Double Dip?

[Saintandy666]

One quarter away from this now. -0.5% last quarter... yes the bad weather played a part, but we would have been stagnant at 0.0% without it. Unemployment is on the rise as well, I think Labour were right... no?

 

Remember, debt and the deficit was lower under Labour than when they came to power until the financial crisis. The deficit and the debt we had appeared because of the financial crisis. I say cut, but slower and raise tax slightly(e.g 50% income tax band from £100,000), then let the economy grow back to where it was and we'll be even again.

[dune]

The incompetent Labour party left us with a £150 billion deficit. And our national debt (the amount of debt we've already racked up) sat at around 62% of GDP. That's not including all the pension and healthcare obligations we've got sitting 'off balance sheet'.

 

Without the measures taken to take Britain out of the danger zone foreign lenders would have become reluctant to lend Britain any more money. That would have driven up the interest rates on UK government debt (gilts), as has happened to Greece and other more vulnerable parts of Europe.

 

We're in a different position to Greece, in that we have our own currency, but the end result would still have been nasty - a major sterling crash would have driven inflation higher, and in turn pushed interest rates up.

[Saintandy666]

Yes, but that public debt is still lower than most major developed countries. For example France and Germany have debt in the region of 70-80% and lets not even talk about Japan and Italy!

 

The debt and deficit did not exist! In fact our national debt was declining year on year until the financial crisis. At that point, Labour made the ideological decision to spend through the recession to ensure we didn't collapse(i.e bailing out the banks... can you imagine what would have happened if hadn't done that?). It was NOT because of a decade of over spending that caused this. For example in 2001/02 our deficit was £1.8 billion and debt was falling.

[Fuengirola Saint]

Did you hear that interview on Radio 5? Georgie Porgie Came across as a complete mong, did you hear him mention the weather about 20 times in 5 minutes? I really believe that this government actually think that if they say something enough times it will become true. God help you all!

[Saintandy666]

Did you hear that interview on Radio 5? Georgie Porgie Came across as a complete mong, did you hear him mention the weather about 20 times in 5 minutes? I really believe that this government actually think that if they say something enough times it will become true. God help you all!

 

Indeed, it was quite sad really. And he had no answer to why even without the weather we would have been at the very best stagnant, and at the very worst still in a dip.

[dune]

Yes, but that public debt is still lower than most major developed countries. For example France and Germany have debt in the region of 70-80% and lets not even talk about Japan and Italy!

 

The debt and deficit did not exist! In fact our national debt was declining year on year until the financial crisis. At that point, Labour made the ideological decision to spend through the recession to ensure we didn't collapse(i.e bailing out the banks... can you imagine what would have happened if hadn't done that?). It was NOT because of a decade of over spending that caused this. For example in 2001/02 our deficit was £1.8 billion and debt was falling.

 

Labours taxing and spending while the sun was shining left the cupboard bare when the crisis hit, and let's not forget that labour were in power for 13 dark years - why didn't the FSA implement measures - such a splitting retail and investment banking?

[Johnny Bognor]

Yes, but that public debt is still lower than most major developed countries. For example France and Germany have debt in the region of 70-80% and lets not even talk about Japan and Italy!

 

The debt and deficit did not exist! In fact our national debt was declining year on year until the financial crisis. At that point, Labour made the ideological decision to spend through the recession to ensure we didn't collapse(i.e bailing out the banks... can you imagine what would have happened if hadn't done that?). It was NOT because of a decade of over spending that caused this. For example in 2001/02 our deficit was £1.8 billion and debt was falling.

 

Are you completely stark raving mad?

 

Jesus H Christ. The debt did not exist and then it did, but it was declining. Make your own mind up. Plenty of people contradict themselves on here, but normally there is more than an exclaimation mark between.

