[petertard]

Just heard it on the tv. No-one ever NEEDS inflation>

[swingaleg]

Originally Posted by petertard

Just heard it on the tv. No-one ever NEEDS inflation>

it's one of the best ways to reduce debt

[petertard]

But Thatcher always said we had to get inflation down.

[*Sparkle*]

Getting inflation down isn't the same as getting rid of it, and it's not at all the same as doing into deflation. Inflation at about 1 or 2% is about right to keep things ticking over.

For Greece, it might be a case of hoping to implement pay/pension cuts by less obvious means. Keeping wages static, while inflation over-takes is the equivalent of a pay cut.

In tough economic times, you are seen as whinging if you won't accept a pay freeze, whereas people seem to have sympathy for an actual pay cut.

[swingaleg]

Originally Posted by petertard

But Thatcher always said we had to get inflation down.

that's when we had 20% inflation in the 80s..........now it's about 4%

[Phil 2804]

Originally Posted by petertard

Just heard it on the tv. No-one ever NEEDS inflation>

Well actually...

At the start of the 1970s Britain's national debt was equal to 80% of GDP. By the end of the decade, despite borrowing heavily all through the decade it stood at 40% of GDP.

[BomoLad]

Originally Posted by petertard

But Thatcher always said we had to get inflation down.

Thatchernomics was inflation low at any (most) costs, including interest rates and unemployment.

[Doc Shmok]

Economist have created a system were it's good that money is less worth. And there is of course growth... endless growth never ending growth..

http://www.businessgreen.com/bg/news...wf-earths-2030
WWF: We will need two Earths by 2030

http://www.clubofrome.org/?p=4211
2052: New Report issues a warning about humanity’s ability to survive without a major change in direction

I wonder how long they can stretch the lies until Natural Laws kick in.

C (consumption) is normally the largest GDP component in the economy, consisting of private (household final consumption expenditure) in the economy. These personal expenditures fall under one of the following categories: durable goods, non-durable goods, and services. Examples include food, rent, jewelry, gasoline, and medical expenses but does not include the purchase of new housing.

You devalue money and I have to spend more money then your GDP grows and that is then a success story..

You gotta be kidding..

In fact nothing seems to really grow as there are never enough jobs for most people and we waste a lot of energy to essentially stay at par..

Another growth success story is that everyone lends everyone something ...

I liked the Swiss experiment business model where everyone was forced to spend the money that day ...

[Phil 2804]

Originally Posted by petertard

But Thatcher always said we had to get inflation down.

Then why did she allow it to get out of control at the start and and at the end of her time in office?

During her first term it peaked at 23%, during her third term it peaked at 10.5%.

High inflation is bad for everyone except a government that has huge debts.

[Mr.Humphries]

Originally Posted by Phil 2804

Then why did she allow it to get out of control at the start and and at the end of her time in office?

During her first term it peaked at 23%, during her third term it peaked at 10.5%.

High inflation is bad for everyone except a government that has huge debts.

At the time the country was dominated by waste. Subsidies for inefficient industries selling products no one wanted. Also there was an unfairly high welfare bill such as today. These needed to be cut and this created the imbalance. But with sensible tax policies Thatcher got the country back on an even keel with prosperity and profit which increased living standards and this led to reduced inflation and more investment for businesses. We need someone like her back at the helm. We are sinking.

[Phil 2804]

Originally Posted by Mr.Humphries

At the time the country was dominated by waste. Subsidies for inefficient industries selling products no one wanted. Also there was an unfairly high welfare bill such as today. These needed to be cut and this created the imbalance. But with sensible tax policies Thatcher got the country back on an even keel with prosperity and profit which increased living standards and this led to reduced inflation and more investment for businesses. We need someone like her back at the helm. We are sinking.

So she reduced the welfare bill by trebling unemployment in 2 years and presiding over the highest level of unemployment ever in the UK?

When Mrs Thatcher came to office she instigated one of the largest sustained increases in public spending, largely funded through borrowing. Far higher than any of the increases under Blair/Brown.

[jmclaugh]

I think the idea is to inflate away debt as two economists on Newsnight said the same thing yesterday. The most controversial part though was Paxman's crass comment when he referred to Greece leaving the € as "a bad kebab being vomitted up" which a Greek politician being interviewed took as being insulting.

[Mr.Humphries]

Originally Posted by Phil 2804

So she reduced the welfare bill by trebling unemployment in 2 years and presiding over the highest level of unemployment ever in the UK?

When Mrs Thatcher came to office she instigated one of the largest sustained increases in public spending, largely funded through borrowing. Far higher than any of the increases under Blair/Brown.

