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[Nickbat]

I think New Labour have done an awful lot to get us in this mess. Prudence? Never happened.

I'm just the local thick kid from the local comprehensive.  But even I know the basics of fiscal management - when the times are good, pay off debts, and maybe even try to save 'for a rainy day'.  When the 'rainy day' comes, it gives you extra flexibility.


New Labour; we'll borrow even more in the good times, in the vain hope of paying it back in the even better times, because "this is the end of boom and bust economy".

Additionally, by discouraging manufacturing in the UK, in preference to a finacial services economy, New Labour left us severely exposed when that market sector hit problems.


But that aside, any ruling party becomes stale, ineffective and out of ideas by the end of the 2nd term. Then they come out with stupid ideas about giving our pets lots of mental stimulation or face a £20k fine.


Nope, Labour must go.

Essentially correct, IMHO. 

It is unarguable that the basic rules which govern personal finance apply equally to the economy of the state, i.e. if your outgoings exceed your income, you must reduce your outgoings and/or increase your income.

Given that the above is a fact of life, it follows that public spending must be cut. Much of this can be done painlessly, but given that there is a socially-acceptable limit to such cuts, attention must be paid to increasing income. In the case of the state, this means increasing tax income and it is here that ALL the main parties (and several economists) get it wrong. If personal tax/vat/duty, etc. is increased significantly, the effect will be to cause stagnation within the economy. Companies will see reduced demand and increased costs. Many will only be able to survive with wholesale cost-cutting - which normally means redundancies. Many will inevitably go to the wall - more redundancies.

Where employed people pay tax and spend a proportion of their net income (thus generating more income for the government). In contrast, those who are unemployed are a drain on the public purse - not only are they not paying tax, but they are obviously costing the government in terms of social security payments - so the government debt gets worse and the cycle continues.

What an incoming government should do (but won't) is to cut public spending AND taxation. That would provide a stimulus to the economy and thereby increase the overall tax income. The additional benefit of a stimulus to the economy would be an increase in new business start-ups, rather than closures, providing the prospect even better rates of fiscal income in the future.

But what do politicians know? Generally, the square root of bu**er all.        

[Nickbat]

Whatever everyone thinks of Gordon Brown (and everyone seems to have an opinion) he handles questions on the economy with ease, he knows what he's talking about and what's required and above all seems to make sense.

In 2000-1, three years into the Labour administration, government spending was £367.1bn. For 2010-11, the government is forecasting a figure of £704bn: nearly twice as much. If it had grown in line with inflation since 2000, public spending would now be £440.8bn – £263.2bn less than current estimates. That saving would be enough to wipe out the £163.8bn deficit, abolish all National Insurance contributions, and get rid of inheritance tax.

Yep, Gordon's record shows that he really understands economics. What a tw*t. 

[Richie London]

Whatever everyone thinks of Gordon Brown (and everyone seems to have an opinion) he handles questions on the economy with ease, he knows what he's talking about and what's required and above all seems to make sense.

In 2000-1, three years into the Labour administration, government spending was £367.1bn. For 2010-11, the government is forecasting a figure of £704bn: nearly twice as much. If it had grown in line with inflation since 2000, public spending would now be £440.8bn – £263.2bn less than current estimates. That saving would be enough to wipe out the £163.8bn deficit, abolish all National Insurance contributions, and get rid of inheritance tax.

Yep, Gordon's record shows that he really understands economics. What a tw*t. 

give a kid money for sweets hes gonna spend it all at once

[Varche]

Interesting debate.

You are all missing the point which is quite simply that Britain is bankrupt and you are all going to have to pay very heavily not just heavily for the horrendous borrowing that has gone on. That means job cuts, pay cuts not just freezes and more tax. Lots of it.

People are saying that Britain isn't like Greece. I maintain that if the market confidence goes then Britain will go the same way. As I keep saying Spain next in July and then Britain in November(once the election honeymoon is over and reality sets in). 

One final point about trimming the waste. I have a good friend who is paid good money to advise and promote healthy eating in schools. He would hate me for saying it but that is a raft of jobs that could surely go now all over the country. Of course he would be on the scrap heap and costing money rather than paying tax.......................................  

[cem_devecioglu]

Interesting debate.