 

 

Anyway.....http://news.bbc.co.uk/1/hi/5097706.stm

 

The defecit was growing BEFORE the financial crisis

National Debt was rising BEFORE the financial crisis

 

Even our European friends thought that our defecit was EXCESSSIVE back in 2006

http://www.independent.co.uk/news/business/news/brussels-delivers-fresh-attack-on-browns-handling-of-budget-deficit-467134.html

 

Now I know there are a few history teachers on here and perhaps they will be able to confirm that the financial crisis started to unfold mid 2007.

 

Jesus, what are they teaching in univerisites these days......... I thought they were teaching people how to think FFS. Perhaps you are better off going into medicine as you will be of no use in the real world. Let me know which hospital you end up working in, just so that I can make sure I avoid it.

Edited 25 January, 2011 by Johnny Bognor

[Saintandy666]

Labours taxing and spending while the sun was shining left the cupboard bare when the crisis hit, and let's not forget that labour were in power for 13 dark years - why didn't the FSA implement measures - such a splitting retail and investment banking?

 

I will repeat what I said again. The Debt and Deficit was lower under Labour than what they inherited in 1997 until 2007. They paid off debt until such a time they then had to increase it again due to the financial crisis. Again, can you imagine what would have happened if we hadn't bailed out the banks and ensured investment? Gordon Brown's plans were copied the world over. He is hugely respected in other countries, more so than here.

[Saintandy666]

Are you completely stark raving mad?

 

Jesus H Christ. The debt did not exist and then it did, but it was declining. Make your own mind up. Plenty of people contradict themselves on here, but normally there is more than an exclaimation mark between.

 

Ok, let me rephrase.

 

- There was no 12.5% budget deficit, it was around 1 or 2 percent.

- National debt as a percentage of GDP decreased.

- National debt was lower than under the Tories.

- The national debt and deficit then became the large amount we see today during the financial crisis because of the ideological decisions they made.

- There was no decade of spending beyond our means.

 

Also, I think you look up the difference between a 'budget deficit' and 'national debt'.

[Saintandy666]

Remember, if you pay off more debt than you borrow in a year, it is quite possible to have a small budget deficit yet have overall nation debt decrease.

[Kingsland Codger]

Without the measures taken to take Britain out of the danger zone foreign lenders would have become reluctant to lend Britain any more money. That would have driven up the interest rates on UK government debt (gilts), as has happened to Greece and other more vulnerable parts of Europe.

 

We're in a different position to Greece, in that we have our own currency, but the end result would still have been nasty - a major sterling crash would have driven inflation higher, and in turn pushed interest rates up.

 

Whilst I don't doubt what you say, one should also acknowledge that with the policies the Coalition are applying we now have ... rising inflation and a rise in interest rates quite likely. The very things you say would have happened had they failed to implement their austere policies.

 

I'm prepared to give the Coalition more time as it will take decades to sort out the mess Labour have left us with (again) but with the recent VAT hike it is quite likely the current quarter will also show negative growth and two consecutive quarters of negative growth will therefore meet the requirements of the full definition of a recession.

 

Should the Coalition attempt to dilute their policies, the forex market would fear they are losing their nerve and then the Sterling crisis we have so far avoided might well come to fruition.

 

As things stand, it looks like we are stuffed. Batten down the hatches and prepare for even harder times.

[dune]

The real difference between the Conservatives and Labour is that the Conservatives ideologically believe in freedom and letting people spend the money they've earnt - this stimulates growth and raises living standards. Socialists on the other hand hate freedom and the very thought of people spending their own money goes against their centralised nanny state ideologies.

 

In 2015 we'll have a choice and it'll be the same the choice we had in 1992. Do you want to pay more taxes and have a nanny state, or do you want earn money and spend it as YOU see fit?

 

[Johnny Bognor]

Ok, let me rephrase.

 

- There was no 12.5% budget deficit, it was around 1 or 2 percent.

- National debt as a percentage of GDP decreased.

- National debt was lower than under the Tories.

- The national debt and deficit then became the large amount we see today during the financial crisis because of the ideological decisions they made.

- There was no decade of spending beyond our means.

