Honest question to Red Kestrel...

So my question is why would you be so dead set against a Government prepared to do just that?

The debt and the deficit was caused by total trust in “the markets”. And nothing else mattering.

 

"The current government has borrowed more money than every Labour administration that has ever existed." As a result of every Labour administration ramping up the deficit before leaving Office
!

Actually I studied economics and continue to take an interest in it.

You make accusations without explaining why it is "waffle and ballax". Please explain to me why you believ that is the case
For example you can take a statistic showing over many years Conservative carried a higher national debt than Labour. However that figure it turns out needs to be not weighted for inflationgiven the different eras/duration different parties were in office. If , as the last time Labour leave an annual deficit of £156bn please explain how the nation debt under the next administration (be it Labour or Conservative ) will not continue to grow until the annual deficit is returned to surplus and the debt can be reduced. Two ways only increase growth and productivity or raise taxes and introduce austerity.
You appear to let your political bias interfere with your reasoning. Putting aside the fact that burden of austerity has indeed been born by most of us whilst the wealthy have endured no hardship how would you argue that borrowing huge sums now and spending it on re nationalising services and paying higher wages would increase productivity and growth to enable that increased debt interest to be serviced?

 

Totally agree and that was the point I was making. Even outsourcing some elements of public services can be ( and have been) abused without proper controls and constraints in place. If managed correctly though there is a place for it. Outsourcing for profiteering and croneyism is the issue.

 

ANNUAL £156bn deficit when they left office. Gold reserves sold off ( thanks Gordon) and low productivity (all in spite of being in the...err...wonderful EU)
Of course debt will grow until the deficit can be brought down. How long do you think it takes a Govt to eliminate a deficit that size in the post 2008 crash climate? Certainly taken longer than Gideon's 2015 estimate .

 

Even talking about things solely in terms of a liberal capitalist economy, surely the idea is that we increase the national debt in order to invest in areas that will deliver stronger growth. If I borrow a thousand pounds and use it to expand my business then I think most of us would agree that to be an acceptable debt to carry (presuming that I've done my due diligence). If I borrow it and spend the lot on a holiday, it's probably not (unless it's a really good holiday). I'm inclined to think that investing money in education, social welfare and - in particular - infrastructure will allow the economy to grow much faster than one whose potential is artificially repressed by austerity and right wing politics.

Predicting the future is notoriously difficult. But one thing I do know, from hard experience, is that growth obtained from cutting costs is almost always less solid than growth obtained from investment.

(It is, of course, complete nonsense to compare the finances of a small business to those of a sovereign nation. However, we've got cabinet ministers regularly comparing the debt of a sovereign nation to the balance on a personal credit card. If they're allowed to pretend to be economically illiterate in order to get a point across I don't see why I shouldn't be able to do the same.)

 

The problem with your argument Tekktyke is that austerity is not leading to better or more prosperous times for the majority. Our growth rate is starting to lag behind the other major economies (including the EU). Or put another way, we are no closer to a "country that works for everyone". And my view is that with no customs union/arrangement, we are headed for more economic downturn. Trump is too unreliable to base our future trading arrangements on and increased trade with China/India will lead us further down the path to being a low wage economy. I know you take a different view about the post-brexit "opportunities". The dangers with a socialist outlook and increased spending are that borrowing will rocket, but I reckon that the people (especially the young) are so fed up with their diminished prospects that they are willing to give Jezza's roulette wheel a spin. I'm glad I no longer work!

 

Just read an article in FT that backs up our decision to sell off gold - saying that it's pointless rich countries hanging on to it. This is always brought up but what about all the industries and services that were sold / privatised at rock bottom prices. Gold lost 5 billion - wonder how much selling off industries cost.

https://www.ft.com/content/5788dbac-7680-11e0-b05b-00144feabdc0

 

Calling Brown economically illiterate for selling off the gold is a bit like calling George Osborne an idiot for not ploughing a couple of billion quid into bitcoin.

 

Wasn't Brown only ever chancellor to deliver 3 surplus budgets

 

I agree with the first half of this post.

 

Housing stock - sold
Electricity - sold
Gas - sold
Transport - sold
BT - sold
NHS - on its way to being sold bit by bit
etc.....all for a fraction of their true worth.

(thanks Tories)

The only thing the Tories are consistent with as regards the economy is blaming everyone but themselves when the figures don't add up .

 

Oi. Stop butting in on Stahlrost's domain

 

I notice you didn't say if you actually gained any qualifications

 

London School of evonomics and you?

And you understand the concept of global economics don’t you?

 

If it could be done I would agree but how do you nationalise without incurring huge costs.. taking back from private (mainly foreign concerns without adequate recompense would be unacceptable and consequences hugely damaging to many ordinary people e.g. impact on Pension funds would result.

Yes but people who argue a sovereign state cannot go bankrupt because they can print money are simply wrong. Bankrupt means liabilities exceed total assets. Greece is a case in point. They are so heavily indebted that they cannot even service the ECB loans and the GDP is insufficient to enable them to pay their debts. The only reason they have not defaulted is that the EU keep lending them money to pay the interest on money already loaned. that cannot continue and sooner or later they will default unless the creditors take a massive haircut.
Whilst it is true that making comparisons between sovereign debt and household bills is a little pointless. the fundamentals still apply to both cases. You argue that as a business you invest to grow but you can only do that if you have credit available at an acceptable price or reserves. YOu must know as a businessman that if you are already heavily indebted, even if you can find a source of funds that is likely to be very expensive.
I would argue that expanding your business e.g. plant, staff to increase sales makes sense but investing in social welfare increasing GDP?? really? How does that work? Even if it does, how do you prove it and convince the money markets that that will happen having a strong welfare state, health Education relies on business, industry and finance to fund that.
Thatcher said that (in her infamous Francis of Assisi speech outside No10 when she fisrt took office) but they turned out to be weasel words as she strengthened the economy but did f*ck all when it came to distrubuting the wealth in the boom years to the people who actually created the wealth i.e. small businesses and the workforce of the country. And for the record, just so there is no doubt I believe that woman caused more long term damage to the fabric of our society than anything or anyone since WW2 and possibly longer.
Still , you offer a reasoned argument which although I disagree with you on some points, I respect. Have a good weekend

 

Is it me or has Tekkytyke started a thread, proceeded to argue against his original point, and then got really angry at his own initial post?

 

a) It's you and b) who said I am angry (cos I ain't.)

 

Nationalisation is cost neutral though pensions deficits could impact this in certain sectors.

 

Again the EU growth is smoke and mirrors driven by the huge and I mean huge QE programme. Agree on some of the other bits though. Anything but Jezza's £500bn bet though.