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Tories set to lose Britain second AAA credit rating


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Old 24-03-2013, 20:10
petertard
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...for deficit reduction, where would we be now ? Would the deficit be lower than the current level under the Tory-Lim Dem coalition ?
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Old 24-03-2013, 20:22
Landis
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Quite simply, unless you have a time machine - we will never know. (Rochdale would be just one of several stops....)
But when you look at his interviews just after the election, and his predictions about the economy, and our future Credit Rating, it is hard not to wonder.
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Old 24-03-2013, 20:25
Pandorian
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...for deficit reduction, where would we be now ? Would the deficit be lower than the current level under the Tory-Lim Dem coalition ?
Perhaps you can tell us what the Darling Plan was and then we maybe able to answer your question.
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Old 24-03-2013, 20:26
Glyn W
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Without knowing what growth we would have had instead of Osborne flatlining it, it's hard to say.
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Old 24-03-2013, 20:30
lemonbun
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If Labour had won the election, the likelihood is that Balls, rather than Darling, would be chancellor.
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Old 24-03-2013, 20:32
Glyn W
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If Labour had won the election, the likelihood is that Balls, rather than Darling, would be chancellor.
What do you base that on?
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Old 24-03-2013, 20:33
Jol44
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Could they have really done a huge amount worse?
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Old 24-03-2013, 20:34
Majlis
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...for deficit reduction, where would we be now ? Would the deficit be lower than the current level under the Tory-Lim Dem coalition ?
Well as the Osborne plan has slipped then we are actually following the Darling plan - how do you think it's going?
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Old 24-03-2013, 20:36
Glyn W
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Well as the Osborne plan has slipped then we are actually following the Darling plan - how do you think it's going?
Really? Where's the growth stimulus?
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Old 24-03-2013, 20:38
Upnorthviewer
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Tories will say stimulus just puts the deficit up but the fact is we had decent growth off it and keeping that going for some time more might have enabled the economy to develop its own momentum.

The difficult thing would have been knowing when to ease off the stimulus.

Japan had a massive asset price crash in the mid nineties and with a huge government stimulus GDP never fell below what it was at the height of the bubble.

People will say Japan(?) lost decade mate but if commercial property prices had fallen 87% in the UK, as they did in Japan in 1995, what do people think would have followed here? We'd all have been in the workhouse.
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Old 24-03-2013, 20:43
monkeydave68
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Could they have really done a huge amount worse?
well they did get the ball rolling pretty good
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Old 24-03-2013, 21:19
cpu121
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Old 24-03-2013, 21:45
whip
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Could they have really done a huge amount worse?
I think that was the idea that the Tories won(sic) the election on. Then they went and showed up in spades.
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Old 24-03-2013, 21:54
WindWalker
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Really? Where's the growth stimulus?
This is their attempt...

Osborne’s sub-prime mortgage mistake


When will they ever learn? Last week, in a Budget which can be praised for many of its pro-business measures, sat a poison pill which the more you look at it, the more toxic it appears.

George Osborne announced with a flourish that the new Help to Buy scheme would support borrowers who would otherwise fail in their attempts to get a mortgage. And who will look after this scheme on behalf of the Government? Hilariously, Northern Rock Asset Management, the wing of the Treasury which presides over running down the “bad bit” of that former darling of the mortgage market, Northern Rock. Chaps, there is a clue in there somewhere.

As with everything Whitehall-driven, the schemes themselves are horribly complicated, increasing the risk of unintended consequences many times.

First, there is the equity loan scheme. Under this plan the Government buys a stake worth up to 20pc of the value of a new-build home. The home itself can be valued at up to £600,000, an amount double what is needed to buy a four-bedroom detached new-build house outside London. Quite what the Government is doing at this end of the housing market is unclear.

Second, there is the mortgage guarantee programme. If a buyer of any home can put together a 5pc deposit, the Government will guarantee a higher loan-to-value mortgage than a lender would agree to unaided.

The scheme will provide up to £12bn of guarantees which will support £130bn of lending for up to 570,000 mortgages. These are horribly high numbers which are listed in the Budget Red Book over two paragraphs of innocuous-looking text. Again the scheme is “temporary” and will run for three years from January 2014.

