So Ed was right: 'too deep & too quick'

rick_chasey

£26k per person in benefits?

TheStone

Rick Chasey wrote:

£26k per person in benefits?

Has to be part of it, although I'd imagine well under the total cost of employing someone.
Would be interesting to see the figures, if they exist.

jimmypippa

TheStone wrote:

DonDaddyD wrote:

The Tories have used buzz words like 'cuts, austerity, sacrifice' to great effect to firmly blame Labour for the "mess they've gotten us into". The one thing they failed to anticipate is the knock on effect all this doom, gloom and blame mongering has had on consumer confidence.

You could argue that both ways. Labour are saying: 'don't cut now, we're still in trouble'

The differences between the two parties are mostly in the language they use. The Tories talk of massive cuts as it's want their followers want to hear. Labour talk of no cuts as it's what their followers want to hear. In reality they were both going to make small cuts.

The cuts will probably have to get bigger. There's only so much printing and/or dumping our problems on the next generation possible.

This is true if you are talking about individuals, families, or even companies, but countries are different. Government revenue comes from taxes skimming off some economic activity.

The only way to fix the deficit is to ensure that there are fewer unemployed. All the public-sector workers whose jobs are threatened or cut will reduce their spending, and thus there will be a knock on to their local economies.

Similarly, taxes on spending (say an increase in the VAT rate from 17.5% to 20%) are going to slow the economy down more than taxes on income. Especially as the poor are more heavily affected by taxes on spending, as they spend more of their income than the rich.

I think that Keynes is vindicated now. Of course *proper* Keynesian economics means using the tax system to reduce the deficit during a boom - indeed the increased tax will slow the boom down by taking money out of the economy, and using this money to support the economy in the downturn. Of course Labour have historically been good at the spending part, whilst the Tories have been good at the tax-cutting part and neither have actually been good at the part where one is supposed to slow down a boom because it is unsustainable. N

TheStone

jimmypippa wrote:

I think that Keynes is vindicated now. Of course *proper* Keynesian economics means using the tax system to reduce the deficit during a boom - indeed the increased tax will slow the boom down by taking money out of the economy, and using this money to support the economy in the downturn. Of course Labour have historically been good at the spending part, whilst the Tories have been good at the tax-cutting part and neither have actually been good at the part where one is supposed to slow down a boom because it is unsustainable. N

What has vindicated Keynes? That we're cutting spending and not seeing growth?

I think the chase for growth is the mistake. We only had the growth due to a debt bubble. We shouldn't even being trying to stand still.

We're increasing government debt to fill the hole left from the private debt bubble. We're stealing GDP, opportunity and standard of living from the future to try to pretend that we deserve all the things we had over the last decade.

This is not a normal recession.

notsoblue

Has anyone speculated as to what our position would be now, a few years on, if we *hadn't* bailed out the banks and had instead just put the money into further debt reduction?

jds_1981

notsoblue wrote:

Has anyone speculated as to what our position would be now, a few years on, if we *hadn't* bailed out the banks and had instead just put the money into further debt reduction?

Well, suppose the contagion risk was as systemic as feared, without many banks left over to finance businesses most would have gone bust..

DonDaddyD

notsoblue wrote:

Has anyone speculated as to what our position would be now, a few years on, if we *hadn't* bailed out the banks and had instead just put the money into further debt reduction?

You bastard! That would mean that very nice man at the top of Scotland wouldn't have got that £900,000 bonus, Greg wouldn't be driving a porsche and a lot of people in the city wouldn't have sex - what with no longer being able to pay for it... [W1]

TheStone

notsoblue wrote:

Has anyone speculated as to what our position would be now, a few years on, if we *hadn't* bailed out the banks and had instead just put the money into further debt reduction?

Bare in mind that the banking bailouts were just further debt and they are also not included in the official debt figures.

It would have been very messy, but possibly a better solution. We need to lose the growth that resulted from the debt bubble before we can move forward again. The bailouts, the SLS, QE (printing), low IRs are all part of a massive bailout of a failed system. We're drifting into a zombie state, where everything could continue to tick down over many decades.

In reality, a middle ground might have made more sense. A bailout, but with much stricter conditions and investor and counterparty haircuts.

W1

DonDaddyD wrote:

notsoblue wrote:

Has anyone speculated as to what our position would be now, a few years on, if we *hadn't* bailed out the banks and had instead just put the money into further debt reduction?

