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How much does policy really affect the economy ?
I studied economics while at college it is a subject that has always interested me. Often described as a social science. It explains what I tend to think of the pattern of human behaviour.
What was clear to me at the time is that the economy follows a given pattern a cycle of growth leading to a rapid growth into a boom followed by a decline that will result in recession before it starts over again. This pattern is repeated without fail, the time between the boom and bust cycle can change it happens typically over years but a single cycle can cover 5 years or 20 years.
The heart boom and bust cycle is complex but the single biggest factor I have always view as confidence in the market or a lack of. Like moods it is prone to go up and down and while outside factors have an impact to what degree they can control it is a subject for debate.
Which brings me to policy. Just how much impact does government policy play in the economy ? Labour took at lot of the blame for the last recession but how much of that was really caused by its policy ? The same is also true of the tories did their policy of cut backs leads us back to boom or did they just ride out the bad times until the market just picked up naturally.
I believe while policy can help reduce the problem by taking the top level of the boom by saving and spending your way out of the down turn. Policy plays a much lesser role than the media and general public believe. If you did nothing at all the results I believe would not be much different. You might change the cycle term by a few months one way or another but that is it. You cannot stop it and you cannot even determine at what point on the cycle you are on until that time has passed and you have the figures.
the parties are locked into a game of spending when the times are good to please the public and having to reduce costs when on a down turn. for all the policy they generate and stats about employment figures to me the results are more down to luck at which point the party is in power to claim the credit or get stuffed with the blame.
what do you think ? have the tories saved us or is this just down to being in the right place at the right time ?
What was clear to me at the time is that the economy follows a given pattern a cycle of growth leading to a rapid growth into a boom followed by a decline that will result in recession before it starts over again. This pattern is repeated without fail, the time between the boom and bust cycle can change it happens typically over years but a single cycle can cover 5 years or 20 years.
The heart boom and bust cycle is complex but the single biggest factor I have always view as confidence in the market or a lack of. Like moods it is prone to go up and down and while outside factors have an impact to what degree they can control it is a subject for debate.
Which brings me to policy. Just how much impact does government policy play in the economy ? Labour took at lot of the blame for the last recession but how much of that was really caused by its policy ? The same is also true of the tories did their policy of cut backs leads us back to boom or did they just ride out the bad times until the market just picked up naturally.
I believe while policy can help reduce the problem by taking the top level of the boom by saving and spending your way out of the down turn. Policy plays a much lesser role than the media and general public believe. If you did nothing at all the results I believe would not be much different. You might change the cycle term by a few months one way or another but that is it. You cannot stop it and you cannot even determine at what point on the cycle you are on until that time has passed and you have the figures.
the parties are locked into a game of spending when the times are good to please the public and having to reduce costs when on a down turn. for all the policy they generate and stats about employment figures to me the results are more down to luck at which point the party is in power to claim the credit or get stuffed with the blame.
what do you think ? have the tories saved us or is this just down to being in the right place at the right time ?
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The only things in the hands of Government is the law and taxation .
Without the right amount of taxes coming in any government is on its ass.
Well Labour didnt agree with you that the economy follows a cycle of boom and bust, they thought (fools) that they had abolished the economic cycle - so their policies made the inevitable crash worse.
So policy does play a part in balancing out the normal economic cycles.
The oil wealth wasn't frittered away.
What was it spent on - and while we are at it what happened to the money from the privatisations
Well it was spent on higher public spending than we otherwise could have afforded without higher taxes.
... certainly not infrastructure
Quite a lot. For example there is a correlation between high levels of tax and borrowing and slower growth.
GDP includes what the government does, so when they government does less this can adversely effect economic growth - at least until the non-government sector takes the slack.
Governments help by insuring the infrastructure supports business.
Having a healthy well educated workforce makes us more productive and therefore a wealthier nation.
you would rather lower benefits and an oil fund?
If this post is for real then I despair at the economic illiteracy.