Cuts, Cuts and ... Handouts???

[Colwyn]

As we all know the UK has a severe debt crisis. The Goverment is imposing pay freezes and cuts on those public sector workers it hasn't yet sacked. The private sector is not doing much better. People are going to have to pay more into their pension, retire later and get less money at the end of this. University students are going to to be burdened with debts that a great many of them will not have paid off by the time they are 51 or more when the 30 year rule clicks in. The list goes on and on it seems. Is it endless? No, the Government has "found" a little bit of money to introduce a new payment for vitally important work. Eric Pickles (is there a nastier MP currently in Parliament?) has come up with £250million - seems to have been in a Tesco bag at the back of a broom cupboard where it had been overlooked before - to hand out to councils that collect black bins weekly instead of fortnightly. (For those you living in Turkey, all the recyclable waste - food, glass, metal, paper, cardboard, etc. - are generally collected weekly anyway).

Meanwhile, our city council has decided to grant £60,000 (I don't know if this was found in a Tesco bag) to the park that our house overlooks. The relevant parks committee is going to recommend that this money is spent on - guess what: clearing the lake of toxic blue-green algae? cutting down and making safe the trees that have fallen during storms? renovating the sports pitches and replacing damaged equipment? Well, no. The have decided to appoint a Park Projects Manager. This will, I guess, be a professional/managerial level post with commensurate salary. Add the on-costs to this - employer's pension contributions, office space, access to secretarial services, an adverizing fund, and so on - and I estimate the full cost of this appointment will be ... £60,000. So we can stop worrying about what projects to plan, because there won't be any money left for them.

Still must remain positive about this. I'm off to look in the cupboard under out stairs to see if there are any bulky Tesco bags in there.

[Colwyn]

Today's daft news is that the halfwit Osbourne - he of the two facial expressions, smirking or sneering - is going to save us council tax payers from paying more this year by subsidizing local authorities with money taken from income tax, national insurance, VAT and so on (i.e. from us). I am trying something similar myself; taking money out of my left hand trouser pocket and putting it into my right hand pocket. I'll let you know whether this is a good way of sorting out my finances.

[keng38]

I assume your right arm is shorter than the left?

[Ovacikpeedoff]

Maybe Osbourne would not have had to do this if Brown and his bunch managed the economy properly. Brown preached we will never go back to boom and burst and that he would steer the ship on a steady course. He was right on that we can forget the boom,instead he led the economy one way to bust. The UK as a percentage of GDP has a higher debt position than Greece or Portugal.

He did not properly regulate the banks because the City of London was filling his pockets so that he could continue his wreckless spending spree.The twit thought that the golden goose would never stop laying. This financial crisis did not happen overnight. There were signs that it was about to happen 2 years earlier but he decided to bury his head in the sand and hope it would go away. His promises at the outset of the Labour government to balance the books each cycle of parliament just went out the window. He set the economic tests to ensure that economic growth and public spending could be effectively managed and then decided either to change them or totally ignore them.

We have Red Milliband and Ed Balls up telling what they would do differently. What they forget to mention is that if Labour had won the last election they would have taken exactly the same steps that the current lot are taking. There is no magic solution to this problem. The fact is that the country must live within its means.

[Highlander]

Points very well made.

[Colwyn]

quote:Originally posted by Ovacikpeedoff

Maybe Osbourne would not have had to do this

He didn't have to do this. In fact, in relation to the two policies I cited he is not actually doing anything at all except rearranging the deckchairs. Subsidizing weekly bin collections has nothing at all to do with the international banking crisis.

Who were the people whosaw this crisis coming two years before it happened? It wasn't sentral banks in Europe and Ameica, it wasn't right wing politicans (certainly not halfwit Osbourne), the CBI and IoD didn't spot it coming, and most of the banks that went down had AAA or AA ratings from Standard & Poor. So these "in the know" must have kept extremely quiet.

[Ovacikpeedoff]

Any responsible government will live within its means and balancing revenue and expenditure so to think that any government gives handouts without either raising it in taxes or extra borrowing is rather naive.Brown did not have to bust the economy with wreckless spending but he did. I certainly welcome the freezing of council tax as it is one of the few benefits that I actually get that puts money in my pocket.I would not have a problem if that money being handed out was given to frontline services.  

To answer the part about who knew is difficult because it is complicated and would take several pages to explain. The current crisis is not a banking crisis it is a sovereign debt crisis and that is a totally different thing.It is the inability of governments to be able to pay their debts. There have been many books and TV programmes made on the subject. The BOE, FSA and most regulators knew we were living in a house of cards and that the first ill wind would bring it down. The problems started with US sub prime lending.Two years prior to the banking crisis the sub prime market had turned sour and the rate of default was increasing at a significant rate.Due to lack of regulation the city boys with 1st class maths degrees were dreaming up schemes to package these debts and sell on.By selling the debt on they were taking risk off the balance sheet and getting funds to lend more and develop even more elaborate schemes. The BOE and the FSA were actually having to get maths experts in to explain to them what was going on.King has stated this openly in the press and on TV. In the UK you had the Northern Rock lending 130% of the valuation of the property and other mad schemes. The financial institution that I worked for actually cut lending criteria back and the max LTV was about 75%. We withdrew and consolidated all exposures to these exotic products, As a result we did not suffer the losses that the big banks did.If our management could see it I am sure many of the others did. The financial markets turned into a feeding frenzy that was driven by greed. Greed by the bankers as they were generating massive profits, greed by the government because the tax revenues allowed them to borrow and spend wrecklessly.The rating agents were major players in this crisis.

The banking crisis led to the begining of the current sovereign debt problems because the banks have pulled the plug there is no money for countries to continue borrowing.

I am now going to stopas I could go on forever and just finish up boring you more than I already have.

[Colwyn]

OPO
It comes as something of a surprise to me, and perhaps it will be to you, to find I agree with just about everthing in you last post - in truth, I haven't actually found anything yet with which to disagee. And I'm not going to scrutinize it any closer simply to find trivial points which to contest!

[Ovacikpeedoff]

Colwyn, I am not a fan of Osbourne and I get annoyed with his superior attitude and pragmatic views.I do think it unfair to call him a halfwit, I would have been happier with obnoxious.

So far it has been nothing but take to try and get us out of this mess we are in.The UK confidence level is very low and we all know that freezing council tax was given more as a tonic than an actual real benefit. As we both agree the money will have to come from somewhere.

[usedbustickets]

The Oxford dictionary defines a halfwit as a foolish or stupid person. And for me any person who is prepared to be foolish enough to not only throw on the handbrake of the economy, but to then put it in reverse, without thinking that there would not be both short and long term damage to the economy, comes across as pretty stupid.  So all in all I think Osbourne deserves the title of being a halfwit[!]