just accept there is no easy way out of this even if those evil Tories weren't around.
uponthedowns
Of course there is a way out of this - other counties are doing it. The tory austerity policy is simply wrong. every economic indicator shows this
they are increasing the deficit because their polices lead to increased government spend in benefits and decreased tax take.
Under the tories
Growth down, tax take down, unemployment up, government spending up. they are making the situation worse not better
No Scamper, nothing edited, nothing corrected. Have you figured out what your point was yet ? Or was there no point to your question ?
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swedishmatt - MemberErnie, TJ: you two are a lost cause
Well according you anyone who didn't go to a Swedish university is a lost cause. Shall I remind you what you said : [i]"I don't think anyone actually gets what I'm saying. Not surprising really given the Uk education system"[/i] So if anyone disagrees with you it's all down to British education. Handy that.
Of course there is a way out of this - other counties are doing it. The tory austerity policy is simply wrong. every economic indicator shows this
Answer the question. Where's the money coming from?
Where's the money coming from?
When there's a recession you build up a deficit, it's standard practice. When the recession has passed you reduce the deficit, although this is no longer standard practice as politicians now like to give tax cuts instead. Getting people in work providing goods and services creates wealth - throwing them on the dole heap doesn't.
From the same place as the money the Tories are wasting - do you understand that they are making it worse - not better - the deficit is increasing, they are borrowing more.
The money comes from decreased government spend ( as the benefits bill drops) and increased tax take ( as economic activity increases) as well as growth.
What bit of this do you not understand
Under the tory austerity policy - unemployment up = increased government spending, economic activity down = decreased tax take - put the two together you get increasing debt and deficit.
the Tory austerity obsession is making things worse not better.
From the same place as the money the Tories are wasting
Which is where? If you mean spending to take make work to take people off benefits then that will cost more than simply keeping them on benefits so where is the extra money coming from?
If we try to increase the deficit Ernie then the interest rates on government bonds will go up thus increasing interest payments and burying us deeper in the debt hole
Answer the question. Where's the money coming from?
Same place all the money comes from?
I could quote the Nobel-prize winning economist again if you like, who said that George Osbourne has been massively exaggerating the risk of a Greece style default, and concentrating too much on austerity with the result of stifling growth.
We keep being told 'we're broke' as a country, but it's not actually true at all. What they mean is there is a small possibility we lose our AAA credit rating, which would make borrowing marginally more expensive.
Same place all the money comes from?
You mean print some more? That's been tried
Raise taxes? Good way to kill off demand and snuff out any smidgeon of recovery
As george has shown us so is increased unemployment and high inflation.
If you mean spending to take make work to take people off benefits then that will cost more than simply keeping them on benefits so where is the extra money coming from?
so if we were all unemployed everything would be better?
Does it .can you prove this
People in work spend money on stuff [ demand which goes to other people to make and deliver stuff who pay wages to people who pay taxes and dont claim benefits and spend their money on stuff there by increasing demand and taxes etc.
You mean print some more? That's been tried
Nope, borrow more and invest it in infrastructure, education etc which will boost the economy now and improve things in the longer term.
The current strategy is failing, what do you suggest?
If we try to increase the deficit Ernie.......
Best reduce it then. But you won't reduce it by throwing people on the dole and cutting consumer demand. That's been proved.
History repeats itself, first as tragedy, second as farce.
What they mean is there is a small possibility we lose our AAA credit rating, which would make borrowing marginally more expensive.
From its current level which is bugger all to the 5-6% Spain and Italy are having to pay? I'd say that would make a bit of a hole in the nation's finances.
Well the tory con really has convinced some folk. Look at that graph I put up a bit ago - Germany and the US - doing far better than us and pursuing different policies. Are the two connected?
Which is where? If you mean spending to take make work to take people off benefits then that will cost more than simply keeping them on benefits so where is the extra money coming from?
From the extra economic activity that will occur.
uponthedowns - Member"Same place all the money comes from?"
You mean print some more? That's been tried
Indeed it has - and shown to work. Whereas austerity cuts do not work.
so it triple A or spain and Italy ratings with nothing in between 🙄
what is the america rating currently?
How have they coped?
What they mean is there is a small possibility we lose our AAA credit rating, which would make borrowing marginally more expensive.
From its current level which is bugger all to the 5-6% Spain and Italy are having to pay? I'd say that would make a bit of a hole in the nation's finances.
