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They will inherit the public finances in a terrible state
I'm sick to the back to teeth of hearing this one.
It's the number one frustration and fabrication, waiting to give Starmer his get out.
The economy is in a mess (for many) but this doesn't affect public finances or the capacity to spend.
roneFull Member
The idea that all the woes started with Brexit is only for those half way up the food chain
if that's in reply to me I clearly said austerity led to Brexit, which led to an even worse economy, especially for those lower down the food chain
I’m sick to the back to teeth of hearing this one.
It’s the number one frustration and fabrication, waiting to give Starmer his get out.
The economy is in a mess (for many) but this doesn’t affect public finances or the capacity to spend.
labour scaling back climate pledge was done because the public simply don't believe that and the Tories will exploit it
The state the country is in its obvious we need a huge amount of investment, but HS2 is the perfect example of nimbyism & terrible procurement/ exploitative contractors turning the public against the kind of investment we need
the other problem is the scale of investment needed is just so huge that it will blow the overdraft/ max out the credit card 😉
theres a double whammy from this
- the markets will be spooked : see Truss, the £ will fall, pensions will suffer etc etc
- the press & Tories will go full on about irresponsible labour spending & the breadth of spending needed means theyll get smashed at the next GE
genuine question @rone how do labour manage those 2 things ?
the markets will be spooked : see Truss, the £ will fall, pensions will suffer etc etc
Why will the markets be spooked by a government investing and putting money into a country? That is nothing like the stuff Truss did
The tories then cannot go on about irresponsible spending as it is investment for which a return will be seen/services improved over the 5 years so a hard thing to label as irresponsible and if public see improvements slagging it off will not be believed will it.
ssuming Starmer actually does any of that
The economy is in a mess (for many) but this doesn’t affect public finances or the capacity to spend.
I'm sick to the back teeth of hearing this.
In the real world of politics today it really does affect capacity to spend otherwise someone would be quite happy putting your fiscal ideas into practice without any downside. Johnson for one would have jumped at it, he had zero principles and would have done anything for a popular headline.
Why will the markets be spooked by a government investing and putting money into a country? That is nothing like the stuff Truss did
This. Any increases in public spending Labour implement will provide a boost to the economy and result in higher growth which the markets will fully support. The problem with Truss's spending was that it went towards tax cuts for the rich and even the markets know that handing more money to people who are already rich doesn't result in more economic growth.
Johnson for one would have jumped at it
He did jump at it, but wasn't around long enough to do anything. When did you ever hear Johnson say 'we can't afford it'?
He did jump at it, but wasn’t around long enough to do anything. When did you ever hear Johnson say ‘we can’t afford it’?
Poor Johnson just needed more time… utter bollocks.
Anyway, for some reason I thought your work was related to this industry:
Plenty of other examples of Johnson promising big infrastructure spend… right up until delivery… and then failing… probably lots of examples in his thread. Bridges, tunnels, power stations, hospitals… on and on…
Any increases in public spending Labour implement will provide a boost to the economy and result in higher growth which the markets will fully support.
Absolutely. And they’re political cowards for scaling back the spending plans for green transition ahead of an election manifesto. The kick back from “markets” and industry would have been zilch… scared of the voters getting into a “can’t trust Labour with our money” mindset, that’s all. Cowards. Mind you, plenty of people far down the pecking order with even more fear of the Tories scraping another win. Snatching defeat from the jaws of victory is Labour’s specialty (with more than a little help from voting demographics, the voting system, the media, and political funding stacked against them), so perhaps that fear is valid and serves a purpose. It’s depressing though, and doesn’t bode well for what needs to be done in the next 10 years.
i remain to be convinced the markets wont push hack against a big spending splurge
tho i think this analysis is saying that they're more likely to do this when finances are already squeezed (which sounds counterintuitive)
I suppose the onus is on Labour to ensure spending is viewed as investment, not waste ( see perception of HS2) That is a huge task against our media landscape
Any increases in public spending Labour implement will provide a boost to the economy
i get the theory , but again using HS2 as an example it has to be done right amd you have to bring the public/press along with you
Interesting, but I’m not sure I buy it. Perhaps it just indicates that stock prices are already low when “constraint is high”.
