GDP came in at up 0.3%

Whoop dee doo

Not great of course and down 0.1% or up 0.3% doesn’t really matter a great deal…. we’re bumping along the bottom.

But not to be in a Triple Dip IS good for sentiment…. Is the end in sight ? Maybe if you’ve really really keen eye sight

WAHOOOOOO!

time to spend again, the only way out of this slump is to borrow loads and spend loads

(Cosmetic) relief for Osborne, no change for the rest of us. As before really….

It’s the sort of thing that matters to people who like party politics IMO rather than really care about people’s lives. If we’d never had a (technically accurate) recession but stuck at 0.1% growth for 5 years, the effect on people’s lives would essentially be the same…

Maybe as most of the world is living on borrowed imaginary money could have something to do with. There is longer to go yet before we can have real growth, personally I’d suggest growth is the wrong thing. We should be reducing consumption and pulling away from the idea growing the economy is the way forward.

Utterly meaningless. We’re looking at a decade of flatlining unless he changes course, Which he won’t do on account of being a completely clueless numpty.

This is a man who’s growth policy is to lend loads of taxpayers money, as deposits, to people who can’t afford mortgages to re-inflate the housing market bubble. Nobody use the word ‘sub-prime’ and we’ll pretend its something different entirely

Oh and print billions more money to sit in bank vaults and not be lent to business. After all… thats worked really well the 6-7 times we’ve done it before, hasn’t it?

I reckon the former members of JLS could probably cobble together a more credible economic policy. Shall we ask them?

I was expecting something entirely different when I read the title…..

production & construction are in a worse state now than 2009

list of uk recessions
one every 10 years, more or less, reckon we’ll see another in a couple of years.
thing is, lots of people are doing very well out of recession, its not affecting everyone adversely, we’re all in it together my ar$e!
stop their benefits!

Obviously we are all underwhelmed by this figure but take into account the truly awful weather since Xmas and the euro-zone’s numerous woes… maybe this really is a “good” number

Sorry I’m a optimist.

I don’t understand how we can expect to have perpetual growth? When I breathe in, as hard as I try, at some point I have to breathe out.

Well Ro5ey, no doubt better than the general level of expectations, which is a good thing, but beyond that not really much to shout about. We are still in a very low growth/flat growth environment and little sign of that changing soon.

list of uk recessions
one every 10 years, more or less, reckon we’ll see another in a couple of years

Interesting that they have split 2008/9 and 2011/12 into two seperate recessions. I must have been asleep during the good times of 2010.

there was some voice on the radio this morning saying something about ‘bumping along the bottom’

i don’t think (roughly) zero growth is ‘bumping along the bottom’ – it’s just zero growth, and what’s wrong with that?

we’re still a rich country, and the idea that we need growth to fix our problems is exactly the same kind of thinking that caused the whole mess in the first place.

it’s just zero growth, and what’s wrong with that?

I asked this on another thread. I think the issue is that we’ve planned our finances taking growth into accout. Like buying an expensive car on the assumption that you’ll get that new highly paid job you’ve applied for.

and that’s completely mental.

I don’t understand how we can expect to have perpetual growth?

Through technological advancement which increases productivity per head. If you smooth out all the ripples, we’ve been had continual growth on a long term since the stone age from discovery of metals, agriculture, steam power, internal combustion engine, telecommunications etc etc.

and that’s completely mental.

Well, I think all countries do it. It’s a good way of investing to grow your economy, as long as you don’t over-do it and get carried away. As politicians do.

However, doens’t mean it’s a bad idea in principle.

Growth was discussed on stefanomics FWIW on radio 4 this week
Economics for idiots basically so i am sure THM will recomend it to a number of us 😉

The defecit* is more worrying apparently his goal was to have it cut by 2015 and at current rates it will only take another 200 years to achieve this goal – Go george
Nothing he has ever done has made me think he is anything other than politically motivated and he would do this no matter what as it is not economically motivated but politically motivated and that is dangerous as it is clearly not working

* may have been structutal deficit i was not listening fully as it was danny alexander speaking and i drfited off

Nothing he has ever done has made me think he is anything other than politically motivated

Well he is a politician and Conservatives believe in enriching their friends whilst making the poor suffer for their sins, so he’s behaving exactly as expected…..

>lots of people are doing very well out of recession, its not affecting everyone adversely, we’re all in it together my ar$e!
stop their benefits!<

What – just stop all ‘benefits?’

The politicians making the decisions are most certainly not all in it together.

“Nothing he has ever done has made me think he is anything other than politically motivated”

Of course…. just like everyother Chancellor…this is not a defending of Osbourne, just the way it is and has to be.

