It's a double dip!
Comments
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Frank the tank wrote:No doubt it will take time for the ecconomy to come good, but in answer to the stone, the reason a contraction is being questioned is because all the cut backs and austerity measures being inflicted on the masses was to avoid such an occurance according to gorgeous George and Dave the rave. And it doesn't appear to be working, that's why.
But surely the cuts will take some time to work? Short term the announcement of them was important to keep interest rates down but in reality they are only just starting to come into affect.0 -
Less spending = less GDP.Pross wrote:Frank the tank wrote:No doubt it will take time for the ecconomy to come good, but in answer to the stone, the reason a contraction is being questioned is because all the cut backs and austerity measures being inflicted on the masses was to avoid such an occurance according to gorgeous George and Dave the rave. And it doesn't appear to be working, that's why.
But surely the cuts will take some time to work? Short term the announcement of them was important to keep interest rates down but in reality they are only just starting to come into affect.
That's the short of it. Gov't spending is a component of GDP.
A shrinking economy means shrinking tax income and increased borrowing.
Once the economy starts shrinking, cuts become self defeating.0 -
Hmm, this is why I don't get involved with politics, reality just has no place in it!
Frank, nothing significant has changed. Some bad press and some pointless childish jeers and whistles in the HoC does not alter the real world in any way whatsoever, despite what MP's and the media would have us believe (god I wish they'd stop the Jeers, nothing crushes my national pride more!). GB was 0 - 0.1% gowing and now it's 0 - -0.1% shrinking - it's minescule! No party would haev been able to alter that, without increasing spending - and no party said they would increase spending, not one!We're in danger of confusing passion with incompetence
- @ddraver0 -
Rick Chasey wrote:Less spending = less GDP.
That's the short of it. Gov't spending is a component of GDP.
But government spending is the only component of GDP that has risen since 2008.
We can of course get into more and more debt having the government spend more and more money that we haven't earned, but that's just stealing from our children. Pure greed.
Or we can accept that we made a mistake for a decade and have to start living within our means and only consume what our production allows us to afford (this includes everything ... health, education, ipads ... everything)
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LeicesterLad wrote:Came on here to see if i could add to the discussion any. I got a 'U' at maths GCSE. This thread is like a nightmare. I'm going now.
Completely off topic, but I really like your most recent blog post. I agree, I would say Wiggins is deffo shaping up to be the favourite!"That's it! You people have stood in my way long enough. I'm going to clown college! " - Homer0 -
MaxwellBygraves wrote:LeicesterLad wrote:Came on here to see if i could add to the discussion any. I got a 'U' at maths GCSE. This thread is like a nightmare. I'm going now.
Completely off topic, but I really like your most recent blog post. I agree, I would say Wiggins is deffo shaping up to be the favourite!
Cheers!
Ill pay you later! 0 -
So, we're officially in recession again
we have not come out of recession since it started a few years back............it`s all statistics and a rose coloured view from the SE power hub. As the Tory woman MP (forgot her name) said about Cameron he hasn`t a clue about real life, cost of milk etc. Why is he gadding about still trying to meddle in other countries, donating billions to IMF when this country struggles, ? Yes think bigger picture but also think charity begins at home. You can`t help others out when you`re in a weak position yourself.0 -
OK - first post other than asking about cleats and what second hand bike I should buy but here goes:
1) Almost all politicians, of whatever hue, are self serving w*nkers oblivious to the ways of the outside world and what happens in it.
2) There are two* financial problems facing our country.
Firstly the problems caused by the collapse of the banks precipitated by Lehman Bros. that has lead to a worldwide crisis of Quazillions of unsecured debt that needs to be repaid/written off or whatever. The present opposition point to this as being "THE" financial problem with their references to the worldwide economic downturn every time they are challenged on their record but this is not the only problem because . . .
Secondly, since 1997 Blair, Brown, Balls, Millibands etc were party to an unsustainable increase in the size of the public sector (effectively creating turkeys that would never vote for Christmas), they raided pension pots, sold our country's assets, courted PFI investors (who also need paying back!) and brought in hundreds of stealth taxes to fund it all - they were as guilty as any plasma screen buying, 110% mortgage borrowing commoner in their profligacy with money they hadn't got. Why did they do this? In order that the books looked good and election victory would follow year on year. (Oh, lets not forget they had to fund the two wars they committed us to)
* There are actually 3 as the Eurozone crisis could bring the whole house down.
