I'm afraid I am going to sound like a broken record, but the news today that the IFS reckons Alistair Darling has underestimated borrowing by £39 billion a year will shock few. But what is his solution?
There are only two. Put up taxes or cut spending. He's already putting up the top rate of tax and increasing national insurance, but if you raise taxes too highly you run the risk of depressing the economy even further. No, the answer is to cut spending and cut it meaningfully. There is no alternative, and I was glad to hear George Osborne say so on the Today Programme this morning. However, he used the term "spending restraint" rather than "spending cuts". Perhaps in his mind they mean the same thing, but I wonder. We need a change in mindset here. All past promises about spending promises should be jettisoned. No departments should be immune.
Osborne also made clear the Tories would fight any proposal for a further fiscal stimulus in the budget. He said that adding to debt would mean the government would show that it was uninterested in fiscal sustainability.
If Alistair Darling doesn't do it voluntarily, the IMF may well make him, because if he doesn't bring the public finances under control, there's only one way we're heading - and that's to the IMF.
82 comments:
Iain I think we have all seen this for a long time and we just have to keep saying it. Aside for nanyhting else the legitimate debate about to what extent we have to keep demnd up is renederd inot gibberish when we continue to waste money in dead wood public sector non jobs
Cameron last week was very shifty about 'cuts'. He just talked about smaller increases.
Maybe he is just biding his time before getting real about the mess we are in.
Everyday HMG are adding another little bit to the 'we've run out of money' rationale.
Now it is supposedly acceptable to print money, go to the IMF, get our spending and growth forecasts laughably wrong etcetera.
What next FFS?
Is it just us blogo-wonks who can see what is going on?
Iain, I agree absolutely.
The Tories have to come out fighting. Showing that they mean business and that, as you say, ALL departments will have to make great savings.
As in most things about this Government it has created levels of 'quango's' behind which Ministers can hide when things go wrong.
Take, for one example, the NHS. And, boy, once you enter the maze you become aware of the vast amount of money, which goes into the National Health Service – for us the patients!- which is wasted on Quango's
The National Institute for Clinical Excellence. The National Research Ethics Service.The Care Quality Commission. The National Patient Safety Agency. The NHS Information Centre.
MONITOR The Independent Regulator of NHS Foundation Trusts, The National Quality Board, The Healthcare Commission, Regional Strategic Health Authorities and the Trusts themselves! There will be more, of that I am certain!
All have offices and staff. They all have a Board with a Chairman, Non Executive Directors and Chief Executives, (who do not come cheap in the NHS!) And a full compliment of Executive Directors.
Foundation Hospitals, it appears to me are just an excuse to give the Chief Executives, Chairmen and Executive Officers a hefty pay rise!
When you consider the money that we pay into the National Health Service why on earth do we need so many organisations?
This cannot be right. There is a need for a restructure of the National Health Service and these Quango's should be closed down without delay.
The quango 'Monitor' tells us, on its website, that their role, towards Foundation Hospitals, is to determine whether they are ready to become a foundation trust, and when approved ensure that they comply with the conditions the trust signs up to and are well led and financially robust when they become foundation trusts.
Well, as the Sunday Telegraph pointed out in its article on the worst hospitals, many of whom were Foundation Trust hospitals, MONITOR has certainly failed to monitor! So just what use are they, save to spare the Ministers blushes? But have you read of any resignations ? or sackings?
Likewise what role did the very expensive TEN Strategic Health Authorities play. They have a management role in those hospitals. They have failed. Any resignations?
Why cannot the Tories look at a system where Local Trusts manage themselves but are answerable direct to the Department of Health? Not through a succession of unelected Quango's
Now, if this is the NHS what are Education, Policing and the rest like?
There is a great opportunity for the Tories to save so much money on all these very expensive and pointless quango's
Are they brave enough?
Apologies for the Thread Hijack!
Does anyone find this worrying?
http://newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc.co.uk/1/hi/technology/7985339.stm?ad=1
Wrong , wrong and wrong again Iain . The route to depressing the economy even more at this stage is to cut spending meaningfully as you put it . Osborne and your propsals would lead to 5 million unemployed in very swift order .
The Do Nothing Party would do better staying as do nothing than putting forward such a calamitous proposal .
I take it that you have noted that RBS shares are now back at 32.5 , a sign that the current strategy is working if rather slowly .
The Conservatives must stop running down this country asnd it's economy for partisan political purposes , the correct description of this is treason .
Sod cuts OR tax rises
Whilst you slumbered last night, and in the many months before, the sinister shape of Directive 2006/24/EC crept into your lives and stole your freedom and your privacy.
Would it have made any difference if this burglar had worn a striped jumper and carried a bag marked 'swag' - probably not, for you slept soundly, happily believing that if you voted for a new government - when someone else got round to organising an election, when someone else handed out leaflets, when someone else hired a loud speaker and toured your streets - if you put your cross on a different name, you could go on with your cosy life, untroubled.
You were quite happy to believe that it really wasn't your concern.
