The Spending Review (tackling the Socialists debt mountain)

[dune]

We are now almost at the point where the seeds are sewn in Britains long road to recovery, and it has long been my view that we need to cut back hard and fast so as to get this country back where we belong on the top table of global powers.

 

I was critical of George Osborne in the run up to the election, and would have much prefered KEN CLARKE - THE MAN WHO LAYED THE FOUNDATIONS FOR BROWN - which created the miracle of a Socialist government remaining in power so long, but I have to say that since the coalition came into being, and the more i've heard from George Osborne, he absolutely spot on with his assessments of where we are and where we need to go. I particularly admire his steadfastness and resolve to make really tough decisions and aside from my reservations about cutting the fleet and its related hardware (this should be avioded at all costs IMO) no area should be ringfenced, and if I was GO I would certainly be looking to target the NHS more than is likely. I do value the NHS and credit where it is due to the Socialists they did the right thing in putting it back on its feet, but I am firmly of the belief that there is a great deal of waste in the NHS (GP's ridiculous high salaries for e.g) that can and should be tackled.

 

There has been concern about the effect of swingeing cuts on the wider economy, and as a nation the private sector isn't yet as confident as i'd like, but just like when I predicted the recession two years before it happened, I do do forsee strength in the private sector and some of our largest companies are sitting on huge amounts of capital and are waiting to invest in increasing their capacity. BT for example have cut back on jobs even recently, but they are sitting on a proverbial mountain of gold just waiting to unleash their high speed broadband technology, and our manufacturing base (although sadly not a patch on it's glory days) is outperforming all the non Germanic European states. The pound is likely to remain weak for at least another 5 years so we have every reason to feel bullish and this is exactly the attitude I expect from business leaders.

 

Todays joint letter from some of Britains most illustrious business leaders further strengthens my view that Britain has now past "rock bottom" and the only way is up!

 

There is however a cloud on the horizon, and at this stage (not yet had time to digest and analyse this to form my viewin its entireity) i'm unsure of how it'll affect us. China. It may come as a surprise to you all, but China Exports have gone from 12% to 3% of the GDP. I am surprised on two counts 1) I would have thought the peak figure would've been greater, and 2) The drop is huge. But this is not the real problem for China - the real problem for them is that construction accounts for 60% of their GDP. To put this into context construction accounts for 17% of UK/US GDP and just look at the affect this relatively small (in relation to Chinas) sectr had when the subprime market went belly up. So what does this mean for China? It means very real danger, and despite the seemingly unstoppable growth I prefer to look at it like a diver climing a another rung of the diving boards ladder. Trust me, sooner or later China is going to CRASH BIG TIME - just like the Asian Tiger nations did in the 90's when their GDPs were so dangerously out of kilter in favour of construction. The only difference is that Construction as %age of GDP in the said Asiatic tigers was 40% - remember that in China it is a whopping 60%!! So where does this leave the UK and the West in general - well unfortunately on face value not in a great position because the effect of China bombing with be a weaking of an already weak Yuan, but in my view we can weather that and in the long it'll be for the best because we would all be far better off with China back where belongs sleeping. Remember Napoleons famous words - "let China sleep for when she wakes the world will tremble" - well she awoke in our generation and we are trembling, so only a fool would not welcome a sedative.

Edited 18 October, 2010 by dune

[Wade Garrett]

Yes, the deficit is only affecting Socialist countries, USA being an example. It wasn't caused by reckless banks and insurers, who were regulated more than the Tories campaigned they should have been. Still it's good to see the bankers are getting their just desserts now that the Tories are in (or have I missed something).

 

China need to diversify a bit. They may be putting their eggs in one basket, but that are a million miles away from a crash. They will probably learn from Thatcher, who put all her eggs in the service industry basket, at the expense of manufacturing and heavy industry.

[dune]

Yes, the deficit is only affecting Socialist countries, USA being an example. It wasn't caused by reckless banks and insurers, who were regulated more than the Tories campaigned they should have been. Still it's good to see the bankers are getting their just desserts now that the Tories are in (or have I missed something).

 

China need to diversify a bit. They may be putting their eggs in one basket, but that are a million miles away from a crash. They will probably learn from Thatcher, who put all her eggs in the service industry basket, at the expense of manufacturing and heavy industry.