 

Also, I think you look up the difference between a 'budget deficit' and 'national debt'.

 

I do know the difference, thank you.

 

I thought I would now quote the Guardian to remove any bias

http://www.guardian.co.uk/business/2007/jan/19/14

 

National debt hit historic highs BEFORE the financial crisis, therefore what you stated in your opening post is complete and utter unadulturated ********

Edited 25 January, 2011 by Johnny Bognor

[Kingsland Codger]

I do know the difference, thank you.

 

I thought I would now quote the Guardian to remove any bias

http://www.guardian.co.uk/business/2007/jan/19/14

 

National debt hit historic highs BEFORE the financial crisis, therefore what you stated in your opening post is complete and utter unadulturated ********

 

Mmmm ... the article to which you kindly gave the above link - dated 19 January 2007 and so therefore before the financial crisis hit - serves as much to confuse as to enlighten.

 

The headline and opening tells us the National Debt is at record highs

 

but later on the article also tells us ... "As a percentage of the economy, however, the national debt is far lower than it has been in the past. It is currently at 38.1% of gross domestic product, lower than the 43.6% than Labour inherited in 1997".

 

This would suggest Saintandy666 was right in some of what he said and you are right in some of what you say.

 

Either way, the latest figures are a huge disappointment and it would appear none of the established parties have a cure for our economic ills.

[Johnny Bognor]

Mmmm ... the article to which you kindly gave the above link - dated 19 January 2007 and so therefore before the financial crisis hit - serves as much to confuse as to enlighten.

 

The headline and opening tells us the National Debt is at record highs

 

but later on the article also tells us ... "As a percentage of the economy, however, the national debt is far lower than it has been in the past. It is currently at 38.1% of gross domestic product, lower than the 43.6% than Labour inherited in 1997".

 

This would suggest Saintandy666 was right in some of what he said and you are right in some of what you say.

 

Either way, the latest figures are a huge disappointment and it would appear none of the established parties have a cure for our economic ills.

 

But none of these articles include the hidden "not on the balance sheet items" which at the time would have more than doubled the national debt, in real terms and as a percentage of GDP.

[Sergei Gotsmanov]

One quarter away from this now. -0.5% last quarter... yes the bad weather played a part, but we would have been stagnant at 0.0% without it. Unemployment is on the rise as well, I think Labour were right... no?

 

Remember, debt and the deficit was lower under Labour than when they came to power until the financial crisis. The deficit and the debt we had appeared because of the financial crisis. I say cut, but slower and raise tax slightly(e.g 50% income tax band from £100,000), then let the economy grow back to where it was and we'll be even again.

 

A great economic guru writes.

[trousers]

Genuine question: Had Labour stayed in power last year, how would their policy on debt reduction have prevented this temporary seasonal dip?

[Saintandy666]

I repeat again. Until the financial crisis, the national debt and the budget deficit were lower than when labour came to power.

[Fuengirola Saint]

Genuine question: Had Labour stayed in power last year, how would their policy on debt reduction have prevented this temporary seasonal dip?

 

Yes it would have prevented this possible double dip because Labour had a plan to halve the deficit in 5 years not cut it all, therefore some confidence would have remained in the fragile economy.

[dune]

To abandon the budget plans would put us back in the danger zone that Labour put us in. It's brilliant to hear George say the plans are not going to be blown of course. When Margaret Thatcher was is a similar situation she didn't back peddle, she pushed a little bit harder. That is what I want to see now.

 

I have found out one thing and that is, if you have an idea, and it is a good idea, if you only stick to it you will come out all right.

 

Cecil Rhodes.

 

 

 

 

 

[video=youtube;nKmvIjifv-o]http://www.youtube.com/watch?v=nKmvIjifv-o

[saintfully]

Yes it would have prevented this possible double dip because Labour had a plan to halve the deficit in 5 years not cut it all, therefore some confidence would have remained in the fragile economy.

 

This.

