This. A thousand times this. Unfortunately our industrial sector was largely decimated by Margaret Thatcher and our economy has been propped up by the service industries ever since. However borrowing to invest might take a while to catch on with the British public. Most of them are still convinced that you can't borrow your way out of a recession (you can, this being one of the basic rules of Keynesian economics)
Again. The left is like a broken record on this issue - it is complete balderdash that manufacturing was largely decimate by Mrs Thatcher - indeed our manufacturing sector output had increased by a fifth under Thatcher/Major - we had this issue earlier in the week - and there are links showing this to be untrue
It has decreased it's share of our total GDP - but no more than many comparable western economies (with the exception of Germany).
The damage to manufacturing occured long before Mrs Thatcher was PM - in the 1970's when saddled with poor quality, costly and old working practices - meant other countries took the markets that we used to .
As for Keynesian economics - for that to work you have to remember the other side of that coin. Keynes called for extra spending during a recession, and saving when you had a growing economy - guess what - for Brown did not for most of the years he was in charge of our economy - so the traditional Keynes way of spending money to get out of a recession has been removed.
PV solar is not something i'm a fan of domestically. the way we do it in this country they never pay for them selves or their environmental impact. and if housing costs are an issue, making every new build pay for a PV panel and their on going cost might not be so good. thermal solar is a better choice, much cheaper and works.
the idea is if you build a motorway that sales guy can visit an extra client, that company can do more deliveries, the cost of transporting stuff is reduced. basically time spent in traffic is leached out of the economy in the form of lost man hours and lower use of capital investment. the idea is basically sound.
i would love some more exotic ideas. than building motorways. there must be some. i guess for something to fly it's going to need to be sufficiently exotic to be smart. but not so exotic that the opposition can mock it.
But the motorway brings us back to that "Field of Dreams, build it they will (fingers crossed) come" scenario. Putting the infrastructure in place for when there is a market doesn't create the market.
The Tories would have been giving it all away with tax cuts. They've got form for doing that rather than paying off the national debt.
Try looking at what Ken Clarke said in his last budget. The Public Sector Borrowing Requirement was due to go negative in 2000 (which it did). The Tories reduced borrowing after both recessions that occured during the Thatcher/Major years.
I absolutely think we need to build more houses and that housing costs need to come down. but it doesn't really help with economic growth...
...and that has to be a priority at the moment. if you're going to borrow for capex you need to do it in a way that will generate or facilitate the generation of income. transport infrastructure is a great example of this. but there are more modern examples around IT. building schools. stuff that will pay you back.
as for the specific allocation of one source of revenue to one source of expenditure, it's economic nonsense. it's a thing that only exists in the minds of politicians. it's not real.
You are thinking short term spiv sentiments rather than building a stable platform for business to flourish. What's with the 'capex should only be for cash returns' argument? Where did that come from?
More private housing means more debt to live in them. Currently debt is about all we have left that is growing. Business have to to be supported by the tax payer because wages don't cover living costs. Immigration is high because folk living ten plus to a shared house for a year or two can do the jobs, take the money and return home to buy their own home. Money out of the country.
You can gain income from capex but you can also use it to reduce outgoings. Housing benefit and tax credits will drop if folk have stable affordable homes. Local business up and down the country can benefit from increased spending in the economy, social issues may well improve with communities developing and people feeling secure enough to start their own ventures. The country actually has an asset, something to show for the spending that will benefit the people and business, not just the corporates.
Having a baseline for homes will act as an anchor to private housing and rents and start to correct the absurd disparity between house prices and wages. That disparity is killing off what hope the economy has because it is sucking too much money from the economy. There is a far bigger picture than using capex to help out private business, that's just short term thinking and beneficial to the few at the top. May be good for jobs on the board or donations but long term does little to help the people that matter.
But you can the interest on it, now returned to the treasury and used to make Osborne look slightly less worse than he really is. Only under this government has the money been reclaimed, it should be put to better use.
God. we were in economic boom. we shouldn't have been borrowing anything, we should have been paying back all the money we borrowed in the last recession.
but it turns out we had a structural deficit of £78bn that the government didn't know about.
that's what happens when you think you have brought an end to boom and bust.
