[Closed] Double dip recession

Yo assume all politicians are honest in their motivations - I am certain the tories are mendacious.

Economy risks were exaggerated, says Nobel prize winner

24 October 2010 Last updated at 04:09 Professor Pissarides said the chancellor should have concentrated on the weakness of the economy
The UK's latest Nobel Prize-winning economist has said George Osborne exaggerated the risk of a debt crisis such as that which affected Greece.

Professor Christopher Pissarides said last week's swingeing cuts package announced by the chancellor was taking "unnecessary risks" with the economy.

Mr Osborne has said drastic action was necessary to avoid a Greek-style collapse in investor confidence.

But Professor Pissarides told the Sunday Mirror the risks were "minimal".

'Postponing cuts'
He said: "It is important to avoid this 'sovereign risk'. But in my view Britain is a long way from such a threat, and the chancellor has exaggerated the sovereign risks that are threatening the country."

Professor Pissarides said the current weakness of the UK economy should have been of more concern for the chancellor.

[b]"Unemployment is high and job vacancies few. By taking the action that the chancellor outlined in his statement, this situation might well become worse," he said.

"These risks were not necessary at this point. He could have outlined a clear deficit-reduction plan over the next five years, postponing more of the cuts, until recovery became less fragile.[/b] The 'sovereign risk' would have been minimal."

He added: "Overall, the chancellor is putting the economy through some unnecessary risks because of his fear of sovereign risk, which does not appear justified."

Professor Pissarides

Great point, well made, wrecker. He may have a Nobel prize for economics but he has a silly name so what does he know?

It's a [i]really[/i] silly name though isn't it? 😀

TJ - can't dissagree with any of your comments in that last post, but I do think very few politicians are in it for anything but personal gain. It's just easier to cover your own gain when you're pleasing those below you short term, especially if you can leave your enemy to pick up the mess in the next term and blame it all on them (applies both ways, not just the current way).

I wonder what it would actually take for the government to admit they need a Plan B?

About a 250K private meeting with Cameron I should imagine....

Anyone want to chip in before we all lose our jobs?

It's amazing how good any party sounds when in opposition

Ed Millibean sounds good?!! 😯

[img] [/img]

To be fair to the Tories their approach is always going to take longer to work and Labours would work bettershort term with potential for problems later. Problem is when a bit of a balanced approach is needed we get dogmatic ideal driven economic policy which is ****ing the whole thing up.

"So how are we going to get out of this mess?"

Probably like a large part of the "developed/western" world by suffering and enduring a long period of low, sub trend growth with largely irrelevant negative and positive blips/noise along the way (except for 24hour news and politicians of course). `Politicians of all persuasions will no doubt pretend otherwise but we have really made very little progress towards solving the massive build up of leverage among countries, financial institutions and households. Austerity - what austerity? That hasn't even started in practice beyond tinkering and rhetoric. The western banking system is held together by band-aids and households still have too much debt. It will take a long, long time for all of this to be worked through especially since most policy instruments (both monetary and fiscal) are increasingly impotent.

Not a good time to be in the public sector, financial services, a pensioner, a school leaver, a graduate, a saver.....ok, in fact not a good time for 99% of us (or should that be 99.9%?).

Since this is an MTB forum, there is at least some good news. The recent "gap jumps" in MTB pricing will hopefully prove to be equally unsustainable.

It's a good time to be a major Tory donor though.

Teamhurtmore - report post.

Please mods stop him he's scaring me!!

And what of Ed Balls'?

I wasn't suggesting we would be better managed under a Labour government. But the point is was making, if you quoted the rest rather than a convenient misrepresentation, was;

Surely Vince cable should would have been a better candidate for chancellor but then again he wasn't in the Bullingdon Club with Cameron was he?

You'd see I was pointing out there was a perhaps a better candidate with a background and history in economics in the coalition who 'might' have performed better in this situation that one of Cameron's posh mates. Of course that's entirely speculation.

For me this is about who is fit for the job, I don't think the current government is and, neither for that matter, is the opposition in any fit state to really make a difference. That concerns me.

Don't even get me started on Theresa May 😀

Sorry A_A, but I started my working life in Japan and have stared a "lost decade" directly in the face. It makes GO and EB look pretty!

Actually, on the point of a Coalition. Has anyone seen that other chap, you know, the deputy prime minister.

Whatever his name is.

😀

If we put "growth" aside for a second, I'm hoping we can get the "cuts" into proportion - so, just how much of a "cut" is reasonable?

lets say "the state" is 5% bigger (real terms) than it was in 2007.

Was the country borked in 2007?

If government spending (in real terms) and staffing, and resources, and NHS facilities, were cut back to where they were in 2007 - after 10 years of Labour government, would we be significantly worse off as a country?

Or can the size of government and its associated spending only ever increase?

The problem is philosophy, we as a race believe that we can do what we like.

