Tough Fiscal Advice

daviesee

It makes for hard reading....
http://www.bbc.co.uk/news/business-16918000

I can't say that I think he is wrong though

UndercoverElephant

daviesee wrote:

It makes for hard reading....
http://www.bbc.co.uk/news/business-16918000

I can't say that I think he is wrong though

"European workers are overpaid and unproductive, Dr Mahathir believes."

I take such exception to this implication, that I'm registering my disgust on an internet forum during work hours.

daviesee

UndercoverElephant wrote:

"European workers are overpaid and unproductive, Dr Mahathir believes."

I take such exception to this implication, that I'm registering my disgust on an internet forum during work hours.

:P :P :P :P

davis

I think he's probably right.

notsoblue

I think he's right about a lot of what he says. Its funny though that we still give so much aid to increase the standard of living for the populations of other countries that have more productive manufacturing industries because of the low standard of living.

TheStone

What he's really saying is that european currencies are overvalued compared the east. We consume most of what they produce, because of the value placed in our currencies (and therefore the work we do).

The future holds a drop in western standards of living. We'll consume less from the East as we can't afford it. The East should be able to start consuming what they produce and raise their own standards of living.

They don't need that much from us, so shouldn't rely on selling stuff to us.

rick_chasey

He's making a point about hypocrtical Western international economic policy than much else.

It's true that though say, a bus driver in Europe who earns €20,000 a year and a bus driver in India who earns €1,000 a year isn't necessarily 20 times a better driver. If anything, you could argue that the Indian bus driver has a tougher job.

lack of immigration keeps wages high...

Anonymous

hear, hear

sketchley

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

rjsterry

So, Asia's economic success is built on cheap labour: who thinks that Asian workers are going to be happy sticking with low wages once all the consumable products that were being sold to Europe and the US are marketed at them?

I don't know whether there is a credible economic model where the whole world is on 'western' wages, and consuming 'western' levels of stuff, never mind whether the planet could support that level of exploitation of raw materials.

rick_chasey

rjsterry wrote:

So, Asia's economic success is built on cheap labour: who thinks that Asian workers are going to be happy sticking with low wages once all the consumable products that were being sold to Europe and the US are marketed at them?

I don't know whether there is a credible economic model where the whole world is on 'western' wages, and consuming 'western' levels of stuff, never mind whether the planet could support that level of exploitation of raw materials.

They're more content with their wages (it seems at face value anyway), than we are with ours...

TheStone

rjsterry wrote:

I don't know whether there is a credible economic model where the whole world is on 'western' wages, and consuming 'western' levels of stuff, never mind whether the planet could support that level of exploitation of raw materials.

This will happen, but once we're all on western wages, imports from the east will not be as cheap, so we won't be able to consume so much.

Raw materials is a separate issue. They will eventually start to run out and become very expensive relative to wages.

daviesee

rjsterry wrote:

So, Asia's economic success is built on cheap labour: who thinks that Asian workers are going to be happy sticking with low wages once all the consumable products that were being sold to Europe and the US are marketed at them?

I don't know whether there is a credible economic model where the whole world is on 'western' wages, and consuming 'western' levels of stuff, never mind whether the planet could support that level of exploitation of raw materials.

In an ideal world there would be an end to cheap (slave?) labour. :evil:
Westerners buy too much "stuff" :oops: For some there is a massive differential between what they need and what they want. Myself included.
The planet couldn't stand it. :evil:

I think in an ideal world, westerners would cut out a whole lot of waste and the rest would get a raised standard of living. Can't see it though.... :evil:

rjsterry

Rick Chasey wrote:

rjsterry wrote:

So, Asia's economic success is built on cheap labour: who thinks that Asian workers are going to be happy sticking with low wages once all the consumable products that were being sold to Europe and the US are marketed at them?

I don't know whether there is a credible economic model where the whole world is on 'western' wages, and consuming 'western' levels of stuff, never mind whether the planet could support that level of exploitation of raw materials.

They're more content with their wages (it seems at face value anyway), than we are with ours...

For now... I don't think that will last once the marketing is aimed inwards rather than outwards. They'll also want better healthcare, schools and so on, which will have to be paid for through higher taxes, and round we go.