You 'tutted' over that 'racist mob' the BNP. You 'clucked' at the alarmist stories in the Daily Mail. You 'grumbled' when you found your litter bin installed with a tracker device. Then you went on and re-mortgaged your house, marvelled at your good fortune, ran up your credit card, bought a new car, bought those ridiculous shoes that you couldn't walk in, and settled down to watch reality TV. You may even have turned on the computer and read some of the blogs, 'clucked' again at the comments, and departed, never bothering to leave your point of view.
Never standing up to be counted. It wasn't really your concern.
Someone else would sort it out for you. Someone else would make a fool of themselves, demanding smaller government, demanding to be left alone to organise their own life, supporting the Libertarian Party, being seen as a 'conspiracist'.
Today it's too late.
Today 52% of the population is dependent on retaining a Labour government for the very food in their bellies. Turkeys don't vote for Christmas.
Today the government spend 43% of your wages on supporting, amongst other things, that 52% of the population.
Today the government has hung a debt of £33,000 round the neck of each of your children.
Today, Directive 2006/24/EC means that the government will be monitoring every e-mail you send, every friend you make on the ubiquitous Facebook, every mobile phone call you make, every time you log onto this or any other web page.
You can't even 'tut' and 'grumble' amongst yourselves in private any more.
Now who will stand up to be counted?
Mark Senior, for possibly the most partisan LibDem commenter on this blog to whinge about partisan comments is a bit rich.
So what would you do? Increase spending still further? That way lies ruin.
old holborn. did you ever enquire why each ballot paper is numbered?
and when you attend to vote they place the number against your name on the voters register?
Did you ever complain that it was supposed to be a secret ballot?
Have you ever thought why all political parties (mainstream) are ALL looking towards the EU? that massive, corrupt, anti democratic organisation, from whence came the missive you are now complaining about?
We are now controlled by former communists!
But there is still a real need to cut PUBLIC SPENDING!
@Mark Senior 6/4 12:28.
Treason?
Labour have ruined and bankrupted our country and surrendered our sovereignty, and you accuse the opposition of treason for opposing the government?
Are you 'aving a giraffe?
Any one would think there was an election coming up, we're skint, we have beurocracies that have gathered a momentum like Mr Holborn mentions, that the prism of the argument is cuts vs wandering around with a clipboard and the Labour Party are utter crap.
Could be wrong tho - may just be that someone's found 200 billion in the cookie jar (if IMF loans are 'stress free Ocean finance' stuff now) maybe we have.
Ah skint, never really as skint as you could be... what a gift.
Iain , we have to continue basically the current strategy with tunibg as necessary but there are signs that the bottom was reached in February , the key now is to ensure that the curve goes up , your proposals would simply ensure a double dip to a new low .
Twig , hogwash , your post is a typical example of the hyperbole and self denigration of this country and it's economy that is all too prevalent in the Conservative party . The country has and is facing severe problems but it's economy has not been ruined and it is not anywhere close to bankruptcy .
Oliver Drew , the basic strategy behind your proposals is sound but the time to implement them is when the economy is growing . To introduce them now would lead to a massive increase in unemployment and greatly increase the length of the recession .
A lot of spending can be cut, but I bet it wont.
Pull our troops out of Iraq and Afhanistan, and anywhere else, especially until they have save planes to fly in and safe vehicles to drive.
Cancel the replacement for Trident.
Cancel Thameslink
Pass a bill which will snatch back the £500 million it costs just to service the debt on PFI contracts
Stop spending on discretionary procedures on the NHS, like IVF and putting gastric bands on Fat people or gender realignment.
Make long term scroungers clean the dogshit in parks.
Reduce the number of managers in the NHS by half.
Cut all unecessary staff from local government; all one-legged black lesbian equality managers, all wheelie bin inspecters and all managers who just manage managers.
Scrap all new data collection quangos.
Stop funding the BBC
Cancel all overseas aid.
Make Paul Boateng and his wife pay for their luxury stay in South Africa.
None of the above will happen of course, but it should.
You, Sir, are a fool. We have around six million unemployed now. Just different titles. We will have 10 million before Labour's incompetence is shown for the treason it is. When such a catastrophe happens, nothing but nothing will stop the inevitable consequences. Only a draconian effort will stop the rot and return us to some form of normality. As for RBS shares, more greed, insider trading and manipulation. Brown has already robbed shareholders of billions. Now he drips feeds them back at a level meaningless compared to the losses caused.
Oldrightie , your post is yet another example of the over exaggeration of the current poor state of this country's economy so prevalent amongst Conservative party supporters . The draconian effort you want was employed by Thatcher in the 1980's recession and resulted in the country facing another recession in the early 1990's .
It is one thing to criticise aspects of the government's policies and actions ( the temporary reduction in VAT for example was not the best use of the money spent on it ) but a post such as yours adds nothing to the debate on how to improve the economy of this country .
Mark Senior said:
"Wrong , wrong and wrong again Iain . The route to depressing the economy even more at this stage is to cut spending meaningfully as you put it . Osborne and your propsals would lead to 5 million unemployed in very swift order ."
