politics and the future of the economy.. Will success = rewards?
I live in hope that this is where the other side of the coalition comes in. If only for its own self-interest in avoiding electoral Armageddon at the next election.
Vince cable is interviewed in the guardian this morning. His take is that if the economy is picking up (and it is still an ‘if’), then the first thing that needs to be addressed is wages – increasing them, especially the minimum wage – and tackling the explosion of zero hours contracts.
Left to their own devices, the Tories couldn’t give a toss about things like that. Much preferring to focus on more tax breaks for their rich mates. So it’ll be interesting to see if the ‘in betweeners’ are actually going to grow a pair and start pressing for this, in return for spending the last 3 years as useful idiots for Dave and his chumsPosted 4 years agowordnumbMember
What is this economic stability which you speak of?
Exactly. George Osborne is taking the fact that the economy hasn’t collapsed under austerity, which Labour and others claimed it would, as proof that it was the best possible tactic and a roaring success. There’s a difference between something that works well and something that doesn’t fail as catastrophically as expected.
The ‘economic stability’ is based on over-inflated property values. Bubbles always burst.Posted 4 years agoyunkiMember
So the Tory party, while trampling on the poor and the weak, do appear to be able to get the job done and force economic stability..
A serious question now.. If they manage to turn this mess around and put Britain back on it’s feet financially.. what will happen then..?
Will they become a benevolent party once all the awkward and unsavoury hard work has served it’s purpose..?
Will the small folk be rewarded for all their sacrifice..?Posted 4 years ago
George Osborne is taking the fact that the economy hasn’t collapsed under austerity, which Labour and others claimed it would
When was the last time anywhere in the world that an economy “collapsed” ? Economies tend not to collapse – no matter how bad things are.
Labour and others claimed that Tory ideologically driven austerity measures would make a bad situation even worse for most people. They were right.Posted 4 years ago
Did Labour and others say that the economy would require outside assistance due to Tory austerity measures ? I only recall the claim that it would cause more unnecessary hardship and the derail the slow and small recovery which was taking place (the Tories inherited a growing economy) The critics have been proved right. Obviously no economic downturn, even the longest economic downturn in history, can last forever. Although poverty can.Posted 4 years agoteamhurtmoreSubscriber
So Ernie, nice simple answer to a direct question – will small folk be rewarded for their sacrifice? I take it that you meant what you said on the other thread this morning about answering an OPs simple question directly rather than adding tangential (albeit relevant) political waffle!!Posted 4 years agoteamhurtmoreSubscriber
Indeed Ernie. It really was silly wasn’t it. Lesson learned?
Yunki – Re the question. Yes, the Tories may do plenty of silly things but they know they also have an election to win. The battle ground has changed to the benefits of recovery not the recovery itself.Posted 4 years agowobbliscottMember
Not sure what rewards people are expecting? What we’re seeing here is a re-ordering of the world order. We’re not as rich as we thought we we’re as individuals and as a nation, and we really need to take a tough look at some of the things we’ve always taken for granted and ask ourselves if we can really afford them.
Not sure the tories have trampled on the poor. What about the tax relief on the poorest earners? I think it is a fact that the lowest earners are better off, despite the benefits reforms so far. Yes, food and other things have increased in price, so the cost of living has increased, but it has for us all, and food prices had been at an all time low over the past 10 to 15 yrs so food prices are just returning to a more normal level, and this would affect any government of the day.
The biggest problem this country faces is debt – we’re so indebted due to the demands of the NHS, benefits system and everything else the government has to support. Even in the so called labour boom years we were still borrowing more than we earned to support all those demands, and we have been for the past 40 yrs.
Any government of the day, if acting responsibly, has to tackle this issue because when interest rates start to rise as they eventually will, we wont be able to service those debts, then we’re into Greece meltdown territory – banks seizing your money, the government seizing your pensions pot, property prices plummeting, businesses and companies not being able to pay your salary, not being able to get access to your money and savings.