 

I think an important factor in the contraction was the massive loss of confidence in the economy in the last quarter. The Irish Euro crisis made potential investors (construction sector) think twice. A major factor in the most recent Irish crisis was a failure to rebound following the initial round of cuts/deficit reduction. This 'cutting too deep and too fast' meant the Irish economy faltered, the banks debt grew rather than shrank and thus, overseas investors got scared and the cost of Irish borrowing rose.

 

The Irish crisis was happening as the reality was dawning on what the ConDems were about to do to the economy (following publication of the Comprehensive Spending Review). People looked across the water, saw what happens if you cut too fast and too deep and retrenched - hence the contraction.

 

So, in my view, Labour's policies might have averted the crisis since all the talk would have been how to cut deeper, instead of what happens when you cut too deep. Meanwhile, the usual ****** will get spouted about how the UK will have been screwed on the gilt markets if labour had got in. In fact there is no evidence to support this; markets look for certainty - the rise in borrowing rates prior to the election was largely due to the uncertainty the election was bringing - not the potential result.

[buctootim]

Useful data on debt.

http://www.ukpublicspending.co.uk/uk_national_debt

[dune]

Meanwhile, the usual ****** will get spouted about how the UK will have been screwed on the gilt markets if labour had got in. In fact there is no evidence to support this; markets look for certainty - the rise in borrowing rates prior to the election was largely due to the uncertainty the election was bringing - not the potential result.

 

Prior to the election Britain was in the danger zone along with Ireland, Portugal, Greece and Spain and without the immediate action taken by the Conservatives in tackling Labours deficit Britain would have seen the rate at which we borrow increase. The measures taken by George Osborne have taken us out of that danger zone and have kept the interest payed on gilts low. Labour left us in the situation of having to pay more in interest on our debts than we spend on education - you should not underestimate the importance to each and every one of us of sorting out the mess inheritted from Labour.

[Jones91]

The Conservative plan is to fix the economy for the long term, not just for the next election which is what Labour would have done.

[bridge too far]

The Conservative plan is to destroy public services and hand the provision of these services to the private sector in order that it can provide an inferior service at a higher cost, as has been shown in the past.

 

I've corrected it for you.

[Saintandy666]

Behind much of the cuts is an ideologically based desire to shrink the public sector. This doesn't mean that I think there shouldn't be cuts, just that the Tories are going further than is necessary for reasons already stated earlier on.

[Thedelldays]

Behind much of the cuts is an ideologically based desire to shrink the public sector. This doesn't mean that I think there shouldn't be cuts, just that the Tories are going further than is necessary for reasons already stated earlier on.

 

seriously...is that really a bad thing..?

[AndyNorthernSaints]

seriously...is that really a bad thing..?

It is for the most vulnerable people in society who need to use support from services etc.

[dune]

Behind much of the cuts is an ideologically based desire to shrink the public sector.

 

Which is a good thing. It all boils down to whether you like a nanny state with high taxes, or you like freedom and low taxes. Clearly you prefer a big brother Labour society, but I guess this is all you've ever known.

[dune]

It is for the most vulnerable people in society who need to use support from services etc.

 

These people need a hand up, not a hand out. Socialism treats the sympton, Capitalism treats the cause.

 

It's like giving a charitable donation to third world African country, it has no lasting benefit - what these people need is a sustainable future and that can only be achieved through capitalism. Most African countries tried Marxism post independence and they've learnt the hard way that it doesn't work. Now countries such as Mozambique have become Capitalist and they're seeing foreign investors coming in and creating employment and this snowballs and raises living standards.

[Saintandy666]

Which is a good thing. It all boils down to whether you like a nanny state with high taxes, or you like freedom and low taxes. Clearly you prefer a big brother Labour society, but I guess this is all you've ever known.

 

Oh, I am against many of Labours reforms affecting our freedom's. For example, I thought section 44 was a disgrace. Thankfully, it is illegal to stop people with no suspicion now. Thankyou Liberty. Thankyou ECHR.