Where are you geting that idea from? Rabid right wing tabloid scare mongering perhaps?
I bevieve there is talk of potentially dropping Britain's rating from AAA to AA which will make very little difference. Tell me, what's Spain's rating?
From the extra economic activity that will occur.
Which might occur after you spend the extra money. As I said where's it coming from? One of these?
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I agree that quantitative easing has a place. It hasn't so far impacted out ability to borrow money but its been used so far very ineffectually. Basically the banks are sitting on it to rebuilt their balance sheets. It would probably have been better to throw the money out of helicopters to the people who might spend it.
I bevieve there is talk of potentially dropping Britain's rating from AAA to AA
That's with current spending plans. Increase spending and lets see how long it takes to get to BBB+ where Spain and Italy are currently.
Osbourne [b]is increasing[/b] spending and increasing the deficit by putting people out of work and pushing us into recession.
Read the quote from the nobel prise winner again - Osbournes policies are making the situation worse not better.
OK lets implement your plan TJ and increase spending even further. You still haven't answered the question. Where's the money coming from?
I'm off to bed now. Maybe you'll have answered by the morning.
It has been answered several times. 🙄
Trouble is you don't want to admit that the tor policy is making things worse as it clearly is.
Let's read what Moody's said in their warning:
In a statement yesterday, Moody's mentioned the 'increased uncertainty regarding the pace of fiscal consolidation in the UK due to materially weaker growth prospects over the next few years'.
So they are saying they aren't convinced about the governments ability to reduce its debts/deficit any time soon, because of a lack of prospects for growth.
Doesnt that sound like lack of growth is the main threat to our credit rating? And what is the chancellor doing to encourage growth again? Erm............
uponthedowns - Member
OK lets implement your plan TJ and increase spending even further. You still haven't answered the question. Where's the money coming from?
From the same place we borrowed the £126bn for 2011/2012?
What a joy to come back into. Personalising debates and falsely assuming people's positions yet again TJ. I am not sure what is funnier/frustrating to read the Internet bullying style or the quality of the economic analysis. But if after repeated requests you want to keep it up, so be it. If that's what it takes to keep you happy carry on. The mods obviously tolerate it - I guess you do keep the page numbers up!! In the meantime, we can amuse ourself with the economic ranting.
Funny how most professional commentators have managed to elevate the analysis of current events above e political rhetoric but not STW!! Enjoy the early hours!
Edit: interesting to see we have gone from Tory spending cuts causing the recession to Osborne now increasing spending. Which one is it?
grum - MemberSo they are saying they aren't convinced about the governments ability to reduce its debts/deficit any time soon, because of a lack of prospects for growth.
Our debt is long term as I mentioned a few pages ago, we have a long debt maturity profiles @ 14 years, over double that of Spain, Portugal, Germany, nearly double that of Greece and over 3 times longer than the US. It costs us less to service and will be longer before we need to refinance so now is actually the perfect time to borrow more.
Teamhurtmore - - are you being deliberately ironical? making a personal attack on me?
Edit: interesting to see we have gone from Tory spending cuts causing the recession to Osborne now increasing spending. Which one is it?
Eh?
Our debt is long term as I mentioned a few pages ago, we have a long debt maturity profiles @ 14 years, over double that of Spain, Portugal, Germany, nearly double that of Greece and over 3 times longer than the US. It costs us less to service and will be longer before we need to refinance so now is actually the perfect time to borrow more.
Aye, seems worth a try, seeing as the current plan is failing.
interesting to see we have gone from Tory spending cuts causing the recession to Osborne now increasing spending. Which one is it?
Both as explained many times.
Under the tory austerity policy - unemployment up = increased government spending, economic activity down = decreased tax take - put the two together you get increasing debt and deficit.
Trouble is you don't want to admit that the tor policy is making things worse as it clearly is.
I don't get that impression. I get the impression that uponthedowns believes there is no alternative. And to be fair he's not alone, the TINA mantra has been widely accepted for a long time, getting as it does almost unchallenged supremacy in the media. And in essence, support from all three main political parties. The Labour Party's position is not fundamentally different, they just would do what the Tories are doing but at a slightly slower speed and with a slightly different emphasis. Which explains why Labour are so weak when it comes to attacking the Tory's economic policies - they offer no real credible alternative. To do so would be far too scarey for them - it would mean taking on the press/media, which quite frankly terrifies them, and passionately putting the case for alternative economic policies to a public which has been molded into believing that there is no alternative to neo-liberalism. So best to play safe and not risk your rewarding political career. Although this might prove to be a little shortsighted as there is vague evidence that people might be starting to seek out other possible 'radical' alternatives. Something which is likely to increase as things get considerably worse.