That the truth is irrelevant and that effective efficient management of resources is unimportant.

If we had people like branson or gates, any number of highly able individuals in charge of giving us direction the world could be a good place.

However as long as the majority of us embrace a delusional, self destructive philosophy that cannot identify useless idiocy and we keep demanding that others sort out our problems, we will all continue to be in a very precarious set of circumstances as a race!

We where always in trouble, they simply managed to hide it from us for a long time 😉

binners - Member
So who thinks we'll see any contrition from Dave and Gideon this afternoon? Or any indication whatsoever that they even give a ****?

No. I think they'll blame TJ.
It's the party line.
And not too complicated for them.

He's had more criticsm on this thread than any of the politicians that have taken this country into recession.

elliot-20, I actually agree with much of that however I didn't conveniently misrepresent anything. Cable would never work, he'd refuse to tow the Tory line and the Tories would want to dictate economic policy. As a result, we have Gideon (yeh, [i]I know[/i]). So, the other alternative is Balls who is as useless as Gideon.

elliott-20 - Member
Actually, on the point of a Coalition. Has anyone seen that other chap, you know, the deputy prime minister.

Whatever his name is.

i think the lib dems have learnt their lesson a bit, they were used as human shields by the torries at the start but are hiding now
also trying to figure out the forthcoming local elections which they will probably do very bad in

Oh dear god! I've just listened to Wallace stumble over his words through the most limp-wristed, pathetic 'attack' on the government yet, at PMQ's. Its tragic!!! The *ing ineffectual imbecile can't even splutter a sentence properly. Will someone please please please put him out of his misery

Part of the reason the whole country is so *ing banjaxed is because these Bullingdon *s don't have an opposition worthy of the name and are pursuing an economic ideology that benefits a minuscule minority - themselves and their friends - and leaves the rest of us utterly *ed!!!

Teamhurtmore: stop writing so much sense.
Zulu eleven: same goes for you.

Here's some light relief:

https://twitter.com/#!/OsborneDrunk

Not read much of this thread.......binners hits the nail on the head after 7 post imo.

Am i allowed to post on this thread as a non big hitter though?

Am i allowed to post on this thread as a non big hitter though?

Binners - after a slightly stumbling performance on N'night last nigh Harman is currently making a better fist of things right now. And there's Milliband looking up at her thinking, "why can't I do that?" 😉

and now watch Cleggy's face behind Hunt. Is it panto time?

Executive summary:

pointless foghorning

haha I think to be a big hitter I would need to read more than the first page and the last few comments on the thread though.......and to defend my black and white clear cut stance on the matter by posting it every 5 minutes or so, on the off chance that someone had missed it 🙂

Oh dear god! I've just listened to Wallace stumble over his words through the most limp-wristed, pathetic 'attack' on the government yet, at PMQ's. Its tragic!!! The ****ing ineffectual imbecile can't even splutter a sentence properly. Will someone please please please put him out of his misery

Binners, some light relief for you 🙂

http://news.bbc.co.uk/democracylive/hi/historic_moments/newsid_8195000/8195545.stm

So basically you all think we should fix the problems we have by making small changes to the system that doesn't work and caused this situation in the first place.

The problems we face are due to an inability to determine what is important and what is not and then to prioritise.

So here's a question for all of you, what is more important quality of life or having money to buy useless shit?

The problem is that not many people really give a shit about the bigger picture, we're all too distracted by this, that and the next thing.

What if all of us tried to make the most out of what we have and then required the same attitude from those who demand the right to rule us!

Tom, Big Hitter status requires you to have at least 20% of posts on whatever thread you contribute to, repeating your point endlessly, and above all copy and pasting at least 20 points from other posters and replying to each of them in one gargantuan post to end all posts 😉

We all of us have to change our perception of the world, we can no longer afford to look at each individual situation and say, how do I get the most out of this for me, **** everyone else.

We need to start saying how do I ensure that everyone gets the most out of this situation that I can, you want a way out of our current problems and to leave this recession behind.

Then we all need to change our attitudes and behaviour, we need to create a set of circumstances were it is not beneficial for individuals to be scum bags or acceptable for thier actions to have a detrimental effect on the culture they live in!

So swedishmatt and/or solo, ready with a nice concise argument regarding the role of bond markets in the financial crisis and recovery?

Or are you just going to keep patronising people who don't agree* with you?

*I may agree with you on some points, but as you haven't actually made any argument except 'Duh, bond markets, stupid. Borrowing? Idiot' it's pretty difficult to tell.

Lifer - Member
So swedishmatt and/or solo, ready with a nice concise argument regarding the role of bond markets in the financial crisis and recovery?

Or are you just going to keep patronising people who don't agree* with you?

*I may agree with you on some points, but as you haven't actually made any argument except 'Duh, bond markets, stupid. Borrowing? Idiot' it's pretty difficult to tell.

