[Chizzleface]

Originally Posted by husted

So the Tory government who made the decision werent to blame?

I don't believe I said that.

[Phil 2804]

Originally Posted by Chizzleface

That was caused by poor guidance - we should never have entered the European Exchange Rate Mechanism.

Black Wednesday came a year after the recession ended. The recession of 1990 was caused by runaway inflation and a failure to curtail the housing market leading to a bust.

The consequences of the recession was the fall in the value if Sterling leading to its eventaul ejection and full devaluation when we exited the ERM.

[Phil 2804]

Originally Posted by bowland37

That's more an accident than any genius on Darling's part. If Gordon Brown had still been PM our triple AAA credit rating would be long gone, growth would probably only be marginally higher and the deficit would be even worse as the small amount of extra growth wouldn't compensate for the higher interest payments and higher public spending.

All fantasy and conjecture based on political bias.

[ThePhotographer]

The numbers involved are mind boggling.

Cutting the deficit is a tricky task, and then to maintain a surplus for a while to may down the deficit. Tough.

[Chizzleface]

Originally Posted by Phil 2804

Black Wednesday came a year after the recession ended. The recession of 1990 was caused by runaway inflation and a failure to curtail the housing market leading to a bust.

The consequences of the recession was the fall in the value if Sterling leading to its eventaul ejection and full devaluation when we exited the ERM.

Yes, Black Wednesday was the day we LEFT the EERM. I said the mistake was entering it in the first place, which it was, as it left the country's currency open to people like George Soros.

[zx50]

Originally Posted by thms

it's going up..

http://news.uk.msn.com/uk/uk-debt-so...31-trillion-57

Public-sector borrowing, excluding financial interventions such as bank bailouts, fell £2.2 billion to £13.7 billion in the month. The City had expected it to fall to £14.9 billion. But this was still enough to drive net debt to £1,003.9 billion, or 64.2% of GDP, up from £883 billion a year ago, and its highest since records began in 1993.

http://www.spectator.co.uk/coffeehou...-apology.thtml

Osborne has kept to his spending plans, which cut departmental totals by 2.8 per cent a year, a fraction faster than Labour's proposed 2.2 per cent a year. But growth has evaporated. Rather than respond to this with more savings, he chose more debt – set to exceed £1.5 trillion in 2017. You can bet that no government will run surpluses large enough to ever reduce that debt below the threshold it crossed today.

I don't get why we're borrowing at all. It's a no wonder that the debt's rising if we're still borrowing.

However, Chancellor George Osborne is still on track to hit a target set by the Office for Budget Responsibility to reduce borrowing to £127 billion in the financial year. The Government borrowed a total of £103.3 billion between April and December, which is £11.3 billion lower than the previous year.

[Old Man 43]

Originally Posted by zx50

I don't get why we're borrowing at all. It's a no wonder that the debt's rising if we're still borrowing.

Because you would have to cut public spending or increase taxes by an enormous amount to stop borrowing straight away.

Both of which would defiantly have caused a serious recession which would have caused tax revenues to drop which would have led to more cuts and we would have gone on a deflationary spiral.

The present cuts were the most that that the government could do given the situation.

[jmclaugh]

Originally Posted by thms

it was all talk.. both parties are identical

Well not quite. Labour is pretending the cuts made to public sector spending are too large and too fast while the Tories are pretending they are making the necessary cuts faster. Meanwhile the Lib Dems are pretending they are curtailing the excesses of Tory spending cuts.

Meanwhile the budget defict figures reveal a very different story, the spending cuts are modest, are accompanied by significant tax rises and are anything but a radical solution to the UK's public overspending.

[wallster]

Originally Posted by jmclaugh

Well not quite. Labour is pretending the cuts made to public sector spending are too large and too fast while the Tories are pretending they are making the necessary cuts faster. Meanwhile the Lib Dems are pretending they are curtailing the excesses of Tory spending cuts.

Meanwhile the budget defict figures reveal a very different story, the spending cuts are modest, are accompanied by significant tax rises and are anything but a radical solution to the UK's public overspending.