If they were all State actors I'd be happy to see that. Unemployment figures are meaningless. They have been fiddled to buggery for decades and the numbers of economically inactive is a vast problem. Still, if welfare was less of a handout and more of a hand up, less of a lifestyle choice and more a short term assistance, less of a cash cow for idle families growing fat and numerous at our expense, more people unemployed wouldn't be such a burden on the taxpayer and a smaller, leaner welfare system would be more able to help people.
"The Do Nothing Party would do better staying as do nothing than putting forward such a calamitous proposal ."
Time and again this 'do nothing' phrase crops up. Have you ever considered the cost and risk of doing the wrong thing? I doubt Gordon has.
"I take it that you have noted that RBS shares are now back at 32.5 , a sign that the current strategy is working if rather slowly ."
Those shares shouldn't even be trading on the market. None of the nationalised by the backdoor banks should be trading on the stock market as the Government holds the reigns.
"The Conservatives must stop running down this country asnd it's economy for partisan political purposes , the correct description of this is treason ."
Have you not noticed the almost command economy we have enjoyed for the last decade? Brown was a partisan Chancellor to the bone. Look at the debacle over the 10p tax rate which was introduced for political reasons and then removed for political reasons. Why bother putting it there in the first place? A waste of time and money. As is the tax credit system, particular when the Government engineered a massive extra cost to childcare.
There is an obscene amount of waste of taxpayer's money. It partly got us into this mess so we will not get out of it by burying our heads in the sand about it. The Government has grown fat on the back of credit spending. That credit spending has all but stopped and it is time the Government went on a crash diet.
Heard the interview; well, what one could of it between Davis's constant and rude interruptions.
Down with the BBC.
@Strapworld. Re Foundation Hospitals - Mid-Staffs got their accreditation on monetary and management considerations. Nothing clinical at all, apparently. Top class at getting Foundation status. Positively fatal for patients.
Public spending cuts is simply a case of thrashing the Quangos again and again till all that is left is that which is useful. Maybe 5%?
Uh?
What I like is Mark Senior `s certainty that these people will to a man be utterly unemployable anywhere where you are required to earn a living . He may well be right .The urgent retraining and de Stalinisation of our state whithin a state is part of the deferred cost of Labour’s years of waste
I fear he may also have a point that an increased level of unemployment , sadly , may also be part of the cost of clearing up Brown’s mess, I hope those Labour weasels who pat themselves on the back with both hands for their generosity with other peoples money will accept responsibility .
As for accusations of traitorousness that’s confusing the diagnosis with the illness but then I suspect it only takes no more than shoe laces to confuse Mark Senior
By the way as I am banned from Liberal Conspiracy by Onan the Barbarian ( idiot Hundal) why is such an clownish simpleton allowed to comment here at all ?
We need Tory spending cuts now.
We need the Tories to summon up their courage and say this.
Given thirty seconds thinking time, those of us who have any dealings with any government department could readily identify savings of 10% - savings which would make no discernible difference to the level of public services.
It would be very interesting to look at the things that were said during the last run up to IMF humiliation under Labour . I noticed that much the same mendacious international debt comparisons were wheeled out.
strapworld said... “did you ever enquire why each ballot paper is numbered?”
Oh dear. I thought everyone knew the answers to this. It’s (1) so an election court can properly investigate fraud and irregularities; and (2) allegedly so Special Branch could once find out who voted Communist the better to lock them up.
Newmania said... “...he may also have a point that an increased level of unemployment, sadly, may also be part of the cost...”
Now where have I heard that before? Norman Lamont 1992 was it?
It's the obvious place to start: tax hikes will send us spinning into deflationary oblivion, the only way we're going to successfully get out of this debt disaster is to cut the rot out of the system; we are haemorrhaging money into the benefit systems, councils, the EU, quangos, the NHS and a thousand other places.
It's going to require a complete system reload I fear, sweeping cuts and permanent reform, it's going to be painful for all concerned, but we cannot continue to support an ever growing state with an over-taxed, put upon desperately over-stretched wealth creating private sector.
Iain, I think you are right that we have to find a way of cutting down expenditure, but the danger is seeing this as a rapid process. I would be the first to say that the state is way too large, but unless you are in a position where there are "wealth creating" jobs for this surplus to move into, every position you cut is just another soul on the dole.
The tragedy of the current situation is that it has got so out of control that these is going to have to been a sudden change soon. This is the inescapable consequence of ten years of Brown and Blair sucking the life out of the private sector to feed a bloated public sector.
Oh dear now we’ve got President Obama continuing the Bush nerve of telling us (the EU) who we should admit (ie Turkey).
It really is time we started telling the USA it should admit Venezuela and Panama to the USA.
Oliver Drew , we are in the deepest recession of the last 100 years certainly but nowhere near the longest and if you want to make it deeper and certainly longer then your proposals implemented now are the way to do it .
Newmania , I do not say that those employed in the public sector who you wish to be made unemployed now are unemployable , however in the current climate there are no jobs available for them period and the result of your policies would be a substantial increase in the current level of unemployment .
