I don't think the NI increase was a genius move by any stretch of the imagination but I don't think the gilt prices would have been any lower without an actual stroke of genius. The economy is fecked and has been for some time. Rejoining the EU might be the only way to change that course at this point, but even that would probably be marginal. The whole economic system went off a cliff in 2008 and has never really come back.
Westminster Politics 2024-2029
- Thread starter Pexbo
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I don't think the NI increase was a genius move by any stretch of the imagination but I don't think the gilt prices would have been any lower without an actual stroke of genius. The economy is fecked and has been for some time. Rejoining the EU might be the only way to change that course at this point, but even that would probably be marginal. The whole economic system went off a cliff in 2008 and has never really come back.
Or, as I was told by a colleague today, the economy was great from 2010 until COVID, which ruined Brexit, and then the Labour Party destroyed 14 years of hard work in six months.
2008? when we had to bail out the banks with £137 billion in cash and loans, and over £1 trillion in financial guarantees didn't help? No?
Small change really compered to Covid-19 measures range from about £310 billion to £410 billion.
I think servicing the debt is 4th/3rd in our biggest yearly cost.
Does your colleague post on the Caf by any chance?
Genius is definitely in short supply right now, it's true.
I don't think the effects of 2008 can be reduced to how much money you have to lend. It was more that it turned out the way the whole rotten system worked was shown to be wrong, and the response was austerity that utterly fecked everyone, rich and poor alike.
We would join and immediately be the poorest state per capita. We have almost nothing to offer the Americans.
The comment about how they’d stop the boats made me laugh though, considering how trump has been elected partly on consecutive presidents (including himself) inability to deal with illegal immigration, from 1 of the 2 countries they share a border with.
So, the austerity to balance our books books had nothing to do with the financial crisis.
I suppose you one of them people that believes that quantitative easing on mass doesn't devalue a currency or create inflation.
Anyway, not too worry I'm sure Rachel can sort this...
It’s class war all the way down
No it's almost like quantitive easing to stop you having to lend more than nominal sums to the banks is part of the problem...
Given that national debt I think doubled or tripled during "austerity", balancing the books seems a laughable justification.
I think my point isn't that Labour can solve this, more that the opposition can only make it worse. If you care to look you'll see exactly what I mean with old Donald in the States. It'll no doubt shock everyone, but their economy and society will continue to degrade, and it will be nothing to do with Donny I'm sure, just the deep state or something.
Apparently Farage said him and Musk have made up now. That must have been some grovelling by him.
Government finances are not like a credit card, bank account, and austerity doesn't balance the books.
The only thing austerity has ever achieved, anywhere, is to create more debt, and a recession.
reves austerity will do the same. This is because the ONLY source of money is government spending. All of it. Every time the government spends money on something, it creates the funds it uses. That is what drives the economy, and taxation, which destroys money, takeing out of the economy, is used to balance inflation.
So when a government cuts spending drastically, without implimenting any other impetus for foreign investment, the ONLY thing that happens is that the supply of money entering the economy is reduced. It cannot lead to growth, only recession.
But it does boost asset prices, and that makes the rich even richer, which is why right wing governments love austerity, and why they all pretend its about balancing the books.
Perhaps you're being deliberately thick but in case you didn't understand my point, it wasn't that austerity is a figment of my imagination or something, it's that it didn't work at all in terms of its stated aim, as the metaphorical books continued to race away from each other in opposite directions as opposed to becoming balanced. Financial crisis -> austerity -> global social and economic ruin.
Of course it didn't, because it was never going to be quick to fix.
I really don't understand why your bring in global and economic ruin. I don't care about other places economically, I'm not a globalist.
They really are just a bunch of wankers led by 'im not a Tory' Starmer. It's just another Tory Government but in a different colour.
I'm not getting into right or left wing, I don't care about it.
So you wanted more privatisation of our services, wants left? NHS (some parts are privatised), councils?
We'll all see what happens with the high tax and more spend model soon. Not long to wait 4 months.
Everywhere except almost every developed economy on the planet at some stage or other.
All of Europe post 2008
UK post war
US 1990s
Greece debt crisis
US post Great Depression
Argentina now
All examples of austerity measures that achieved their stated aims. There are plenty more.
As with any good economic policy a balance needs to be struck. It needs to be a short term policy and cuts need to be balanced by tax rises and or redistribution of capital into growth projects.
The UK should have brought it to an end around 2016. It would have been overall a very successful policy had that happened.
Anyway, we don't have austerity cuts now, the budget set out a spending increase of £70bn a year.
The scale of the debt increased at an accelerated pace throughout austerity. It doesn't bring debt down, never has. The low interest rates post financial crisis are exactly the time you should be spending to try to generate growth. Now they're relatively high again and we've missed the boat. They'll stay high too because of the likes of Trump and his chaos.
Found this funny.
I can understand people calling for more borrowing when money is cheap but it isn't anymore.
You have a fundamental misunderstanding of this I think.
Debt increased because of the large deficit we ran, however debt did not accelerate. It decelerated and we almost reached a surplus before Brexit screwed it all up. It was working as planned.
There are also very different types of investment. Transport and power generally provide the best return. We've cut transport spend and are doggedly pursuing the mental net zero policy, and are ploughing money into social projects that provide little return. Borrowing more to fund those kinds of projects would be a millstone for future generations.
Okay...
The scale of the debt increased at an accelerated pace throughout austerity.
This was because of the structure of the payment back to service the debt.
