More on Osborne's plans
A bit more on how George Osborne's package compares with the government's plans - and some of the potential savings that the shadow chancellor took off the table.
On the question of scale - Robert Chote of the Institute for Fiscal Studies and I have come up with a clearer way to think about the big picture. Though it's not for the faint-hearted.
You'll remember that the government has said it will cut borrowing by £45bn a year, in today's money, by 2014 (or 3.2% of GDP). To do that, they've said they will raise taxes by about £9bn.
The Tories today said they would accept those increases, at least for now.
As an aside, it's true that Osborne's speech leaves a question mark over the new 50p rate for the highest earners, because he would only say he would keep it in place until the end of the public sector pay freeze in 2012. But there's no firm commitment to get rid of it in the next Parliament, either. Of course, if the IFS is right that it won't raise very much money, keeping it becomes rather a moot point.
So, roughly speaking, both the government and the Tories have signed up to £9bn in tax rises between now and 2014. But even on the government's own plans, that still leaves a roughly £36bn cut in public spending between now and 2014 relative to what you might have forecast before the crunch.
Today Osborne set out his stall. But even if all of George Osborne's plans were adopted tomorrow - and achieved that £7bn a year cost saving by 2014 - you'd only be one fifth of the way to the total squeeze in spending that the government has pencilled in for the next parliament.
And - just to really do your head in - even if the next government meets that target, the Chancellor's Budget forecasts suggest that the deficit in 2014 would still be nearly £100bn. The Conservatives have said many times that they would want to move faster.
As Labour has been quick to stress, this analysis leaves out various Conservative spending pledges which do not appear to have been costed. For example, the Treasury claims that reversing what Osborne called Gordon Brown's "raid on pensions" would cost the exchequer £3-5bn a year. He committed the party to do that in today's speech. And the new allowance for married couples doesn't seem to have been factored into the shadow chancellor's numbers either.
It all goes to underline the point I made earlier - that you ain't seen nothing yet. The Conservatives have a lot further to go if they're going to match their plans to their tough rhetoric. (And, of course, so does the government. The pressure will now be on the chancellor to show how he plans to fill that £36bn hole next month, in his Pre-Budget Report.)
All in good time, the Tories might say. And there was a great deal that the shadow chancellor didn't announce in his speech. Whisper it softly, but if they're committed to tightening more than the government in the first year - it's tax rises, rather than spending increases, that can raise money fastest. For example, each additional 1p on the basic rate of VAT would raise about £4.5bn a year.
There are also still plenty of "middle class" benefits which Osborne left untouched today - presumably because he didn't want to scare every non-public-sector worker as well.
As I mentioned on Monday, getting rid of child benefit and child tax credits for families earning more than £31,000 a year would save a whopping £6bn a year. By limiting himself to just the child tax credit piece of that - and abolishing it only for families on incomes over £50,000 - Osborne will save a mere £400m a year. Whoever wins the next election, I'd be surprised if the next government leaves the other "middle class benefits" intact.
I'm 
© MMIX~RS~q~RS~~RS~z~RS~25~RS~)
Comments
Sign in or register to comment.
This comment was removed because the moderators found it broke the House Rules.
Yet more anarchistic free-market lovin' clap-trap!....deck chairs and Titanic springs to mind, CAPITALISM JUST AINT WORKING...is this really the best they can come up with (that means all of them Lib/Lab/Con).
Complain about this comment
Why should we have to accept any of this ? It is the banks that have "lost" trillions of pounds and it is they who should be forced to recover it. Money lost and not recovered is money stolen.
A bit more on how Osborne's package compares with the government's plans ?
A totally pointless comparison really. I'm not going to pay for somebody elses fraud and I somehow don't think others will either.
Complain about this comment
Perhaps we're all being too pessimistic. After all, within 10 years of the Great Depression, the world still managed to afford the most expensive war in history. Caledonian Comment
Complain about this comment
#4 CaledonianComment wrote:
"Perhaps we're all being too pessimistic. After all, within 10 years of the Great Depression, the world still managed to afford the most expensive war in history".