I do not disagree that the public sector should be cut back , it should but the time to do this is when the economy is growing .
Stein's Law says "If something cannot go on forever, it will stop."
As the budget deficits we are currently running obviously fall into that category, there will be an end to it eventually. There has to be.
Either we reduce expenditure to meet income, or raise income to meet expenditure, or, most likely, a bit of both.
If we do nothing, and continue to borrow with no plans to reduce the deficit, eventually no-one will lend us money, and the above actions will be forced upon us.
The only other alternative is to print the money as in Zimbabwe, and we know what that leads to.
We have swapped a 1930s style Depression for national impoverishment on a grand scale. One way or another, at the end of this whole process, we will collectively be considerably poorer relative to other countries, as our savings are inflated away, our taxes rise, our public services are cut, and our purchases cost more due to a lower pound.
May I draw your attention to this little example of out of control pay?
Iain, we need to cut spending by something around £200bln+, as I have long banged on.
The economy would benefit from keeping money in the pockets of those who earn it, for they know best (in the round) how to spend it. Thus, end income tax so people can first cut personal debt then think about spending when it is right for them.
Alas, you have seen that Osborne is still not able to utter the C word!
The Libertarian Party is open about moving towards Sound Money and Balanced Budgets. It has been saying this since creation and for very good reason - it is the right thing to do.
We are not in the deepest recession for 100 years.We are infinitely better off than we were in ther 70s never mind the 30s.
if you want to make it deeper and certainly longer then your proposals implemented now are the way to do it .
That is balls there is a ( dubious ) argument that using state sinecures as form of inefficient demand boost is a good idea ,but even if we accept that throwing freshly printed money at the economy was useful ,doing so via fake state jobs is quite clearly the worst way to do it.
It will not ‘increase employment’ money left in our hands increases employment and allocates resources efficiently. It will over time increase unemployment but the real point is not amongst the unionised Public Sector who will remain better protected than anyone else .
This is why the Labour Party and their little Liberal friends must be defeated . The Labour Party is now financed entirely by a parasite empire of dependency .The consequences for the ordinary tax payer would be catastrophic.
Yes it would have been better to slim the Public sector gradually during growth ,.......some prat missed than chance and why ? Because according to some prat we were never having another recession .
Hang on. I wonder if some of the Fiscal stimuli are bogus?
The situation is desperate. But if they make it more desperate than it sohuld be, or can make it look worse than it really is, they can then go to the IMF, get a package from the IMF and claim: "We have to slash public spending. But it is the IMF who are making us do this. Our hands are tied."
It really is time we started telling the USA it should admit Venezuela and Panama to the USA.
Or to get out of Hawaii, the US Virgin Islands, Guam, American Samoa, Puerto Rico, and the Northern Mariana Islands?
Perhaps we should show support for the Hawaiian independence movement?
http://www.hawaii-nation.org/index.html
We're heading to the IMF. In fact, is there a bookie taking bets? I'll have a punt!
The most worrying sign is Lord Voldermort's press interviews.
"We've taken away the stigma of going to the IMF"
So they are going to the IMF, but they are doing their best to lay the groundwork that it's "not that big of a deal" to go to the IMF.
Labour are a disgrace and should die as a party. Subhuman scum, the lot of them.
John - go to politicalbetting.com - - there is a market there for a bet on virtually anything - and if not then someone may offer you odds via Betfair.
We can argue the whys and wherefores all day, but it doesnt alter the fact that Labour, old or new, cant run an economy. The last time they were in power they had to run to the IMF and they will have to do it again this time.
The IMF will decide on spending cuts, where and how deep oh yes and they will deal with the other growing problem of inflation...expect a sudden and quick increase in interest rates....thats what will happen, its what happened last time and history does repeat itself...
Iain in broadly right, wasteful spending can be cut straight away, not essential.
Mark Senior misses the point here. Reducing spend right now would be very bad for unemployment. But the few highly paid people in quango's will not be the ones able to claim many benefits as the amply paid all have over £15k in savings.
What I think is worse is this, the Government is using all its power to its own ends and is gambling with everything it has. This way does lead to the IMF.
Mirtha
"history does repeat itself"
Only to those who refuse to learn from it.
Gareth
"If they were all State actors I'd be happy to see that"
And the best thing about firing public sector workers is it helps balance the books e.g. fire 1m bureaucrats with an average salary of £20k and have them all claim JSA (approx £3.5k per year) - saving £16.5bn. And you get a bigger saving if you fire more of them, or better paid ones.
How will McBust get Darling to give the voting mugs a pre election giveaway. I know it sounds stupid, but that is the level to which McMental will go to, so he can hang onto power.
Mark Senior does not miss the point at all . I accept that reducing public expenditure is the correct thing to do in the longer term when the economy is growing .
Some of the proponents on here of cutting it drastically now are being honest and accept that it will lead to a big increase in unemployment , others are not so honest about it .
Not a single one of you , Iain included , is prepared to say what level of unemployment they will be prepared see to achieve your so called aim of " a sound economy " . Because of this you are not being honest to yourselves and being totally dishonest with the country as a whole .