 

However, social justice is the fairest way to address the discrepancies capitalism causes. Capitalism must be humanised before it is fit for purpose in a moral world.

[Thedelldays]

would it be a disaster if institutions like Royal Mail be completely privatised..?...breaking it up and offering competition..?

[bridge too far]

would it be a disaster if institutions like Royal Mail be completely privatised..?...breaking it up and offering competition..?

 

It's hard to see a commercial organisation being interested in the less profitable / loss making parts of RM. Collecting and delivering mail to the remotest parts of the UK for example.

 

Unless, of course, said organisation charges according to mileage and remoteness.

[trousers]

Yes it would have prevented this possible double dip because Labour had a plan to halve the deficit in 5 years not cut it all, therefore some confidence would have remained in the fragile economy.

 

Fair enough, but give me a tangible 'high street' example though...... i.e. company 'x' would have sold more of product 'y' during November/December because of Labour cutting back at a rate 2% less that the ConDems (ho ho) have done....

 

A TANGIBLE example please....

[dune]

would it be a disaster if institutions like Royal Mail be completely privatised..?...breaking it up and offering competition..?

 

The problem with Royal Mail is the pension fund black hole. As of 31 March last year there was an actuarial deficit of £10.3bn.

 

Did Gordon Brown raid this fund like he did all the other pension funds?

[bridge too far]

Fair enough, but give me a tangible 'high street' example though...... i.e. company 'x' would have sold more of product 'y' during November/December because of Labour cutting back at a rate 2% less that the ConDems (ho ho) have done....

 

A TANGIBLE example please....

 

A good guess would be that 'the man on the street', worried about forecasted job losses in the private and public sectors, might have decided to spend less, regardless of the weather (after all, the eonomic forecasts had factored in the bad weather when optimistically predicting 0.5 percent growth). The imminent VAT rise didn't stimulate the economy in earlier months either

 

Whilst the weather will have affected the construction industry somewhat, I think it's generally agreed that the 3% drop in output is attributable to the reduction in public sector capital programmes as well as the problems with the housing market.

[trousers]

A good guess would be that 'the man on the street', worried about forecasted job losses in the private and public sectors, might have decided to spend less, regardless of the weather (after all, the eonomic forecasts had factored in the bad weather when optimistically predicting 0.5 percent growth). The imminent VAT rise didn't stimulate the economy in earlier months either

 

Whilst the weather will have affected the construction industry somewhat, I think it's generally agreed that the 3% drop in output is attributable to the reduction in public sector capital programmes as well as the problems with the housing market.

 

So, for example, as a consumer of magazines, I was less likely to walk into WH Smiths on, say, 16th December and buy "Capitalist Monthly" under the current coalition Government than I would have been had Labour still been in power, thus denying a sale to WH Smiths, thus denting the British economy?

[dune]

From a selfish point of view I would quite like a mini global slowdown as it'd put the spot price of gold up even more. That'd have a very positive effect on my gold mining investments.

[bridge too far]

So, for example, as a consumer of magazines, I was less likely to walk into WH Smiths on, say, 16th December and buy "Capitalist Monthly" under the current coalition Government than I would have been had Labour still been in power, thus denying a sale to WH Smiths, thus denting the British economy?

 

You don't deserve to have a considered debate if you use that as your argument.

 

In any event, consumer confidence is hard to quantify but is probably the driver for the downturn.

[trousers]

You don't deserve to have a considered debate if you use that as your argument.

 

In any event, consumer confidence is hard to quantify but is probably the driver for the downturn.

 

But I still don't have a tangible example to highlight the difference in consumer behaviour during 4Q10 depending on whether Labour or the ConDems (ho ho) were in power.

 

I'm trying (fairly hard) to suggest that the average man (or woman) in the street would have pretty much spent the same under either regime, thus the economy would pretty much be in the same position at this relatively early stage in a five year government regardless.

