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Cable calls for "greatly expanded" spending funded through borrowing, not cuts


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Old 07-03-2013, 21:44
howmanytimes
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AS the hare and the tortoise story shows us 'slow and steady wins the race' So cutting hard and fast may not be such a good idea. Maybe politicians could look at how we rebuilt this country after the second world war when we had a deficit much the same as we have now.
It is a good idea to the Tories when they are waging a war on the poor though. They probably love the fact that wages have dropped 3.2 % over the past two years... Osborne was smiling in the last picture I saw anyway.

We keep learning it's not good for the economy, but they don't change things. When commentators are asked why are this government doing it if it isn't working, they can only stare blankly or say that is a good question. They shouldn't get away with it, but they do.

Anyway, Caroline Lucas is also calling for more spending and investment along with Vince Cable. She gave a speech about it yesterday...

"We must spend and invest, not slash and burn, our way out of economic crisis"

http://greenparty.org.uk/news/2013/0...onomic-crisis/
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Old 07-03-2013, 22:21
rusty123
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It's not about the immediate return on the investment, it's about reducing government outgoing for years to come and taking the burden of high housing costs off the low paid. If they have more money in their pockets because housing costs are not sucking it all out, then how can that be bad?
Not inclusive enough or able to make a quick enough impact to warrant doing it now with borrowed money IMO. I believe you've been one of those people criticising the govt by saying two and a half years in power has been plenty of time to have got a grip of the economy and here you are talking about long term investments.
It's the short to medium term we've got to worry about at the moment for a whole host of reasons - affordable housing is just one of them.

If you want the govt to make an instant impact across the whole country the most obvious thing to do would be to slash the duty on diesel. Pretty much everything we buy is effected by haulage costs - particularly food. That extra bit of money in peoples pockets would flow through the entire economy and benefit everyone, not just those people struggling with housing costs.
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Old 08-03-2013, 00:26
WindWalker
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Not inclusive enough or able to make a quick enough impact to warrant doing it now with borrowed money IMO. I believe you've been one of those people criticising the govt by saying two and a half years in power has been plenty of time to have got a grip of the economy and here you are talking about long term investments.
It's the short to medium term we've got to worry about at the moment for a whole host of reasons - affordable housing is just one of them.

If you want the govt to make an instant impact across the whole country the most obvious thing to do would be to slash the duty on diesel. Pretty much everything we buy is effected by haulage costs - particularly food. That extra bit of money in peoples pockets would flow through the entire economy and benefit everyone, not just those people struggling with housing costs.
The short term boost will be in employment and money to spend in local communities. I would stipulate training, proper apprenticeship in each discipline of the building as well so it helps youngsters as well as construction workers. Local shops get custom, tea rooms and cafe's, shops and tax revenue. Long term as they are completed folk move in and benefit from lower housing costs. It doesn't take that long to build homes and various places up and down the country have been ear marked. It doesn't all have to be private house building which only increases debt and corporate bank balances.

I agree with fuel taxes being lowered and have said so in another post here a few days ago.
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Old 08-03-2013, 03:03
Majlis
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According to the LSE the UK’s growth of GDP per capita – 1.42% a year between 1997 and 2010 – was better than in any of the other “G6” countries:
built on a massive expansion of debt - was that sustainable and would you like to go back to it?
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Old 08-03-2013, 03:13
SULLA
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Cable is a loose cannon
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Old 08-03-2013, 07:59
Raring_to_go
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I do believe David Cameron gave a suitable response when he said 'there is no magic money tree'
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Old 08-03-2013, 08:52
helioslumos
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I do believe David Cameron gave a suitable response when he said 'there is no magic money tree'
Than David Cameron does not understand (or refuses to state for political reasons) the benefits of investment and borrowing. The key to our economy is movement. At this stage we can only fund movement by investment

"Magic money tree" is just a way of him rubbishing the intellectual arguments against him without having to respond in any sensible way
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Old 08-03-2013, 09:00
Hit Em Up Style
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The first indicator that the next government will be a Labour/Lib Dem one

People in here can try to say Cameron is right all they want but the fact is the UK economy is now worse than it was in 2010. Osborne has made the whole thing worse. He did that. No one else. This will be his legacy.