The electorate have the right to know to what level of unemployment 5,6,7,10 million Conservatives would be prepared to see to achieve their desire - is there a single one of you who will be brave enough to put a figure in black and white on this thread - I expect not .
The majority of you Iain included are prepared to kill the patient in pursuit of a cure for what you see as the cause of the sickness in the country's economy .
Another question, Mark, would be what levels of unemployment (the real, non-fudged, no cheating allowed figures, mind!) Labour are prepared to see now and in the immediate future? 5,6,7,10 million?
Mark do you seriously think we can ameliorate unemployment by inventing jobs taxing people in real ones and handing over money we have to borrow or print ? Unemployment is already shooting up and will get to 3,000,000 . You are confused again...
In the ‘other argument’ you are having with an invisible person exciting points are being made to and fro about the efficacy of shooting up with the hard drugs of Policy Zimbabwean style so as to keep demand high and retain production /employment /demand etc. avoiding Deflation .Never mind what it does to the currency inflation supply and our chance of a recovery . Even if that fairly specious self serving excuse for politically expedient bribes were allowed to have some merit,it would still not justify retaining employment in the most useless part of the economy.
Got it ?
Almost anything you say about the economy is true to some degree but in this case your remarks have such a tiny amount of truth so very diluted that it might be sold as a homeopathic remedy for thinking too much. Or at all .
Haven`t you got some community cohering through face paint and nose flutes to do or something ?
There's no chance of Call Me Dave pledging spending cuts. Wouldn't want to risk making state workers vote for Labour again, would he?
This is pathetic. The UK needs another Margaret Thatcher to come along and save it. But I don't see anyone who could step up to the mantle. If the Tories fail to obliterate this lot at the next general election, they don't deserve to exist as a party.
Mark Senior, for possibly the most partisan LibDem commenter on this blog
Blimey I had not realised he was a Lib Dem .Just shows you it is actually impossible to tell the difference between Gordon`s morons Cleggs collectivists
Its like one of those birds just looks 'Brown ' to me , but to the orhithologists is the closely related 'Brown with a slightly more orange beak ' - bird
The Tory party is slowly, ever so slowly coming to the realise that what Simon Heffer has been saying for a long time now contains some truth.
It really is now a simple matter for 'Dave' to find his voice (and leadership) to say to the country that it can no longer live on a sea of debt and needs to make some painful adjustments. Dave does not need to specify what 'cuts' are required ahead of a general election as, truthfully, he is not in a position to do so. However what he can and must do is set out a simpler and clearer vision as to what fundamental principles will drive him when making such painful adjustments. Such principles based on trust, fair play, good faith and measurable economic benefit.
I have zero doubt that if Cameron were to take this honest line over the coming months leading up to a general election he will archieve a solid overall majority.
By constantly avoiding speaking about what the country actually needs Cameron will increasingly be seen as not being honest, and will only win the general election by default as the majority of the country are now fed up to the back teeth with the current lot.
The last thing this country needs is a Tory government with no overall majority having to purchase favours from the likes of Clegg and Cable. I'll be emigrating if that happens!
Ed the Shred said... “I'll be emigrating if that happens!”
I hope that’s a promise and not just an aspiration.
They should start by cutting benefits for those that keep breeding.
They should then cut 1 million public sector jobs.
Then get out of Iraq and Afghanistan.
I really, really hope that Cameron has briefed his shadow ministers to come up with hit lists. Quangos, futile layers of managerialism, outreach jobs and so on that might be justifiable if we were rich but aren't as we're not.
Some ruthless slashing and burning and he would probably find he had money for frontline workers like nurses, firemen and teachers of proven quality.
I see Mx Gardner still has a blocked profile - que?
If you have nothing to hide, you have nothing to fear, as they say.
Are you one of Mr Draper's many online personalities?
So Mr Gardner
Let me understand what your position is. Is it:
1. That this country does not need painful adjustments?, or
2. That this country does need painful adjustments and that it should be carried out with dishonesty, bad faith and mistrust?
Thanks for the ad hominin attack. I was warned about people like you.
Plato said... I see Mx Gardner still has a blocked profile - que?
As someone has pointed out in another thread, many use a bogus name or an alias (do look up their reasons - it was in Iain’s thread about anonymous posting). I OTOH have always used my actual name for my very many years posting on line. That means I disclose what I choose to disclose and don’t disclose what I choose not to disclose, It’s become second nature. So tough titty.
Ed the Shred said... “Thanks for the ad hominin [sic] attack. I was warned about people like you.”
No ad hominem. I just get heartily sick of people making this particular specific boast and then never carrying it out. So I was taking the piss (not the same thing at all).
You wouldn’t believe how very many people I met in the US during the 2004 presidential elections who swore they would move to Canada if Bush got elected. He did; they didn’t.
So are you serious or aren’t you?
I gather from your answer that you aren’t.