You make it sound as if politics are or should be separate from economics …. but how can politics and it’s goal of governance actual be anything other than a form of economics ??

I reckon the former members of JLS could probably cobble together a more credible economic policy. Shall we ask them?

STOP IT!!!!!

hang on, borrowing so much money that you’re relying on a pay-rise to meet the repayments is

molgrips – Member

…a good way of investing to grow your economy…

I’m a massive thicky, could you explain that again with short words please?

(you’re quite good at explaining things, i need your help with this)

You make it sound as if politics are or should be separate from economics …. but how can politics and it’s goal of governance actual be anything other than a form of economics ??

ok fair enough –

Would be nice to see graph of what he predicted in his first budget and what has happened though as it must be obvious to al lthe medicine is not working.

thing is, there is no solution from any political party.

so were not going to get any real change in economic activity for years.
but I dont think we’re doing that bad, it could be worse and we would all like it to be better.
but for all the money we take in taxes the government (regardless of political party) just wastes it on war, missiles, failed computer systems and generally being shit at being in government.

I’m a massive thicky, could you explain that again with short words please?

Well, I am not an economist, but when times are good you need to borrow to invest well to take advantage of it, I think.

The way I see it is this: If you come out of recession you don’t have much cash lying around, so you can’t invest in much. If you waited for growth to give you lots of cash, that would take a while, and other countries might outstrip you in various areas. So you borrow lots of money to capitalise on favourable market conditions. You are pretty confident that your economy will grow well as a result of this, so you know the repayments will be really easy to make and it won’t look too bad on your balance sheet as its percentage of GDP diminishes.

So the economy grows well, and you can repeat that cycle. You can keep on doing this until the global economy crashes. However no-one knows when that’s going to be.

It may well be that the politicans of the world have accepted that the amount of money you can make in the good times outweighs the amount you’ll lose in the bad times, and just keep on doing this cos it’s easier than trying to predict recessions.

It’d be like playing poker, and accepting that you’re going to lose some hands, but overall you’ll win enough to make a profit.

The economy has been growing overall for many decades, so I guess it works in the long run. Of course, those of us poor sods at the bottom of the ladder would rather it be more consistent…

You make it sound as if politics are or should be separate from economics

An interesting idea….

Through technological advancement which increases productivity per head. If you smooth out all the ripples, we’ve been had continual growth on a long term since the stone age from discovery of metals, agriculture, steam power, internal combustion engine, telecommunications etc etc.

OK, over that long a period we’ve had perpetual growth but that’s because we’ve actually created stuff of value which we’ve been able to sell to others, or we’ve taken things by force. At points in that period of time we’ve also had massive contractions (ripples) so if we’ve spent the last 10, 20, 50 years (depending on your viewpoint) living beyond our means and we’re fast running out of natural resources how can we not expect to have a contraction of some kind.

Molgrips hits the nail on the head (edit: in an earlier post) – people (and nations) borrow against future productivity, expecting pay rises and an ever increasing quality of life. IMO we’ve long since reached the point where this is unsustainable without some kind of correction, and the politicians understand this but it’s not politically convenient to expose people to the cold hard truth and allow things to rebalance.

i reckon below 2% growth and the average joe’s/josie’s standard of living is most likely declining – the zero growth figure for a recession is probably just a figure from a grad students year end paper back in the 50’s that got enshrined in economic laws

unwritten rule of economics “every economic cycle is different”

that’s because we’ve actually created stuff of value

I still don’t know why stuff of value has to be physical material..?

I still don’t know why stuff of value has to be physical material..?

It doesn’t, it just needs to be something that creates wealth of it’s own accord and doesn’t just skim off the top of others’ productivity (a la some of the wizardry in financial services).

Politicians have many faults but I doubt very much that any of them are deliberately trying to run the country into the ground.
Their analysis of and/or solutions to our economic position may be flawed and coloured by their political beliefs but that is surely an error of judgement.Does George Osbourne or any other chancellor really want to down in history as the man who ruined the country or as the man who brought econmic prosperity?
To say that George Osbourne is just trying to help himslef and his mates out is also mistaken.Yes cutting the top rate of tax benefits them directly but many of the other decisions he has made don’t. There are far more lucrative ways he could have done more for himself and his pals outside of politics with a lot less risk and hassle.
The issue is a more basic one I reckon.Arrogance and hubris,they think they know best.Some may even believe, as many Tories grandees have througout history, that they are the only ones who have the necessary skills to run the country be it through breeding or whatever.
Basic human flaws.

