adrianc
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Post by adrianc on May 17, 2017 13:15:12 GMT
For the first 5 years of his reign didn't George Brown maintain the policies of his conservative predecessor? Probably one would need a more sophisticated instrument than the simple blue and red graph to relate the behaviour of the economy and level of borrowing to the policies of a particular chancellor. I don't think the graphic is attempting to do any more than chart the normal historical ebb and flow of deficit/surplus across economic cycles.
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Steerpike
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Post by Steerpike on May 17, 2017 13:23:48 GMT
For the first 5 years of his reign didn't George Brown maintain the policies of his conservative predecessor? Probably one would need a more sophisticated instrument than the simple blue and red graph to relate the behaviour of the economy and level of borrowing to the policies of a particular chancellor. I don't think the graphic is attempting to do any more than chart the normal historical ebb and flow of deficit/surplus across economic cycles. Interesting. Other folk might think that the use of blue and red is significant.
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adrianc
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Post by adrianc on May 17, 2017 13:29:37 GMT
I don't think the graphic is attempting to do any more than chart the normal historical ebb and flow of deficit/surplus across economic cycles. Interesting. Other folk might think that the use of blue and red is significant. Simple way of indicating which party was in power at what time.
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Steerpike
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Post by Steerpike on May 17, 2017 13:37:36 GMT
Interesting. Other folk might think that the use of blue and red is significant. Simple way of indicating which party was in power at what time. Which to many folk might imply some sort of correlation.
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jonno
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nil satis nisi optimum
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Post by jonno on May 22, 2017 10:43:54 GMT
There could be one massive positive if Corbyn were to win. If the Treasury made his first meeting with the Queen "Pay per View" it could wipe out the national debt at a stroke  |
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yangmills
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Post by yangmills on May 22, 2017 12:17:17 GMT
... And, yes, if there's a deficit, the debt does continue to increase. Because the gov't is still spending more than is coming in. Which is why bringing the deficit down - ideally to surplus - is generally perceived as A Good Thing. It's like continually spending more than you earn, then wondering why your credit card bill and overdraft aren't going down... ... Why is a govt surplus a good thing? Uk inflation is currently 2.7% (RPI 3.5%). Post-war, inflation in the UK has averaged more than that. With UK 10-year and 30-year gilts at 1.1% and 1.7%, respectively, the UK sovereign state is being paid to borrow in real terms. Many a household/businesses would jump at the chance to borrow for 10-years fixed at 1.1% to buy infrastructure (houses, shop, factory etc). It's clearly a risk given the track record on public infrastructure spending is not great, with many big projects having generated negative returns on capital. However, the hurdle rate has never been lower. Given monetary policy has been out of bullets for a long while, fiscal expansion at historically cheap levels might be a good risk to take. More importantly, however, for the global economy as a whole, it's a clear conservation law that govt deficits = net private sector saving. So a lower budget deficit means lower private saving, and a budget surplus would mean more private sector debt. Now the UK isn't a closed economy (we clearly have a current account deficit and capital account surplus in our balance of payments so we can't ignore foreign flows) but by attempting to run a budget surplus, you will likely increase private sector debt. Why is this a good idea? The private sector has a much more fragile debt position than the UK sovereign; it pays higher rates and doesn't control the fiat currency. The roots of every global post war recession (and 2008 in particular) can be found in too much private sector debt (and leverage). No recession has ever been triggered by the sovereign state's debt position in local currency. There is too much focus on sovereign debt. The UK's biggest problem is private sector debt (and the unfunded pension liabilities which are a multiple of the national debt). The whole idea of treating the UK sovereign state like a household or a business doesn't really make sense (it seems more like just ideology) but seems to have taken hold of the public's imagination.
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Post by yorkshireman on May 23, 2017 8:08:44 GMT
... And, yes, if there's a deficit, the debt does continue to increase. Because the gov't is still spending more than is coming in. Which is why bringing the deficit down - ideally to surplus - is generally perceived as A Good Thing. It's like continually spending more than you earn, then wondering why your credit card bill and overdraft aren't going down... ... Many a household/businesses would jump at the chance to borrow for 10-years fixed at 1.1% Don’t worry, the way things are going they’ll soon be able to borrow at those rates for 5 years on Ratesetter. 
