Austerity

[ParisInAKilt]

Probably the main theme from the election. Not gonna pretend I know a lot about it other than the impact brutal cuts will have but came across the following that I haven't seen posted on here

Austerity economics are naive - http://everyinvestor.co.uk/2015/05/05/video-steve-keen-criticises-naive-austerity-politics/

The austerity delusion - http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion

Covering up the austerity mistake - http://www.newstatesman.com/politics/2015/04/economic-consequences-george-osborne-covering-austerity-mistake

Makes you wonder why the media and specifically Labour / Lib Dems didn't make more of this before the election.

[Haggis_trap]

Austerity is just another word for "more spending cuts" during the next 5 years.

The public dont understand government debt - and the Tories use this fear to drive their right wing agenda.

[Jie Bie]

The public dont understand government debt - and the Tories use this fear to drive their right wing agenda.

Yep. That "there is no money" letter Cameron brandished at every opportunity will have cost Labour far more votes in England than a potential deal with the SNP.

[Charlie Endell]

I hope he's better at economics than football management.

You'd hardly expect the Guardian and New Statesman to say austerity is a great idea.

[neilser]

The public dont understand government debt - and the Tories use this fear to drive their right wing agenda.

It's bigger than that - the public don't understand the concept of money. Hence the regular squeals about how 'you can't just create money out of thin air', despite that being essentially what quantitative easing is.

[ParisInAKilt]

I hope he's better at economics than football management.

You'd hardly expect the Guardian and New Statesman to say austerity is a great idea.

But is it a great idea?

[Menschlich]

It's bigger than that - the public don't understand the concept of money. Hence the regular squeals about how 'you can't just create money out of thin air', despite that being essentially what quantitative easing is.

Yes, but you cannot create wealth out of thin air. Quantitative easing creates new money but in doing so only redistributes wealth by making the money that everyone had earlier worth less.

These people who say that austerity is a delusion or not at all necessary are totally deluded. You only have to look at the massive unfunded liabilities that many Western governments have to see that even if current deficits and debts were entirely affordable that projected levels of spending just aren't.

[Haggis_trap]

^ ... as % of GDP the debt repayments have been much worse in recent history....

Indeed we have had a national debt for 300 years.

The only euro nations running a surplus are Norway and CH.

The IFS agreed-ed the SNP spending plans were viable.

Indeed even their proposed 1% increase each year would have been effective below inflation cut.

This plot says alot.

Edited May 12, 2015 by Haggis_trap

[ParisInAKilt]

Yes, but you cannot create wealth out of thin air. Quantitative easing creates new money but in doing so only redistributes wealth by making the money that everyone had earlier worth less.

These people who say that austerity is a delusion or not at all necessary are totally deluded. You only have to look at the massive unfunded liabilities that many Western governments have to see that even if current deficits and debts were entirely affordable that projected levels of spending just aren't.

Any links to counter the ones above?

[Menschlich]

Any links to counter the ones above?

Well, as I said, that doesn't take into account unfunded liabilities at all which amount to multiple times current economic output.

[ParisInAKilt]

Well, as I said, that doesn't take into account unfunded liabilities at all which amount to multiple times current economic output.

I mean links to evidence that austerity is needed

Edited May 12, 2015 by ParisInAKilt

[scotlad]

Probably the main theme from the election. Not gonna pretend I know a lot about it other than the impact brutal cuts will have but came across the following that I haven't seen posted on here

Austerity economics are naive - http://everyinvestor.co.uk/2015/05/05/video-steve-keen-criticises-naive-austerity-politics/

The austerity delusion - http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion

Covering up the austerity mistake - http://www.newstatesman.com/politics/2015/04/economic-consequences-george-osborne-covering-austerity-mistake

Makes you wonder why the media and specifically Labour / Lib Dems didn't make more of this before the election.

Probably because they were intent on implementing austerity of their own!

As far as the Tories are concerned, their planned cuts are ideological more than anything else.

[Scunnered]

Of course austerity isn't necessary, but not in the eyes of the electorate, the only major party I know of who stood on an anti-austerity ticket won no seats and took 0.1% vote share UK wide.

[Charlie Endell]

But is it a great idea?

I certainly wouldn't describe it as a 'great' idea, but sometimes it's a necessary evil (e.g. after the mess Brown & Darling left the UK in).

