Just been chatting with John McDonnell.

No. Why would he?

 

They've had to borrow to get us out of the financial mess that Labour left us in . Like the Labour MP said 10 years ago upon leaving office ' The money's run out '.

 

A wonderful bit of tory spin that was further emboldened by first Milliband and then Corbyn failing to stand up to the blatant lies and getting the politics all wrong.

The govt and the BoE propped up the banks to avoid catastrophic and systemic failure. I can't even consider what a complete banking collapse would feel like. I'm not sure how much poorer we would have all ultimately been, how much we would have lost and how many of us would've been homeless and jobless. Brown also injected a Keynsian stimulus into the economy to ensure there was capital investment, securing some jobs and borrowing at the lowest interest levels in generations. All very wise. And all very successful. The calamity was the start of a tory period of administration where Keynsian stimulus was pulled and stark austerity replaced.

That practically meant that the stimulus failed (despite solid growth and economic performance). Since then we've had banks "sold" back early, meaning public money has not been recouped, and BoS managing to clear huge amounts of deadwood from its history, and cutting huge amounts of jobs, while under the safety net of govt ownership. The moment it returns to the markets, it will no doubt be generating profit again.... though not paying tax as it will have massive losses to net against.

The global banking crisis and the credit crunch that preceded it were not the fault of Labour policy. That it was much less painful that it well could have been, was probably down to the governments swift actions when the world was in meltdown. I wasn't a fan of Brown at all, but I think it was helpful someone with such financial and economic acumen was in charge at the time.

 

The lack of basic economics from some here e.g. Mickey Finn staggering and I note the 'font of all knowledge' (Jimmy Cricket) doesn't make any attempt to correct the misconceptions.
I am referring to the usual rantings about the National Debt vs the deficit. Like any loan you have to pay interest and like any budget if your income is less than your outgoings the debt and the interest increases. Whilst I appreciate that is simplistic and there are major differences between domestic household economics and those of a nation state particularly around borrowing e.g. householders cannot simply print more money, the basic premise holds true.
Labour embarked on a massive public sector spend when last in Government. which was exacerbated by the 2008 crash. Of course that overspending made things look better for people compared to the austerity that followed but that was simply the hangover resulting from the party. This 'party' resulted in the famous 'Sorry there is no money left' note left by Liam Byrne for the incoming Conservative Government. In order to 'prop up the banking system' after the crash, QE and borrowing had to rise.
However, in order to reduce the National debt a Government has to run a surplus i e. more coming in than going out. Austerity has hit people hard but the deficit has been reduced massively over the past few years (albeit nowhere near as fast as Gideon promised) from where Labour left it, which means we are ever closer to a surplus which means we can actually start to reduce the National debt or at the very least stabilise it. The important point is the lower the debt the more money can be diverted from paying interest on that debt to providing housing, public sector services and infrastructure improvements.
In 2005 the UK “current budget deficit” was less that £20 billion. But then came the worldwide financial crisis of 2008 and subsequent recession. The budget deficit skyrocketed to £50 billion in 2009 and £103 billion in 2010. In the subsequent recovery the deficit has steadily declined, down to £1.9 billion in 2018.
In terms of Gross Domestic Product the UK “current budget deficit” in 2005 was less than 2 percent of GDP, and declined to about 0.6 percent GDP in 2007 and 2008. In the Great Recession the deficit ballooned, to 6.9 percent of GDP in 2010. Since then the deficit has steadily declined, to less than one percent GDP in 2017.

O'Donnell would undo all that with the proposed Labour spending which means he would have to borrow hugely. Some economists arguethe plan is self funding' (the ones who clearly know where the forest of money trees are located. They also argue that Labour's re-Nationalisation plans and EU membership are compatible. They are NOT.

All that said, Neither major party are fit to govern but Labour scare me more than Cons as it would be "Bankrupcy for the many not for the few"

 

Do you seriously believe that? REALLY?? Brown = Financial acumen!!!! What about the famous note left by Byrne for the incoming Conservative Govt?

 

The note that was an attempt at humour that got spun for political gain?

There were several interesting chronicles of the crazy days of the banking crisis and how Brown was swiftly taking decisive actions that were followed globally and commended by institutions, IMF, BoE and the Fed.

Of course, he could have done nothing and left the whole worldwide banking system to collapse.

 

Big call in your opening paragraph, pal.

 

So a deficit of 6.9% of GDP and £103bn in 2010 being reduced to less than 1% and £1.9 bn whilst reducing unemployment demonstrates Conservative economic incompetence and a failed austerity program??

Yeah! OK!

 

Did Gordon Browns govt cause the global banking collapse?

 

If Brown had so much 'financial and economic acumen' why did he sleepwalk us into recession ? . Yes he reacted to the situation post crash, but did very little proactively .

 

I think some folk need to realise you can be a socialist country without being communist.

Being different doesn't make it wrong.

 

Sweet jesus. Sleepwalk? The banking crisis started with sub prime lending in the US. Global banks bought, sold, swapped, traded these debts in a variety of shapes and forms for years. Only when the sub prime bottom fell out did the credit crunch start in earnest and the precursor to the global issues, the run on Northern rock.

I'm not sure how you can expect someone to be proactive when banks had complicated these trades so much, that even they hardly understood their risks.

 

I'd also recommend you search out some of the independent accounts of Brown and Darlings actions during the events when Lehmann et al were crumbling. They were highly proactive and took some huge calls that protected us all. Can you imagine what would have happened to us all if banking had collapsed? No, me neither.

 

Labour didn't overspend on public services pre 2008. In fact Cameron pledged to match Labour spending.

 

And when those companies leave the UK, and we’re knocking on the door of the IMF...............

 

Someone who knows what theyre on about. I try explain this to my family but the only retort is "but corbyn said" and "anyone but the tories".

 

Just like in a business (and essentially, the UK economy is just that), there are two ways you can increase bottom line (profit in a company, surplus in the Uk economy). By cutting costs (largesse and services). Or by increasing revenue, or income and tax take in the govts case.

Although cost cutting can assist, its seldom the most effective, as in doing so, you generally also cut income to some degree in doing it. An example, HMRC jobs were cut. Less attempts were made to collect and check taxes, as a result, tax takes are and were below what they should be.

The most obvious thing to state is that economic expense should be sufficient to maximise its income. To fall below that level risks a minimised income, to rise above, can see natural wastage and excess.

 

Joke? Humour? Was that their spending policy? Any party would have used that note... to leave it in the first place is moronic!

 

And Liam was most certainly that.