Structural deficit is a political construct that can mean anything anybody wants it to mean. By all accounts, from the thread here a while ago, you can run the economy with a surplus but still have a structural deficit. It's a nonsense put about in the game of numbers which is statistics.
The myth of the structural deficit
But you can the interest on it, now returned to the treasury and used to make Osborne look slightly less worse than he really is. Only under this government has the money been reclaimed, it should be put to better use.
what do you mean 'Only under this government has the money been reclaimed'?
Structural deficit is a political construct that can mean anything anybody wants it to mean. By all accounts, from the thread here a while ago, you can run the economy with a surplus but still have a structural deficit. It's a nonsense put about in the game of numbers which is statistics.
The myth of the structural deficit
lol. there's people who understand the structural deficit, and people who don't believe in the structural deficit.
i read the first line of that article:
In a letter to the Sunday Times, a group of economists have asked the next government to "set out a detailed plan to reduce the structural budget deficit more quickly than set out in the 2009 pre-budget report." This raises one of my gripes - that the notion of a structural budget deficit is unhelpful.
have you read the whole thing or just the title you're focused on?
if you don't thing there is such a thing as a structural deficit then you should contact Mr Balls because he must be wrong twice. he's admitted the last labour government miscalculated by £76bn pa, he must now be wrong again since you have found some shitty blog post that disagrees with all economists.
You are thinking short term spiv sentiments rather than building a stable platform for business to flourish. What's with the 'capex should only be for cash returns' argument? Where did that come from?
More private housing means more debt to live in them. Currently debt is about all we have left that is growing. Business have to to be supported by the tax payer because wages don't cover living costs. Immigration is high because folk living ten plus to a shared house for a year or two can do the jobs, take the money and return home to buy their own home. Money out of the country.
You can gain income from capex but you can also use it to reduce outgoings. Housing benefit and tax credits will drop if folk have stable affordable homes. Local business up and down the country can benefit from increased spending in the economy, social issues may well improve with communities developing and people feeling secure enough to start their own ventures. The country actually has an asset, something to show for the spending that will benefit the people and business, not just the corporates.
Having a baseline for homes will act as an anchor to private housing and rents and start to correct the absurd disparity between house prices and wages. That disparity is killing off what hope the economy has because it is sucking too much money from the economy. There is a far bigger picture than using capex to help out private business, that's just short term thinking and beneficial to the few at the top. May be good for jobs on the board or donations but long term does little to help the people that matter.
honestly your understanding of economics is woeful. i'm not going to teach you economics just so i can tell you you are wrong. i'd much rather do that in areas that you can understand.
what do you mean 'Only under this government has the money been reclaimed'?
What I say.
George Osborne bags £35bn windfall from QE
The change in policy will cut both the public debt and budget deficit, flattering the public finance figures when the Office for Budget Responsibility updates its outlook at the Chancellor’s Autumn statement next month.
So now we know why the Bank of England's Monetary Policy Committee called a halt to more Quantitative Easing this week – it's because the Chancellor and the Governor of the Bank of England have concocted a backdoor way of doing the same thing.
The latest little (actually quite big at a tidy £35bn) money printing wheeze comes about as close to outright monetising of government spending as it is possible for the Bank of England to go without simply creating the money and handing it by the lorry load to the Treasury, a la Weimar.
honestly your understanding of economics is woeful. i'm not going to teach you economics just so i can tell you you are wrong. i'd much rather do that in areas that you can understand.
Get rich quick schemes and corporate welfare is not economics...although the right seem to think it is...
lol. there's people who understand the structural deficit, and people who don't believe in the structural deficit.
i read the first line of that article:
In a letter to the Sunday Times, a group of economists have asked the next government to "set out a detailed plan to reduce the structural budget deficit more quickly than set out in the 2009 pre-budget report." This raises one of my gripes - that the notion of a structural budget deficit is unhelpful.
have you read the whole thing or just the title you're focused on?
if you don't thing there is such a thing as a structural deficit then you should contact Mr Balls because he must be wrong twice. he's admitted the last labour government miscalculated by £76bn pa, he must now be wrong again since you have found some shitty blog post that disagrees with all economists.
lol
You must have missed the first sentence in my post.