WWIII as the solution to get people to tighten their belts and accept having less?
A bit drastic and possibly Bush's thinking, but it worked once (although it did allow the US to dominate Britain economically).
Worryingly the pessimism may actually be optimistic, however once things stabilise, people tend to have short memories (negative equity in the early 1990s following an asset bubble anyone?) and with the return of optimism and everyone with a vested interest promoting that ethos, the bubbles will re-inflate.
Unfortunately, that will probably mean people decide things are okay and ignore the structural deficiencies in the economy.
(e.g. high imports, total dependence on exporting financial services to finance them)
Complain about this comment
My 9 year old daughter just asked if he is related to Sharon and Ozzy. I think she might be on to something...
Complain about this comment
"The pressure will now be on the Chancellor to show how he plans to fill that £36bn hole next month, in his Pre-Budget Report"
I expect it will be a fudge of some sort. The current chancellor knows he has only a few months left in the job, then it will be someone else's problem.
The problem for the Tories is the medicine will not be to everyone's liking. No doubt the economy will recover in a few years, by which time Labour will be waiting in the wings to wreck it all over again. People have short memories....
Complain about this comment
Is there a list anywhere of who will cut/tax what? I'm a public sector worker so rather woried about a combination of pay freeze and increased tax and inflation from the blue team. But the red team have promised to get rid of childcare vouchers which are worth £140 per month to my family.
Both are promising to kick me. Who will kick the hardest?
Complain about this comment
Today's announcement by Osborne is a taster of what lies in store who ever wins the next election. It is however difficult to argue if everyone is being asked to contribute. Yes the banks brought us to our knees. I guess it goes to show that it is never wise to think that it is not our problem because it clearly now is!
Complain about this comment
There are a couple of lines in the piece that are quite frightening.
"even if all of George Osborne's plans were adopted tomorrow - and achieved that £7bn a year cost saving by 2014 - you'd only be one fifth of the way to the total squeeze in spending that the government has pencilled in for the next parliament."
and
"It all goes to underline the point I made earlier - that you ain't seen nothing yet. "
I've noticed that some government ministers, including Brown, have started commenting that when UK borrowing peaks at (according to their projections) around 80% of GDP, then we will still be only "on a par" with countries like Germany and Japan. This makes me wonder if Gordon Brown's unstated ambition is for net public sector debt of 80-100% of GDP to be re-defined as the new normal.
Politically it has obvious attractions. By never repaying the vast sums he is now borrowing, he can minimise confrontation with the unions and his own party. There will still be a fair amount of pain, but it will arise from reducing the annual borrowing figure from the current 180 billion or so down to 30 billion or so and not from repaying many hundreds of billions of pounds as well.
It all highlights the sheer immensity of the economic disaster that this government has created. Unfortunately, it may also mean that the challenge is so huge that even the conservatives will eventually by forced to give up - probably in the face of looming electoral meltdown in the 2015 election.
If public sector debt did stabilise at, say, 90% of GDP, where would that leave us?
Complain about this comment
I also recommend everyone reading this blog reads writingsonthewall as well...this guy is smart!...he's got the zeitgeist!
Complain about this comment
Yes it is the banks that caused this crisis and it's the public that's going to pick up the tab - that's capitalism for you! And don't expect the banks to charge you less either!!
People don't seem to be talking about this 'W' shaped recession that the CEO of HSBC is convinced is going to happen. What happens when the banks get in trouble again? What happens if the Govt can't stimulate the economy again? All this will be happening in the background of cuts in public and private sector pay and high unemployment. The State will be facing a legitimacy crisis with the public. And about time too I say!
Complain about this comment
Large cuts in public expenditure will only be possible with widespread redundancies which will in the short term actually make the deficit worse as well as reduce some of the services the poor and recently unemployed will need. Only by Taxing large accumulations of wealth and super incomes can the 'circle be squared' Both the public accounts and the private sector need the economy to pick up sharply turning off the government spending tap is a form of economic self mutilation. What is needed is bringing forward the future inflation adjustment increases in benefits combined with targeted public works. The public sector debt may have to be refinanced and maybe we need the government to borrow from the IMF. There must be a new way of running the economy with comprehensive intervention on private credit creation together with direct control of the current nationalised banks becoming at least a desirable medium state.