Absolutely correct. The spending cuts are very modest compared to the debt mountain. The only consolation is that the deficit is being reduced faster now than if Ed Balls was Chancellor, but really the Coalition Government should have made much deeper reductions in public expenditure.

[jmclaugh]

Originally Posted by wallster

the Coalition Government should have made much deeper reductions in public expenditure.

Indeed it should and to boost growth it should have used a significant chunk of the savings to cut direct taxes.

[Nick1966]

Politicians make budget plans to get them to the next general election. Over the coming 50 years, there will be strains on spending making defcit reduction ever harder that no politician now will want to deal with.

The main areas of government spending increases may well be in:

• already 10% of all government spending goes on the basic state pension. It's paid for from current tax revenue and borrowing. Do not kid yourself that your NI payment pays for your future pension - we are all living longer.
• As we live longer, NHS spending can only rise above general prices. One sixth of all government spending goes on the NHS.
• One of the biggest local council spends in on providing care for the elderley and infirm. Looking after the geriatric population costs a lot more than collecting your rubbish.

So what's to be done:

• raise tax to cover our increased life expentancy and the demands on public services which go with it
• introduce some NHS charges: GP visits and overnight hospital stays
• raise the age of the basic state pension to 70 by (say) 2020,
• And for those who have a property, use this to pay for their care in old age when they are too old to feed, cloth and care for themselves.

Any other suggestions to cut the debt ?

For the record, I am 45. Already bracing myself for having to work until they day after I die.

[jmclaugh]

Originally Posted by Nick1966

Politicians make budget plans to get them to the next general election. Over the coming 50 years, there will be strains on spending making defcit reduction ever harder that no politician now will want to deal with.

The main areas of government spending increases may well be in:

• already 10% of all government spending goes on the basic state pension. It's paid for from current tax revenue and borrowing. Do not kid yourself that your NI payment pays for your future pension - we are all living longer.
• As we live longer, NHS spending can only rise above general prices. One sixth of all government spending goes on the NHS.
• One of the biggest local council spends in on providing care for the elderley and infirm. Looking after the geriatric population costs a lot more than collecting your rubbish.

So what's to be done:

• raise tax to cover our increased life expentancy and the demands on public services which go with it
• introduce some NHS charges: GP visits and overnight hospital stays
• raise the age of the basic state pension to 70 by (say) 2020,
• And for those who have a property, use this to pay for their care in old age when they are too old to feed, cloth and care for themselves.

Any other suggestions to cut the debt ?

None of that anything to do with cutting debt it about how to stop it increasing even more as the costs of paying for a population is that is living longer. However the basic answer is the country will have to live within its means as it cannot continually borrow money to avoid doing that.

[Nick1966]

Originally Posted by jmclaugh

However the basic answer is the country will have to live within its means as it cannot continually borrow money to avoid doing that.

Any ideas how ?

A quick fix would be to raise the basic state pension to 70. Annual basic state pension payments are already around £65 billion per annum.

Or introducing capital gains tax on the sale of all residential properties ? That would raise billions.

Or how about scrapping the upper earnings limit on employees' NI contriution. The conservative scrapped the upper NI limit on employers' NI contributions when they got elected back in 1979.

[spiney2]

when banks start lending money again. this caused the credit crunch and has kept it going since. the banks all think they did nothing worng and the rest of us "should " bail them out.

a real economy that produces stuff - instead of a fake one based on accountancy and silly management fads - would also help.

[jmclaugh]

Originally Posted by Nick1966

Any ideas how ?

I'm not sure why you need any over and above living within your means. Perhaps we should have a political system whereby any incoming government gets X, being the amount of money the country can afford to spend, and the various parties can then set out their stalls on what they propose to spend it on.

Any deviation from X by more than 10% automatically triggers a general election and all members of the cabinet are barred from standing.

[wallster]

Originally Posted by Nick1966

Any ideas how ?

A quick fix would be to raise the basic state pension to 70. Annual basic state pension payments are already around £65 billion per annum.

Or introducing capital gains tax on the sale of all residential properties ? That would raise billions.

Or how about scrapping the upper earnings limit on employees' NI contriution. The conservative scrapped the upper NI limit on employers' NI contributions when they got elected back in 1979.