 

No abuse for me Mr Garrett, you disapoint me, or could it be that you are finally absorbing the edutorial (if this isn't a real word it should be) lessons from myself and my junior apprentice (in intellect but not age but ceratinly on charm and charisma) Jonny Bognor?

[dune]

China need to diversify a bit. They may be putting their eggs in one basket, but that are a million miles away from a crash. They will probably learn from Thatcher, who put all her eggs in the service industry basket, at the expense of manufacturing and heavy industry.

 

You are simply wrong about that Wade. By the very fact 60% of their GDP is inconstruction they are vulnerable. They will crash in the short to medium term.

[Noodles34]

No abuse for me Mr Garrett, you disapoint me, or could it be that you are finally absorbing the edutorial (if this isn't a real word it should be) lessons from myself and my junior apprentice (in intellect but not age but ceratinly on charm and charisma) Jonny Bognor?

 

clearly not in the spelling dept. eh?

[dune]

clearly not in the spelling dept. eh?

 

Mate i'm dyslexic. I hope you feel proud for basically calling me a mong. I now know how Mr X feels and I bet you'd have preffered it if i'd been terminated in womb. I'm so tempted to report you for your Spazist intollerence, but that'd make my like 1976 Child who isn't a real Spaz, but does a cracking impersonation of one. Delldays however isn't Spazzy at all and I dunno why I just thought of him too.

Edited 18 October, 2010 by dune

[thefunkygibbons]

Me, I have always been for only the amount of public services we can afford

 

And right now, we cannot afford the amount we have, so trimmimg back to a more sustainable level is not just a choice, it is an obligation

[Wade Garrett]

Me, I have always been for only the amount of public services we can afford

 

And right now, we cannot afford the amount we have, so trimmimg back to a more sustainable level is not just a choice, it is an obligation

 

I'm not sure it's as simple as that. There should be cuts in public services, there should definitely be cuts in the welfare budget. There also should be a levy on the banks, and a purge on the tax-avoiders (eg. Phillip Green) and the non-doms. Presently, the coalition only look to be going one way, which in my opinion, isn't fair.

 

Spending a small fortune on a replacement for Trident is wrong at the moment, as is building aircraft carriers that have no aircrafts.

[dune]

Spending a small fortune on a replacement for Trident is wrong at the moment, as is building aircraft carriers that have no aircrafts.

 

Having a Nuclear capability is essential because it gives us a seat at the worlds top table.

[trousers]

Having a Nuclear capability is essential because it gives us a seat at the worlds top table.

 

Can't we just pretend to have one? You know, like those false alarm boxes on houses?

 

How would Iran etc know whether we actually have one or not? As long as we tell them we've got a big weapon then they will be none the wiser.

 

We could even get the Americans to print a false receipt in case they ask to see proof of purchase.

[dune]

Can't we just pretend to have one? You know, like those false alarm boxes on houses?

 

How would Iran etc know whether we actually have one or not? As long as we tell them we've got a big weapon then they will be none the wiser.

 

We could even get the Americans to print a false receipt in case they ask to see proof of purchase.

 

Now you're just being silly. We have tree huggers for that. Behave yourself.

[badgerx16]

Having a Nuclear capability is essential because it gives us a seat at the worlds top table.

And that is the crux of the problem - we are still trying to play 'Billy Big B0ll0x' with no justification. We are not a major world player, and should wake up to the fact and accept it.

[trousers]

Now you're just being silly. We have tree huggers for that. Behave yourself.

 

;-)

 

Pssst....don't worry....I'm secretly on your side...just trying to confuse the enemy comrade

[Noodles34]

Mate i'm dyslexic. I hope you feel proud for basically calling me a mong. I now know how Mr X feels and I bet you'd have preffered it if i'd been terminated in womb. I'm so tempted to report you for your Spazist intollerence, but that'd make my like 1976 Child who isn't a real Spaz, but does a cracking impersonation of one. Delldays however isn't Spazzy at all and I dunno why I just thought of him too.

 

didn't know we were mates? Didn't call you a mong or spaz, bought that up once before, basically sames as homophobia and racism, so that makes you a bit of a knob as well as being dyslexic, dont know why you bother.....mate..

[badgerx16]

As for the letter from the 'top 30 business leaders', as some economists have been quoted in the media this morning; they might know how to run a business, but what do they know about running an economy ?