Complain about this comment
#9 cooldrmichael. The banks did not bring you to your kness, the people fell on their own knees in supplication. Stand up - you can still walk.
Complain about this comment
1) Reduce the school-leaving age to 15 or 14. Large numbers of kids in their final year at school are not even there, with the connivance of the "authorities". At least that is the way it was four years ago when I was a supply teacher. They are on "extended study leave." This applied to the kids who everybody knew wosn't going to get no GCSEs.
2) Reduce National Insurance contributions and all taxes which discourage honest work and honest employers.
3) A new property tax for those with large properties who pay little or no income tax. I suspect this would apply to Il Presidente Tony Blair. What a crying shame!
4) Road pricing, especially for trucks.
5) Lowish import taxes especially targetting un-eco nasties.
6) Leave the "EU"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Complain about this comment
#10 "This makes me wonder if Gordon Brown's unstated ambition is for net public sector debt of 80-100% of GDP to be re-defined as the new normal."
It's an interesting question, and I think it depends on whether the Government can borrow the money at a low enough level of interest. I understand that the Japanese achieve this because lots of ordinary savers choose to invest in low-risk, low-interest, government-owned savings accounts. Maybe after what's happened over the past couple of years plenty of people here might be persuaded to do the same. Alternatively forcing the banks to hold large amounts of assets in the form of Government Bonds might have a similar effect.
The world has changed. We want to move to a system where the banks hold much more capital relative to what they lend. Maybe a much higher level of Government Debt is part of that same new formula. We should not assume that any "Golden Rule" will be the same as before.
Complain about this comment
What is interesting is the mentality as to how difficult this is. Using household economics its clear that cutting the goverment departmental expenditure limits by 5% (without exeption) and you save £42bn or so per annum. 5% is painful for two years but not the end of the world - private sector companies handle this sort of volatility all the time. Perhaps we should be more aggressive and get over the hangover within 1 year by accepting 10% reduction.
Complain about this comment
# 10. hants_gw wrote:
"If public sector debt did stabilise at, say, 90% of GDP, where would that leave us?"
Spending vast amounts of taxpayer money to finance borrowing whenever interest rates rise.
The problem is with low growth and a systematic deficit, even stabilising debt is another matter, never mind reducing the accumulated debt.
btw:
Do these forecasts of public sector debt include things such as PFI and public sector pensions?
------------------------------------------------------------
#13 watriler wrote:
"Large cuts in public expenditure will only be possible with widespread redundancies which will in the short term actually make the deficit worse as well as reduce some of the services the poor and recently unemployed will need."
??
Only as the result of redundancy costs, unless those made redundant in the public sector somehow cost more on benefits... or the redundancies are done in the usual haphazard way via voluntary redundancies for large pay offs, where gaps are left to be filled by agency staff or by overtime / acting up and not targeted specifically at the least productive roles.
Of course there is an argument for subsidising any job up to the level of benefits that would otherwise be paid; but that doesn't just apply to the public sector.
Unfortunately while companies make profits, its sometimes hard to determine the value added by many public sector bodies and value for money of many public sector roles.
If such things were performance related, the treasury would have been fired en masse.
The thing is the public sector has evolved and grown from historic roots and along departmental lines, perhaps we need to take a "big step back" and consider what we want the public sector to do at what cost and what we need to achieve that; defining priorities and allocating resources accordingly - not just based on last years budget plus or minus a few percent. Looking at where we need to be, rather than just trying minor amendments to the current position.
Complain about this comment
What is interesting about all this is that until only a very short time ago, Brown was still denying there would be any need to rein in spending at all. Remember how he was boasting about Labour 'investment' versus Tory cuts.
Eventually realising people weren't buying that, he tries to suggest Tory cuts will affect front line services, whereas Labour cuts can come from greater efficiency, all gain and no pain.