The change in policy will cut both the public debt and budget deficit, flattering the public finance figures when the Office for Budget Responsibility updates its outlook at the Chancellor’s Autumn statement next month.
So now we know why the Bank of England's Monetary Policy Committee called a halt to more Quantitative Easing this week – it's because the Chancellor and the Governor of the Bank of England have concocted a backdoor way of doing the same thing.
The latest little (actually quite big at a tidy £35bn) money printing wheeze comes about as close to outright monetising of government spending as it is possible for the Bank of England to go without simply creating the money and handing it by the lorry load to the Treasury, a la Weimar.
No i understand what happened. i'm asking what this phrase means 'Only under this government has the money been reclaimed' - to me that would mean that we have a history of successive government engaging in QE that have done something other than 'reclaim' the interest.
No i understand what happened. i'm asking what this phrase means 'Only under this government has the money been reclaimed' - to me that would mean that we have a history of successive government engaging in QE that have done something other than 'reclaim' the interest.
Exactly as it says, BoE interest money has never been returned to government until this one changed it so it can be.
You must have missed the first sentence in my post.
no, i read it. i completely understand what structural deficit means. it's nonsensical to me for you to say that it doesn't mean anything. it just means you don't understand it.
the article you posted just says it's difficult to accurately estimate.
Exactly as it says, BoE interest money has never been returned to government until this one changed it so it can be.
Right so what....
actually lets not try and lead you to it.
i'm asking what this phrase means 'Only under this government has the money been reclaimed' - to me that would mean that we have a history of successive government engaging in QE that have done something other than 'reclaim' the interest.
QE began just before the last election. we have never had the situation before where the treasury was paying interest on £375bn of debt to the BoE. the idea that previous governments have done something different with the interest is bizarre.
the housing benefit bill will need to be reduced, we are currently spending £20 billion a year on housing benefits, and it's rising.
Cameron has pledged he'd build 100,000 new homes, but it simply is not enough.
will building new homes grow the economy ? yes it will. jobs will be created, tax revenues will rise. council homes are assets that will produce an income for many years to come.
I get that building houses will give a boost to the economy, but if your are proposing to scrap the restrictions on building houses that apply at the moment, then rather than the State borrow more money why not let the private sector builders build the homes. I would also point out that there was precious little 'income' from Council Housing.
Based on the previous Tory government a Tory chancellor would have given away in tax cuts any surplus.
Are you working by the way? You seem to have a lot of spare time.
'Give away' - that would imply that it was his to give away in the first place. Brown was the same - seemed to think that the money people earned was his to do with as he wishes and it was really nice of him to let us keep 60% of it.
I get that building houses will give a boost to the economy...
I don't. I can see how it would give a minimal boost a local economy but when you're talking about borrowing billions and risking paying higher interest on the trillion plus we're already in debt by there's not a hope in hell it can have the desired effect on a national economy IMO.
He doesn't 'give away' anything - he simply takes less of our money. :rolleyes:
You gotta love leftie logic. Always generous with someone elses money.
I've got a couple of well off left leaning friends. They don't like it when I point to their two detatched houses, new cars, and regular foreign holidays and jokingly say "practice what you preach and give half of that away then - problem solved."
It's amazing how quick a conversation can change subjects after that
The only way Cable could become a minister as a LibDem would be by way of a coalition with Labour or the Labour leader appointing him over the likes of Balls' dead body. Interesting to not that despite the perception he's good at financial matters, it wasn't him that got the job as Osborne's sidekick.
Complete speculation
Perfectly legit opinion based on Cable's previous form.
Well they obviously won't win a majority, so I'm not sure why you mentioned that. And it is perfectly believable, perhaps even probable, that the Lib Dems could end up in coalition with Labour if there is a hung parliament.