The first rule for anyone who knows a thing about money and business is that you have to spend and invest to gain

Not cut, cut, cut and cut. That creates ZERO growth. Which is what is happening lol
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Old 08-03-2013, 09:14
Rastus Pieface
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It is a good idea to the Tories when they are waging a war on the poor though. They probably love the fact that wages have dropped 3.2 % over the past two years... Osborne was smiling in the last picture I saw anyway.
good grief. waging a war? how dramatic. and yes, the tories obviously love the fact wages have dropped, because that means the tax take drops, which puts more pressure on osborne.
and he smiled? holy crap. is he not allowed to?

The first indicator that the next government will be a Labour/Lib Dem one

People in here can try to say Cameron is right all they want but the fact is the UK economy is now worse than it was in 2010. Osborne has made the whole thing worse. He did that. No one else. This will be his legacy.

The first rule for anyone who knows a thing about money and business is that you have to spend and invest to gain

Not cut, cut, cut and cut. That creates ZERO growth. Which is what is happening lol
is that why when businesses are struggling, the first thing they do is cut costs?

if we want to create growth, we need the banks to start lending to businesses again. the amount they are lending has fallen (again). they are holding on to money to make their bottom line look good.

we don't need the government to borrow billions more to "invest". we need banks to lend billions, to millions of businesses to create growth.
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Old 08-03-2013, 09:16
Hit Em Up Style
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good grief. waging a war? how dramatic. and yes, the tories obviously love the fact wages have dropped, because that means the tax take drops, which puts more pressure on osborne.
and he smiled? holy crap. is he not allowed to?



is that why when businesses are struggling, the first thing they do is cut costs?

if we want to create growth, we need the banks to start lending to businesses again. the amount they are lending has fallen (again). they are holding on to money to make their bottom line look good.

we don't need the government to borrow billions more to "invest". we need banks to lend billions, to millions of businesses to create growth.
I think you will find when businesses are struggling the first thing they will do is invest in new advertising.... and new ways of promotion

Cutting gets no one no where. You certainly don't tax the working classes more anyway as its the working classes who will be the one's to get the UK out of recession by spending. Not the rich bankers and the millionares. They spend their money in other countries on skying holidays and Monaco casinos
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Old 08-03-2013, 10:04
Rastus Pieface
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I think you will find when businesses are struggling the first thing they will do is invest in new advertising.... and new ways of promotion

Cutting gets no one no where. You certainly don't tax the working classes more anyway as its the working classes who will be the one's to get the UK out of recession by spending. Not the rich bankers and the millionares. They spend their money in other countries on skying holidays and Monaco casinos
they can only invest if they have the funds to do so, or borrow the money from a bank (assuming the bank thinks they are worth lending to). so are you saying that business that are struggling are wrong when they make people redundant?
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Old 08-03-2013, 10:47
gummy mummy
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built on a massive expansion of debt - was that sustainable and would you like to go back to it?
Looking at this chart in this link it doesn't appear that there was a massive expansion of debt between 1997 and 2008


http://www.ukpublicspending.co.uk/do...ent%20Of%20GDP

And looking at the charts in this link it looks as though there's an even bigger expansion of debt to come.


http://www.ukpublicspending.co.uk/uk...ebt_chart.html

so what are these cuts achieving other than making the people on benefits whether working or not struggle to live ?
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Old 08-03-2013, 11:02
Majlis
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Looking at this chart in this link it doesn't appear that there was a massive expansion of debt between 1997 and 2008
Thats because you are looking at the wrong thing - UK GDP doesn't consist solely of government spending

If you look at total UK (Household, Government, Financial, Corporate etc) then it was the fastest growing out of all the major economies over the last 20 years - that is where your wonderful GDP growth figure comes from.
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Old 08-03-2013, 11:05
gummy mummy
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Thats because you are looking at the wrong thing - UK GDP doesn't consist solely of government spending
Ooops,

Maybe you have a chart that shows the massive debt expansion when Labour were in power then ?
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Old 08-03-2013, 11:13
Majlis
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Ooops,

Maybe you have a chart that shows the massive debt expansion when Labour were in power then ?
Well in 1979 total UK debt was about 270% of GDP - by 2009 it had risen to about 450% of GDP, the highest in the world after Japan.

Try reading Debt and deleveraging by McKinsey. (pdf)
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Old 08-03-2013, 11:21
gummy mummy
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Well in 1979 total UK debt was about 270% of GDP - by 2009 it had risen to about 450% of GDP, the highest in the world after Japan.