On the right here is the C19 Debt graph vs GDP goes down quickly because the GDP didn't shrink, like in a recession. I'll cover that below.
Whereas in 2008 we/the US crashed financial services, which is weighted inside UK economy, i think its the our number one tax revenue stream.. so... until the GDP come back pre or better the austerity was the only way ANY government could balance the books
(You see that large drop?)
The low interest rates post financial crisis are exactly the time you should be spending to try to generate growth
we dont borrow against interest rate, that set by the Bank of England - When the UK Government needs to borrow money, it can issue a bond. This is a way of requesting a loan from investors via the financial markets. In buying a bond, investors are loaning the government money.
Now they're relatively high again and we've missed the boat
okay..Glits, Interest rate and inflation.
If interest rates are expected to rise, then demand for bonds (Glits) tends to fall - this is set by the Bank of England normally to off set inflation.
Now, inflation this normally happens when a currency is devalue (for example given it away in Covid) the Bank of England needs to set interest rate for mortgages to stop the bubble (i think there is one) on homes popping there are lots of people remortgaging it's breaking them.
I love the France the model with 20/10 year mortgages they are not subject to peak or low points.
What Rachel has done;
she has spooked the markets for one. They know she has backed herself into a corner and they also know that interest rate need to stay low to allow houses to be sold (bank of England), but she has also taxed businesses more from April meaning less investment (private) or even worse job loses meaning less tax.
So less tax, less investment, higher borrowing rate, inflation high or same = ?
Pure fecking evil. I receive benefits so he’s directly attacking me.
Sorry to hear that. Hopefully you’ll be able to not get hit by any incoming cuts.
Racheal Reeves is finally getting to live out the dreams she had in 2013.
Holy crap. Major player in local politics too.
E: didn't realise he had been suspended from Labour for some dodgy related stuff:
https://www.brightonandhovenews.org...uspended-from-party-over-serious-allegations/
He still has an active westminster pass because he is a close friend and advisor to peter kyle, he was a big player in taking down corbyn, because he was 'dangerous'.
Okay...
The scale of the debt increased at an accelerated pace throughout austerity.
This was because of the structure of the payment back to service the debt.
On the right here is the C19 Debt graph vs GDP goes down quickly because the GDP didn't shrink, like in a recession. I'll cover that below.
Whereas in 2008 we/the US crashed financial services, which is weighted inside UK economy, i think its the our number one tax revenue stream.. so... until the GDP come back pre or better the austerity was the only way ANY government could balance the books
(You see that large drop?)
The low interest rates post financial crisis are exactly the time you should be spending to try to generate growth
we dont borrow against interest rate, that set by the Bank of England - When the UK Government needs to borrow money, it can issue a bond. This is a way of requesting a loan from investors via the financial markets. In buying a bond, investors are loaning the government money.
Now they're relatively high again and we've missed the boat
okay..Glits, Interest rate and inflation.
If interest rates are expected to rise, then demand for bonds (Glits) tends to fall - this is set by the Bank of England normally to off set inflation.
Now, inflation this normally happens when a currency is devalue (for example given it away in Covid) the Bank of England needs to set interest rate for mortgages to stop the bubble (i think there is one) on homes popping there are lots of people remortgaging it's breaking them.
I love the France the model with 20/10 year mortgages they are not subject to peak or low points.
What Rachel has done;
she has spooked the markets for one. They know she has backed herself into a corner and they also know that interest rate need to stay low to allow houses to be sold (bank of England), but she has also taxed businesses more from April meaning less investment (private) or even worse job loses meaning less tax.
So less tax, less investment, higher borrowing rate, inflation high or same = ?
We did ungodly amounts of QE to make sure the banks benefitted from the money we printed, not our infrastructure though or anything that generates growth.
Same here. I think I’m on PIP so hopefully I don’t get affected too negatively.
Reeves won't be lasting long
If your benefits get cut or you can’t afford the heating then just remember Rachel Reeves is feeling sad .
Also
Also
If your benefits get cut or you can’t afford the heating then just remember Rachel Reeves is feeling sad .
Also
Streeting to replace her?
You almost feel sympathy for her until you remember how vindictively she's gone after certain groups. She lied to get the job and she's been found out massively and now the whole country will have to suffer for it.
If Starmer appoints Streeting that's him appointing his successor.
If Starmer appoints Streeting that's him appointing his successor.
Artificial intelligence will be “mainlined into the veins” of the nation, ministers have announced, with a multibillion-pound investment in the UK’s computing capacity despite widespread public fear about the technology’s effects.
Keir Starmer will launch a sweeping action plan to increase 20-fold the amount of AI computing power under public control by 2030 and deploy AI for everything from spotting potholes to freeing up teachers to teach.
https://www.theguardian.com/politic...ns-labour-announces-huge-public-rollout-of-ai
Maybe the only thing that will be implemented on time will be the rise of Skynet?
Keir Starmer will launch a sweeping action plan to increase 20-fold the amount of AI computing power under public control by 2030 and deploy AI for everything from spotting potholes to freeing up teachers to teach.
https://www.theguardian.com/politic...ns-labour-announces-huge-public-rollout-of-ai
Maybe the only thing that will be implemented on time will be the rise of Skynet?
I wouldn't worry about Skynet if it emerged from a UK government IT project
Reeves is no different from Hunt, Kwarteng, Zahawi, Sunak, Javid, Hammond, and Osborne. She’s just the latest in a long list of neoliberal arseholes.