[dune]

didn't know we were mates? Didn't call you a mong or spaz, bought that up once before, basically sames as homophobia and racism, so that makes you a bit of a knob as well as being dyslexic, dont know why you bother.....mate..

 

I'm going to have stop giving you serious and honest replies because you are clearly too delicate to handle them. In future i'll pull your leg and draw out that legendary sense of humour of yours.

[dune]

;-)

 

Pssst....don't worry....I'm secretly on your side...just trying to confuse the enemy comrade

 

They are most dangerous when confused. You might be walking down the road and in the distance spy a lanky ginger person acting erratically and he might confuse you for a tree. Do you really want that?

[trousers]

As for the letter from the 'top 30 business leaders', as some economists have been quoted in the media this morning; they might know how to run a business, but what do they know about running an economy ?

 

Genuine question: what skills do the heads of britain's blue chip companies lack which are required for running an economy?

 

As I say, not a wind up question.

[dune]

Genuine question: what skills do the heads of britain's blue chip companies lack which are required for running an economy?

 

As I say, not a wind up question.

 

May I answer please?

[trousers]

May I answer please?

 

Why of course Sir. Be my guest :-)

[badgerx16]

Genuine question: what skills do the heads of britain's blue chip companies lack which are required for running an economy?

 

As I say, not a wind up question.

What skills does GO have ?

[dune]

Why of course Sir. Be my guest :-)

 

Well excuse me for telling the truth and saying it how it is (those on the left with delicate nerves who are prone to fits of the vapours DO NOT READ ON)

 

They have more skill than most politicians, because business is the same as politic in that both make a product and both SHOULD do it efficiently. This is why Socialism is a failed concept and capitalism is proven to suceed.

[dune]

What skills does GO have ?

 

Who know's, but I like to think i'm a good judge of a person, and I rate him highly. Yeah he's a nerd, but I think he's smart and I also think he's a cvnt so won't go all soft and try to slow the pace of the deficit reduction. His approach isn't desireable - IT IS ESSENTIAL. I'm so admiring that he's putting the country before his parties popularity because that is just what i'd do because me and him share the principle of putting Britain first, and that is something that is rare in an MP and something that he should clapped for.

Edited 18 October, 2010 by dune

[Johnny Bognor]

No abuse for me Mr Garrett, you disapoint me, or could it be that you are finally absorbing the edutorial (if this isn't a real word it should be) lessons from myself and my junior apprentice (in intellect but not age but ceratinly on charm and charisma) Jonny Bognor?

 

Junior? Apprentice? I agree that I have more charm and charisma, that goes without saying. Not sure about age as I could not get excited about collecting spoons. FYI, I am in my late 30's.

 

As for the letter from the 'top 30 business leaders', as some economists have been quoted in the media this morning; they might know how to run a business, but what do they know about running an economy ?

 

In running a business you have to look at income and expenditure and ensure you make a profit, but at the very least balance the books, something that most history graduates do not have a clue about. The only hope we have is that the current history graduate can learn from the mistakes of the last history graduate who should have gone on to work in a museum, not running our economy.

[thefunkygibbons]

I'm not sure it's as simple as that. There should be cuts in public services, there should definitely be cuts in the welfare budget. There also should be a levy on the banks, and a purge on the tax-avoiders (eg. Phillip Green) and the non-doms. Presently, the coalition only look to be going one way, which in my opinion, isn't fair.

 

Spending a small fortune on a replacement for Trident is wrong at the moment, as is building aircraft carriers that have no aircrafts.

 

I agree that it is not simple

 

However, I know that in my business that you can rely on cost cutting whereas working on the revenue side is always promises, some of which do not get delivered

[dune]

Junior? Apprentice? I agree that I have more charm and charisma, that goes without saying. Not sure about age as I could not get excited about collecting spoons. FYI, I am in my late 30's.

 

The style and charisma is all mine, before you get ideas above your station. In Political terms i'm a bit of a Churchilian character and you're more Lembit Opik.

[Fuengirola Saint]

I'm not sure it's as simple as that. There should be cuts in public services, there should definitely be cuts in the welfare budget. There also should be a levy on the banks, and a purge on the tax-avoiders (eg. Phillip Green) and the non-doms. Presently, the coalition only look to be going one way, which in my opinion, isn't fair.