You bastard! That would mean that very nice man at the top of Scotland wouldn't have got that £900,000 bonus, Greg wouldn't be driving a porsche and a lot of people in the city wouldn't have sex - what with no longer being able to pay for it... [W1]

Libel!

Actually, if we hadn't bailed out the banks, the whole country would most likely have collapsed. Seriously. All the mortgages would have been called in. There would be a run on the banks, but the physical money would run out within two hours or so. No-one would be getting paid, so no-one would go to work - so no power, water, petrol, food in the shops.....

greg66_tri_v2.0

W1 wrote:

DonDaddyD wrote:

notsoblue wrote:

Has anyone speculated as to what our position would be now, a few years on, if we *hadn't* bailed out the banks and had instead just put the money into further debt reduction?

You bastard! That would mean that very nice man at the top of Scotland wouldn't have got that £900,000 bonus, Greg wouldn't be driving a porsche and a lot of people in the city wouldn't have sex - what with no longer being able to pay for it... [W1]

Libel!

Actually, if we hadn't bailed out the banks, the whole country would most likely have collapsed. Seriously. All the mortgages would have been called in. There would be a run on the banks, but the physical money would run out within two hours or so. No-one would be getting paid, so no-one would go to work - so no power, water, petrol, food in the shops.....

One of the Dads at 66 minor's school is Brazilian, and lived there when the economy was all over the place. He explained one evening that when you get to the point where your currency is valueless, people move to a barter system.

Short point is that if you don't have skills that other people need on a daily basis, you ain't got no spending power.

He didn't think that lawyers had a great deal to offer in that environment.

W1

Greg66 wrote:

W1 wrote:

DonDaddyD wrote:

notsoblue wrote:

Has anyone speculated as to what our position would be now, a few years on, if we *hadn't* bailed out the banks and had instead just put the money into further debt reduction?

You bastard! That would mean that very nice man at the top of Scotland wouldn't have got that £900,000 bonus, Greg wouldn't be driving a porsche and a lot of people in the city wouldn't have sex - what with no longer being able to pay for it... [W1]

Libel!

Actually, if we hadn't bailed out the banks, the whole country would most likely have collapsed. Seriously. All the mortgages would have been called in. There would be a run on the banks, but the physical money would run out within two hours or so. No-one would be getting paid, so no-one would go to work - so no power, water, petrol, food in the shops.....

One of the Dads at 66 minor's school is Brazilian, and lived there when the economy was all over the place. He explained one evening that when you get to the point where your currency is valueless, people move to a barter system.

Short point is that if you don't have skills that other people need on a daily basis, you ain't got no spending power.

He didn't think that lawyers had a great deal to offer in that environment.

And he'd be right.

Luckily I'm a good shot.

notsoblue

W1 wrote:

Greg66 wrote:

W1 wrote:

DonDaddyD wrote:

notsoblue wrote:

Has anyone speculated as to what our position would be now, a few years on, if we *hadn't* bailed out the banks and had instead just put the money into further debt reduction?

You bastard! That would mean that very nice man at the top of Scotland wouldn't have got that £900,000 bonus, Greg wouldn't be driving a porsche and a lot of people in the city wouldn't have sex - what with no longer being able to pay for it... [W1]

Libel!

Actually, if we hadn't bailed out the banks, the whole country would most likely have collapsed. Seriously. All the mortgages would have been called in. There would be a run on the banks, but the physical money would run out within two hours or so. No-one would be getting paid, so no-one would go to work - so no power, water, petrol, food in the shops.....

One of the Dads at 66 minor's school is Brazilian, and lived there when the economy was all over the place. He explained one evening that when you get to the point where your currency is valueless, people move to a barter system.

Short point is that if you don't have skills that other people need on a daily basis, you ain't got no spending power.

He didn't think that lawyers had a great deal to offer in that environment.

And he'd be right.

Luckily I'm a good shot.

Professional Golfer?

Interesting point about a barter system. Would be quite an adjustment considering we all work in the service industry in this country.

W1

notsoblue wrote:

W1 wrote:

Greg66 wrote:

W1 wrote:

DonDaddyD wrote:

notsoblue wrote:

Has anyone speculated as to what our position would be now, a few years on, if we *hadn't* bailed out the banks and had instead just put the money into further debt reduction?

You bastard! That would mean that very nice man at the top of Scotland wouldn't have got that £900,000 bonus, Greg wouldn't be driving a porsche and a lot of people in the city wouldn't have sex - what with no longer being able to pay for it... [W1]

Libel!