Only perfectly believable if you believe in miracles and you ignore the fact that Miliband has categorically stated he wouldn't form a coalition with a Clegg lead LibDem party. No doubt Cable will be beavering away below the surface to remove Clegg.
i'm asking what this phrase means 'Only under this government has the money been reclaimed' - to me that would mean that we have a history of successive government engaging in QE that have done something other than 'reclaim' the interest.
QE began just before the last election. we have never had the situation before where the treasury was paying interest on £375bn of debt to the BoE. the idea that previous governments have done something different with the interest is bizarre.
This government changed the rules to allow it, no other government has ever reclaimed BoE interest money paid to it by government. I'm sure Labour would have loved that wheeze in 2008 but it was only when Osborne would miss his own targets that it happened and the money used to prop up his figures, as the links earlier clearly show.
I don't. I can see how it would give a minimal boost a local economy but when you're talking about borrowing billions and risking paying higher interest on the trillion plus we're already in debt by there's not a hope in hell it can have the desired effect on a national economy IMO.
I'm not advocating the government borrowing even more to fund this idea. I would like to see a revival of the successful program that was used in the 30's where we had a private sector led housing boom to create an economic boost.
I don't. I can see how it would give a minimal boost a local economy but when you're talking about borrowing billions and risking paying higher interest on the trillion plus we're already in debt by there's not a hope in hell it can have the desired effect on a national economy IMO.
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?
Comments
Again. The left is like a broken record on this issue - it is complete balderdash that manufacturing was largely decimate by Mrs Thatcher - indeed our manufacturing sector output had increased by a fifth under Thatcher/Major - we had this issue earlier in the week - and there are links showing this to be untrue
It has decreased it's share of our total GDP - but no more than many comparable western economies (with the exception of Germany).
The damage to manufacturing occured long before Mrs Thatcher was PM - in the 1970's when saddled with poor quality, costly and old working practices - meant other countries took the markets that we used to .
As for Keynesian economics - for that to work you have to remember the other side of that coin. Keynes called for extra spending during a recession, and saving when you had a growing economy - guess what - for Brown did not for most of the years he was in charge of our economy - so the traditional Keynes way of spending money to get out of a recession has been removed.
But the motorway brings us back to that "Field of Dreams, build it they will (fingers crossed) come" scenario. Putting the infrastructure in place for when there is a market doesn't create the market.
Try looking at what Ken Clarke said in his last budget. The Public Sector Borrowing Requirement was due to go negative in 2000 (which it did). The Tories reduced borrowing after both recessions that occured during the Thatcher/Major years.
You are thinking short term spiv sentiments rather than building a stable platform for business to flourish. What's with the 'capex should only be for cash returns' argument? Where did that come from?
More private housing means more debt to live in them. Currently debt is about all we have left that is growing. Business have to to be supported by the tax payer because wages don't cover living costs. Immigration is high because folk living ten plus to a shared house for a year or two can do the jobs, take the money and return home to buy their own home. Money out of the country.
You can gain income from capex but you can also use it to reduce outgoings. Housing benefit and tax credits will drop if folk have stable affordable homes. Local business up and down the country can benefit from increased spending in the economy, social issues may well improve with communities developing and people feeling secure enough to start their own ventures. The country actually has an asset, something to show for the spending that will benefit the people and business, not just the corporates.
Having a baseline for homes will act as an anchor to private housing and rents and start to correct the absurd disparity between house prices and wages. That disparity is killing off what hope the economy has because it is sucking too much money from the economy. There is a far bigger picture than using capex to help out private business, that's just short term thinking and beneficial to the few at the top. May be good for jobs on the board or donations but long term does little to help the people that matter.
But you can the interest on it, now returned to the treasury and used to make Osborne look slightly less worse than he really is. Only under this government has the money been reclaimed, it should be put to better use.
Structural deficit is a political construct that can mean anything anybody wants it to mean. By all accounts, from the thread here a while ago, you can run the economy with a surplus but still have a structural deficit. It's a nonsense put about in the game of numbers which is statistics.
