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Cable calls for "greatly expanded" spending funded through borrowing, not cuts


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Old 07-03-2013, 09:07
Annsyre
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Discussing which Labour safe seat he'll get come the next election. When will people realise this guy is a duplicitous ship jumper?
He certainly is and he is also an accomplished self-publicist.
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Old 07-03-2013, 09:20
flagpole
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Public housing does pay you back. It reduces housing costs, puts more money into the economy ( by creating jobs and allowing the recipients of public housing having more disposable income). It stabilises family life, makes people feel more secure, etc. It is a GOOD thing
I don't doubt that it's a good thing but the question, if you are going to borrow specifically to do it is about economic growth.

obviously all public expenditure creates employment at the time it is done. that is a given. but if you are going to borrow more specifically to do it you need an investment that will pay you back in cash.

think of it like you were running a business and applying for a loan. you might get one if you said you wanted to upgrade your IT systems, buy a truck, some piece of manufacturing equipment. you'd never get one if you said you wanted to make your family more secure.

the cause of building more housing stock is noble and i would like to see it done as part of the day to day activities of the government. but in the context of a one off stimulus program it is not the most effective use.
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Old 07-03-2013, 09:31
Auld Snody
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I don't doubt that it's a good thing but the question, if you are going to borrow specifically to do it is about economic growth.

obviously all public expenditure creates employment at the time it is done. that is a given. but if you are going to borrow more specifically to do it you need an investment that will pay you back in cash.

think of it like you were running a business and applying for a loan. you might get one if you said you wanted to upgrade your IT systems, buy a truck, some piece of manufacturing equipment. you'd never get one if you said you wanted to make your family more secure.

the cause of building more housing stock is noble and i would like to see it done as part of the day to day activities of the government. but in the context of a one off stimulus program it is not the most effective use.
It is because it creates an asset that can be exploited. People will have to pay rent, they do not get their housing free. As a long term asset ( houses last a long time) it creates a revenue stream. The side effects are ( as it were) stability. Stability increases well being, meaning less crime, less illness, less (legal and illegal) drug use etc. It is a GOOD thing
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Old 07-03-2013, 09:41
flagpole
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It is because it creates an asset that can be exploited. People will have to pay rent, they do not get their housing free. As a long term asset ( houses last a long time) it creates a revenue stream. The side effects are ( as it were) stability. Stability increases well being, meaning less crime, less illness, less (legal and illegal) drug use etc. It is a GOOD thing
It is a good thing. it's just not the best form of capex for economic stimulus.

unfortunately whilst it does create a revenue stream it, for the most part, actually robs peter to pay paul. you may well think that peter has enough money. and he may well do. but if you are trying to create a stimulus it doesn't help.

like i say i want more homes built across all prices and sizes. but it is demonstrably true that it is not the best form of economic stimulus for a one off project like this.
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Old 07-03-2013, 09:41
rusty123
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If given the green light for a govt spending spree, what would people spend it on that would benefit everyone?

I've been formulating an idea for what I'd spend it on but I'll keep my powder dry on that for a sec because I haven't fully thought it through yet.
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Old 07-03-2013, 09:51
flagpole
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If given the green light for a govt spending spree, what would people spend it on that would benefit everyone?

I've been formulating an idea for what I'd spend it on but I'll keep my powder dry on that for a sec because I haven't fully thought it through yet.
generally it is accepted that it has to be infrastructure projects. and things that alleviate barriers to economic activity.

road building is always popular. most of the stuff that would help is in private hands. a new airport in the south east, the railways, broadband etc.
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Old 07-03-2013, 10:00
Auld Snody
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It is a good thing. it's just not the best form of capex for economic stimulus.

unfortunately whilst it does create a revenue stream it, for the most part, actually robs peter to pay paul. you may well think that peter has enough money. and he may well do. but if you are trying to create a stimulus it doesn't help.

like i say i want more homes built across all prices and sizes. but it is demonstrably true that it is not the best form of economic stimulus for a one off project like this.
And there lies the problem with your thinking. It should not be a one off project. Investment in infrastructure should be ongoing.
It is the short termism approach and the lack of investment in our infrastructure , over the last 30 years, that has led us to the position we are in now.
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Old 07-03-2013, 10:08
flagpole
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And there lies the problem with your thinking. It should not be a one off project. Investment in infrastructure should be ongoing.
It is the short termism approach and the lack of investment in our infrastructure , over the last 30 years, that has led us to the position we are in now.
lol.

that's not a problem with my thinking. i've said we need to build homes, and more homes, as part of the day to day activities of our government. i said that a couple of posts ago.

this thread though is about a one off borrowing for economic stimulus program. and i'm saying that home building is not the best way of doing that. that you need to invest in economic infrastructure.

i think you might be arguing just for the sake of it. you know you're angry, just not exactly what about.
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Old 07-03-2013, 10:16
Upnorthviewer
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Quite, we were 'borrowing to invest' in the years leading up to the crisis - worked well didn't it?
Borrowing as a % of GDP was by historical standards fairly moderate until the bank bailout. We were running a small deficit.