In the real world of politics today it really does affect capacity to spend otherwise someone would be quite happy putting your fiscal ideas into practice without any downside
It seems to be working quite well in the US.
It seems to be working quite well in the US.
You want us to follow the American model of economic management, that country well known for it economic and social equality across society? No thanks.
We all agree investment into our country is badly needed and will have positive outcomes beyond the immediate infrastructure or service provision, the question is how it's funded and probably more importantly how it's perceived to be funded.
I very much doubt the US has released the cash in the way Rone is proposing, the Republicans block anything other than the most moderate spending.
Spending in this country is at record levels but it's not being spent on dealing with the root causes of the issues.
Fuel poverty - money being spent on additional payments rather than the infrastructure to bring energy costs down.
Housing - same, spending money on housing benefit rather than correcting the market by mass building of quality, energy efficient affordable housing.
NHS - massive amounts spent on re-arranging the deck chairs, no coherent 20 year training and recruitment plan.
Schools - the academy system is criminal.
Roads - well there's nothing left for their maintenance.
The rouble is you can't divert the here and now payments to the long term solutions without leaving a lot of people destitute, that's the Tory legacy and will take at least 2 parliamentary terms to start the reversal process.
You want us to follow the American model of economic management, that country well known for it economic and social equality across society? No thanks.
No idea what you're on about. Biden has spent money on infrastructure (including green infrastructure) to stimulate the economy. It seems to be working. How the benefits are utilised is a wider discussion.
You want us to follow the American model of economic management, that country well known for it economic and social equality across society? No thanks.
I've gone at great pains to say the USA has big distributional problems. Inequality - absolutely.
But the core of what Biden has done has given them growth and employment not equaled by many big economies.
There are always loads of things to fix and put right, doesn't mean you can't start with fundamentals for investment and stimulus programmes.
Besides, the US has problems that go way back from where we are now.
So it seems to me you are simply blending a whole host of logic. Fine, but you can't ignore their numbers and both the Tories and Labour would kill for growth as a starting point.
There is one route to growth what you do with it from there is political will.
There is some stuff on this subject in this rather long interview here, plus many other interesting bits. Kelton was in the UK a few days ago at Warwick University.
(I'm not mad keen on this interviewer.)
Poor Johnson just needed more time… utter bollocks.
Oh FGS I never suggested Johnson would have done all that he claimed, just that he never used the excuse of not having enough money. In fact all I ever heard from Johnson was promises about spending money on all sorts of things, and then he'd be reigned in by Sunak. Johnson (to some extent May before him) was a weird tory PM in that he wasn't a big fan of austerity, quite the opposite in fact.
I’m surprised you bought into that myth. He announced shit to gain power and support, and then forgot about it or cancelled it. Take the one example above… do you think he just cancelled rail projects in the north to spite northerners, or to avoid spending the money on it?
EDIT: that’s a rhetorical question, we’ve done all this in the Johnson thread already, let’s drop it.
I’m surprised you bought into that myth.
Aside from £400bn on covid, sure.
Covid spending… no way to condense a response to that into less than about a 100 posts!
Absolutely, but it's a fact that the government "found" the money to invest into the economy without the usual myths around affordability.
They talked up “paying for it later”… and anyway, the “myth” I was talking about was Johnson wanting to invest and others holding him back… it was always planned jam tomorrow, and cancelled spending before we got to tomorrow… that was always his thing… it was nothing to do with a wish to invest, he’s just a con man… the myth that others, or time, thwarted him is highly damaging to the UK… we need to learn from his cons, not feed the Johnson myth.
Take the one example above… do you think he just cancelled rail projects in the north to spite northerners, or to avoid spending the money on it?