Actually, if we hadn't bailed out the banks, the whole country would most likely have collapsed. Seriously. All the mortgages would have been called in. There would be a run on the banks, but the physical money would run out within two hours or so. No-one would be getting paid, so no-one would go to work - so no power, water, petrol, food in the shops.....

One of the Dads at 66 minor's school is Brazilian, and lived there when the economy was all over the place. He explained one evening that when you get to the point where your currency is valueless, people move to a barter system.

Short point is that if you don't have skills that other people need on a daily basis, you ain't got no spending power.

He didn't think that lawyers had a great deal to offer in that environment.

And he'd be right.

Luckily I'm a good shot.

Professional Golfer?

Interesting point about a barter system. Would be quite an adjustment considering we all work in the service industry in this country.

Hunter gatherer.

DonDaddyD

W1 wrote:

Actually, if we hadn't bailed out the banks, the whole country would most likely have collapsed. Seriously. All the mortgages would have been called in. There would be a run on the banks, but the physical money would run out within two hours or so. No-one would be getting paid, so no-one would go to work - so no power, water, petrol, food in the shops.....

AND

Mr66 wrote:

One of the Dads at 66 minor's school is Brazilian, and lived there when the economy was all over the place. He explained one evening that when you get to the point where your currency is valueless, people move to a barter system.

Short point is that if you don't have skills that other people need on a daily basis, you ain't got no spending power.

That would be so cool!

Women would become a commodity. "I give you two cows for your wife"

greg66_tri_v2.0

DonDaddyD wrote:

W1 wrote:

Actually, if we hadn't bailed out the banks, the whole country would most likely have collapsed. Seriously. All the mortgages would have been called in. There would be a run on the banks, but the physical money would run out within two hours or so. No-one would be getting paid, so no-one would go to work - so no power, water, petrol, food in the shops.....

AND

Mr66 wrote:

One of the Dads at 66 minor's school is Brazilian, and lived there when the economy was all over the place. He explained one evening that when you get to the point where your currency is valueless, people move to a barter system.

Short point is that if you don't have skills that other people need on a daily basis, you ain't got no spending power.

That would be so cool!

Women would become a commodity. "I give you two cows for your wife"

Yes, but in some people's eyes, men would become a commodity.

"Mah, you sure do have a purdy mouth" is not a something you'd want to hear as the opening gambit in a barter, is it?

rick_chasey

Greg66 wrote:

"Mah, you sure do have a purdy mouth" is not a something you'd want to hear as the opening gambit in a barter, is it?

You might.

noodles71

Do you really trust the two Ed's understand how to run the economy? After all, this all happened on their watch.
A great example was Stephen Hester who was brought in to rescue RBS.

On Friday 27th there was 59226304064 RBS shares in existence 84% owned by the taxpayer. Friday's trading price was as high as 0.28005 as Ed opened his mouth about the guys bonus. On Monday as Ed was celebrating victory for the taxpayer the price had reached 0.26433. Our stake went from £13 932 514 220.62 to £13 150 442 720.72 costing the taxpayer £782 071 499.90.

So he was willing to cost us near £800 million by upsetting the markets to score some cheap political points about saving less than a million on a contract his party had actually signed up to to rescue a bank that collapsed under their watch. Hester has reduced our liabities by over £600billion (thats a B not M) and been kicked around like a football for doing a f**king good job for a banker. Thank god Ed has kept his trap shut since and our stake has recovered.

sketchley

noodles71 wrote:

Do you really trust the two Ed's understand how to run the economy? After all, this all happened on their watch.
A great example was Stephen Hester who was brought in to rescue RBS.

On Friday 27th there was 59226304064 RBS shares in existence 84% owned by the taxpayer. Friday's trading price was as high as 0.28005 as Ed opened his mouth about the guys bonus. On Monday as Ed was celebrating victory for the taxpayer the price had reached 0.26433. Our stake went from £13 932 514 220.62 to £13 150 442 720.72 costing the taxpayer £782 071 499.90.

So he was willing to cost us near £800 million by upsetting the markets to score some cheap political points about saving less than a million on a contract his party had actually signed up to to rescue a bank that collapsed under their watch. Hester has reduced our liabities by over £600billion (thats a B not M) and been kicked around like a football for doing a f**king good job for a banker. Thank god Ed has kept his trap shut since and our stake has recovered.

I think I said something about this earlier and not taking a bonus could be seen a failure or lack of confidence.