3) The cuts in public spending have to happen - both sides are agreed on this but do not agree on how far and how fast. The issue that not many seem to realise is (1) above! It has nothing to do with political ideology, logic, or considered mathematics and everything to do with political ambition. The Conservative (and Lib coalition) party have 4 years in which to make things look better if they are to stand any chance of being re-elected at the next election and see a regime of fast, deep cuts as the best way to achieve this in the short term. The Labour party will always be banging the drum about the cuts being too deep, too fast. Why? because the slower they are made, the more chance of little difference being made to the country's finances in the present parliament and therefore the more chance they (Labour) will get in next time round.
One thing is for sure, the money is not there so cuts have to be made.
4) We have a presently decreasing private sector funding an ever increasing public sector so there is not going to be any money around to change this trend until: either the public sector is drastically reduced, or the private sector gets drastically busier.
5) I can't remember the last time I heard a politician give a straight "yes" / "no" answer to any question.
I don't know the figures but I would love to see how many of, say, the last 6 cabinets have had jobs outside of the political sphere. If, as I suspect, there are very few, I would like to ask them on what grounds they believe they can or could run this country.
That is all.Wilier Izoard XP0 -
laurentian wrote:It has nothing to do with political ideology
Good post. I particularly agree with this. Ideology is overplayed by the press (and voters). Whoever was in power, much the same would be happening. Labour had virtually the same housing benefit cuts planned. Although their proposed cuts were less quick than the tories proposed, they were deeper than what's actually happening.
The public sector didn't cause the problems, but was extended on the back of the debt boom which caused the problem. It's unsustainable and can't continue.0 -
TheStone wrote:Rick Chasey wrote:Less spending = less GDP.
That's the short of it. Gov't spending is a component of GDP.
But government spending is the only component of GDP that has risen since 2008.
We can of course get into more and more debt having the government spend more and more money that we haven't earned, but that's just stealing from our children. Pure greed.
Or we can accept that we made a mistake for a decade and have to start living within our means and only consume what our production allows us to afford (this includes everything ... health, education, ipads ... everything)
Couldn't agree more, and that is going to be painful for a lot of people to accept, politicians included. I personally think the government should only be allowed to run a deficeit in exceptional circumstances approved by parliament. If not, they have to balance the books or god forbid even a surplus!0 -
The thing I don't understand in all of this 'they're all shysters who cut services purely because they enjoy it' debate is where the critics think the money's coming from. The extreme example is the Greek protesters throwing rocks because the government are cutting pensions. But the Greek government know that if they carry on spending, at some point their creditors are going to turn around and say 'no more money' - then what?
If you take away the noise, I don't see much that this government is doing that I fundamentally disagree with. If you haven't got the money coming in then it makes sense to cut spending, and given 'the poor' are the main consumers of goverment spending then they're bound to be disproportionately affected by cuts. So you also take steps to increase the money coming in. Well, maybe a handful of super-wealthy are superficially better off - at least until the Inland Revenue get round to closing down the truly abusive tax avoidance schemes that have some of them paying less than 20% on their incomes, but speaking as a higher-rate taxpayer, I can certainly confirm that they've taken a wedge off me over the past year or so, and that wedge gets even bigger next year.
And as for the 'granny' tax, I'd contend that most of the pensioners currently on over £10,000 have been beneficiaries of an unprecedented period of growth over the last 30-40 years, which has seen wealth shifted more and more away from the younger generation. Why on earth should they receive more generous personal tax allowances than anyone else - their pension pots were built up from tax-exempt income after all, and most of their contributions were also protected from tax on investment income, yet another privilege taken away from the younger generation? Why should they be protected from the economic turmoil which has everyone else in the country tightening their belts? Especially against a background where the basic state pension has just gone up by over 5% - far more than it would have done under the old labour escalation rules and shifting cash to the pensioners who do not have independent incomes.0 -
rhext wrote:The thing I don't understand in all of this 'they're all shysters who cut services purely because they enjoy it' debate is where the critics think the money's coming from.
When the government finds the funds it needs to pay for all of its pet projects, they're on a very sticky wicket when it comes to defending cuts in services. Take free schools for example - large amounts of taxpayers' money is going to be spent on opening new schools which are run by complete amateurs and are allowed to recruit teachers with no training and no experience.