I still don’t know why stuff of value has to be physical material..?

It doesn’t, it just needs to be something that creates wealth of it’s own accord and doesn’t just skim off the top of others’ productivity (a la some of the wizardry in financial services).

….. or artificially inflating house prices, so that a certain section of society – homeowners – can secure credit against it, then spaff all their equity on cars, and clothes, and holidays, then calling this economic growth. Like Gordon did for a decade

molgrips – Member

I still don’t know why stuff of value has to be physical material..?

you’re right, you can sell ideas, computer code, legal advice, etc. You can spend loads of money without needing a bag to carry your shopping home in.

But there’s a limit surely? – you can’t eat a cool T-shirt design, or live in a house made of java script.

i’ve got a plumber coming round next week, i will pay him cash to fix my leaky boiler. I won’t pay him in humming for dancing a lovely jig.

(however, i have just bought 2 tickets online so i can go and listen to some people play cellos for an hour or so)

It doesn’t, it just needs to be something that creates wealth of it’s own accord and doesn’t just skim off the top of others’ productivity (a la some of the wizardry in financial services).

Hmm… but as long as someone is making physical things, surely it’s valid to be making money on top of that?

I don’t see the difference between say, making prestige cars out of someone else’s steel, and making money trading someone else’s corn.. (ok I might but this is for the sake of discussion)

And the people making money this way, with dodgy financial deals etc, will be in turn buying prestige cars and food and whatnot won’t they? Thus ensuring a market for those things, which will in turn ensure someone has to continue making them…?

I don’t see the difference between say, making prestige cars out of someone else’s steel, and making money trading someone else’s corn.. (ok I might but this is for the sake of discussion)

how about speculating on the price of the steel they’re going to be using to make the car, using somebody else’s money, the trousering half the profit as a bonus?

Or gambling on how much corn any given country will need for their population not to starve, then making a tidy sum on that too?

It was the governor of the Bank of England, not some rabid lefty, who said that the City of London provided no useful function to wider society. I prefer Will Huttons description of its activities “Just money talking to itself”

IMO we’ve long since reached the point where this is unsustainable without some kind of correction, and the politicians understand this but it’s not politically convenient to expose people to the cold hard truth and allow things to rebalance.

I agree. Trouble is the seeds of the imbalance were sown 60 years ago. ‘Rebalancing’ now would in effect mean the impoverishment of everyone under 40 whilst allowing everyone currently retired or about to retire to sit back and enjoy their fat pensions, benefits and property based wealth. Any rebalancing would have to take this into account but I don’t see any politicians queuing up to raid the pension pots and bank accounts of the over-60s.

ahwiles – Member

i don’t think (roughly) zero growth is ‘bumping along the bottom’ – it’s just zero growth, and what’s wrong with that?

Reverting to zero growth when your economy’s strong wouldn’t be too bad. Reverting to zero growth immediately after a recession, with massive unemployment etc, is pretty bad. It’s not so much the lack of growth as the position you’re in when you stop.

Growth isn’t a simple subject though. Obviously you can’t presume to grow, but new ideas, new systems, new products all make it possible to do more with less so as long as technology isn’t static it’s reasonable to assume your economy won’t be either. Ipod sales are way up on 20 years ago 😉

But growth at the expense of all else, or growth as the sole indicator of success, isn’t a healthy mindset.

how about speculating on the price of the steel they’re going to be using to make the car, using somebody else’s money, the trousering half the profit as a bonus?

Hold On I am going to sell insurance on whether your gamble pays off and then sell that insurance on to someoen else.

they really did this BTW

To a degree yes, and to a degree the financial services are necessary and provide a good service. The guy making the cars for example might need access to cash to help him fulfill a large order.

The problem for me comes when people start speculating, to use your example of making money trading someone elses corn, if speculation gets out of control then the price goes up so high that people can’t afford the bread it’s used to make. Ordinarily this would be fine as market forces would intervene (no bread sales) and the cost of bread (and thus corn) would drop until the market could support it. Problems come when you add in a good dose of ‘support’ from governments for example (via central banks buying corn bonds perhaps) and you have a situation where nobody can afford to buy any bread, but those dealing it are just fine because the government is buying it from them and throwing it away.

binners +1 – I try not to get onto this topic as it makes me angry, but house price inflation has made us un-competitive as a nation. If we** didn’t spend a massive proportion of our income on putting a roof over our heads then it could be spent more productively into the wider economy.

Edit: ** by we I mean those of us who haven’t been lucky enough to have ridden the house price inflation gravy train.