 

Spending a small fortune on a replacement for Trident is wrong at the moment, as is building aircraft carriers that have no aircrafts.

 

As you say about Tax avoidance/evasion, aren't the figures for tax evasion 120 biliion pounds and 1.5 billion pounds for benefit fraud?

I saw in the Guardian yesterday that the HMRC let Vodafone off a tax bill of 6 billion if they paid 800,000 up front and then 450,000 over 3 yrs i think, the head of Vodafone's tax dept worked with the head of HMRC at revenue and customs previously :-0 ( This has nothing to do with the Tories i hasten to add as it happened from 2007, its about the incompetence or corruption in high places.

 

THIS IS WHAT WE HAVE TO STOP

[trousers]

What skills does GO have ?

 

I asked my question first. You go first with the answer to mine then I'll answer yours.

 

;-)

[saintsdan]

Having a Nuclear capability is essential because it gives us a seat at the worlds top table.

 

Like the Germans and Japanese you mean?

[badgerx16]

I asked my question first. You go first with the answer to mine then I'll answer yours.

 

;-)

I was merely repeating what I have read & heard in the media this morning, as a counterpoint to one sentence in the OP. I would think if personal tax avoidance and shifting your company's tax base offshore were an essential qualification for running the economy, there may well be many on that list of 30 who would qualify.

 

You might as well have countered with "What do economists know about running the economy?".

Edited 18 October, 2010 by badgerx16

[dune]

Like the Germans and Japanese you mean?

 

Both of whom are rich manufacuring powerhouses, governed in a pruddent and right wing way. Britain could have grown into a country like Germany if only bastards hadn't cust 100 years wealth fighting them a your bloody labour hadn't given away our beautifu empire

[Joensuu]

Both of whom are rich manufacuring powerhouses, governed in a pruddent and right wing way. Britain could have grown into a country like Germany if only bastards hadn't cust 100 years wealth fighting them a your bloody labour hadn't given away our beautifu empire

 

Sorry, but Japan isn't exactly being run in the right way, you know full well that it has had a lengthy recession. Sure it is the worlds third largest economy, but has more than twice the workforce we have, and when you look at it's per capita GDP it's ranked below us. The UK is at least as deserving of a retaining a G8 position as Japan is, and neither needs a nuclear deterrent to do so. Let's face it, the 'retaining a top table' position argument doesn't really stack up as a reason to keep trident.

[badgerx16]

Sorry, but Japan isn't exactly being run in the right way, you know full well that it has had a lengthy recession. Sure it is the worlds third largest economy, but has more than twice the workforce we have, and when you look at it's per capita GDP it's ranked below us. The UK is at least as deserving of a retaining a G8 position as Japan is, and neither needs a nuclear deterrent to do so. Let's face it, the 'retaining a top table' position argument doesn't really stack up as a reason to keep trident.

It does if you read the Daily Heil.

[Lord Duckhunter]

We should cut the overseas aid budget by 50% at least.

[franny]

Does anyone know (I have seen nothing in the press) whether during all of this budget cutting the EU are cutting their spending and by inferrence our contribution to the pot reduces. Strikes me whether you are pro or anti EU that if we are cutting back government spending here 15-20% as most other European nations are doing we should see something similar from Brussels.

[teamsaint]

Coupla things.

 

1. agree with Franny, the EU should certainly be joining in on the housekeeping front.

2. Nuclear weapons. IF we need them, I am (very) reliably informed that warheads can be fitted to an exocet missile, and that these can now go half way round the world. Bit cheaper, and every bit as scary as trident.

3. Threatening other countries with nuclear destruction isn't a really good way to go on anyway.

4.Allowing people like phillip Greene anywhere near governmanet is a disaster. Have you BEEN to BHS?

5.Funny how we have money for big projects like nuclear power stations, but pathetically nonexistent investment in proven small scale solutions like solar panels.

6The NHS is being privatised by the back door....just watch american healthcare companies come in and buy up, or take over the management of the new huge budgets that the GPs will have.

7. The tories really hate real businesses that actually make stuff....you know, steel, cars, coal. Unless they are chinese of course.

8. ALL politicians are brilliant at spending our money

9. Unless the lib dems do something amazing, and quickly, most people who previously voted for them never will do so again.

