It's not though. With longer term cuts, we'd have eventually reached a point where growth started to increase, meaning more income for the government through corporation and income tax collected, meaning that a lot of the projected cuts in a long-term strategy could have been scaled back or cancelled altogether as we naturally reached a break-even point.
So if you take longer to pay down the deficit it means that you will be borrowing more to cover the shortfall.
That means almost certainly higher interest rates but even without that, more borrowing means more interest being paid therefore more cuts....
You cannot escape the financial facts of life.
A slower pay-down rate also means a much bigger chance of there still being a structural deficit when the next slowdown/recession starts and there we are, back to square one. Deeper cuts to follow....
If the coalition aim to eliminate the deficit over the parliament and New labour were only going to halve it I can't quite see how they'd have to make 80% of the cuts.
I realise I may be misthinking this, but I'd like to see some figures.
I would guess it may have something to do with the interest. If you clear it more slowly you will be paying the interest for longer and it will add up to more. Also the interest charged on Government borrowings would have been higher. The ratings agencies were not convinced by the Darling plan. The interest rate came down following the announcement of the coalition's plan.
Either I seriously misheard in which case I put my hands up or labours constant haranguing about the cuts is a joke, 80%!
Of course it's a joke. It's classic opposition politics. Say you'll do things differently, but never go into the detail. The only problem is when the voters get wise to your tactics and are reminded constantly of your track record in government.
This is a very simple question to all those that are giving total support to the current government.
If we hadn't had to plough hundreds of billions of pounds into the banks to stop them from imploding would we be in this position now?
I grant you the fact that Labour overspent and increased our national debt, but the Tories are deliberately ignoring the massive effect that the banks had on our economy just to make political capital out of the situation.
If we hadn't had to support the banks and nearly bankrupt the country while doing it, we would now have plenty of money to fund most of the things that are being cut.
So please do not ignore the effect of capitalist greed and blame everything on the working classes.
This is a very simple question to all those that are giving total support to the current government.
If we hadn't had to plough hundreds of billions of pounds into the banks to stop them from imploding would we be in this position now?
I grant you the fact that Labour overspent and increased our national debt, but the Tories are deliberately ignoring the massive effect that the banks had on our economy just to make political capital out of the situation.
If we hadn't had to support the banks and nearly bankrupt the country while doing it, we would now have plenty of money to fund most of the things that are being cut.
So please do not ignore the effect of capitalist greed and blame everything on the working classes.
I don;t thhink it was the money we had to put into the banks that has put us in this position, I think we should get a significant proportion of that back.
The problem is the worldwide recession they caused reduces the Govt tax income a bit and increases Govt expenditure like benefits payments a bit. The problem is then that, although the proportions that income and expenditure change by is quite small, the gap between them, meaning extra borrowing, is quite big in real money terms. So borrowing in a year goes from around 40 billion to 170 billion.
Actually I feel you are misinformed. I work in a place where benefits are given out to fit, able and young people who call their payouts as "wages" and then bound off happily with £300 to spare, their rent and council tax all paid for and more spare cash in a week that I have left and I work for a living.
On the flipside, I see struggling people who can't walk, can hardly see, people who are genuinely depressed because they want to work but can't a job bevause they can't afford to learn to drive or similar. These people are frustrated because they really are struggling on a pittance.
That makes no sense, how do the fit able people get more benefits than the struggling ones?
This is a very simple question to all those that are giving total support to the current government.
If we hadn't had to plough hundreds of billions of pounds into the banks to stop them from imploding would we be in this position now?
I grant you the fact that Labour overspent and increased our national debt, but the Tories are deliberately ignoring the massive effect that the banks had on our economy just to make political capital out of the situation.
If we hadn't had to support the banks and nearly bankrupt the country while doing it, we would now have plenty of money to fund most of the things that are being cut.
So please do not ignore the effect of capitalist greed and blame everything on the working classes.
The budget was in deficit before the banking crash i.e. we were spending more in 2006 and 2007 than we were earning. That was reckless in the extreme – you pay down debt in the good times not rack it up.