Getting rid of all the public sector 'non jobs' certainly is a start, and one which I will support. Of course unemployment will go up, but paying all the ex non job employees benefits, rather than a wage will be cheaper, thus less public spending. Maybe my view is a bit simplistic, however it makes sense in my little mind.
This crisis is the result of a consumer bubble triggered by an inlationary spurt - it parallels the 91 recession. The dotcom crash was an investment bubble just like the 87 privatization crash. The economy will recoverbecause human nature is greedy.
The problem at the moment is that the liabilities of UK Plc are over stretched. It is simply notbelievable that Gordon Brown doesn't know this. The banking crisis is an accounting and regulatory issue where too much was lent cheaply and has led to unstable personal and corporate financial models.
The levels of Government commitments are based on a political model that is also not sustainable. Irresponsible commitments have been made to people and projects with very low rates of return. Justification has been made for personal and ideological reasons. It is not responsible government. Regulation of government spending has failed. We do not earn enough to pay our debts back in a politically sustainable time frame. That is to say the level of taxes required to pay our bonds will notbeaccetable to the public.
At some point in the future not only will we have to go to the IMF but we will have to cut spending to a point that alot of productive spendingon defence, education, health and trade will also have to be cut. This will further diminish our international standing as services are cut to the bone.
Gordon brown has bankrupted the country. He can neither admit nor correct his mistake publically. It will be the poor who cannot compete globally who will suffer over the next ten years. It will be labour jobs in labour areas that will be forced to go.
country will me bankrupted
Mark Senior is a prime example of why the libdems should never ever be allowed to grasp the keys to No10 in their sticky mitts.
The sheer fantasy island stupidity of the libdem posters combined with their tinpot Marxist claptrap ideals never ceases to amaze me, they have the fiscal intelligence of a backward seven yr old.
Both the libdems and the socialists actually think they can create wealth by waving their magic wand while spewing out their ridiculous party slogans.
The libdems and socialists are social/wealth parasites, they feed off the real wealth creators of the nation and yet far from being grateful for the free ride, they do their best to make real wealth creation as hard and as difficult as possible all the while insulting and demeaning them as 'dirty profiteers/capitalist swine etc.
The state parasites are killing the beast of burden that is the wealth creator, WTF will they do when the beast dies?
Before the parasite class can spend the money it has to be earned first and its bloody hard to create wealth, its very easy for the parasite class to spend it of course.
The parasite class should be forced to do some real work for a change, that might get through to them eh?
Well not one of you brave Conservatives feels able to put any numbers to your brave talk of slashing public expenditure and the resultant cost in higher unemployment , not even Iain Dale who writes such a gung ho thread on the topic . What snivelling cowards you and your party are .
OK Let us have a stab . A drastic cut in public expenditure must be say at least a 20% cut if not more .
The number of public sector employees is currently of the order of 6 million so that is 1.2 million people you want to make unemployed . Around 1.5 million are employed in the national health service and police force , we can hope ( although Iain says that no area should be immune ) you are not planning to throw out onto the dole nurses , doctors and police officers so that means you will have to reduce the rest of the public sector by 30% - almost 1/3rd of all council staff to go , the same proportion of immigration officers , inland revenue staff , customs officers etc etc .
I can imagine Iain stabding at Osborne's shoulder applauding him as he announces this Conservative plan to bring despair and misery to millions of people throughout the country .
The public sector is full of 'non job' employees with gold plated pensions. They must go.
OT as this is all too serious for me.
It's being reported that T Blair is odds-on to be the first President of the EU.
I've dug up the speech given by William Hague about it - it's even more hilarious than I recall
Mr Senior
What utter rot you write. You present a false dichotomy and then expect people to think are so clever. In addition your scaremongering should really be consigned to the dustbin of history.
The false dichotomy is to suppose that the cuts will occur overnight with the increase, as you suggest, of unemployment also happening overnight.
It is a process my dear chap, a process of moving people from non-productive jobs to productive jobs. This will take time, lots of it, however it is a direction the country has to take.
Iain,
What economic theory would recommend cutting spending in a recession?
In a lot of this commentary there seems to a belief that "money" is something real.
I think it is equally fair to see money as purely symbolic notation of value whose purpose is to manage not just the exchange of goods, but to introduce incentives into an economy.
What government policy is trying to do is to utilise this symbolic notation to bring about specific economic ends.
Actual academic economic is spectacularly unable to deal with the chaotic aspects of money, and actual political discourse is dominated by people who seem not to realise money is a system of symbols at all.
I would expect that within less than 10 years we will have the computing ability to make effective economic planning possible and ditch the drang und sturm of imaginary "rational markets."
I cannot believe prattling Senior is still rehearsing his childish theory . According to him our troubles are easily solved . We simply borrow ( not that anyone will let us ) and create another 3,000,000 foot masseuse it really doesn’t matter and by this means unemployment will be cured .