You are all missing the point which is quite simply that Britain is bankrupt and you are all going to have to pay very heavily not just heavily for the horrendous borrowing that has gone on. That means job cuts, pay cuts not just freezes and more tax. Lots of it.

People are saying that Britain isn't like Greece. I maintain that if the market confidence goes then Britain will go the same way. As I keep saying Spain next in July and then Britain in November(once the election honeymoon is over and reality sets in). 

One final point about trimming the waste. I have a good friend who is paid good money to advise and promote healthy eating in schools. He would hate me for saying it but that is a raft of jobs that could surely go now all over the country. Of course he would be on the scrap heap and costing money rather than paying tax.......................................  

Greece is our loving neighbour.. 

and I think I know Brits too.. I can confidently say that you have nothing in common ..

neither the working life, rules, personal attitude ,life style .. no..

and must add engineering, industrial production , trading are incomparable..

[waspy]

I think New Labour have done an awful lot to get us in this mess. Prudence? Never happened.

I'm just the local thick kid from the local comprehensive.  But even I know the basics of fiscal management - when the times are good, pay off debts, and maybe even try to save 'for a rainy day'.  When the 'rainy day' comes, it gives you extra flexibility.


New Labour; we'll borrow even more in the good times, in the vain hope of paying it back in the even better times, because "this is the end of boom and bust economy".

Additionally, by discouraging manufacturing in the UK, in preference to a finacial services economy, New Labour left us severely exposed when that market sector hit problems.


But that aside, any ruling party becomes stale, ineffective and out of ideas by the end of the 2nd term. Then they come out with stupid ideas about giving our pets lots of mental stimulation or face a £20k fine.


Nope, Labour must go.

Well said that man

[STMO999]

Interesting debate.

You are all missing the point which is quite simply that Britain is bankrupt and you are all going to have to pay very heavily not just heavily for the horrendous borrowing that has gone on. That means job cuts, pay cuts not just freezes and more tax. Lots of it.

People are saying that Britain isn't like Greece. I maintain that if the market confidence goes then Britain will go the same way. As I keep saying Spain next in July and then Britain in November(once the election honeymoon is over and reality sets in). 

One final point about trimming the waste. I have a good friend who is paid good money to advise and promote healthy eating in schools. He would hate me for saying it but that is a raft of jobs that could surely go now all over the country. Of course he would be on the scrap heap and costing money rather than paying tax.......................................  

They get to put a logo on their headed paper that tells everyone that they are a subscriber to healthy eating at that school.
Then the teachers hand out rewards for good behaviour and merit points. rather haribo sweets...bags and bags of them. I told my son's teacher that if he needed to visit the dentist, she would be taking him.

[Banjax]

we've avoided a depression thanks to Brown's plan taken up by the G20 - a fact which seems forgotten.

GB and the labour government are rightly criticised for not having stuck to their own fiscal rules. On the other hand, before this recession we had low debt-to-GDP ratio – remember being prudent?

It's because of the earlier prudence that we haven't collapsed so obviously blame labour for being too soft on banks (against GB's better judgement) but please don't tell me they got us into this mess - that was US banks gambling on a housing bubble with poor credit rating mortgages.

And ask yourself would a tory government have been harder on banks? theres a first time for everything I suppose, maybe now they say they will but you're kidding yourself if you think we wouldn't have been in a worse mess under the tory party.

by your argument, go back in time and tell me which party and which policies at the time would have prevented the global collapse - there are none - the tories would have you believe its all gordons fault - easily stated, harder to back up.....still we're only electing the single most important leader in the last 50yrs - lets decide it on who has the best quips, most polished soundbites or the best suit  :-?


there do need to be cuts - but lets wait until we're out of intensive care before we pull the plug eh? 

Wrong again, I'm afraid.

http://www.spectator.co.uk/coffeehouse/3078296/the-true-extent-of-britains-debt.thtml

you're looking at external debt Nickbat, I'm looking at the public debt only, if you want to include 
all the debt owed by private companies and consumers then fine, i'd fully expect it to be high - thats all the mortgages, credit cards, loans and financing - and you know what good little consumers we are. add to that all the debt owed in business (including..ahem..the banks) and its going to be high - but dont compare apples with oranges 

[Banjax]

Interesting debate.

You are all missing the point which is quite simply that Britain is bankrupt and you are all going to have to pay very heavily not just heavily for the horrendous borrowing that has gone on. That means job cuts, pay cuts not just freezes and more tax. Lots of it.