Let's abolish all child benefit apart from payment for the first child.

[ThePhotographer]

I don't think it's possible to fund the public services to the amounts they are. No amount of taxing the rich will solve the problem. Every argument for raising tax is to help fund public services, but what if public services need to be reduced, cut or streamlined? If people are paying tax from either national insurance, income tax, fuel duty, VAT or other tax then that money will not filter direct though the economy - at least it's going to pay staff, create jobs and possible business expansions.

Whilst I want certain things to remain 'free' I am under no illusion that they may have to be charged for at a later date such as certain services. I wont be happy with that, but it may need to happen. We need to live within our means, and work harder in life even if people are working very hard now.

I may have to work till the day I die, but to be honest I be happy with that. I would be so bored otherwise and I enjoy what I do. I admire people who work till their old, and whilst I despise people like Murdoch and their press I do admire his work ethic. To be that rich, but yet still work at his age and have the pressure he has...it is admirable. Even though his media is trash.

We also have a global population problem which is causing strain on scare resources, and I would be delighted if the UK population could have a a trend in which the population falls. We should aim to restrict child benefit payments in a way that's tough, but fair. I understand arguments about people losing their job etc and that has to be addressed. However, I think people who come from a poorer background will be satisfied or not worried to have children at a young age with the knowledge that they get housing and other stuff for them. We need to deter people from having kids unless they are financially capable of having a child in the first place - if circumstances change then that's where benefits could come into play, and I fully accept that.


Does anyone agree that we need to be looking at attracting business to this country from places such as Asia? Too much money is going out of the country, and that's a fact. To have any proper chance of a good economy we need to deal with the balance of payments problem. But that is just one thing that is required our of many things. Of course, how this goes about it up for debate and would love to hear solutions for this.

Issue of benefits needs to be addressed, but can't just eradicate benefits as the unemployment rate is high. However, should there be a influx of business to this country to bring that rate down then we can certainly look at cutting various benefits.

Whilst I support an open borders policy for people with skills to come here and go to other countries I do not support people coming here if they are to be here on benefits. We're not the only country in the world, and there's plenty more out there for people to go if they have problems in their origin country.

As stated before the numbers involved are mind boggling just to try and get a decent enough surplus to even start tackling the actual debt and then maintain a surplus if possible will be tricky.

[Chizzleface]

Originally Posted by jmclaugh

I'm not sure why you need any over and above living within your means. Perhaps we should have a political system whereby any incoming government gets X, being the amount of money the country can afford to spend, and the various parties can then set out their stalls on what they propose to spend it on.

Any deviation from X by more than 10% automatically triggers a general election and all members of the cabinet are barred from standing.

That wouldn't work, there's too many fluctuations over the course of five years, and outside influences that could force overspend.

The answer is to look to remove as many outside influences on the economy as possible - I still think it's insane that a currency can be devalued or destabilised by just one person speculating on the stock exchange. It is high time that trading on currencies was barred, this would allow for much more stable economies in the long run - it'll never happen because all countries are just as reliant on currency trading as the rest. The US owes $300bn to the UK, for example. This is how financing works, we may have large debt but we also have lots of people and countries who owe US money. That doesn't show up on the balance sheets because it's not a lump sum receipt of payments.

The bottom line is that we may have high debt, but we also expect to receive high repayments from other countries on debts they hold with us. It's a flimsy system, and one that could go belly up at any moment, but the only way to get rid of it is through international accord to stop currency trading.

[jmclaugh]

Originally Posted by Chizzleface

That wouldn't work, there's too many fluctuations over the course of five years, and outside influences that could force overspend.

I'm not talking over 5 years I'm talking every year.

[Chizzleface]

Originally Posted by jmclaugh

I'm not talking over 5 years I'm talking every year.

There's still too many outside influences for that to be feasible.

[jmclaugh]

Originally Posted by Chizzleface

There's still too many outside influences for that to be feasible.

I don't agree as if you wish to live within your means that is what you do leaving aside a natural disaster or being invaded.