10.They tories want higher education for the few, like the old days.Sadly for them, they will have to pay to keep the oiks out, but it will be worth it.And they can get rid of those horrible new universities which help ordinary people get skills and improve their thought processes....

11. This country can easily afford quality higher education...but thats no way for the rich and powerful to stay that way, is it?

12. Vince cable is the biggest disappointment since Kleber Chala.

 

And don't get me started on Scotland........................

[hamster]

We should imho start at the top, it shows not only initiative but also commitment.

 

I read the other day how her maj has cancelled the annual staff xmas party and gift giving, alas she has no plans to cut back on the family bash at her (our) scottish pile.

 

get them out and then maybe people like me will start to subscribe to the lunatic suggestion that we (the socialists) should look in the mirror. The monarchy represent all that is wrong with society imo and as long as she chooses Cunard over the commonwealth then I'll stick to hating them. That seems pretty fair to me.

[badgerx16]

http://www.independent.co.uk/news/uk/politics/prominent-tory-donors-among-business-leaders-who-backed-osbornes-cuts-2110268.html

 

"The Federation of Small Businesses attacked the call by leaders of 35 of Britain's biggest companies for the Coalition Government to stick to its tough deficit reduction plans"

 

"Christopher P!ssarides, Britain's new Nobel laureate in economics and professor of economics at the LSE, said: "I am rather puzzled as to why big companies think the private sector will create jobs if the cuts are immediate rather than spread over two or three years, to give the private sector time to plan ahead. The situation is not so grave; there is no big risk premium of government debt as in Greece or Spain. I see a lot of confidence in the ability of the British Government to control the deficit. That confidence will remain if there is a well-arranged plan over the next few years rather than the next few months.""

 

"David Blanchflower, a former member of the Bank of England's Monetary Policy Committee, said of the letter: "It's a terrible, terrible mistake. The sensible thing to do is to spread [the cuts] over a long time. Clearly you have to deal with the deficit, but there is no economics that says you have to deal with it in a week or a month.""

 

"

Stephen Alambritis, chief spokesman for the Federation of Small Businesses, said: "Large companies can take these cuts in their stride. The City will reward them with a higher share price if they reduce their workforce. But the Chancellor should not be emboldened by these business leaders.

"Some small firms rely on public-sector contracts for 50 or 60 per cent of their turnover. If the cuts are swingeing and overnight, these companies will be lost to the UK economy forever.""

 

 

But then, what do they know ?

[moonraker]

All the deficit is doing is giving the tories an even bigger excuse for their traditional cust cutting policies, just wait in 4 years there will be plenty of Tax breaks for there core supporters!!

[Mao Cap]

Meh. The simplistic, 1930s economics-for-morons that dominates public debate now (the debts and deficits of a nation of 70 million people is totally the same as one guy using a credit card, you know) can be easily torn apart. But there's not much point arguing, the disaster that will unfold over the next few years with this discredited economic strategy will speak for itself.

[trousers]

All the deficit is doing is giving the tories an even bigger excuse for their traditional cust cutting policies, just wait in 4 years there will be plenty of Tax breaks for there core supporters!!

 

The same core voters who will be shafted for said 4 years to clear up Labour's "spend and borrow without thinking about the long term consequences".

 

I think in 4 years time a tax cut or two will have been well deserved by those on modest incomes.

[The Cat]

"David Blanchflower, a former member of the Bank of England's Monetary Policy Committee, said of the letter: "It's a terrible, terrible mistake. The sensible thing to do is to spread [the cuts] over a long time. Clearly you have to deal with the deficit, but there is no economics that says you have to deal with it in a week or a month."

 

From my limited knowledge of economics and what I've read over the past few years I'd be inclined to agree with anything this bloke says. He was predicting the crashes and recession long before they happened, and if the BOE committee had listened to his views on when to raise and lower interest rates then we may not have been in such a mess in the first place.

[Johnny Bognor]

Meh. The simplistic, 1930s economics-for-morons that dominates public debate now (the debts and deficits of a nation of 70 million people is totally the same as one guy using a credit card, you know) can be easily torn apart. But there's not much point arguing, the disaster that will unfold over the next few years with this discredited economic strategy will speak for itself.