They then tell the public that their services need to be cut. :roll:0 -
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johnfinch wrote:rhext wrote:The thing I don't understand in all of this 'they're all shysters who cut services purely because they enjoy it' debate is where the critics think the money's coming from.
When the government finds the funds it needs to pay for all of its pet projects, they're on a very sticky wicket when it comes to defending cuts in services. Take free schools for example - large amounts of taxpayers' money is going to be spent on opening new schools which are run by complete amateurs and are allowed to recruit teachers with no training and no experience.
They then tell the public that their services need to be cut. :roll:
Privatisation of the education system by stealth.Purveyor of "up"
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Peddle Up! wrote:johnfinch wrote:rhext wrote:The thing I don't understand in all of this 'they're all shysters who cut services purely because they enjoy it' debate is where the critics think the money's coming from.
When the government finds the funds it needs to pay for all of its pet projects, they're on a very sticky wicket when it comes to defending cuts in services. Take free schools for example - large amounts of taxpayers' money is going to be spent on opening new schools which are run by complete amateurs and are allowed to recruit teachers with no training and no experience.
They then tell the public that their services need to be cut. :roll:
Privatisation of the education system by stealth.
I know. And conveniently the government can find money for it.0 -
johnfinch wrote:Peddle Up! wrote:johnfinch wrote:rhext wrote:The thing I don't understand in all of this 'they're all shysters who cut services purely because they enjoy it' debate is where the critics think the money's coming from.
When the government finds the funds it needs to pay for all of its pet projects, they're on a very sticky wicket when it comes to defending cuts in services. Take free schools for example - large amounts of taxpayers' money is going to be spent on opening new schools which are run by complete amateurs and are allowed to recruit teachers with no training and no experience.
They then tell the public that their services need to be cut. :roll:
Privatisation of the education system by stealth.
I know. And conveniently the government can find money for it.
See my earlier post for some perspective.Purveyor of "up"0 -
ddraver wrote:Can you give us the gist? I don't care enough about an internet forum discussion to watch an hour long program!
No wish to offend, but understanding events that govern my, and my family's future is worth investing an hour or so.
To answer your question regarding the gist - Everyone talks about money, but do you know what money is? Do you?Purveyor of "up"0 -
Peddle Up! wrote:
That film is nonsense. It's been around for a while. At best disingenuous, but in reality lies.
I think banks and leverage of money (debt) have caused all of the problems we now have, but that film is cr@p.
I could go on massively, but if you have any questions, please ask.0 -
TheStone wrote:Peddle Up! wrote:
That film is nonsense. It's been around for a while. At best disingenuous, but in reality lies.
I think banks and leverage of money (debt) have caused all of the problems we now have, but that film is cr@p.
I could go on massively, but if you have any questions, please ask.
I'm always keen to learn so please continue.Purveyor of "up"0 -
rhext wrote:Well, maybe a handful of super-wealthy are superficially better off - at least until the Inland Revenue get round to closing down the truly abusive tax avoidance schemes that have some of them paying less than 20% on their incomes,
It sounds like you have fallen into believing the government "spin" on this subject about these "tax avoidance schemes" such as an Enterprise Investment Scheme or Venture Capital Trusts which have both been mentioned in recent weeks by the politicians as tax avoidance.
These were introduced in 1994 / 1995 (under a Conservative government strangely) as a way of encouraging the more wealthy individuals to invest into small, high risk companies who wouldnt normally be able to raise finances through other means such as the banks. Given that this is likely to create jobs and hence taxes, plus help lower unemployment, i see it as very strange that the government are trying to poison the nation's minds to these scheme's now!! They're very quick to roll out the stats as to how much tax is being "avoided" but not so quick to tell us how many thousands of successful companies and jobs have been created!!0 -
Yep I would also love to see how you try and disprove the analysis that film provides - I watched it 6 or 7 years ago and it seems almost prophetic now, doesn't it.Peddle Up! wrote:TheStone wrote:Peddle Up! wrote:
That film is nonsense. It's been around for a while. At best disingenuous, but in reality lies.
I think banks and leverage of money (debt) have caused all of the problems we now have, but that film is cr@p.
I could go on massively, but if you have any questions, please ask.