[Chizzleface]

Originally Posted by ThePhotographer

I don't think it's possible to fund the public services to the amounts they are. No amount of taxing the rich will solve the problem. Every argument for raising tax is to help fund public services, but what if public services need to be reduced, cut or streamlined? If people are paying tax from either national insurance, income tax, fuel duty, VAT or other tax then that money will not filter direct though the economy - at least it's going to pay staff, create jobs and possible business expansions.

Whilst I want certain things to remain 'free' I am under no illusion that they may have to be charged for at a later date such as certain services. I wont be happy with that, but it may need to happen. We need to live within our means, and work harder in life even if people are working very hard now.

I may have to work till the day I die, but to be honest I be happy with that. I would be so bored otherwise and I enjoy what I do. I admire people who work till their old, and whilst I despise people like Murdoch and their press I do admire his work ethic. To be that rich, but yet still work at his age and have the pressure he has...it is admirable. Even though his media is trash.

We also have a global population problem which is causing strain on scare resources, and I would be delighted if the UK population could have a a trend in which the population falls. We should aim to restrict child benefit payments in a way that's tough, but fair. I understand arguments about people losing their job etc and that has to be addressed. However, I think people who come from a poorer background will be satisfied or not worried to have children at a young age with the knowledge that they get housing and other stuff for them. We need to deter people from having kids unless they are financially capable of having a child in the first place - if circumstances change then that's where benefits could come into play, and I fully accept that.


Does anyone agree that we need to be looking at attracting business to this country from places such as Asia? Too much money is going out of the country, and that's a fact. To have any proper chance of a good economy we need to deal with the balance of payments problem. But that is just one thing that is required our of many things. Of course, how this goes about it up for debate and would love to hear solutions for this.

Issue of benefits needs to be addressed, but can't just eradicate benefits as the unemployment rate is high. However, should there be a influx of business to this country to bring that rate down then we can certainly look at cutting various benefits.

Whilst I support an open borders policy for people with skills to come here and go to other countries I do not support people coming here if they are to be here on benefits. We're not the only country in the world, and there's plenty more out there for people to go if they have problems in their origin country.

As stated before the numbers involved are mind boggling just to try and get a decent enough surplus to even start tackling the actual debt and then maintain a surplus if possible will be tricky.

No, we need to concentrate on rebuilding some kind of exports industry, manufacturing needs to be restarted. Foreign companies would just exploit the tax systems and that would be no good at all for the economy. We need proper British-owned and run companies producing merchandise that outside countries want to buy.

The export market is one of the keys to economic growth.

[ThePhotographer]

Originally Posted by Chizzleface

No, we need to concentrate on rebuilding some kind of exports industry, manufacturing needs to be restarted. Foreign companies would just exploit the tax systems and that would be no good at all for the economy. We need proper British-owned and run companies producing merchandise that outside countries want to buy.

The export market is one of the keys to economic growth.

So, companies coming here and actually creating jobs would be bad if those companies were to relocate their headquarters and be based here? They would create jobs, pay those people money, pay income tax and NI and allow the UK welfare bill to be cut. How do you exploit PAYE for an average worker?

Of course exports are key, but what do we do to change it? Is there currently an export market in the UK that can be grown? We do need British based companies to expand, create jobs but is that easier said than done? What companies or areas of business that can expand and help to get a positive balance of payments situation going.

[Chizzleface]

Originally Posted by jmclaugh

I don't agree as if you wish to live within your means that is what you do.

The problem is that economies can't be compared to simple debt accounts. Like I said, we owe money out but we balance that by having money owed to us in return - that's the bit the Government don't tell you when they play the "masses of debt" line.

[Chizzleface]

Originally Posted by ThePhotographer

So, companies coming here and actually creating jobs would be bad if those companies were to relocate their headquarters and be based here? They would create jobs, pay those people money, pay income tax and NI and allow the UK welfare bill to be cut. How do you exploit PAYE for an average worker?

Of course exports are key, but what do we do to change it? Is there currently an export market in the UK that can be grown? We do need British based companies to expand, create jobs but is that easier said than done? What companies or areas of business that can expand and help to get a positive balance of payments situation going.

It would be better to encourage wholly British companies to grow, rather than foreign companies. We want foreign companies to buy from us, not produce from within.