Which rail projects in the North did Johnson cancel?
All I could find with regards to the question was this:
So obviously not that.
I posted a link. It was while he was PM.
You want us to follow the American model of economic management, that country well known for it economic and social equality across society? No thanks.
Odd. I would have thought you would be in favour with your belief that its a good thing labour should start representing the centre right with the tories representing the loony right and everyone else left to it.
After all thats the democrat/republican model.
It seems to be working quite well in the US.
It works well for the US as they are the last real superpower, and a lot of the world works on the US Dollar, they can afford to take risks, as it's pretty much negligible they'll suffer any negative effects in the markets due to their might and their currency.
The UK, well the pound isn't quite as robust!
The UK, well the pound isn’t quite as robust!
Quite a sweeping statement. Care to provide some evidence?
And besides, currency markets go up and down, all that really matters is what we do within the UK economy, and that's completely within the control of the UK govt and BoE. The UK govt can spend what it likes as long as the economy can resource it, and the markets don't panic, and they won't panic as long as the money spent generates growth as apposed to filling the pockets of those who don't need it.
they can afford to take risks, as it’s pretty much negligible they’ll suffer any negative effects in the markets due to their might and their currency.
Yup, US markets never panic. Taking risks is not a problem for them.
Except for the US subprime mortgage crisis of 2007-10
US as they are the last real superpower, and a lot of the world works on the US Dollar
Hmm.. a lot to unpack there!
There's no such thing as a 'super power' ... China, Rusia, India, and the EU are all 'super powers'.
If you add the USA into the mix, that's at least 5 super powers. The 'super power' podium is getting a bit crowded!
The ‘super power’ podium is getting a bit crowded!
Not really, the US is still by far the predominant military and economic force in the world. Not as much as it used to be though, largely due to its massively divisive internal politics driven by the inequalities of neoliberal capitalism. It’s an irony that the US (and other western countries) would be much more powerful if they hadn’t abandoned the progressive social democratic politics of the postwar period.
Not really, the US is still by far the predominant military and economic force in the world.
Care to back that up with any facts? I'm sure the USA loves to think it is.
Certainly the UK cannot rely on them given past and recent rhetoric.
The UK leaving the EU was a massive, massive foot-in-mouth moment.
Out of interest I checked the comparison between the USA and China and whilst the USA is obviously (still) easily the greater superpower I was frankly shocked to see that it was much closer than I expected.
The Chinese have impressive foreign reserves!
And difference between 0.0706 and 0.0699 power index doesn't sound that massive.
The UK, well the pound isn’t quite as robust!
So what do you think would happen?
Care to back that up with any facts?
Eh? Do some quick Googling and you’ll find the US still has the largest military and highest GDP. Not as much as it used to be, but still significantly ahead.
To be fair mattyfez didn't say that the USA wasn't the most powerful superpower, he said that there were other superpowers globally.
There is no accepted definition for the term superpower. Obviously Americans are likely to feel that only the US qualifies but it doesn't necessarily mean that their definition is correct.
Anyway despite all that military and money and power and stuff, the US economy crashed less than twenty years ago and they lost a war against one of the poorest nations on earth - Afghanistan.
So as mattyfez suggests the term superpower doesn't really mean that much.
What Ernie said...
You can't be a super power unless you have goldie lookin' trainers!
You knows it!
The US spends close to a trillion dollars in the military budget which last time I checked was the same as the next 10 countries combined. (Although I wonder where that stands now with Russia who as a currency issuer too has managed stack up there recently.)
The dollar is the reserve currency and China has to bank with the USA in dollars for all its trade.
It's fair to say a lot hinges around the USA
USA v CHINA GDP?
28 trillion v 18 trillion. (Est 2024)
I've been lucky enough to visit the states a fair bit and absolutely love the place but as a tourist you are so insulted from most of the bad stuff. Take a look around the back streets of LA and San Francisco and the homeless problems are absolutely devastating.