The effect of the two schemes will be that demand for housing will rise more quickly than supply, putting upward pressure on prices. An asset bubble follows. And we know where that gets us.


http://www.telegraph.co.uk/finance/c...e-mistake.html

Clueless is being kind...
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Old 24-03-2013, 22:00
Majlis
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Really? Where's the growth stimulus?
Quite - now Osborne's spending plans have changed he is actually spending almost exactly what Darling was planning. Perhaps Darling (or whoever replaced him) wasn't intending to keep to his published plan?
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Old 24-03-2013, 22:04
WindWalker
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Quite - now Osborne's spending plans have changed he is actually spending almost exactly what Darling was planning. Perhaps Darling (or whoever replaced him) wasn't intending to keep to his published plan?
What on?
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Old 24-03-2013, 22:18
whip
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Quite - now Osborne's spending plans have changed he is actually spending almost exactly what Darling was planning. Perhaps Darling (or whoever replaced him) wasn't intending to keep to his published plan?
So your saying it's Darling that had it right and Osbourne was hopelessly wrong.
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Old 24-03-2013, 22:26
husted
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Tory, BOE and Osborne's rhetoric has been doom and disaster. 'We're in a worse state than Greece' etc. They destroyed confidence. Darling's plan was to be positive, keep growing and gradually cut.

It was a better plan, but the problem would've been (if Labour had won the last election) that it came from Labour. Labour 's plan wouldn't have worked well either as people had lost confidence in Brown.

People and companies need to believe we are going forward before they start employing more people, investing and taking risks.

Difficult as British people have become very negative.

So IMO the recovery will come only as the world economy grows and we get pulled forward by other economies.
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Old 24-03-2013, 22:27
Majlis
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So your saying it's Darling that had it right and Osbourne was hopelessly wrong.
Well if you agree with the current spending plans then you can say that Darling was correct.
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Old 24-03-2013, 22:33
whip
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Well if you agree with the current spending plans then you can say that Darling was correct.
I believe the idea you can cut spending just like that is ridiculous, but I also think Darling may have taken it from other places rather than the sick and defenceless like they are doing at the moment.
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Old 24-03-2013, 22:34
Nick1966
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...for deficit reduction, where would we be now ? Would the deficit be lower than the current level under the Tory-Lim Dem coalition ?
We shall never know for sure.

Although as I understand it, currently levels of annual UK government deficits are higher in Mr Darling's 2013 projections which he made prior to the 2010 general elections.
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Old 24-03-2013, 22:39
WindWalker
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So where has spending increased under Osborne?
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Old 24-03-2013, 22:40
thenetworkbabe
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Quite - now Osborne's spending plans have changed he is actually spending almost exactly what Darling was planning. Perhaps Darling (or whoever replaced him) wasn't intending to keep to his published plan?
He's spending more to achieve less. The alternative trajectory was to maintain growth as much as possible, reign in increasing expenditure, but not have silly cuts, and have some tax rises. There would also have been no appetite for the massive extra assault on the sick and poor and a more cautious approach to the welfare cuts Labour had started. The UK might have followed more of the trajectory the US did (albeit by accident there as no one has been in charge) than the one it did.

Osborne just had silly ideas that people said were silly at the time.He assumed cuts would build up the private sector and we actually find that they just reduced demand for the private sector.It doesn't need more room in the economy, or more profits , it needs demand. That was just following a Tea Party like ideology. He also assumed that exports would pick up the missing demand - in a world where our markets were also in depression and we were failing to compete in emerging ones that were doing better. That was ridiculous. The result is plummetting demand, necessary jobs undone, labour moved into low pay and temporary jobs, declining uptake for higher education and losing the AAA status that was supposedly the outcome of not following the plan for drastic cuts.

Meanwhile, there have been drastic cuts and areas like health have failed to get the resources needed to even stand still. Our defence capability and international position have been savaged. And its done precisely no good at all - as benefits rise to cover the people sacked, and demand and economic activity falls - taking tax take with it . You end up with a downward spiral as lower real pay, increased savings , increased taxes and fiscal drag just strip more and more demand out of the economy. its doubtful if Darling could have got it so wrong.
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Old 24-03-2013, 22:41
allaorta
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Could they have really done a huge amount worse?
They did.
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Old 24-03-2013, 22:43
husted
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We shall never know for sure.

Although as I understand it, currently levels of annual UK government deficits are higher in Mr Darling's 2013 projections made prior to the 2010 general elections.
It's about what you do with the money too.

Darling would've spent money encouraging demand. Keynesian style.

This should've lead to more consumer and business spending and investment, therefore more economic activity and more tax revenue. More tax revenue =>lower deficit.

Instead Osborne is focused on supply. More money in corporate pockets, cheap labour etc. It's not working.
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