I'm always keen to learn so please continue. 0 -
Peddle Up! wrote:I'm always keen to learn so please continue.
The video makes out that a bank simply creates a loan from thin air, which is not true. They must have the deposits or share capital or have borrowed the money from somewhere else. The creation of a loan does expand the broad money supply, but this is really double counting of the same money.
For example
PersonA has £100
Bank has £0
At this stage the bank cannot create a loan, they have no money. So PersonA deposits with the Bank.
PersonA has £0
Bank has £100
The Bank can now loan £100, minus what's the regulators insist they keep (say 10%). So
PersonA has £0
Bank has £10
PersonB had £90.
There's still only £100 in existence, but PersonA thinks they have £100 (on deposit) and PersonB actually has £90, so broad money is now £190.
The action of creating the loan has expanded the money supply. This example can continue.
All banks are nearly always illiquid. If PersonA turned up for their money the bank does not have it, it has lent it to PersonB. The fractional reserve (now capital adequacy ratio, which is slightly different, but the same maths) should mean that the bank has enough cash available to deal with day to day requests. It's also some insurance against default. In this example, if PersonB fails to repay the loan, the Bank can't pay PersonA and is insolvent.
Then the taxpayer* pays!!!
* and by taxpayer, I mean future taxpayer.0 -
TheStone wrote:Peddle Up! wrote:I'm always keen to learn so please continue.
The video makes out that a bank simply creates a loan from thin air, which is not true. They must have the deposits or share capital or have borrowed the money from somewhere else. The creation of a loan does expand the broad money supply, but this is really double counting of the same money.
For example
PersonA has £100
Bank has £0
At this stage the bank cannot create a loan, they have no money. So PersonA deposits with the Bank.
PersonA has £0
Bank has £100
The Bank can now loan £100, minus what's the regulators insist they keep (say 10%). So
PersonA has £0
Bank has £10
PersonB had £90.
There's still only £100 in existence, but PersonA thinks they have £100 (on deposit) and PersonB actually has £90, so broad money is now £190.
The action of creating the loan has expanded the money supply. This example can continue.
All banks are nearly always illiquid. If PersonA turned up for their money the bank does not have it, it has lent it to PersonB. The fractional reserve (now capital adequacy ratio, which is slightly different, but the same maths) should mean that the bank has enough cash available to deal with day to day requests. It's also some insurance against default. In this example, if PersonB fails to repay the loan, the Bank can't pay PersonA and is insolvent.
Then the taxpayer* pays!!!
* and by taxpayer, I mean future taxpayer.
ahhh.. got to love the fractional reserve banking system -> we wouldn't be where we are today (and i mean that in a good way) without debt.. so lets stop hating the bankers.
I blame politicians for not setting adequate regulations and not setting any terms when they do quantitative easing -> because the banks just hold the excess cash in reserve... and don't inject it back into the economy via lending.0 -
Wirral_Paul wrote:rhext wrote:Well, maybe a handful of super-wealthy are superficially better off - at least until the Inland Revenue get round to closing down the truly abusive tax avoidance schemes that have some of them paying less than 20% on their incomes,
It sounds like you have fallen into believing the government "spin" on this subject about these "tax avoidance schemes" such as an Enterprise Investment Scheme or Venture Capital Trusts which have both been mentioned in recent weeks by the politicians as tax avoidance.
Well, the one I was thinking of was the one where a handful of multi-millionaires were buying film rights and then selling them back and claiming tax deduction on losses - generating effective returns on investment of about 1,000% tax-free. But whichever way you look at it, if you've got a bunch of people paying less than 20% on their income then changing from a 50% to a 45% marginal rate for high earners is a bit academic because none of them are paying it anyway.
I listen to this stuff about investments and all I hear is 'Leave the super-rich alone: they know exactly where to put their money for the good of society and should be given the freedom to choose how it's spent. As for you, you're far too stupid to be trusted to spend your surplus cash on those kind of investments (or don't have enough of it to make it worth the accountant's while to dream up a good wheeze for you), so pay your bl***dy tax'. I'm actually in favour of the 50p to 45p move despite the fact I'm not in that bracket, and I'd even be supportive of an eventual move to 40p...but I do want everyone who earns that kind of mony to pay tax at that rate!!!0 -
An interersting aspect of the financial markets is the frequent use of the word "confidence". Confidence is not a tangible asset, like crops or minerals might be, it is a notion and nothing more, yet the lack of "confidence" in the markets is preventing people from investing (although this is not the sole reason obviously). So where do we make confidence?0
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johnfinch wrote:Peddle Up! wrote:johnfinch wrote:rhext wrote:The thing I don't understand in all of this 'they're all shysters who cut services purely because they enjoy it' debate is where the critics think the money's coming from.