I also spoke to many people last year who totally despised Trump but that was Colorado so what do you expect. If you've got money you're doing okay there.
If you’ve got money you’re doing okay there.
Like most countries then. They look good on the face of it as a tourist but living there as a poorer person doesn't look quite the same.
The US spends close to a trillion dollars in the military budget which last time I checked was the same as the next 10 countries combined.
And yet they couldn't win a twenty year war against Afghanistan, I don't call that value for money.
The dollar is the reserve currency and China has to bank with the USA in dollars for all its trade.
That's the point, and I can't see immediate change in this being likely though who knows what a few decades may bring? Either way the UK is not in this position.
(And yes - US compared to most of Europe, higher average GDP/per capita but private wealth, public squalor and a big class of the shut out.)
China has to bank with the USA in dollars for all its trade.
I think that "all" might be an exaggeration:
MARKETS.BUSINESSINSIDER.COM I think that “all” might be an exaggeration:
I don't really understand your point.
Currently:
Chinese exporters receive U.S. dollars for their goods sold to the U.S
At some point things might change. But Dedollarization is always being touted.
But the current mechanics say how it is. At least to the scope of my understanding.
ENGLISH.HANI.CO.KR Yeah much discussion.
Future is a hard thing to play with all this. I was expecting a bust cycle but doesn't look like it.
Markets are booming currently in the USA.
Shrug.
And yet they couldn’t win a twenty year war against Afghanistan, I don’t call that value for money
Perhaps not but they know how to throw money at things.
It's funny how the Republicans are struggling to recognise the relative success of Biden's economics. They're calling it a disaster and yet they really need to shut up and look at their own metrics.
I wonder if this will cut though come the election?
(I mean listen to Jamie Dimon - extremely confusing politically.)
Future is a hard thing to play with all this.
Indeed. There is an argument that the Hamas attack of Oct 7 has tentative links with Saudi Arabia's slow disengagement from the petrodollar. Seeing Saudi Arabia moving away from its total dependency on the US and more towards China and Russia the US government, it is claimed, pushed very hard for the normalisation of Saudi-Israeli relations. This would have resulted in a military-economic codependency and helped to keep Saudi Arabia within the Western orbit of influence.
Oct 7 changed all that, or at least has made it extremely difficult. The Saudi government was always going to struggle to sell its policy of normalisation of relations with Israel to public opinion in the region (and its regional influence is very important to the Saudis) as the world watches the Israeli slaughter of Palestinian men, women, and children, (mostly women and children) that has now currently become impossible.
And yet they couldn’t win a twenty year war against Afghanistan, I don’t call that value for money.
US military hardware is always going to cost loads more than that from China Russia, because the latter two countries use state industries to build theirs, whereas the US arms manufacturing industry is completely capitalist. So spending more doesn't necessarily translate to the US having better military equipment, it just means it costs more. And as for 'military superiority', we've seen time and again how the mighty USA gets its arse kicked by far less well-equipped fighters, wherever it decides to create a conflict. So all that hardware is little more than sabre rattling; the US can't actually use all that against a comparable opponent, because it would just get its arse kicked even more. It can only ever really engage in bigger wars by proxy; see Ukraine for the latest example.
And as for economic superiority; this is another myth. Whilst the US does have a large manufacturing base, much of those products are consumed within the US itself (apart from the military hardware of course). The USA, like the rest of the world, is now increasingly reliant on raw materials and products controlled and produced by Chinese controlled entities. China has mining and production industries across the globe. And companies don't work the way they used to; you don't get so many wholly US owned corporations and conglomerates any more, they tend to be owned by multiple entities globally. China has been quietly buying up large chunks of al sorts of industries for decades. So the label may say 'USA', but the money behind it is from all over, especially China.
So getting back to Starmer; given that UK manufacturing is effectively all but dead, bar a few very small specialist industries, and we can't afford US imports, what is Starmer's plan to help the UK become less reliant on foreign imports (and the related economic control)?