 

To use your analogy, it is like someone who earns £1800 a month (GDP divided by population divided by 12), but their outgoings are £1900 a month (Defecit divided by population added to monthly earnings) and the credit card is maxed out at £22,000 (National Debt divided by population).

 

The defecit reduction is equivalent to cutting the outgoings from £1900 to £1890 which is about £10 a month. Quite small in the scheme of things.

Edited 19 October, 2010 by Johnny Bognor

[saintfully]

I will be interested to see whether the 50% tax for those earning over 150,000 is cut first, or whether the plan to take those earning less than 10,000 out of tax is stuck to ?

[moonraker]

The same core voters who will be shafted for said 4 years to clear up Labour's "spend and borrow without thinking about the long term consequences".

 

I think in 4 years time a tax cut or two will have been well deserved by those on modest incomes.

 

If previous tory tax cuts are anything to go by the real winners wont be those on modest incomes.

[OldNick]

Modern society is so soft. The first small cuts and there was bleating. The soft option is to keep borrowing and pass it on to the next generation,and on again.

The moment Britain loses its AA credit rating and the interest charged is raised, our debts will spiral even more. Its like moving your mortgage from a low rate to a higher rate, madness.

By doing nothing /little the rating will be effected. The Labour party telling us that they know what to do is laughable, oh yes lets tax the banks and so they move and all their taxes are lost. They are global , they wont think twice about upping sticks if they think it is worth it. What is our country left with then to earn us money?

Labour took on a golden economy, the timing of them coming to power was perfect for Blair and co. Our national debt had been basically wiped out under the Tories and what are we left with?

I don't wish for people to lose jobs, and would look to find ways of avoiding that but it is inevitable that this will happen. Too many jobs were manufactured by the last government and to have 40% of the population working for the state seems madness.

Im not sure we have the skills to start big manufacturing again, but we need to find some fast.

[badgerx16]

Our national debt had been basically wiped out under the Tories .................

An old article on the BBC news site http://news.bbc.co.uk/1/hi/magazine/7733794.stm

 

This includes the following image

 

We could play ping-pong with figures and claims from now 'til Doomsday. The real issue is whether the cuts need to made as deep, and as quick, as the ConDems would have us believe, and I hope the consensus is shifting against them.

[Johnny Bognor]

An old article on the BBC news site http://news.bbc.co.uk/1/hi/magazine/7733794.stm

 

This includes the following image

 

We could play ping-pong with figures and claims from now 'til Doomsday. The real issue is whether the cuts need to made as deep, and as quick, as the ConDems would have us believe, and I hope the consensus is shifting against them.

 

That is deliberately misleading. I know it is old, but if you go back to a time before it got out of control, of course it is not going to look too bad.

 

Taking the latest figures from here:

http://www.statistics.gov.uk/cci/nugget.asp?id=206

 

I have brought the graph up to date

 

 

Doesn't look so good now, does it?

Edited 19 October, 2010 by Johnny Bognor

[Fuengirola Saint]

Labour took on a golden economy, the timing of them coming to power was perfect for Blair and co. Our national debt had been basically wiped out under the Tories and what are we left with?

 

Why do people just lie to back up their arguments? I only have 3 posts so can't get into a big debate but its obvious you either made this statement up or were grossly misinformed.

With the other argument that the banks would leave if we raised their taxes to a fair level thyey would leave, well i say let em leave then nationalise all of their branches and offices here without compensation and finally get off our backsides as a country and diversify our economy into other industries i.e: I.T, blue chip industries and quality made products that the chinese can't make.

The Germans and Japanese can do it so can we.

[badgerx16]

That is deliberately misleading. I know it is old, but if you go back to a time before it got out of control, of course it is not going to look too bad.

 

Taking the latest figures from here:

http://www.statistics.gov.uk/cci/nugget.asp?id=206

 

I have brought the graph up to date

 

 

Doesn't look so good now, does it?

 

It wasn't intended to be misleading, and I don't deny the situation, but to claim that the Tories had 'wiped out' the debt is a blatant untruth, as it was increasing dramatically when the 1997 election took place. And, take note, over the first 6 years of Bliar's tenure, it went down, which gives the lie to another myth about Labour's stewardship of the economy.

How would it look if the US hadn't dragged the world to the event horizon of an economic black hole ?