The increased public spending was most unfortunate. We can learn that this was wrong as it is today. The high unemployment was due to overmanning and someone needed to tackle the waste. It is a shame though that she was prejudiced against working class people but the overall unhealthy picture need to be tackled. We need someone like her today.

[heskethbang]

Originally Posted by Mr.Humphries

The increased public spending was most unfortunate. We can learn that this was wrong as it is today. The high unemployment was due to overmanning and someone needed to tackle the waste. It is a shame though that she was prejudiced against working class people but the overall unhealthy picture need to be tackled. We need someone like her today.

On the contrary, she considered them to be 'my people'. Her victories in the elections in '79 and '83 were in no small part down to working class voters switching allegiances, particularly the C2's and to some extend the D's. The break in post war consensus came from ordinary people as much as it did from Mrs Thatcher.

[Nick1966]

Originally Posted by Phil 2804

High inflation is bad for everyone except a government that has huge debts.

Inflation is also good for those with mortgages on their property and who have no savings.

With 10% per annum inflation, your mortgage repayments will be halved in real terms after just 5 years. And you may also get a 10% pa pay rise and your property's value may also have kept pace with inflaiton, too.

Inflation is good for homeowners with big mortgages, credit card debts and no savings.

[Nick1966]

Originally Posted by Mr.Humphries

We need someone like [Mrs Thatcher] today.

Specifically to:

• Re-introduce the poll tax
• Put section 28 back on the statue books
• Scrap the Greater London Authority and post of mayor
• Make a mess of bus services outside London (she wasn't that stupid to do the same in London)

[johnnybgoode83]

Greece needs helluva lot more than inflation, they need a miracle if they are to survive and stay in the Eurozone.

[Nick1966]

Originally Posted by johnnybgoode83

Greece needs helluva lot more than inflation, they need a miracle if they are to survive and stay in the Eurozone.

In which case, why is more likely happen:

a mircale

...or..

Greek exit from eurozone

?

[jmclaugh]

Originally Posted by Nick1966

In which case, why is more likely happen:

a mircale

...or..

Greek exit from eurozone

?

Logic would tell you the latter and I think it will in the end.

However when it comes to logic that goes out of the window when it is the European project so they may well try yet more sticking plaster.

[johnnybgoode83]

Originally Posted by Nick1966

In which case, why is more likely happen:

a mircale

...or..

Greek exit from eurozone

?

I can see them leaving the euro eventually. There are only so many bail outs the other country's will be willing to fund without seeing improvements.

[wallster]

Originally Posted by swingaleg

that's when we had 20% inflation in the 80s..........now it's about 4%

We didn't have 20% inflation in the 80s. We did have 26% inflation during the Labour Government that preceded Mrs Thatcher's first period in office.

[Nick1966]

Originally Posted by johnnybgoode83

I can see them leaving the euro eventually.

So can I.

The point when the Greek goverment adopts a new currency, is when their banks run out of euros.

Already some Greek banks have seen their overall deposit base shrink by 25% as savers take out their cash and move it somewhere less risky.

[Davser]

Originally Posted by Nick1966

Inflation is good for homeowners with big mortgages, credit card debts and no savings.

As long as your pay keeps up with inflation.

[Nick1966]

Originally Posted by Davser

As long as your pay keeps up with inflation.

Exactly.

And this is the problem with inflation this time around.

Currently most people's pay is not keeping up with inflation. Anybody on average or below avergage pay is worse off than they were 4 years ago.

And it's fair to say that looking ahead, most folk will see yet another year when their pay won't match prices rises.

Only the top 1% of British employees are seeing a rise in their living standards.

[Drunken Scouser]

Originally Posted by Nick1966

Exactly.

And this is the problem with inflation this time around.

Currently most people's pay is not keeping up with inflation. Anybody on average or below avergage pay is worse off than they were 4 years ago.

And it's fair to say that looking ahead, most folk will see yet another year when their pay won't match prices rises.

Only the top 1% of British employees are seeing a rise in their living standards.

I've said before on here that I'm open to the idea of inflating debt away, but what you point out is a major drawback to the idea. There's been a huge structural change in our economy since the days when inflationary ideas were mainstream. In those days wages kept up with productivity, hence why real wages actually rose during the stagflationary period of the 70s. Now however they routinely lag behind, or even stagnate completely.

I think before we can consider inflationary ideas we need to radically change the way wage awards are given, perhaps by making the remuneration committees at large companies set pay for the entire company and not just the board, and then putting it up for a company-wide vote, with a certain level of consent required from the workforce before it becomes company policy.