[ParisInAKilt]

I certainly wouldn't describe it as a 'great' idea, but sometimes it's a necessary evil (e.g. after the mess Brown & Darling left the UK in).

Is it working?

I thought the banking crisis was what caused the problems to the UK economy?

[Menschlich]

Is it working?

I thought the banking crisis was what caused the problems to the UK economy?

The banking crisis was largely a result of the massive expansion of credit and the money supply during the New Labour years. The state has much to blame for this and particularly the Bank of England with its rock-bottom interest rate policy. Why was there this expansion of the money supply which caused housing booms etc.? Because the government needed it to finance their spending.

[RenfrewBlue]

The banking crisis was largely a result of the massive expansion of credit and the money supply during the New Labour years. The state has much to blame for this and particularly the Bank of England with its rock-bottom interest rate policy. Why was there this expansion of the money supply which caused housing booms etc.? Because the government needed it to finance their spending.

Bad management caused the collapse. If the banks had followed sensible rules and not loaned out money to folk that couldn't afford it, there wouldn't have been as big a problem.

They just couldn't say no, so fecked everybody in pursuing a risky return.

A good management would not have let it happen.

[Menschlich]

Bad management caused the collapse. If the banks had followed sensible rules and not loaned out money to folk that couldn't afford it, there wouldn't have been as big a problem.

They just couldn't say no, so fecked everybody in pursuing a risky return.

A good management would not have let it happen.

Yes, the banks have a lot of responsibility for the crisis but we have to recognise that it was the state and politicians who were influential in causing banks to issue sub-prime mortgages and so on.

Also the banks and the government (particularly the central bank) work together.

[thplinth]

"George Osborne calls emergency July budget to reveal next wave of austerity

Chancellor promises a ‘budget for working people’, which will also spell out how the Conservatives will cut £12bn from Britain’s welfare bill"

I wonder how many No voters are sitting at home shitting themselves now...

[EddardStark]

Austerity starts in managing your own finances. Once you can handle that then apply this to the wider economy. Never spend what you don't have.

[fishcumnock]

Av got £2.50 left till Wednesday .its gone on a coupon !!

Once its up I'll be OK .

I should have went into hedge funding !

[Huddersfield]

Austerity starts in managing your own finances. Once you can handle that then apply this to the wider economy. Never spend what you don't have.

That classical Thatcherite approach of conflating household budgets & national budgets is really flawed. There are arguments for & against whether or not & how much a deficit can or should be in different economic circumstances but that is not a viable argument. By that logic, nobody should ever get a mortgage.

[EddardStark]

That classical Thatcherite approach of conflating household budgets & national budgets is really flawed. There are arguments for & against whether or not & how much a deficit can or should be in different economic circumstances but that is not a viable argument. By that logic, nobody should ever get a mortgage.

It's common sense.

[Huddersfield]

It's common sense.

Which is probably the reason it's flawed because "common sense" is a loaded concept that tends to oversimplify complex issues.

But if I buy the argument for a moment, do you therefore think nobody should get a mortgage? Because that is borrowing well above your income for something you can't afford & is available though other means. Andwhat do you think the impact on the economomy would be if nobody ever borrowed to buy a house?

The key thing is here I'm using your starting point; in a real world Capitalist economy, rightly or wrongly, credit is a fundamental necessity for the system to work. In order for it to work in an equitable way, create growth, encourage trade, grow businesses, etc., borrowing is a core element of the economy.

[EddardStark]

Which is probably the reason it's flawed because "common sense" is a loaded concept that tends to oversimplify complex issues.

But if I buy the argument for a moment, do you therefore think nobody should get a mortgage? Because that is borrowing well above your income for something you can't afford & is available though other means. Andwhat do you think the impact on the economomy would be if nobody ever borrowed to buy a house?

The key thing is here I'm using your starting point; in a real world Capitalist economy, rightly or wrongly, credit is a fundamental necessity for the system to work. In order for it to work in an equitable way, create growth, encourage trade, grow businesses, etc., borrowing is a core element of the economy.

I am not saying that no-one should get a mortgage. Never spending what you don't is maybe too narrow a term. But don't spend what you can't afford is probably more accurate. Sound financial planning is key. Should be taught in schools.