The national debt is still racing upwards under Osborne you know.
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Old 07-03-2013, 10:17
grassmarket
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I'd like to see them spend some quantitative easing money rebuilding British industry the way Germany did after the war.
Or the Greeks did during the 1980s and 1990s.
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Old 07-03-2013, 10:29
flagpole
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Borrowing as a % of GDP was by historical standards fairly moderate until the bank bailout. We were running a small deficit.

The national debt is still racing upwards under Osborne you know.
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.
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Old 07-03-2013, 10:29
flagpole
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I'd like to see them spend some quantitative easing money rebuilding British industry the way Germany did after the war.
you can't spend QE money.
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Old 07-03-2013, 10:41
Upnorthviewer
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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.
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.
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Old 07-03-2013, 11:09
Auld Snody
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lol.

that's not a problem with my thinking. i've said we need to build homes, and more homes, as part of the day to day activities of our government. i said that a couple of posts ago.

this thread though is about a one off borrowing for economic stimulus program. and i'm saying that home building is not the best way of doing that. that you need to invest in economic infrastructure.

i think you might be arguing just for the sake of it. you know you're angry, just not exactly what about.
I am not angry, disappointed , but not angry. A one off stimulus programme is still short termism. We are not planning for the future, we are planning for yesterday.
We need to get spending on infrastructure now. That should lead to stimulus in other areas of the economy.
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Old 07-03-2013, 11:15
flagpole
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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.
have they?
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Old 07-03-2013, 11:16
flagpole
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I am not angry, disappointed , but not angry. A one off stimulus programme is still short termism. We are not planning for the future, we are planning for yesterday.
We need to get spending on infrastructure now. That should lead to stimulus in other areas of the economy.
disappointed with whom?
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Old 07-03-2013, 11:16
Upnorthviewer
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Sure.
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Old 07-03-2013, 11:17
flagpole
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they have presided over an economic boom and come out with more debt than they went in to it with? just before the biggest recession the world had ever seen? when?
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Old 07-03-2013, 11:37
rusty123
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generally it is accepted that it has to be infrastructure projects. and things that alleviate barriers to economic activity.

road building is always popular. most of the stuff that would help is in private hands. a new airport in the south east, the railways, broadband etc.
Those ideas, particularly roads etc always strike me as being too localised. I don't see how the billions they are looking at on HS2 for instance would be of any benefit to me in Gloucester let alone anyone further south and west of here and what this country needs is a blanket boost not a local one.

I'm not a great believer in the building affordable social housing boosts the economy line either. Again that's localised and enters into "field of dreams" territory to my way of thinking. For one thing, where are the well paid jobs for the people who'd occupy the things once built?

I think it's time to start thinking outside of the box and think of schemes that kill multiple birds with fewer stones and spread the benefit and I've been wondering if our energy demands and environmental commitments hold the key to all of that.
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Old 07-03-2013, 11:51
Andy2
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It's time for Vince to wrestle the controls off Osborne and grab hold of the joystick
It's time for him to come clean and cross the floor to where 'magic money tree' fantasies are still current.
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Old 07-03-2013, 11:53
flagpole
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Those ideas, particularly roads etc always strike me as being too localised. I don't see how the billions they are looking at on HS2 for instance would be of any benefit to me in Gloucester let alone anyone further south and west of here and what this country needs is a blanket boost not a local one.

I'm not a great believer in the building affordable social housing boosts the economy line either. Again that's localised and enters into "field of dreams" territory to my way of thinking. For one thing, where are the well paid jobs for the people who'd occupy the things once built?

I think it's time to start thinking outside of the box and think of schemes that kill multiple birds with fewer stones and spread the benefit and I've been wondering if our energy demands and environmental commitments hold the key to all of that.
building motorways is generally good for everyone even if you don't live along it. the same with HS2. you don't have to use it feel the economic benefit. and it is economic activity we are talking about.