Banks made mistakes – but we can all take the blame for that. Who borrowed the money which they couldn’t afford to pay back (people to buy houses). We are likely to make a profit in the end when we sell our shares in RBS and HBOS.
Ultimately this deficit is structural – spending money that wasn’t real.
And of course most of the 'working classes' work in the private sector – the public sector is disproportionately made up of the middle classes. So should we carry on robbing the poor private sector worker to subsidise the largesse of the middle class public sector worker.
And of course most of the 'working classes' work in the private sector – the public sector is disproportionately made up of the middle classes. So should we carry on robbing the poor private sector worker to subsidise the largesse of the middle class public sector worker.
It is now because most of the working class, cleaners, security guards, binmen etc. were privatised a while ago.
Even then, I heard that 80% of the civil service earn below the average wage.
I don;t thhink it was the money we had to put into the banks that has put us in this position, I think we should get a significant proportion of that back.
The problem is the worldwide recession they caused reduces the Govt tax income a bit and increases Govt expenditure like benefits payments a bit. The problem is then that, although the proportions that income and expenditure change by is quite small, the gap between them, meaning extra borrowing, is quite big in real money terms. So borrowing in a year goes from around 40 billion to 170 billion.
You see, even you say that the banks caused a WORLDWIDE recession, so it's not just Labour mismanagement that has put us in the mess that we now face. It's a worldwide problem that has come to governments of all colours, some more than others.
My main point was that the Tories are putting 100% of the blame on Labour for political reasons and deliberately ignoring the effects of capitalist greed because it suits their agenda.
The budget was in deficit before the banking crash i.e. we were spending more in 2006 and 2007 than we were earning. That was reckless in the extreme – you pay down debt in the good times not rack it up.
Banks made mistakes – but we can all take the blame for that. Who borrowed the money which they couldn’t afford to pay back (people to buy houses). We are likely to make a profit in the end when we sell our shares in RBS and HBOS.
Ultimately this deficit is structural – spending money that wasn’t real.
And of course most of the 'working classes' work in the private sector – the public sector is disproportionately made up of the middle classes. So should we carry on robbing the poor private sector worker to subsidise the largesse of the middle class public sector worker.
Good points here, but even this is not the full story.
Fact is, even with the cuts, and you take them at the worst level the coalition are bringing in, the deficit will still be greater than £130 billion pounds. That means the UK credit card balance gets worse for next year, despite the cuts.
For anyone who has been in this position with a credit card, it means that next year your interest payments will increase, leaving you next year with less money left to pay the bills. Its like paying even less than the minimum payment. In the UK's case, this means less money for public spending next year.
Even with the worst cuts they are promising.
The debt will increase.
This is the position Labour's financial incompetence and political engineering of the economy has left us with.
Now what Labour are saying is that if we max out the credit card a little more it will help future spending, by increasing the debt. It really beggars belief, and if it were to be done, it would simply mean there would be even less money left in the future to help those 'poor' people that Labour claim to champion so. And it would also probably mean our credit rating would be hit, making our interest payments far larger, meaning even less money for public services next year.
I really believe that if the marchers - and I congratulate the real marchers for conducting a peaceful protest - should have marched on Labour party headquarters, or at least heckled Milliband at Hyde Park, for being part of a government who brought about this catastrophic state of the economy.
You see, even you say that the banks caused a WORLDWIDE recession, so it's not just Labour mismanagement that has put us in the mess that we now face. It's a worldwide problem that has come to governments of all colours, some more than others.
My main point was that the Tories are putting 100% of the blame on Labour for political reasons and deliberately ignoring the effects of capitalist greed because it suits their agenda.
It's things like this that annoy me, the Banks did NOT put us in this mess! Do you know how much the bank bailout cost? About £90bn. Do you realise how much debt we're in? About £1trillion, and we're still borrowing £150bn this year. Now the banks seemed to have been ok after we saved them, it's what we did after and still doing that has put us here, not bailing out the banks.
Ofcourse the Tories are putting the blame all onto Labour, that's why the 50% was demolished, and thats why bankers bonuses aren't highly taxed and banks don't have to pay a levy on profits.....oh hang on
And of course most of the 'working classes' work in the private sector – the public sector is disproportionately made up of the middle classes.