People are saying that Britain isn't like Greece. I maintain that if the market confidence goes then Britain will go the same way. As I keep saying Spain next in July and then Britain in November(once the election honeymoon is over and reality sets in). 

One final point about trimming the waste. I have a good friend who is paid good money to advise and promote healthy eating in schools. He would hate me for saying it but that is a raft of jobs that could surely go now all over the country. Of course he would be on the scrap heap and costing money rather than paying tax.......................................  

there won't be any honeymoon period if we all re elect Mr Brown 

[KW]

Additionally, benefits need to be slashed

We really need to adopt the US attitude on that one.

[Nickbat]

I swear I read this after I'd written my post this morning:

In the end, the solution must be something along the lines of that enacted by the New Zealand government of 1984 (the post on which is recreated from the DK archives below): not only a massive cut in government spending and a consequent consciousness of how—not how much—money is spent, but also a massive cut in taxes (and regulatory burdens).

Actually, you should read the whole article. Unless something is done with our finances - and soon - "by 2040 the average family would be paying (in today's money) over £10 grand every year just to pay the government's debt interest bill."

http://www.devilskitchen.me.uk/2010/05/scale-of-crisis.html

with an update for emphasis here:

http://www.devilskitchen.me.uk/2010/05/just-for-emphasis.html

Makes for sobering reading. 




PS DK has given up swearing so no NWS warning necessary! 

[jereboam]

Just a couple comments, prefaced by the oft repeated statement that I Don't Like Gordon Brown.

GB has had charge of the economy for 13 years, during which time he and the New Labour spin machine have assured us on a daily basis that GB has been the best Chancellor of the Exchequer there has ever been.  A financial savant, a safe pair of hands, an international fiscal guru.  Maynard Keynes eat your heart out, J K Galbraith run and hide, Milton Friedman weep bitter tears, for Gordon Brown is our saviour.

The only problem is that it just isn't completely obvious what it is that entitles him to this reputation. 

Could it be the brilliant decision (made soon after he came to office) to raid the national pension pot to the tune of £5bn a year?  Just look at the state of pensions now - many important businesses are showing pension fund deficits that are threatening their future.

Or perhaps the decision to sell the UK's entire gold reserve at a time when gold prices were at a historic low?

Or the "light touch" regulation strategy that allowed the UK banks to gamble themselves to the point of insolvency?

Or the defence budget restraints that allowed us to put inadequately equipped troops into battle in wars we should never have been in and for which (it now seems) our Gordon was not actually involved in making the decisions?

And of course we have him to thank for the creative accounting techniques which announce fiscal changes one or two years in advance, add them (when convenient) to this budget, then include them again they actually come into force.  Magic - just like that!

As for saving the world, well our bit of it wasn't actually in that much trouble before he started tinkering with it. 

And if you want to know why I'm unemployed and broke, just Google "IR35" and find out how he managed to destroy the business I built up over many years ofhard graft.

[size=12]Vote anyway you like, but remove Gordon Brown. [/size]

[Nickbat]

[size=12]Vote anyway you like, but remove Gordon Brown. [/size]

I'll go along with that! 

[albitz]

Very well said Jereboam. ...........Imo there are only two kinds of people who could contemplate voting this disgraceful specimen back into power.
1. Fools
2. Those with a vested interest (public sector employees / those who like living on benefits for example) and are happy to put their own interests above those of the future of their country.

I am no fan of the Tories, but out of the 3 main parties they are the only party who might put right some of the wrong which has been done under this hateful shower. I notice that George Osborne has been missing from the Tories election campaign, hopefully this is a sign that Cameron has realised that he is a liabilty and plans to replace him with Ken Clarke - the man who left Brown with an economy which was in a very healthy state.
If anyyone who is thinking of voting Labour would care to do a little research on the UK economy since the 2nd world war, they will find that every time Labour get in they take over a healthy economy from the Tories, they then proceed to wreck it and it stays wrecked until the Tories are voted back in to put it right. They have made a bigger mess this time than any government in history and if they are re-elected I predict that Darling (or Cable ?) will be going cap in hand to the IMF just like Healey did in the 70,s.
 
Personally, Im still voting UKIP. 

[Nickbat]

Personally, Im still voting UKIP. 

Good man! Me, too!