If Labour had ever understood the concept of 'efficiency' their words might carry more weight. But they understand only profligacy.
This is the government of tax-and-waste.
Complain about this comment
No 13 "The public sector debt may have to be refinanced and maybe we need the government to borrow from the IMF. "
If the IMF's track record is anything to go by, they'll insist on even deeper cuts as a condition of their loan(s) so that the national debts can be paid off as soon as possible. They may attach other conditions as well.
After all, they did force Hungary to cut a fair bit of their public sector spending as a condition of their loan.
Complain about this comment
No 16 "I understand that the Japanese achieve this because lots of ordinary savers choose to invest in low-risk, low-interest, government-owned savings accounts."
Most East Asians are obsessive and cautious savers. As such, they will opt for the least risky means of savings. One of them happen to be their equivalent of the Post Office Savings accounts. In return, their government had to ensure that this money is not looted and spent on crazy schemes. One of their investments will be in JGBs.
The JGBs (Japanese Government Bonds) were backed by their world class manufacturing and export industries. That made them more acceptable as low-risk instruments regardless of the interest rate.
Britain does not have such industries in place and therefore, the Gilts will be considered to be more risky. As such, their interest rate(s) will have to reflect that level risk.
Complain about this comment
All this is just the blowing of smoke over the eyes of the electorate. As Ms. Flanders said in the article, taking all that had been said into account, this just amounts to approximately 1/5 of the total needed cuts !! Where will the other 4/5 come from ?? We are still waiting.....
Complain about this comment
#19 DistantTraveller wrote:
"....Brown was still ..... boasting about Labour 'investment' versus Tory cuts."
And its also noteworthy how much of that "investment" was nothing of the sort, it was pure expenditure.
An investment is paying for something now to gain advantage from it in the future, not increasing the amount spent on something and committing to spend that and more every year from now on.
And how many of the investments were successful?
- ID cards?
- computer systems?
- etc.
Even things like school buildings, hospitals and health centres were not governmment investment, they were financed via PFI; we haven't paid a fraction of the cost of many of these projects yet and will be paying for them for years to come.
Yet to keep the costs out of the borrowing figures, we pay more than could otherwise have been the case.
Now surely investment would've been employing those not currently needed in the construction industry on non premium boom time wages to increase the social housing stock - cheap properties built in a depressed market, with supply of materials / labour exceeding demand.
But then an increased supply of housing would potentially drive down property prices and result in losses for those who speculated on buy to let or overstretched in buying as expensive a home as possible as "an investment" that they "couldn't lose on".
I can't actually see much in the way of a "stimulus", except for QE, allowing banks to strengthen their balance sheets and profit while servicing the ever increasing government debt.
All we've done is prop up the banks and throw money away on VAT and to the motor trade and foreign car manufacturers .
To say other public sector excesses are a "stimulus" is deceptive, given that most of these were commitments preceding the downturn.
Just more token initiatives for whatever happens to be in the headlines next.
Perhaps proper budgeting and accountability in the public sector would be a start, rather than, add 5% to last years budget, and then the rush to spend everything at the end of the year, regardless of whether things are needed, to justify that budget for the following year... protecting empires rather than delivering value for money, and wasting money that could be better used elsewhere. Its a process the treasury manages and is common throughout the public sector, it is also incompetently wasteful.
Complain about this comment
Stephanie:
Thanks for the excellent information in the Osborne plans....
~Dennis Junior~
Complain about this comment
Armagedion - responded in an "embarassment of cuts". Feel free to cntinue thread here
Complain about this comment
Here's what will happen:
a) Banks will become further nationalised / regulated
b) The banks will be told to limit interest rates, perhaps with a fix on monthly repayments of household and commercial debt so that principal reduces, while raising income taxes
Complain about this comment
re: 16. random_thought
"I understand that the Japanese achieve this because lots of ordinary savers choose to invest in low-risk, low-interest, government-owned savings accounts."
Thanks for that response. I hadn't really understood how the Japanses were able to get away with such seemingly huge levels of borrowing.