Fair point - I seem to remember that 40 % of our graduates work in the Public Sector - so a significant proportion of our best (?) educated are working not in the part of the economy that creates the wealth to pay for all these welfare schemes (SureStart, etc. etc.)
It's things like this that annoy me, the Banks did NOT put us in this mess! Do you know how much the bank bailout cost? About £90bn. Do you realise how much debt we're in? About £1trillion, and we're still borrowing £150bn this year. Now the banks seemed to have been ok after we saved them, it's what we did after and still doing that has put us here, not bailing out the banks.
Ofcourse the Tories are putting the blame all onto Labour, that's why the 50% was demolished, and thats why bankers bonuses aren't highly taxed and banks don't have to pay a levy on profits.....oh hang on
Report, Dec 2009.
Government support for Britain's banks has reached a staggering £850bn and the eventual cost to taxpayers will not be known for years, the public spending watchdog says today.
That's a little more than the £90bn you are claiming.
On the subject of bank profits and bonuses. Do you not think that if they were not screwing us into the ground they would be able to pay bonuses for one years work that exceed the lifetime earnings of most people.
Government support for Britain's banks has reached a staggering £850bn and the eventual cost to taxpayers will not be known for years, the public spending watchdog says today.
That's a little more than the £90bn you are claiming
Support isn't the same as spending. It's mostly guarantees.
Our problems were caused by the recession, caused by the banks.
Government support for Britain's banks has reached a staggering £850bn and the eventual cost to taxpayers will not be known for years, the public spending watchdog says today.
That's a little more than the £90bn you are claiming.
On the subject of bank profits and bonuses. Do you not think that if they were not screwing us into the ground they would be able to pay bonuses for one years work that exceed the lifetime earnings of most people.
Get a life.
The government took stakes in the banks - it holds shares which have a market value and will ultimately be disposed of, in return for money. Hopefully, if we have the patience to wait they will actually make us a decent profit. Not the same as spending money you haven't got which you'll never be able to get back.
I never seem to recall Mr Osbourne calling for more regulation of the banks & until the crash wasnt he telling anybody who'd listen that he'd match labours spending commitments pound for pound on the NHS & education?
There needs to be cuts, nobody is denying it, the moot point is how you go about it. Slashing & burning everything in your wake in the idea that if you hack it down enough it will save money is flawed. By not frontloading the cuts the pian could have been eased, with natuaral wasteage & by getting the economy to grow, which was happening under Darlings stewardship. The growth figures dont lie , under Osbourne its dropping , under Darling we where on the upward turn.
The tories are taking a sledgehammer to crack an eggshell. Their approach is purely dogmatic , they are using it to make the changes they want to make, but know they couldnt if the circumstances where different.
The way the tories are using divide & conquer again to justify the changes is also wrong. Turning the nation on each other is not the way to tackle the defecit.
Labour's position on the government's spending cuts is nothing short of total hypocrisy. That is what you get from a party in denial and when the public sector unions elect their leader.
I never seem to recall Mr Osbourne calling for more regulation of the banks & until the crash wasnt he telling anybody who'd listen that he'd match labours spending commitments pound for pound on the NHS & education?
There needs to be cuts, nobody is denying it, the moot point is how you go about it. Slashing & burning everything in your wake in the idea that if you hack it down enough it will save money is flawed. By not frontloading the cuts the pian could have been eased, with natuaral wasteage & by getting the economy to grow, which was happening under Darlings stewardship. The growth figures dont lie , under Osbourne its dropping , under Darling we where on the upward turn.
The tories are taking a sledgehammer to crack an eggshell. Their approach is purely dogmatic , they are using it to make the changes they want to make, but know they couldnt if the circumstances where different.
The way the tories are using divide & conquer again to justify the changes is also wrong. Turning the nation on each other is not the way to tackle the defecit.
That 'sledgehammer to crack a nut' as you put it, will still leave us needing to borrow north of £130 billion this year. The value of the cuts is way less than £40 billion.