Try reading Debt and deleveraging by McKinsey. (pdf)
Thanks for that.

I will have to wait for my son to do whatever it is you do to read that report though as I haven't a clue what to do.
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Old 08-03-2013, 11:53
WindWalker
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built on a massive expansion of debt - was that sustainable and would you like to go back to it?
1. What is growth

2. How do you get growth?
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Old 08-03-2013, 11:57
WindWalker
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Well in 1979 total UK debt was about 270% of GDP - by 2009 it had risen to about 450% of GDP, the highest in the world after Japan.

Try reading Debt and deleveraging by McKinsey. (pdf)
What do you think that link shows?
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Old 08-03-2013, 12:00
Majlis
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Thanks for that.

I will have to wait for my son to do whatever it is you do to read that report though as I haven't a clue what to do.
No problem - the graph on page 10 is quite illuminating.
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Old 08-03-2013, 12:05
WindWalker
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Thanks for that.

I will have to wait for my son to do whatever it is you do to read that report though as I haven't a clue what to do.
Gummy, you may have to ask majlis the questions posed at #117 and #118 as he is having a hissy fit with me.
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Old 08-03-2013, 13:05
Charlottesweb
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Well in 1979 total UK debt was about 270% of GDP - by 2009 it had risen to about 450% of GDP, the highest in the world after Japan.

Try reading Debt and deleveraging by McKinsey. (pdf)
Interesting choice of dates there.

Your own document shows in 91/92 debt at around 400% of GDP, and just prior to the banking crisis, about 415% GDP.

So not the drastic rise under labour you are trying to claim.

At all.

Given it also includes personal debt , the housing price rises people STILL applaud to this day are one of the main driving forces, and the current government STILL has not learned the lesson given the more than £1 Billion pounds of tax payers money they have so far used to prop up those same house prices, and in a falling earnings market at that, thus exacerbating personal debt, not lessening it (not that the previous lot were any better, self interest and bank protection lies behind the endless ways of protecting housing cost)
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Old 08-03-2013, 14:00
howmanytimes
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Well in 1979 total UK debt was about 270% of GDP - by 2009 it had risen to about 450% of GDP, the highest in the world after Japan.

Try reading Debt and deleveraging by McKinsey. (pdf)
Why does this website say different?

http://www.ukpublicspending.co.uk/uk_national_debt
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Old 08-03-2013, 17:24
Majlis
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Interesting choice of dates there.

Your own document shows in 91/92 debt at around 400% of GDP, and just prior to the banking crisis, about 415% GDP.

At all.
I do wish that posters would reply to what I have posted, rather than what they hoped I said. I never blamed it all onLabour, that is why I chose 1979 as a start date, but it appears that some cannot hold back from trying to score political points.
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Old 08-03-2013, 17:29
allaorta
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Interesting choice of dates there.

Your own document shows in 91/92 debt at around 400% of GDP, and just prior to the banking crisis, about 415% GDP.

So not the drastic rise under labour you are trying to claim.

At all.

Given it also includes personal debt , the housing price rises people STILL applaud to this day are one of the main driving forces, and the current government STILL has not learned the lesson given the more than £1 Billion pounds of tax payers money they have so far used to prop up those same house prices, and in a falling earnings market at that, thus exacerbating personal debt, not lessening it (not that the previous lot were any better, self interest and bank protection lies behind the endless ways of protecting housing cost)
Perhaps the later figure was helped by the sale of substantial gold reserves.
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Old 08-03-2013, 17:30
Charlottesweb
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I do wish that posters would reply to what I have posted, rather than what they hoped I said. I never blamed it all onLabour, that is why I chose 1979 as a start date, but it appears that some cannot hold back from trying to score political points.
Perhaps you should pay closer attention to what you actually say.

You posted THIS


built on a massive expansion of debt - was that sustainable and would you like to go back to it?
In response to this.

According to the LSE the UK’s growth of GDP per capita – 1.42% a year between 1997 and 2010 – was better than in any of the other “G6” countries:

You blamed the 97 to 2010 growth on a massive expansion of debt, and then used the example of 270 - 450 as proof.

Despite the vast majority of that happening by '92 , as the figures you posted show.

So nothing at all to do with a massive increase in debt at all, around 15% in 20 years mostly accounted for by a near 30% increase in housing cost during the same period as it happens.

I
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