Cuts, Cuts and ... Handouts???

[Ovacikpeedoff]

Anyone who says that the nation's deficit should continue to go unchecked is the halfwit. You live within your means and the UK has not been doing that.

All the major political parties in the UK and all the major financial bodies such as the IMF agree that the only way forward is to cut the deficit. So they all must be halfwits as well.

Maybe they are all wrong and CBF has found a new economic guru to solve the problems.

[usedbustickets]

OPO I don't think I said anything about not cutting the deficit.  It is the rate - and the long term plan - that you apply to the deficit reduction that matters.  Osbourne has applied the deficit reduction brake too hard - particularly at a time when the private sector is struggling to recover itself from the problems of 2008 - and in so doing is causing the economy to unnecessarily contract.

Combine this with the huge reductions in economic confidence - both business and consumer - which is in part caused by the government's own siren voices about the economic situation, has locked the economy into a continual downward spiral of contraction, at a time when we actually need growth to pull us out of the mess.

That is why I support the view that Osbourne is a halfwit, as defined earlier.  Particularly as he is supposed to be getting us out of the mess, not putting us further into it.
 
BTW I was flattered that you should think of me as an Economics Guru, how nice!:D  I always consider it a pleasure to inform and enlighten members of the Unwashed School of Economics.

[Ovacikpeedoff]

In the eyes of the IMF and other leading financial experts the measures taken by Osbourne are correct.If we had elected Brown again (luckily we did not)there is very little difference in the amounts of cuts that are to be made. In the first year the cuts proposed by Labour amounted to the same that the current lot has implemented. In future years all that was to happen under Labour is the cuts were to be slightly less and would be one year longer than the curent proposals.

National debt as a percentage is higher than 1976 when Healy had to go the IMF with cap in hand. In the last year of the last government the budget deficit was a whopping £170 billion. This amount has to be borrowed. Throughout the last governments time in office they managed to have a budget surplus in only two years.When they were elected in 1997 the budget was actually in balance.

Borrowing more and more is like living beyond your means with a credit card. Eventually you reach your limit and most of what you pay is not really paying off the capital but just paying interest. The less you pay off the longer the pain will be and you finish up paying more.

The real question to ask and answer:

Is it right for us to continue to run up debt that future generations will be lumbered with and having to pay it off?

UBT stand by your phone and make sure your passport is valid. I can see an invitation coming for you to address and enlighten the G20 on how to solve the worlds problems at the next meeting in Cannes
 

[usedbustickets]

So good old George has got it right on the economy has he? Was that large whirring sound at lunchtime  not the sound of the Bank of England printing presses being fired up to produce £75 billion - yes that's SEVENTY FIVE BILLION POUNDS - of Quantitative Easing.  That's a real good indication of how successful George has been in his management of the economy.

[usedbustickets]

Sorry should have added above that the principal purpose of the £75 billion of QE is more to do with delivering greater liquidity into UK banks to help them deal with the potential  eurozone fall outs in the next few weeks, than a fully viable attempt to increase growth into the economy.

[Colwyn]

The £ has devalued against all major currencies since that announcement was made.

[Ovacikpeedoff]

QE was introduced by Darling, this is an extension of this.I wish people would make their minds up. You want growth and you want a deficit cut. There are not many ways this can be done. This is the only way you can have increase GDP without increasing borrowing.

It was not Osbourne who introduced this round of QE. It is a decision that was taken by the MPC.

One of the very few good things that Brown did was making the BOE independent of the government.

I know some of you think that I am an ultra right conserative but I am not. You cannot blame the guy who currently has the purse strings when for the previous 13 years  the previous holders just made a big hole in the purse. The current crisis has got to be sorted.

[Colwyn]

Wasn't UBT's point that this move suggests that Osbourne's policies are not working so the BoE felt it had to step in. Further we may question now who is in charge of UK economic policy (certainly with respect to growth) - is it HMGov or BoE. When G.Brown gave decision making powers to the BoE it was stictly in relation to inflation; not to be a shadow Treasury. This move will, almost certainly raise inflation which is already high (the BoE is quite relaxed about this) and is also likely to lead to devaluation of the pound (already has). This may a good thing - making our exports cheaper and thus encouraging growth. But I rather expect the government to make these sort of decisions. Perhaps the BoE doesn't trust HMG to do it.

[Ovacikpeedoff]

It was not. Brown gave decision making powers in relation to monetary policy and not just inflation.The main purpose being that governments raised and lowered interest rates as it pleased them. Whether it was Labour or Conservative we always seem to have a cut in interest rates just before the election. It did not matter whether it was good or bad for the country, it was an election ploy.

[BM06]

''printing money is the last resort of  desperate governments when all other policies have failed. It can not be ruled out in the fight against deflation, but in the end printing money risks losing control of inflation and all the economic problems that high inflation brings'' Gideon Osborne 2009[)]