Labour themselves admit they would be cutting - around £2 billion less than the coalition, according to the Guardian's figures. They knew they wouldn't have to cut, and could blame the Tories, because they thought they wouldnt win the last election. So they splashed out all over knowing they wouldnt have to pick up the pieces.
Does that mean if Labour did their version of the cuts they would be being dogmatic too? Are they on a divide and conquer agenda as well?
Labour's position on the government's spending cuts is nothing short of total hypocrisy. That is what you get from a party in denial and when the public sector unions elect their leader.
Haha. Which rather exposes a dislike of democracy and the risible suggestion that any other New Labour leader would be saying much different.
The Tories said they would eliminate the structural deficit (which accounts for about 65% of the total.
Labour said they would halve the deficit as a whole.
Structural deficit, deficit as a whole?
Does this mean Just for the record for those of us who don’t know how these things work, is it still Labours policy to halve it over a term of office, or less than half ,more or what?
Comments
So if you take longer to pay down the deficit it means that you will be borrowing more to cover the shortfall.
That means almost certainly higher interest rates but even without that, more borrowing means more interest being paid therefore more cuts....
You cannot escape the financial facts of life.
A slower pay-down rate also means a much bigger chance of there still being a structural deficit when the next slowdown/recession starts and there we are, back to square one. Deeper cuts to follow....
I would guess it may have something to do with the interest. If you clear it more slowly you will be paying the interest for longer and it will add up to more. Also the interest charged on Government borrowings would have been higher. The ratings agencies were not convinced by the Darling plan. The interest rate came down following the announcement of the coalition's plan.
Of course it's a joke. It's classic opposition politics. Say you'll do things differently, but never go into the detail. The only problem is when the voters get wise to your tactics and are reminded constantly of your track record in government.
If we hadn't had to plough hundreds of billions of pounds into the banks to stop them from imploding would we be in this position now?
I grant you the fact that Labour overspent and increased our national debt, but the Tories are deliberately ignoring the massive effect that the banks had on our economy just to make political capital out of the situation.
If we hadn't had to support the banks and nearly bankrupt the country while doing it, we would now have plenty of money to fund most of the things that are being cut.
So please do not ignore the effect of capitalist greed and blame everything on the working classes.
I don;t thhink it was the money we had to put into the banks that has put us in this position, I think we should get a significant proportion of that back.
The problem is the worldwide recession they caused reduces the Govt tax income a bit and increases Govt expenditure like benefits payments a bit. The problem is then that, although the proportions that income and expenditure change by is quite small, the gap between them, meaning extra borrowing, is quite big in real money terms. So borrowing in a year goes from around 40 billion to 170 billion.
That makes no sense, how do the fit able people get more benefits than the struggling ones?
The budget was in deficit before the banking crash i.e. we were spending more in 2006 and 2007 than we were earning. That was reckless in the extreme – you pay down debt in the good times not rack it up.
Banks made mistakes – but we can all take the blame for that. Who borrowed the money which they couldn’t afford to pay back (people to buy houses). We are likely to make a profit in the end when we sell our shares in RBS and HBOS.
Ultimately this deficit is structural – spending money that wasn’t real.
And of course most of the 'working classes' work in the private sector – the public sector is disproportionately made up of the middle classes. So should we carry on robbing the poor private sector worker to subsidise the largesse of the middle class public sector worker.
It is now because most of the working class, cleaners, security guards, binmen etc. were privatised a while ago.
Even then, I heard that 80% of the civil service earn below the average wage.
You see, even you say that the banks caused a WORLDWIDE recession, so it's not just Labour mismanagement that has put us in the mess that we now face. It's a worldwide problem that has come to governments of all colours, some more than others.
My main point was that the Tories are putting 100% of the blame on Labour for political reasons and deliberately ignoring the effects of capitalist greed because it suits their agenda.
Rather optimistic - the compound cost of lending on the money borrowed for the bailout is wiping out any gain in the share price at the moment.
Good points here, but even this is not the full story.
Fact is, even with the cuts, and you take them at the worst level the coalition are bringing in, the deficit will still be greater than £130 billion pounds. That means the UK credit card balance gets worse for next year, despite the cuts.