Energy, and cheap energy, would be great for everyone. but this is largely out of the government's hands. the economic benefit of green energy needs to be considered very carefully. buying a load of german wind turbines that produce more expensive energy than the stuff we have already is not great. i'm sure there are ways of doing it but just throwing money at it isn't it.

I'm all for out of the box thinking. if we are going to do this we do need to get it right. the last thing we need is to borrow more and it not work.
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Old 07-03-2013, 12:17
rusty123
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building motorways is generally good for everyone even if you don't live along it. the same with HS2. you don't have to use it feel the economic benefit. and it is economic activity we are talking about.

Energy, and cheap energy, would be great for everyone. but this is largely out of the government's hands. the economic benefit of green energy needs to be considered very carefully. buying a load of german wind turbines that produce more expensive energy than the stuff we have already is not great. i'm sure there are ways of doing it but just throwing money at it isn't it.

I'm all for out of the box thinking. if we are going to do this we do need to get it right. the last thing we need is to borrow more and it not work.
HS2 is probably a bad example. For one thing I'd have probably died of old age before anyone boards a train in Manchester bound for London. It's decades away. Within that timeframe we face a major energy problem.
I'm thinking about the latest generation of solar panels. For starters I'd make them compulsory on every newbuild - be that business or domestic properties (private or council).

I was listening to Nicky Campbell for a bit this morning about our energy problems and from that my mind wandered bringing in topics like the current economy, calls for government intervention to boost the economy, jobs etc and I started wondering why not start manufacturing and installing panels with a view to putting them on every house in the UK starting with those from poorer backgrounds?
That would create jobs for years to come, both in manufacture and localised installation and would boost the local economies by putting a few more quid in the pockets of the poorer people who statistics say are more inclined to recycle money through the local economies than any other group. It ticks a lot of boxes and spreads the benefit to all corners of the country and wouldn't have the inflationary pitfall things like a 'living wage' would have.
Labour were always accused of creating non jobs. At least this would be a good use of taxpayers money.

I'm not suggesting for a moment that solar is the answer to our energy problems but it could help solve a few other (and more immediate) problems along the way and anything that decreases our demand on fossil fuels also reduces the price of them so the facts that everything we buy in the shops has a diesel cost associated with it that can push inflation out of our control and make forecasting and budgetting a nightmare....I'm rambling now (deep breaths)

It seems such an obvious choice I must be missing something. Why would a motorway or a few new council houses (that wouldn't neccessarily solve our social mobility problems regarding where the people are in relation to the jobs) be a better proposition?
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Old 07-03-2013, 13:46
flagpole
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HS2 is probably a bad example. For one thing I'd have probably died of old age before anyone boards a train in Manchester bound for London. It's decades away. Within that timeframe we face a major energy problem.
I'm thinking about the latest generation of solar panels. For starters I'd make them compulsory on every newbuild - be that business or domestic properties (private or council).

I was listening to Nicky Campbell for a bit this morning about our energy problems and from that my mind wandered bringing in topics like the current economy, calls for government intervention to boost the economy, jobs etc and I started wondering why not start manufacturing and installing panels with a view to putting them on every house in the UK starting with those from poorer backgrounds?
That would create jobs for years to come, both in manufacture and localised installation and would boost the local economies by putting a few more quid in the pockets of the poorer people who statistics say are more inclined to recycle money through the local economies than any other group. It ticks a lot of boxes and spreads the benefit to all corners of the country and wouldn't have the inflationary pitfall things like a 'living wage' would have.
Labour were always accused of creating non jobs. At least this would be a good use of taxpayers money.

I'm not suggesting for a moment that solar is the answer to our energy problems but it could help solve a few other (and more immediate) problems along the way and anything that decreases our demand on fossil fuels also reduces the price of them so the facts that everything we buy in the shops has a diesel cost associated with it that can push inflation out of our control and make forecasting and budgetting a nightmare....I'm rambling now (deep breaths)

It seems such an obvious choice I must be missing something. Why would a motorway or a few new council houses (that wouldn't neccessarily solve our social mobility problems regarding where the people are in relation to the jobs) be a better proposition?
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.
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Old 07-03-2013, 13:47
Auld Snody
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disappointed with whom?
With you, dear flagpole
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Old 07-03-2013, 13:57
thomas pain
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I am not convinced that mass council house building is going to be a massive growth stimulus. .
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.
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