The myth of the structural deficit
http://www.investorschronicle.co.uk/2012/01/25/comment/chris-dillow/the-myth-of-the-structural-deficit-kxaAou6Uxk3agiUtDUZEnI/article.html
what do you mean 'Only under this government has the money been reclaimed'?
lol. there's people who understand the structural deficit, and people who don't believe in the structural deficit.
i read the first line of that article:
have you read the whole thing or just the title you're focused on?
if you don't thing there is such a thing as a structural deficit then you should contact Mr Balls because he must be wrong twice. he's admitted the last labour government miscalculated by £76bn pa, he must now be wrong again since you have found some shitty blog post that disagrees with all economists.
lol
honestly your understanding of economics is woeful. i'm not going to teach you economics just so i can tell you you are wrong. i'd much rather do that in areas that you can understand.
What I say.
George Osborne bags £35bn windfall from QE
The change in policy will cut both the public debt and budget deficit, flattering the public finance figures when the Office for Budget Responsibility updates its outlook at the Chancellor’s Autumn statement next month.
http://www.telegraph.co.uk/finance/economics/9666812/George-Osborne-bags-35bn-windfall-from-QE.html
The Bank of England has just crossed the line into straight government financing
So now we know why the Bank of England's Monetary Policy Committee called a halt to more Quantitative Easing this week – it's because the Chancellor and the Governor of the Bank of England have concocted a backdoor way of doing the same thing.
The latest little (actually quite big at a tidy £35bn) money printing wheeze comes about as close to outright monetising of government spending as it is possible for the Bank of England to go without simply creating the money and handing it by the lorry load to the Treasury, a la Weimar.
http://blogs.telegraph.co.uk/finance/jeremywarner/100021222/the-bank-of-england-has-just-crossed-the-line-into-straight-government-financing/
Get rich quick schemes and corporate welfare is not economics...although the right seem to think it is...
You must have missed the first sentence in my post.
No i understand what happened. i'm asking what this phrase means 'Only under this government has the money been reclaimed' - to me that would mean that we have a history of successive government engaging in QE that have done something other than 'reclaim' the interest.
Exactly as it says, BoE interest money has never been returned to government until this one changed it so it can be.
no, i read it. i completely understand what structural deficit means. it's nonsensical to me for you to say that it doesn't mean anything. it just means you don't understand it.
the article you posted just says it's difficult to accurately estimate.
Right so what....
actually lets not try and lead you to it.
i'm asking what this phrase means 'Only under this government has the money been reclaimed' - to me that would mean that we have a history of successive government engaging in QE that have done something other than 'reclaim' the interest.
QE began just before the last election. we have never had the situation before where the treasury was paying interest on £375bn of debt to the BoE. the idea that previous governments have done something different with the interest is bizarre.
I get that building houses will give a boost to the economy, but if your are proposing to scrap the restrictions on building houses that apply at the moment, then rather than the State borrow more money why not let the private sector builders build the homes. I would also point out that there was precious little 'income' from Council Housing.
He doesn't 'give away' anything - he simply takes less of our money. :rolleyes:
'Give away' - that would imply that it was his to give away in the first place. Brown was the same - seemed to think that the money people earned was his to do with as he wishes and it was really nice of him to let us keep 60% of it.
I don't. I can see how it would give a minimal boost a local economy but when you're talking about borrowing billions and risking paying higher interest on the trillion plus we're already in debt by there's not a hope in hell it can have the desired effect on a national economy IMO.
You gotta love leftie logic. Always generous with someone elses money.
I've got a couple of well off left leaning friends. They don't like it when I point to their two detatched houses, new cars, and regular foreign holidays and jokingly say "practice what you preach and give half of that away then - problem solved."
It's amazing how quick a conversation can change subjects after that
This government changed the rules to allow it, no other government has ever reclaimed BoE interest money paid to it by government. I'm sure Labour would have loved that wheeze in 2008 but it was only when Osborne would miss his own targets that it happened and the money used to prop up his figures, as the links earlier clearly show.
I'm not advocating the government borrowing even more to fund this idea. I would like to see a revival of the successful program that was used in the 30's where we had a private sector led housing boom to create an economic boost.
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?