Let's Get Political!

[jayohaitchenn]

Thanks for the Wiki link that confirmed my point,.

In Krugman's view, balance sheet recessions require private sector debt reduction strategies (e.g., mortgage refinancing) combined with higher government spending to offset declines from the private sector as it pays down its debt, writing in July 2014: "Unlike a financial panic, a balance sheet recession can’t be cured simply by restoring confidence: no matter how confident they may be feeling, debtors can’t spend more if their creditors insist they cut back. So offsetting the economic downdraft from a debt overhang requires concrete action, which can in general take two forms: fiscal stimulus and debt relief. That is, the government can step in to spend because the private sector can’t, and it can also reduce private debts to allow the debtors to spend again. Unfortunately, we did too little of the first and almost none of the second."[4]

[Samdy Gray]

Ha, perhaps I should've read it before I posted the link

I stand by my opinion though, eventually the government will have to reduce the deficit. I've got more on this but have to go into a meeting now so I'll respond later.

[jayohaitchenn]

The best way to reduce the deficit is for the government to invest in areas where we will see a return on the money and therefore grow the economy.

[Red and Proud]

The next 5 years is going to be about the brerak up of the UK and the Tory right's hope for a withdrawal form the EU...

 ...not going to be pretty.

Sorry, who gave the Scots devolution?

[Red and Proud]

Im a happy bellend as well

Me too. Oh look, all those 24 carat gold bars tucked under my bed just doubled overnight.

[StfcRusty]

Me too. Oh look, all those 24 carat gold bars tucked under my bed just doubled overnight.

If you had shares in the major banks you would have done pretty well this morning too eh.

[Abrahammer]

Not sure what I should do, I better stick to the lazy stereotype apparently all of us voted Tory are meant to adhere to though.

Probably go fox hunting then find an immigrate or someone on welfare to abuse.

[Reg Smeeton]

Sorry, who gave the Scits devolution?

Labour, of course, a manifesto pledge, delivered, along with the Welsh Assembly and Power Sharing in Stormont.

The proposed regional assemblies in England, were rejected by the electorate in referendum.

Maybe Cameron will surprise us, and live up to his claim of being a One Nation Tory, and act in the national interest rather than his own and his party interest......I'm not expecting it though

[Red and Proud]

Labour, of course, a manifesto pledge, delivered, along with the Welsh Assembly and Power Sharing in Stormont.

The proposed regional assemblies in England, were rejected by the electorate in referendum.

Maybe Cameron will surprise us, and live up to his claim of being a One Nation Tory, and act in the national interest rather than his own and his party interest......I'm not expecting it though

[Red and Proud]

Labour, of course, a manifesto pledge, delivered, along with the Welsh Assembly and Power Sharing in Stormont.

The proposed regional assemblies in England, were rejected by the electorate in referendum.

Maybe Cameron will surprise us, and live up to his claim of being a One Nation Tory, and act in the national interest rather than his own and his party interest......I'm not expecting it though

Yes, New Labour Reg, new Labour because they thought it would cement the Scottish people to Labour in perpetuity. That was the thin end of the wedge and you should be careful what you wish for some times shouldn't you.

[Reg Smeeton]

Not sure what I should do, I better stick to the lazy stereotype apparently all of us voted Tory are meant to adhere to though.

Probably go fox hunting then find an immigrate or someone on welfare to abuse.

Would being unable to spell correctly comform to stereotype?

[Samdy Gray]

The best way to reduce the deficit is for the government to invest in areas where we will see a return on the money and therefore grow the economy.

Potentially yes, but where are these areas for growth? You used WW2 as an example of where spending helped, but in that case we literally had to rebuild the country which created hundreds of thousands of jobs and created huge demand for industry and manufacturing. Where do we find that now? That's why this "austerity doesn't work" has caused a lot of debate.

It is really a bit of a chicken and egg situation. Growth is (mainly) stimulated by consumer confidence. Consumers feel confident when they've got money to spend and don't have to worry about the debt they hold. With austerity there are cuts to services and jobs which semi-artificially causes the public (private sector) to pay down their debt until they are at a level where we feel confident about our spending. If we go with the "spend our way out" approach you have to create sufficient enough growth to not only encourage growth in the economy through additional jobs, infrastructure, manufacturing etc. but consumers have to be given confidence that they can afford to go out and spend and either maintain or pay down their debt.

We will, at some point, have to reduce the level of government borrowing (the deficit). The government could wait for growth to return before resorting to cutting spending but with a recession that cut so deep and unlike many before, that could take a very long time. Consumers took on a lot of debt unlike in previous bubbles (110% mortgages) which means we'd need a hell of a lot of growth for consumers to feel confident enough to spend. That could take decades. Whilst austerity hurts, it drastically cuts down on the amount of time it would take to get us back into some sort of "normal" economic cycle.

The nature of my job means that I get to listen to a lot of very clever economists. Some are very pro-austerity and some a quite against it. A lot are indifferent. The majority want us to get back to a normal situation as soon as possible and so do I. I don't want years and years of limp growth and tit-for-tat politics where elections are won on the basis of who can manage the deficit the best and squeeze in a few policies rather than having a stable economy and a budget that allows government to run the country as it should be.

Austerity sucks, and it is a bit like cutting off an arm, but it sure beats having to crawl on our hands and knees for the next 20 years.

[jayohaitchenn]

I'd start by privatising essential services - the railways, energy companies and water providers. Perhaps start building a couple of hundred thousand houses for the social, that has the double benefit of creating plenty of construction jobs and providing affordable housing/keeping rental prices from rising.

[Reg Smeeton]

I'd start by privatising essential services - the railways, energy companies and water providers. Perhaps start building a couple of hundred thousand houses for the social, that has the double benefit of creating plenty of construction jobs and providing affordable housing/keeping rental prices from rising.

You may not have noticed Jayo, but essential services are already privatised.

[horlock07]

Would being unable to spell correctly comform to stereotype?

I really hope that is deliberate...