 

That said, I could be talking b*****ks (inconceivable I know)

[Fuengirola Saint]

So, for example, as a consumer of magazines, I was less likely to walk into WH Smiths on, say, 16th December and buy "Capitalist Monthly" under the current coalition Government than I would have been had Labour still been in power, thus denying a sale to WH Smiths, thus denting the British economy?

 

If you were worried about losing your job then maybe you would have thought twice about buying said magazine because you would have had better things to spend your money on. Didn't you read my reply to you? It's all about confidence, if there were many less people worried about losing their job then confidence would be higher, it has nothing to do with what government is in power it's what they do when they are there. C'mon promise me you'll buck up

[Lord Duckhunter]

The coalition have planned for some rocky times and some bad poll ratings in the coming months and years. It is the state of the economy in 5 years time that will decide the election, not a double dip in 2011 or job losses in 2011.The whole policy has been to sort the finances out by the next election and if they've done so, Labour will lose and if they haven't then Labour will win.

[trousers]

If you were worried about losing your job then maybe you would have thought twice about buying said magazine because you would have had better things to spend your money on. Didn't you read my reply to you? It's all about confidence, if there were many less people worried about losing their job then confidence would be higher, it has nothing to do with what government is in power it's what they do when they are there. C'mon promise me you'll buck up

 

You have my word, I will buck up shortly....

 

So, in summary, we're saying that 'the economy' would have been less stagnant during 4Q10 if "a.n.other" government had been in power because in the relatively short space of time between then and the last election (in 2Q10) the UK as a whole would have been more "confident" in the economy that under the current government?

[AndyNorthernSaints]

These people need a hand up, not a hand out. Socialism treats the sympton, Capitalism treats the cause.

 

It's like giving a charitable donation to third world African country, it has no lasting benefit - what these people need is a sustainable future and that can only be achieved through capitalism. Most African countries tried Marxism post independence and they've learnt the hard way that it doesn't work. Now countries such as Mozambique have become Capitalist and they're seeing foreign investors coming in and creating employment and this snowballs and raises living standards.

 

I'm sure an elderly or disabled person would appreciate you caring views when their carer does not up leaving them them stuck in bed covered in faeces etc or when their local luncheon club or day centre is closed leaving them housbound/socially islolated/depressed etc not forgetting cuts to Police numbers leaving them more vulnerable to bogus callers/thieves/muggers.... etc anyway i'm sure they will feel comforted by knowing capitalism treats the cause. What this has to do with your further ranting about Africa is a mystery to me. You seem obsessed with the Empire and ruling regimes over non white people which is very weird.

[simo]

It's the weather's fault !

[bridge too far]

It's the weather's fault !

 

I like this quote from Len McCluskey of UNITE:

 

"George Osborne sounds like a rail boss trying to blame delays on leaves on the line," he said.

The blame lies squarely on this government's policy of massive spending cuts with no strategy for growth."

[trousers]

I like this quote from Len McCluskey of UNITE:

 

"George Osborne sounds like a rail boss trying to blame delays on leaves on the line," he said.

The blame lies squarely on this government's policy of massive spending cuts with no strategy for growth."

 

That takes me back. I remember those quaint nationalised british rail excuses with much fondness... ;-)

[bridge too far]

That takes me back. I remember those quaint nationalised british rail excuses with much fondness... ;-)

 

Your memory is playing tricks then Trousers. Wrong leaves / snow etc is a recent phenomenon and certainly postdates the nationalised rail industry.

[CB Saint]

Well having read the thread it is apparent that no-one, left or right, has any clue about what is going to eventually transpire and that probably extends to George, balls, the treasury and almost certainly the press. I recall an old economics teacher of mine telling me the the full extent of economic policy change take years to manifest themselves in real terms. So what we have here is a bit of labours policy, a bit of tory policy and some bad weather thrown in and a press corp revelling in the midst of a great bad news story.

[dune]

We can't even trust the 0.5% retraction to be accurate. I expect that when the figure is revised it'll show a small amount of growth despite the weather.