The only thing any government can do is to try to create the best possible environment for businesses and the economy to thrive and compete to increase our GDP, whilst looking to reduce the structural deficit. But we cannot make up for the debt by relying on an increase in GDP only, even if things are starting to recover.
This notion that you can borrow your way out of situations like this and stimulate a recovery and increase GP has been proved to not work not only in this country but in others like Greece, Portugal, Argentina, Ireland etc. And it was Jim Calahan back in the 60’s/70’s who tried to address the recession of the 70’s by borrowing and investing in the public sector and other things (i.e. Labours Plan) and it just didn’t work and very nearly broke the nation. He mentioned in a speech that the idea that you can borrow your way out of recession and stimulate growth by borrowing just doesn’t and cannot work. So the Labour party themselves have experienced this first hand and have chosen to ignore the lessons of the past. They’re either doing this as a cynical ploy to tell voters what they want to hear just to get into power and then do something different, or they really are as ignorant as they are arrogant.
We’re definitely not out of the woods yet. There is still the crisis in the NHS to face, the pensions crisis is looming, the problem of increasing property prices is still there and needs to be tackled and many others. There is alot to do yet before we’re on an even keel. Maybe things wont get worse, but I don’t think they’re going to get much better. Forget the indulgent decade of the 90’s. That was a one off anomaly and we’re paying the price for it now. It wont happen again.
I really don’t understand how people can think that we can get out of a debt crisis by getting into more debt. Would you do that with your own personal finances?Posted 4 years agobinnersSubscriber
In light of all that, George Osbourne’s Help to Buy scheme is utterly bonkers, as it seeks to make people take on unaffordable levels of (now taxpayer funded) debt to prop up an overvalued property market. It’s insane! Have they learnt nothing?
It’s also a tacit admission that they’ve given up any pretence to rebalancing the economy. They’re simply putting in place the cornerstones of the next economic catastrophe, which will deliver the same victims, while their rich mates walk away unscathed. Just like last time.Posted 4 years agoathgrayMember
I was under the impression that the coalition went down an austerity lite path in the end? It feels that if the consensus is that the economy is picking up it is not down to any action by George Osborne. It is early days yet, however I am more prepared to put faith in the new govenor of the Bank of England than the current Tory chancellor.Posted 4 years agofootflapsSubscriber
The biggest problem this country faces is debt – we’re so indebted due to the demands of the NHS, benefits system and everything else the government has to support.
The benefits system cost is in the noise (a few £billion). It gets lumped in with pensions when they quote the figure, and the pension spend is very large, hence they can quote a large ‘benefits’ figure and rant about how much we need to cut ‘benefits’. It’s just a ruse to rally the people behind a ‘bash the poor’ banner.
Any government of the day, if acting responsibly, has to tackle this issue because when interest rates start to rise as they eventually will, we wont be able to service those debts,
If you’re talking about government debt, rather than personal debt, then the bonds are often long term and fixed interest rate, so a state can de-risk this significantly. Obviously as some point you have to refinance the bonds when they mature but the UK has never struggled to do this and is unlikely to struggle in the near future.
But we cannot make up for the debt by relying on an increase in GDP only, even if things are starting to recover.
That is generally how ‘investing for growth’ works, both at a company level and a state level. You borrow money, increasing debt, invest in the resources to increase productivity and pay off the debt with the rewards from increased productivity. An increased GDP means an increased tax revenue, which allows for increased debt repayments.
really don’t understand how people can think that we can get out of a debt crisis by getting into more debt. Would you do that with your own personal finances?
Again, if you mean government debt, rather than personal debt, as a short term measure, Keynesian Economics prescribes a role for governments to smooth the economic cycle by increasing government expenditure during a dip, through debt, which boosts the economy, decreases the dip duration and over a longer term allows GDP to average a higher value, than without the injection. The additional debt is then paid off from higher tax revenues etc.Posted 4 years ago
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