In the real world ,in order to create employment ,the economy has to grow and the less people sitting around doing nothing the better .The allocation of resources by the market money for buying stuff beats throwing money in the sea ,as any fule do know except one. It frankly amazes me that after months of kicking around the economic crisis there are still people left who do not realise we live in a joined up world ( Senior`s is also static …. ) . A sudden cut of 20% in one year would of course be quite impossible we cannot dump an industry even a pointless one at a stroke . We might freeze employment currently still escalating 100,000 last 12 months . We might renegotiate all final salary pensions , we might , shrink through wastage which would get us down 20% over say five years . I fear we will soon have no choice and whose fault is that , the stupid high tax Labour Party and its Mut gopher the Liberals
You talk about honesty you lying poltroon .What about the Libe Dems coming clean and going to the Polls in their Southern seats admitting that if anyone listened to them we would have a vastly higher tax system and that if anyone ever read their twaddle that’s what it says . If not how were you planning to pay for these non jobs ? .Having criticised New Labour from the left if at all for the noughties they are culpable for the disaster as much as anyone . What about that fat ignorant liar Norman Baker here sticking his hand up and admitting he wants ordinary working people to pay even more for his constituency of layabouts to have jobs for life pensions for death and not a care while we work get redundant move retrain worry and budget .
How much more tax
How many more jobs lost in the real world
How much longer in recession
How many Liberals in over paid cosy quangos ?
Answer that if you are feeling brave which I expect you are not Senior you clown
PS Paul Hansall, not money waste Keep up or shut up
When will this kind of wanton waste end?
http://www.yorkshirepost.co.uk/news/Costs-alert-on-health-trust.5142349.jp
Ah Iain writes a thread which says that public expenditure must be cut now and when I show the cost of that would be unbearable in human terms I am given verbal abuse - the last resort of the inept and unintelligent - and told of course it won't happen overnight . I am also told that the Conservatives would not dump a whole industry at a stroke .
What a joke , the Conservatives in the early 1980's managed to destroy many of Britain's industries pretty much overnight .
Just one final point , in which year did public sector employment peak as a % of total emplotment . Not under your hated Labour party but the paek year was in fact 1992 after 14 years of Conservative government under Thatcher .
@Mark Senior
You ask what level of unemployment would be acceptable, well, I can't speak my others but my value would be around the I don't care mark.
There needs to be a rebalancing of the UK's economy, and it's not going to be painless. Labour, the Lib Dems and the Tories ought to already know this, but - as it's not exactly a vote winning message - won't say it.
We need to radically cut public spending now, the gap between tax receipts and spending is already out of hand, and accelerating spending at a time of decreasing incomings is a gamble at best - and gambling is something Labour have shown themselves incredibly inept at - and more likely sheer lunacy.
“It's being reported that T Blair is odds-on to be the first President of the EU.”
Would the EU have someone from a non-Euro country? I think not.
Simon, you have been long enough on this blog to know the rules on swearing.
I am given verbal abuse -
At least you are allowed to comment at all you hypocrite maggot which is more than I am on Labour Lost or Liberal Conspiracy so stop whining and get your own ‘comment is not free’ cess pit in order
What a joke , the Conservatives in the early 1980's managed to destroy many of Britain's industries pretty much overnight .
Yes that’s right , you mean our profitable coal industry and our lean mean steel industry .They were destroyed by successive governments refusing to face the Unions and force them to make a living other than from everyone else . That it ws admittedly a ghastly upheaval was the fault of Callaghan and the Liberal puppets cheering on the use of Nationalised industries as regional and redistributive policy . It could not be sustained and no one ,,not anyone , thinks it could . …oh except you of course…
Just one final point , in which year did public sector employment peak as a % of total emplotment . Not under your hated Labour party but the paek year was in fact 1992 after 14 years of Conservative government under Thatcher .
And that was for the same reason the rapid contraction of the working population as the economy adjusted violently form its long period of self deception a cycle you are I think encouraging us to get into once again.
Obsidian said... “...what level of unemployment would be acceptable, well, I can't speak my others but my value would be around the I don't care mark.”
Typical ******* Tory. How easy it will be to hate them again and how right.
[I thought you might do that and so afterwards kept a copy. Notwithstanding the swearword was instinctive to the context and entirely appropriate.]
Yet again this "managed to destroy" meme.
Look, the Conservative government did not "destroy", what they did was stop subsidising. That is hugely different. Does a doctor "murder" when they turn off life support for a terminally ill patient in a hospital with no money and a queue of others outside who might have a chance to recover? By not giving those outside a chance are they not also "murdering" them? It is not a simple choice.
It is not a matter of "how many unemployed", but a matter of "how many in viable employment", for you can delude yourself as long as you want, but eventually things have to be paid for and the ONLY people who can pay for it are those souls creating and working in viable jobs, NOT the public sector, NOT subsidised industry (including "green tech"!).
Recovery Wanted: Rent-seekers need not apply!
You are right. The term "spending restraint" is indeed the sort of euphamism that can only persuade people that the Tories don't really mean it & that things aren't that bad. They should be saying that we are on the road to national bankruptcy & not dar drom the end of it either. If the Tories want the job they must persuade people now exactly how bad Labour are doing it. I think the electors will accept the need for cuts if they are told the full problem & believe the Tories really know the way out.