The other thing that gets missed when the massive rates of growth for some African and Asian countries are compared to western Europe is the level they are starting from. To pick an example out of the air Botswana's GDP grew by 30% in a year, but that was from $11.5bn to $14.9bn, as compared to the UK GDP of $2.25tn (2009 and 2010 figures).

UndercoverElephant

rjsterry wrote:

To pick an example out of the air Botswana's GDP grew by 30% in a year, but that was from $11.5bn to $14.9bn, as compared to the UK GDP of $2.25tn (2009 and 2010 figures).

To pick apart the same example, Botswana has a population of about 2 million as opposed to the UK's 60 million. They have roughly half the GDP per capita of somewhere like Greece, or about one-third that of the UK. If that level of growth is sustainable, it won't take long before they overtake Greece, and not that much longer after that before they overtake the UK.

rjsterry

UndercoverElephant wrote:

rjsterry wrote:

To pick an example out of the air Botswana's GDP grew by 30% in a year, but that was from $11.5bn to $14.9bn, as compared to the UK GDP of $2.25tn (2009 and 2010 figures).

To pick apart the same example, Botswana has a population of about 2 million as opposed to the UK's 60 million. They have roughly half the GDP per capita of somewhere like Greece, or about one-third that of the UK. If that level of growth is sustainable, it won't take long before they overtake Greece, and not that much longer after that before they overtake the UK.

Some stats to get your teeth into

Compare the figures for China, India, UK and Brazil by GDP and GDP per capita, and see how they jump around. China has by far the highest GDP, but its GDP per capita is second lowest - I can't see how, with such a vast population growth, China or India's living standards will ever approach current western standards.

rick_chasey

rjsterry wrote:

UndercoverElephant wrote:

rjsterry wrote:

To pick an example out of the air Botswana's GDP grew by 30% in a year, but that was from $11.5bn to $14.9bn, as compared to the UK GDP of $2.25tn (2009 and 2010 figures).

To pick apart the same example, Botswana has a population of about 2 million as opposed to the UK's 60 million. They have roughly half the GDP per capita of somewhere like Greece, or about one-third that of the UK. If that level of growth is sustainable, it won't take long before they overtake Greece, and not that much longer after that before they overtake the UK.

Some stats to get your teeth into

Compare the figures for China, India, UK and Brazil by GDP and GDP per capita, and see how they jump around. China has by far the highest GDP, but its GDP per capita is second lowest - I can't see how, with such a vast population growth, China or India's living standards will ever approach current western standards.

Happiness (in economic terms) tends to come from growth, not affluence though.

Stevo_666

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Something that still seems to be lost on a lot of continental governments as well as the UK Labour party.

rick_chasey

Stevo 666 wrote:

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Something that still seems to be lost on a lot of continental governments as well as the UK Labour party.

So why did Osbourne exceed his own borrowing target this last budget?

:P cheap political points will only derail threads :P

W1

Stevo 666 wrote:

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Something that still seems to be lost on a lot of continental governments as well as the UK Labour party.

De-rail alert - I've done the hard work and earned a charity of your choice a fiver from Brekkie.

This thread:
viewtopic.php?f=40012&t=12743909&start=180

Go and collect.

No charge (cos I'm nice like that).

Stevo_666

Rick Chasey wrote:

Stevo 666 wrote:

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Something that still seems to be lost on a lot of continental governments as well as the UK Labour party.

So why did Osbourne exceed his own borrowing target this last budget?

:P cheap political points will only derail threads :P

Pot, Kettle, Black ? ;-)

rick_chasey

Stevo 666 wrote:

Rick Chasey wrote:

Stevo 666 wrote:

Sketchley wrote:

Reminds me of stunning peace of advice from a debt expert on BBC news a few years ago.

Reporter "What is your one peace of advice for people trying to get out of debt"
Debt Expert "Spend less than you earn"

Something that still seems to be lost on a lot of continental governments as well as the UK Labour party.

So why did Osbourne exceed his own borrowing target this last budget?

:P cheap political points will only derail threads :P

Pot, Kettle, Black ? ;-)

Indeed so :P

Name a developed nation that hasn't run a deficit in 2010/11?

TheStone

Rick Chasey wrote:

Name a developed nation that hasn't run a deficit in 2010/11?

Norway?
Maybe not a fair comparison.

rick_chasey

TheStone wrote:

Rick Chasey wrote:

Name a developed nation that hasn't run a deficit in 2010/11?