For anyone who has been in this position with a credit card, it means that next year your interest payments will increase, leaving you next year with less money left to pay the bills. Its like paying even less than the minimum payment. In the UK's case, this means less money for public spending next year.
Even with the worst cuts they are promising.
The debt will increase.
This is the position Labour's financial incompetence and political engineering of the economy has left us with.
Now what Labour are saying is that if we max out the credit card a little more it will help future spending, by increasing the debt. It really beggars belief, and if it were to be done, it would simply mean there would be even less money left in the future to help those 'poor' people that Labour claim to champion so. And it would also probably mean our credit rating would be hit, making our interest payments far larger, meaning even less money for public services next year.
I really believe that if the marchers - and I congratulate the real marchers for conducting a peaceful protest - should have marched on Labour party headquarters, or at least heckled Milliband at Hyde Park, for being part of a government who brought about this catastrophic state of the economy.
It's things like this that annoy me, the Banks did NOT put us in this mess! Do you know how much the bank bailout cost? About £90bn. Do you realise how much debt we're in? About £1trillion, and we're still borrowing £150bn this year. Now the banks seemed to have been ok after we saved them, it's what we did after and still doing that has put us here, not bailing out the banks.
Ofcourse the Tories are putting the blame all onto Labour, that's why the 50% was demolished, and thats why bankers bonuses aren't highly taxed and banks don't have to pay a levy on profits.....oh hang on
Fair point - I seem to remember that 40 % of our graduates work in the Public Sector - so a significant proportion of our best (?) educated are working not in the part of the economy that creates the wealth to pay for all these welfare schemes (SureStart, etc. etc.)
They did because, were it not for their actions, we wouldn't be in a recession in the first place. How much the bailout cost is a side issue.
But you're right, I meant "wouldn't have been in a recession..."
Report, Dec 2009.
Government support for Britain's banks has reached a staggering £850bn and the eventual cost to taxpayers will not be known for years, the public spending watchdog says today.
That's a little more than the £90bn you are claiming.
On the subject of bank profits and bonuses. Do you not think that if they were not screwing us into the ground they would be able to pay bonuses for one years work that exceed the lifetime earnings of most people.
Get a life.
Support isn't the same as spending. It's mostly guarantees.
Our problems were caused by the recession, caused by the banks.
The government took stakes in the banks - it holds shares which have a market value and will ultimately be disposed of, in return for money. Hopefully, if we have the patience to wait they will actually make us a decent profit. Not the same as spending money you haven't got which you'll never be able to get back.
There needs to be cuts, nobody is denying it, the moot point is how you go about it. Slashing & burning everything in your wake in the idea that if you hack it down enough it will save money is flawed. By not frontloading the cuts the pian could have been eased, with natuaral wasteage & by getting the economy to grow, which was happening under Darlings stewardship. The growth figures dont lie , under Osbourne its dropping , under Darling we where on the upward turn.
The tories are taking a sledgehammer to crack an eggshell. Their approach is purely dogmatic , they are using it to make the changes they want to make, but know they couldnt if the circumstances where different.
The way the tories are using divide & conquer again to justify the changes is also wrong. Turning the nation on each other is not the way to tackle the defecit.
That 'sledgehammer to crack a nut' as you put it, will still leave us needing to borrow north of £130 billion this year. The value of the cuts is way less than £40 billion.
Labour themselves admit they would be cutting - around £2 billion less than the coalition, according to the Guardian's figures. They knew they wouldn't have to cut, and could blame the Tories, because they thought they wouldnt win the last election. So they splashed out all over knowing they wouldnt have to pick up the pieces.
Does that mean if Labour did their version of the cuts they would be being dogmatic too? Are they on a divide and conquer agenda as well?
Haha. Which rather exposes a dislike of democracy and the risible suggestion that any other New Labour leader would be saying much different.
Structural deficit, deficit as a whole?
Does this mean Just for the record for those of us who don’t know how these things work, is it still Labours policy to halve it over a term of office, or less than half ,more or what?