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Post by yorkshireman on Jun 1, 2017 12:09:40 GMT
Doesn’t seem to have been much change, if any, of voting intentions since I last looked at this thread. Perhaps YouGov should adopt this method of polling.  |
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Post by Deleted on Jun 1, 2017 12:47:11 GMT
... And, yes, if there's a deficit, the debt does continue to increase. Because the gov't is still spending more than is coming in. Which is why bringing the deficit down - ideally to surplus - is generally perceived as A Good Thing. It's like continually spending more than you earn, then wondering why your credit card bill and overdraft aren't going down... ... Why is a govt surplus a good thing? Uk inflation is currently 2.7% (RPI 3.5%). Post-war, inflation in the UK has averaged more than that. With UK 10-year and 30-year gilts at 1.1% and 1.7%, respectively, the UK sovereign state is being paid to borrow in real terms. Many a household/businesses would jump at the chance to borrow for 10-years fixed at 1.1% to buy infrastructure (houses, shop, factory etc). It's clearly a risk given the track record on public infrastructure spending is not great, with many big projects having generated negative returns on capital. However, the hurdle rate has never been lower. Given monetary policy has been out of bullets for a long while, fiscal expansion at historically cheap levels might be a good risk to take. More importantly, however, for the global economy as a whole, it's a clear conservation law that govt deficits = net private sector saving. So a lower budget deficit means lower private saving, and a budget surplus would mean more private sector debt. Now the UK isn't a closed economy (we clearly have a current account deficit and capital account surplus in our balance of payments so we can't ignore foreign flows) but by attempting to run a budget surplus, you will likely increase private sector debt. Why is this a good idea? The private sector has a much more fragile debt position than the UK sovereign; it pays higher rates and doesn't control the fiat currency. The roots of every global post war recession (and 2008 in particular) can be found in too much private sector debt (and leverage). No recession has ever been triggered by the sovereign state's debt position in local currency. There is too much focus on sovereign debt. The UK's biggest problem is private sector debt (and the unfunded pension liabilities which are a multiple of the national debt). The whole idea of treating the UK sovereign state like a household or a business doesn't really make sense (it seems more like just ideology) but seems to have taken hold of the public's imagination. All this economic theory is very entertaining, but is... theory. If you travel a short way across Europe you will find Marxist Economic theory still being taught in major French universities while in Germany the principle of the Swabian housewife holds sway. What modern British/American theory has done is to develop an economy where the poor stay poor and the rich get rich. Different theories (especially where not being a country in debt) seem to end up with the poor getting richer and the rich getting richer. I suggest your theories are interesting but not attractive.
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pikestaff
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Post by pikestaff on Jun 2, 2017 10:15:07 GMT
Why is a govt surplus a good thing? Uk inflation is currently 2.7% (RPI 3.5%). Post-war, inflation in the UK has averaged more than that. With UK 10-year and 30-year gilts at 1.1% and 1.7%, respectively, the UK sovereign state is being paid to borrow in real terms. Many a household/businesses would jump at the chance to borrow for 10-years fixed at 1.1% to buy infrastructure (houses, shop, factory etc). It's clearly a risk given the track record on public infrastructure spending is not great, with many big projects having generated negative returns on capital. However, the hurdle rate has never been lower. Given monetary policy has been out of bullets for a long while, fiscal expansion at historically cheap levels might be a good risk to take. More importantly, however, for the global economy as a whole, it's a clear conservation law that govt deficits = net private sector saving. So a lower budget deficit means lower private saving, and a budget surplus would mean more private sector debt. Now the UK isn't a closed economy (we clearly have a current account deficit and capital account surplus in our balance of payments so we can't ignore foreign flows) but by attempting to run a budget surplus, you will likely increase private sector debt. Why is this a good idea? The private sector has a much more fragile debt position than the UK sovereign; it pays higher rates and doesn't control the fiat currency. The roots of every global post war recession (and 2008 in particular) can be found in too much private sector debt (and leverage). No recession has ever been triggered by the sovereign state's debt position in local currency.
There is too much focus on sovereign debt. The UK's biggest problem is private sector debt (and the unfunded pension liabilities which are a multiple of the national debt). The whole idea of treating the UK sovereign state like a household or a business doesn't really make sense (it seems more like just ideology) but seems to have taken hold of the public's imagination. All this economic theory is very entertaining, but is... theory. ... Much of the post, which I've highlighted in bold, is not theory or opinion, but fact. I agree with virtually all of it.
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Jun 2, 2017 10:22:52 GMT
Anyone know the current betting odds on a labour snp coalition please?
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Post by Deleted on Jun 2, 2017 10:31:29 GMT
Trouble is expansion always gets dissappated, it is like trying to blow flour in the direction you want.
I followed the arguement about infrastructure expansion over the last 4 weeks pretty closely. When a Labour representative explained that mental health was "an infrastructure" I gave up the will to continue.
If we borrow to buy back the water industry, how will we see an increase in our water infrastructure?
You can't push the economy you can only pull it.
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pikestaff
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Post by pikestaff on Jun 2, 2017 14:47:33 GMT
...When a Labour representative explained that mental health was "an infrastructure" I gave up the will to continue. If we borrow to buy back the water industry, how will we see an increase in our water infrastructure?... Re mental health, the terminology is excruciating but well-directed expenditure on mental health (especially of the young) is certainly an investment. And it's an area where we don't invest enough. I agree about water. Borrowing to buy back the water industry would have no effect of itself, other than an increase in public borrowing matched by a decrease in private borrowing. Future investment would almost certainly go down because there would be less regulation and cash-strapped governments would be sure to neglect it.
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Post by yorkshireman on Jun 2, 2017 18:46:56 GMT
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adrianc
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Post by adrianc on Jun 3, 2017 8:53:43 GMT
Guido is hardly the most politically neutral of commentators.
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