Norway?
Maybe not a fair comparison.

Haha.

Where's W1?

notsoblue

TheStone wrote:

Rick Chasey wrote:

Name a developed nation that hasn't run a deficit in 2010/11?

Norway?
Maybe not a fair comparison.

They only managed that because they ruthlessly cut welfare budgets, restricted immigration, abolished subsidised further education and increased the motorway speed limit though. Modern economies can't afford stuff like that or to be restricted to 70mph.

Stevo_666

TheStone wrote:

Rick Chasey wrote:

Name a developed nation that hasn't run a deficit in 2010/11?

Norway?
Maybe not a fair comparison.

For the love of god, don't get him started on Scandanavia :-)

Depends how you define 'deficit' but here it is by current account balance, looks like there were over 50 and you'll be delighted to know that Norway was 5th on that measurement...
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_current_account_balance

rick_chasey

Stevo 666 wrote:

TheStone wrote:

Rick Chasey wrote:

Name a developed nation that hasn't run a deficit in 2010/11?

Norway?
Maybe not a fair comparison.

For the love of god, don't get him started on Scandanavia :-)

Depends how you define 'deficit' but here it is by current account balance, looks like there were over 50 and you'll be delighted to know that Norway was 5th on that measurement...
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_current_account_balance

That's BOP though (measures the flow in and out of the country), nothing to do with gov't deficits!

Low BOPs means heavy importers, High BOPs mean high exporters.

rjsterry

Stevo 666 wrote:

TheStone wrote:

Rick Chasey wrote:

Name a developed nation that hasn't run a deficit in 2010/11?

Norway?
Maybe not a fair comparison.

For the love of god, don't get him started on Scandanavia :-)

Depends how you define 'deficit' but here it is by current account balance, looks like there were over 50 and you'll be delighted to know that Norway was 5th on that measurement...
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_current_account_balance

Interestingly, there seems to be little correlation between CAB and GDP or GDP per capita - China is at one end, India and Brazil are at the other. And wow, does the USA owe a lot?

rick_chasey

rjsterry wrote:

Stevo 666 wrote:

TheStone wrote:

Rick Chasey wrote:

Name a developed nation that hasn't run a deficit in 2010/11?

Norway?
Maybe not a fair comparison.

For the love of god, don't get him started on Scandanavia :-)

Depends how you define 'deficit' but here it is by current account balance, looks like there were over 50 and you'll be delighted to know that Norway was 5th on that measurement...
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_current_account_balance

Interestingly, there seems to be little correlation between CAB and GDP or GDP per capita - China is at one end, India and Brazil are at the other. And wow, does the USA owe a lot?

See above :P

rjsterry

Rick Chasey wrote:

rjsterry wrote:

Stevo 666 wrote:

TheStone wrote:

Rick Chasey wrote:

Name a developed nation that hasn't run a deficit in 2010/11?

Norway?
Maybe not a fair comparison.

For the love of god, don't get him started on Scandanavia :-)

Depends how you define 'deficit' but here it is by current account balance, looks like there were over 50 and you'll be delighted to know that Norway was 5th on that measurement...
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_current_account_balance

Interestingly, there seems to be little correlation between CAB and GDP or GDP per capita - China is at one end, India and Brazil are at the other. And wow, does the USA owe a lot?

See above :P

It's not the amount of debt, but whether you are good for the money.

rick_chasey

rjsterry wrote:

Rick Chasey wrote:

rjsterry wrote:

Stevo 666 wrote:

TheStone wrote:

Rick Chasey wrote:

Name a developed nation that hasn't run a deficit in 2010/11?

Norway?
Maybe not a fair comparison.

For the love of god, don't get him started on Scandanavia :-)

Depends how you define 'deficit' but here it is by current account balance, looks like there were over 50 and you'll be delighted to know that Norway was 5th on that measurement...
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_current_account_balance

Interestingly, there seems to be little correlation between CAB and GDP or GDP per capita - China is at one end, India and Brazil are at the other. And wow, does the USA owe a lot?

See above :P

It's not the amount of debt, but whether you are good for the money.

BOP and CAB have nothing to do with debt.

It's just a measure of the flow of spending in and out of the country.

Americans do a lot of imporing, to the tune of 600BN (offset against exports).