Which explains why Labour are so weak when it comes to attacking the Tory's economic policies - they offer no real credible alternative. To do so would be far too scarey for them - it would mean taking on the press/media, which quite frankly terrifies them, and passionately putting the case for alternative economic policies to a public which has been molded into believing that there is no alternative to neo-liberalism.
Completely agree.
Completely agree.
+1
Doubt any govt will be able to come up with better policies so the only thing they can do is to ride out the recession with less pain.
The present govt is doing just that but with more pain because they want to change the culture of overreliance on the govt for handouts ...
🙄
Not to get drawn into the main debate- I'd rather eat my own leg- but can anyone enlighten me as to why anyone still takes these credit ratings seriously? Moodys considered Greece an A proposition til mid 2010 after all, and it seems widely accepted that the misrating of toxic debt packages was contributory to the banking crisis to boot.
The Labour Party's position is not fundamentally different, they just would do what the Tories are doing but at a slightly slower speed and with a slightly different emphasis. Which explains why Labour are so weak when it comes to attacking the Tory's economic policies - they offer no real credible alternative. To do so would be far too scarey for them - it would mean taking on the press/media, which quite frankly terrifies them, and passionately putting the case for alternative economic policies to a public which has been molded into believing that there is no alternative to neo-liberalism.
well put
What a joy to come back into...I am not sure what is funnier/frustrating to read
If there's no joy and all frustration in you reading this thread - just don't.
can anyone enlighten me as to why anyone still takes these credit ratings seriously?
Many investment managers for e.g. pension funds have mandates that say "this fund will not invest in any bonds with less than a AAA rating". The upside of that is that it means investment managers of a high security low growth can't go putting the whole lot in Libyan Emu futures; the downside is that it does rather leave the whole system reliant on the ratings agencies.
Ernie what's your solution then? 😆
Let me guess.....
Kona, the thread is fine and interesting, Just the shame about some bits of behaviour especially when mods try to prevent it. But life goes on!
So the UK is doing everything so much worse than everyone else? Hmmm, so if that was the case - weak prospects, incorrect policy mix, negative real interest rates, rising unemployment, bust banks, more QE, the value of the £ would.......?
........go down. Actually not a bad thing and that was th actual policy not so long ago. Massive monetary stimulus, low rates, QE and weaker currency was the BOE chosen route.
...but what is happening now? Given all those presumably smart people looking at FX rates know at last as much as STW posters, you would expect them to be selling the £ a lot.....it's the basket case of Europe, right? Instead the £ keeps on rising (up 5% against the dollar and 2% against the Eur0 YTD. Honestly, how can all those clever people be making such a stupid decision. The mind boggles 😉
Honestly, how can all those clever people be making such a stupid decision. The mind boggles
Didn't this financial crisis come about through a lot of very clever people making very stupid decisions?
Didn't this financial crisis come about through a lot of very [s]clever[/s] [i]overpaid[/i] people making very stupid decisions?
Better
Didn't this financial crisis come about [s]through a lot of very clever overpaid people making very stupid decisions?[/s]because the history of capitalism is the history of boom and bust.
THM once more you tells us how the market is reacting* this and not how the ordinary person in the street is reacting to this.
We should be trying to help the majority not the rich elitists who value money above all else...you will be telling me the market never gets anything wrong next and has a moral voice and conscious. perhaps you could use tobacco or asbestos to illuminate your argument.
We need to balance the two [ if we have capitalism] and it is not unreasonable to suggest that there may be a Plan b that would be better.
* this is as much an indication the Euro is on the radar and they think they have more power than Europe so they will take it on so to speak to - US is in an election hence their is uncertainty in the market place as well as the debts issue Mit will slash and burn as well I imagine hence barak wont]
Surely the rich clever people made clever decisions? They just dont give a **** about others.
Surely we don't want an expensive Pound as that makes our exports less competitive and just encourages us to buy stuff from abroad.