Budget 2013

daviesee

DonDaddyD wrote:

I agree that they're politicians and we can expect little in the way of them taking responsiblity for anything... However, just because the last Government did it, does not make it OK that the current Government now does the same.

Two wrongs don't make a right

Better. :P

rhext

DonDaddyD wrote:

Isn't it about time that the current Government stop blaming the previous one for the state of the economy as it is and start to take ownership for their own actions, both their successes and failures.

I guess the answer to that depends on how long you think it's reasonable for them to take to fix the mess they were left with! I reckon they're still fixing the mess, which means that it's still OK for them to remind us of that when they have to do something unpopular.

rhext

jamesco wrote:

rhext wrote:

jamesco wrote:

........As other people have pointed out, if the state of Osborne's austerity economy is a success, what would his definition of failure look like?

Errrmmmm, Cyprus? Greece?

That's what Osborne would like to compare the UK with so it won't seem like he's doing such a bad job, but neither is remotely comparable. Both Cyprus & Greece are in the Euro zone, and therefore don't have the freedom to manipulate their own currencies. Cyprus has a banking sector worth 10 times GDP, much higher than even the unbalanced UK sector, which is built on shady Russian money. Greece has both much more debt and much worse tax collection. And most importantly, they're small economies which have no choice but to do what the ECB, IMF, et al tell them to do.

A better comparison for the UK would be with Scandinavian countries - in the EU but outside the Euro zone - or, further afield, Japan, Korea, New Zealand, US etc.

Don't get me wrong, I agree that the previous government stuffed up royally letting the housing & banking sectors go out of control, but oddly enough, Gordon Brown's reaction to the crisis was exactly right.

If you manipulate your currency too much, you pay in other ways: specifically runaway inflation (as imports of things like oil become increasingly expensive); and higher interest rates (from overseas lenders concerned about currency devaluation).

The bottom line here is that our government is spending far more than they receive in taxes and they're having to walk a tightrope between raising more cash via taxes (with consequent suppression of growth) and maintaining enough credibility to continue borrowing at sensible interest rates. I shudder at what might happen if we voted in a government who felt that the answer was to avoid making unpopular decisions and just to keep borrowing more in the hope that the problem will go away.

TheStone

DonDaddyD wrote:

Isn't it about time that the current Government stop blaming the previous one for the state of the economy as it is and start to take ownership for their own actions, both their successes and failures.

All the problems were caused during the previous government's reign, so they'll continue to blame them till it's fixed (which won't be any time soon)

The tories would've made most of the same mistakes, but that's not the point.

Wunnunda

Yesterday The Sun's website had a shortlived headline "Things Can Only Get Debtor". Which was nice.

TheStone

rhext wrote:

..... and maintaining enough credibility to continue borrowing at sensible interest rates.

I agree with you except the interest rates bit.

I'm not sure there's a real gilt market anymore. £375bn is sat in the Bank of England accruing no interest and will eventually be destroyed. Most of rest is held by British banks and pension funds because they have to.

There is no market to really test the government. They don't seem to care about inflation or the currency.