If they want the people's trust they should trust the people with the truth, the whole truth & nothing but, now.
@Simon Gardner
Errr, not a Tory. But I am incredibly amused how so often the more left wing display a complete lack of open-mindedness on peoples political leanings. Displays the origin of the box-ticking, little-Hitler mindset quite nicely.
And what exactly is the problem is throwing people in notjobs on the dole? Or do you support increasing, unremitting debt and the inevitable consequences of it?
Reading some of the comments on here makes you realise that there are as many lunatics supporting the Conservative on this board as there are on US political blogs who believe that Obama is a communist islamic sleeper setting out to destroy the USA .
Neil Craig says that the Conservatives must spell out how bad things are and that we on the road to national bankruptcy . Of course the Conservative leadership will do no such thing . Why not because of course it is completely false . The country's economy is in a poor state but very very far from anything approaching bankruptcy .
There are some public sector jobs that are none jobs as some of you put it but that number is much smaller than you seem to think . The vast majority of public sector jobs cannot be simply done away with as the country would cease to function without nurses , doctors , police , refuse collectors , inland revenue staff ( much as we may hate them ) etc etc .
When you take of cutting 1 million or more public sector jobs you are just deluding yourselves if you think that there are anything like that number of non jobs that can be cut without damaging the fabric of the country .
Isn't it £39 Billion total over the next three years ...? And whether that's right or not the real question for the electorate needs to be what will George GOO "Rabbit in Headlights" Osborne do about it should the electorate be foolish enough to put him in charge?
Palpably incapable of dealing with reality in any way shape or form.
If we need to spend £13 Billion or even £39 Billion per year more these next three years then so be it. The alternative of walking away and twiddling thumbs is not conscionable.
Actually it's over SIX years. Up to and including 2015-16. You have effectively exaggerated six-fold by not specifying the time frame.
Mark Senior says it is "completely false to say that we are on the raod to bankruptcy.
Well our current overspend is about £180 billion - 12% of GNP. If you include in the national debt not only the official figures but also both PFI contractual liabilities & future pensions liabilities our debts are at least 3 trillion - twice our GNP. Of that GNP over 50% is government spending & about half of the rest is spent adhering to government regulations. It seems hardly necessary to point out that our money has recently lost over 25% of its value.
I thought I was being relatively restrained when I said that that was "on the road to national bankruptcy & not far from the end of it either" but perhaps Mark could point put any arithmetical errors.
Neil Craig , the pound has certainly gone down by 25% in recent times but exchange rates go up and all the time and are pretty irrelevant as to being a measure of the health of a country's economy . The current exchange rate v the dollar is just below that in 1993/1994 and at the same level as in 2001 . The peak since 1990 was in 2007 but I bet you didn't think then that you must go out and vote Labour because the pound was wurth more than at any time in the last 17 years .
Mark said "exchange rates go up and all the time and are pretty irrelevant as to being a measure of the health of a country's economy"
Bolleaux. They are a pretty good measure particulaly when they lose a quarter of their value in a few months. They are also a good measure of how close the international money men think we are to banhruptcy. Is that really the best you can do? I note that you can't even attempt to dispute the overspend & givernment parasitism figures you by default & I quite openly consider even more serious measures of "the health of a country's economy".
All you do is say we can't cut spending & therefore must ignore the inevitable. Reminds me of the Admiralty in WW1 who told LLoyd George that the Germans were sinking ships so fast that Britian would be out of food in 8 weeks but that nothing could be done, specially not trying convoys. DLG told them it could & guess what happened.
Chris Paul, It's not £39bn spread over 6 years. It's an annual "black hole" (i.e. gap between the Chancellor's already dismal projections in the PBR and what is likely to happen in reality) that rises to £39bn for the year 2015/16, starting with £16.8bn in 2008/9. (See http://www.ifs.org.uk/publications/4469)
This is additional to the large deficits already projected. It does not allow for losses from the bank bail-outs, now projected to be around £130bn.
The net effect (without the bail-outs) is a projected deficit of £95bn in 2008/9, and around £150bn a year for 2009/10, 2010/11 and 2011/12.
The PBR predicted that public-sector net debt would peak in 2012/13 (at 57.4% of GDP), and that the budget would be back in balance by 2015/16. The IFS now project that net debt will still be growing in 2015/16 (when it will be 73.5% of GDP).
If there is not a fiscal tightening, they expect debt to keep climbing to 2050 and beyond. Fiscal expansion will only make this worse, as additional debts now mean additional repayments later.
There are other options besides cutting spending: governments can try to inflate the debts away, or they can try to put up taxes. But tax increases have diminishing returns that at some point turn negative, and inhibit the economic recovery that is needed if the situation is not to get worse. Given the public-choice incentives, we are quite likely to get inflation (whoever wins the next election). But Iain is right that spending cuts would be preferable.
Darling's assessment that the recession would be over & we would be back into growth by the 2md quarter this (ie 1st July). If not each 1% point of growth not achieved means just over 1% less tax revenue.
Anybody think his promise the recession will be over by July will be kept.
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