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Econoce

Listed below are comments made by Econoce between Monday, 14th September 2009 and Monday, 23rd November 2009.

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Spot the difference 4:25pm on 23 Nov 2009 Let's face it, Brown doesn't want to face up to the problems nor does much of electorate. The UK will emerge, if you can call it that, from this recession (which really is an adjustment to living with lower persoanl debt) with a huge structural deficit that will keep on adding to the stock of debt. Every 24 billion of debt means 1,000 pounds per person working in the private sector. The structural deficit is well above 100 billion per annum (so over 4,000 per person working in the private sector) and the deficit this year and next will total some 200 billion for every year (over 8,000 per year, so in total over 16,000 pounds per person working in the private sector in the next 2 years).

Debt is being recycled to the public sector from the private, and increased. The UK does not have the direst of demographics to deal with this but it does not have much of an inflation hedge because it is past peak-oil. There are not many industries in the UK that will have pricing power in the next inflation cycle. The next inflation cycle will hit the ordianry Brit very hard indeed, because the ordinary Brit will not be able to increase his wage in tandem with the inflation rate.
If you thought it was all over... 4:55pm on 19 Nov 2009 So you expect someone from a country that is outside the euro as well as enjoying a rebate on its contributions and turning up deliberately late for signing the Lisbon treaty, should just expect to get the top job.

There is a lot wrong with the EU, not least with the agricultural subsidies that literally cost lives in developing countries, but here the Brits, especially the latte sipping incrowd of Islington gets it wrong.

Were it not for Murdoch switching over to the conservatives, Brown would have never condoned Blair as a potential EU president. Blair is just an instrument in Brown's electoral campaign.
Plotters, quitters and fighters 3:47pm on 16 Nov 2009 The first bullet point sub the fighters' point of view is either very superficial analysis or underscores the problems of the british electoral system.

Superficial analysis because only 12 thousand out of 60 thousand voters, i.e. a mere 20% cast their vote for labour in Glasgow NE. Moreover, the 3,800 postal votes outstrip the number of votes for conservatives and lib dems added together. 4,000 newly registered voters seem to have accounted for 20% of cast votes. Hence it should not be assumed that the Glasgow NE result implies labour is on the rise again.

Problems within the electoral system are pretty much highlighted by the numbers above. First-past-the-post has disenfranchised a large chunk of the electorate (a nice way of saying that there's no point to vote) and there are many opportunities for fraud.

If you're slightly cynical (or worse, like me), Brown has indeed been very clever by expanding all the means-tested-benefits and public sector jobs. A lot of voters will not be the turkey that votes for christmas, which will make for a very strong barrier for the conservatives to gain seats in constituencies with plenty of public sector jobs and benefits receivers. Some constuencies are effectively bought.

The upshot, for the labour fighters, is that a hung parliament indeed is possible.

2010 will be the year of the postal vote - bbc, get your reporters on the job: keep tabs on postal voring.
Rising slowly 09:11am on 15 Oct 2009 @233

Yep, in April OECD estimated UK's structural budget deficit at about 7% of GDP or 105 billions pounds (and as you probably know, "structural" meanse that this is the annual post-recesssion deficit that will be recorded when growth has recovered to trend and unemployment benefits are lower and tax revenues higher).

And here we now have the EU estimating the annual gap at 12% or 180 billion pounds or 7,500 pounds per worker in the private sector if policy on spending and revenue raising (tax!) stays unchanged.
Rising slowly 08:45am on 15 Oct 2009 A sobering thought:

EU warns UK's debt is 'unsustainable'

http://www.independent.co.uk/news/business/news/eu-warns-uks-debt-is-unsustainable-1802774.html
A new approach to peace and to war 5:13pm on 25 Sep 2009 Obama: "Hey Gordon, how's it going. You know, I'm alright, my budget deficit will be 13.5%."

Brown: "Well Barack, mine will be slightly larger." (this annoying poster guestimates close to 20% this year and next)

Obama: "Don't worry, you got that central bank of your neighbouring country to buy half the conventional gilts out there, so yields are still modest and your electorate think you can finance all that debt cheaply. Fed is doing a great job too, you know - kick ass. No bubble trouble!"

Brown: "I'm so glad I can cuddle up to you because you did the right thing with those duties on Chinese tyres. I wasn't serious when I said the world should not relapse into protectionism. We should teach those Chinese exporters and savers a lesson, despite that they buy all your treasuries to finance your debt."

Obama: "You're not making fun of my tire plan, are you?".

Brown: "You mean tyres, not tires, big man?"

Obama: "Watch it, or next time I won't even meet you in the kitchen!"

Brown: "Ok, ok. Something else: I've got this plan to put one my aides in place to push the deficit spending agenda. She will also advocate quantitative easing and low interest rates. Should help prevent the Germans get across their views that deficits should be reduced as quickly as possible."

Obama: "Yeah, that sounds quite clever. We got to keep printing money, I mean: keep interest rates low and spend. It would help the democrats in the next elections, as it will help you next year."

Brown: "Great, I'll get the news out back home. Should help me with my party conference next week"

Obama: "Ok, slam dunk for us money printers. Those German and Asian savers should change their ways. We'll make them, Gordo!"
The 'C' word 11:35am on 15 Sep 2009 @invisiblehandadvisor, you might wanna have a read of this and conlcude that the few billion tax revenues from tax exiles will not really help you out that much:

http://news.bbc.co.uk/2/hi/business/8004567.stm

And my best guess is that the UK's structural fiscal position has actually worsened since the OECD put out the referenced forecast for the strucutral deficit which equals 4,250 pounds per annum per person working in the private sector.

PS Your hero Brown was already running a deficit close to 3% of GDP before summer 2007, gearing the budget cycle towards planned elections in the autumn of 2007, but then sudddenly Cameron made a half-decent conference speech and Brown subsequently lost his bottle.
The 'C' word 11:17am on 15 Sep 2009 "Aaaaaaaaaaaaand Cut!"

"Apologies Mr Speaker, ...

... I meant: I recommend this budget to the House!"
No-one can rewrite political history 1:11pm on 14 Sep 2009 A good one for the rewriting history books is also Brown's 1992 letter in The Evening Standard in which he wrote "weak currency is the result of a weak economy which is the result of a weak government".

Last year, that same Brown rubbished Osborne when he warned about the consequences of high deficits and debt on sterling. The latter was unpatriotic.
No-one can rewrite political history 11:56am on 14 Sep 2009 Well done, spin unspun! Mandy and Campbell will take notice.

To prevent some more spin on Brown's line that it will cost you less if you borrow more now, some numbers about the deficit and debt at grassroots level:

-the deficit per worker in the private sector will amount to 12,760 pounds this year and next (20% of 1.5 trillion GDP divided by 23.5 million);

-the structural deficit, i.e. the deficit that will still be recorded after recovery to trend growth, will be 4,250 pounds per year per person working in the private sector (7% GDP structural deficit forecast by OECD);

-the government debt may hit 114,890 pounds per person working in the private sector (180% debt-to-GDP ratio as bearish European Commission forecast)

As comparison, the median UK wage is just below 25 thousand, with public sector employees on higher wages than their private sector funders.

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