When the government finds the funds it needs to pay for all of its pet projects, they're on a very sticky wicket when it comes to defending cuts in services. Take free schools for example - large amounts of taxpayers' money is going to be spent on opening new schools which are run by complete amateurs and are allowed to recruit teachers with no training and no experience.
They then tell the public that their services need to be cut. :roll:
Privatisation of the education system by stealth.
I know. And conveniently the government can find money for it.
That's just different ideology: the government believe that these schools will provide better education at lower cost. You don't So their quality improvement programme is your 'pet project'. I suspect the only way of finding out the truth will be to try it. But for every person who's saying '....complete amateurs...' there's another person saying '....free schools from beaurocracy and let teachers teach...' Ironically, a fair few of them are the same people.
The 'privatisation' one is interesting, because 'privatisation by stealth' is an accusation which gets trotted out regularly by people opposing government policy as if it were a bad thing. But as long as the service is free at point of delivery, I'm not sure that it matters that segments of it are delivered by private companies if they can do it cheaper and better than a state-owned outfit. Schools use a lot of toilet rolls: should the goverenment therefore own forests, construct paper mills and packaging plants, own and manage a fleet of delivery trucks etc etc or does it perhaps make more sense to buy them in? If they do buy them in, then should the owners of the company that produces them go without profit simply because it happens to be a government department that buys their product? I don't care: if it's cheaper and more convenient to buy them in then do so, but please don't try to charge me every time one of my kids goes to the loo!0 -
Surely anyone who's ever seen It's a Wonderful Life understands this?TheStone wrote:For example
PersonA has £100
Bank has £0
At this stage the bank cannot create a loan, they have no money. So PersonA deposits with the Bank.
PersonA has £0
Bank has £100
The Bank can now loan £100, minus what's the regulators insist they keep (say 10%). So
PersonA has £0
Bank has £10
PersonB had £90.
There's still only £100 in existence, but PersonA thinks they have £100 (on deposit) and PersonB actually has £90, so broad money is now £190.
The action of creating the loan has expanded the money supply. This example can continue. 0 -
rhext wrote:johnfinch wrote:Peddle Up! wrote:johnfinch wrote:rhext wrote:The thing I don't understand in all of this 'they're all shysters who cut services purely because they enjoy it' debate is where the critics think the money's coming from.
When the government finds the funds it needs to pay for all of its pet projects, they're on a very sticky wicket when it comes to defending cuts in services. Take free schools for example - large amounts of taxpayers' money is going to be spent on opening new schools which are run by complete amateurs and are allowed to recruit teachers with no training and no experience.
They then tell the public that their services need to be cut. :roll:
Privatisation of the education system by stealth.
I know. And conveniently the government can find money for it.
That's just different ideology: the government believe that these schools will provide better education at lower cost. You don't So their quality improvement programme is your 'pet project'. I suspect the only way of finding out the truth will be to try it. But for every person who's saying '....complete amateurs...' there's another person saying '....free schools from beaurocracy and let teachers teach...' Ironically, a fair few of them are the same people.
The 'privatisation' one is interesting, because 'privatisation by stealth' is an accusation which gets trotted out regularly by people opposing government policy as if it were a bad thing. But as long as the service is free at point of delivery, I'm not sure that it matters that segments of it are delivered by private companies if they can do it cheaper and better than a state-owned outfit. Schools use a lot of toilet rolls: should the goverenment therefore own forests, construct paper mills and packaging plants, own and manage a fleet of delivery trucks etc etc or does it perhaps make more sense to buy them in? If they do buy them in, then should the owners of the company that produces them go without profit simply because it happens to be a government department that buys their product? I don't care: if it's cheaper and more convenient to buy them in then do so, but please don't try to charge me every time one of my kids goes to the loo!
No problem with that, if I trusted that the Gov was working in the interests of the electorate, but I'm afraid I don't...Purveyor of "up"0