Right. I will. Give me 5 minutes.

I wasn't loading up on credit cards, maxing my mortgage and getting a car on HP as many many people seemed to be doing. The very type of things that caused the whole mess. I think most of us could see (certainly by 2007) that this couldn't be sustained.

As much as I dislike the Tories, I cannot argue with the Micawber approach to fiscal responsibility:

"My other piece of advice, Copperfield, said Mr. Micawber, you know. Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery"

I understand Keynesian economics, and the argument about stimulating growth, but there does come a point where you have to stop borrowing, and I think we're there. That's why not even Labour will promise to reverse the austerity measures. The Micawber analogy applies to governments and nations as well as individuals.

The problem is that nobody on any side of the political landscape has any solutions that are guaranteed to work, and the political establishment has run out of options. Hence why extremist politics/the nationalist alternative are becoming more and more popular across Europe, because the mainstream parties are seen not to be dealing with the situation - all they proffer is either austerity (unpopular) or spending (risky).

We're in a mess, and the mess was caused by rampant selfish capitalist greed. The question is, who will come up with a viable alternative and what will that be? I hope it's not the extremists, but at the moment it's only them thinking about alternatives to rampant free-market-ism. Time for the politicians to catch on.

Spot on littlemisspanda

1. GDP is a shit crap measure. However, this is what is being used.
2. The UK borrows money. This leads to something called the deficit. All the years of deficits lead to a debt. The UK borrows this money from funds, banks and other sources. The UK pays interest on this money. The UK gets this money through selling government bonds. So people lend money to the UK, and the UK pays the bond holders a % of interest, called yield.
3. The UK officially has basically 4 trillion pounds in debt. Read the independent yesterday. This is several hundred % of GDP.

The UK is on a path that WILL lead to a Greece, Portugal, Italian and whichever basket case country you look at. I guess this could be a bone of contention as the UK can magically PRINT money. But if it prints too much, the bond holders will be pissed off because the pound will be worth less (inflating the money supply which is one factor that causes inflation).

If the UK starts INCREASING the deficit, i.e. borrowing more - the rating agencies WILL downgrade the UK. This will mean HIGHER borrowing costs.

Labour would, by now, have borrowed even more, and cut less. I guess I can't with certainty say they would have borrowed more, but I think they would. I think we can be certain they would "cut" less. If you follow the conversations around the UK's credit rating, you will find that it's wholly dependent if they will meet the deficit reduction targets. If they don't meet them, downgraded -> more expensive to borrow money, which leads to worse GDP in the end as the government will spend money on not goods and services, but repaying debt. Labour's short term approach MIGHT have lead to a temporary increase in GDP, but without fail, would have bombed shortly after because of the reaction of the bond market.

I don't know what figure you think it's sustainable to have as national debt, but several hundred % is NOT sustainable.

Now, someone might be a hell of a lot better than me explaining this.

In essence, the UK can't afford to keep borrowing at the levels it has.

GDP is a bad measure because you can inflate it by borrowing money and spending it in the economy. Would it be fair to call that a false economy? Borrowing money to push a figure up? It's stupid. Would the bond markets and rating agencies fall for it? Well, no, I don't think so.

That, is in essence, why Labour would have ****ed up even more. But the population would of course be happy - until the UK turns Greek and get shut out of the bond market or have to pay 6%+ yields. That, is not sustainable.

Haven't the tories borrowed an extra £150bn than they said they would? Is that more or less than what Labour said they would?

love the way kaesae just got blanked. twice. lol

love the way kaesae just got blanked. twice. lol

The UK is on a path that WILL lead to a Greece, Portugal, Italian and whichever basket case country you look at.

There's a Nobel prize-winning economist (who I quoted higher up the thread) that disagrees, but I'm sure you know best.

littlemisspanda - Member
That's why not even Labour will promise to reverse the austerity measures.

This is beacuse a weak labour are scared of the propagnada machine the tories own - they hare afraid to / have not been able to make the case against the cuts so have capitulated

Which is a shame because he has some reasonable ideas

that is what i was getting at. though admittedly my post didn't make it clear.

have not been able to make the case against the cuts

So, [b]even[/b] the labour party - reknowned party of social justice, recognise the fact, but TJ stands Canute (careful now) like, telling the tide to turn back, that we can keep on spending more than we take in taxes.

swedishmatt

completely ignoring the feffect growth would have - so if our economy had been growing more the debt become less as a % of GDP which stimulating the economy woulod do. However the tory cuts causing recession reduces GDP so make the debt less payable. Torys have increased the debt not decreased it as tax revenues are down, government spend is up as they have more benefit to pay

also tax increases are possible and a shift of tax burden from poor to rich - doing this increases economic activity.

so please tell us how to get out of this mess. all yo have done is blamed labour but you have not addressed the question of how to get out of this mess