I'm not at all sure that the same would work here. I remember in the early days of the banking crisis seeing claims that total British debt (ie government plus corporate plus personal) was around 300% of GDP and that personal debt was the largest part of that. If so, getting to the Japanese model would require a) paying down vast amounts of personal debt and then b) accumulating substantial amounts of personal savings. That would take a lot of money out of circulation and might even resemble the apocalypse that Brown says would happen without his borrowing binge.
It increasingly seems to me that we have a choice between two unpleasant alternatives. If we seriously try to re-pay the debt, that will mean harsh cuts in public spending, tax rises, quite possibly another recession and all the political conflict that flows from those things.
If we just try to live with the debt we end up paying interest on a 100% of GDB debt, much of which will be money borrowed abroad (since, unlike the Japanese, we don't have a large pool of domestic savings). If interest rates average, say, 3%, we will pay 3% of GDP in interest each year. If the economy grows at 2% per year (rough historical trend for a mature economy) that looks to me as if the economy will actually be shrinking. Of course, if growth is lower or interest rates higher ...
The choice seems to be between several years of very real misery and a sustained future of (at best) anaemic growth and more likely actual slow decline.
I will be very happy for someone to explain why I have got it all wrong.
Complain about this comment
At 10:49pm on 06 Oct 2009, SuffolkBoy2 wrote:
1) Reduce the school-leaving age to 15 or 14. Large numbers of kids in their final year at school are not even there, with the connivance of the "authorities". At least that is the way it was four years ago when I was a supply teacher. They are on "extended study leave." This applied to the kids who everybody knew wosn't going to get no GCSEs.
You're joking that you were a Supply Teacher?
Complain about this comment
RE 18. Reaper_of_Souls
"btw:
Do these forecasts of public sector debt include things such as PFI and public sector pensions?"
As far as I know, no they don't include either of those things. I've tried to use the government figures as far as I remember them since the situation looks bleak enough as it is and the things you mention just make it even worse.
Complain about this comment
Remember all these cuts are attempts to realised the vast amounts of fictitious capital that have been built up.
That is, to avoid capital devaluation, profits have been artifically maintained through asset price rises, e.g. stockmarket and housing bubbles.
But all these 'clever' financial instruments rest upon the ability to extract value from the workers at some point in time, i.e. pay ever increasing amounts for a house, work longer (in hours per day & in years), paying more in taxes, etc.
Ordinary people are struggling today.
Squeezed even harder tomorrow there will eventually be a backlash (even if initially an ugly jingoistic one).
And even if the Tories manage to resolve the fiscal blackhole (looking unlikely), the UK is very much exposed to the collapse of the US dollar (which although long predicted now seems on the horizon).
For it is the US dollar that has been behind the huge growth in fictitious capital since the 1970's.
The fictitious capital that has been recycled through the City of London.
Bye, bye dollar, hello inflation.
Complain about this comment
Just go the whole hog, re-introduce rationing and make the population feel miserable like they did after the war. A fearful population is more easily controlled history tells us, so why not give it a go?
I have no real solution or ideas as to what to do, but I do know that I have heard non this week persuade me that anyone else has an idea either....... shame really.
Complain about this comment
This all looks like the Tory Tax increases of the 1980s when VAT was doubled and beer taxes increased and higher rate income taxes cut. That only increased unemployment still more. As consumers' confidence in their futures declined, families saved more and business revenues dropped further. Bankruptcies and government debts soared.
In short what we're offered now is more of the panic measures that made the 1980s an inflation boom and an economic bust. Enoch Powell warned us: trades unions demand extra pay because money supply is boosted by government borrowing that causes runaway inflation.
So we've had these panic measures before from Geoffrey Howe and Nigel Lawson. They made things much worse then, and Osbourne wants to repeat those disasters.
Complain about this comment
#31:
"A fearful population is more easily controlled history tells us, so why not give it a go?"
Perhaps a good start would be to start something called a "war on terror", and convince the masses that there's a terrorist around every street corner just waiting to blow us all up. Once you've done that, you could introduce control orders for people who aren't convicted of anything, ban demonstrations anywhere near Parliament, give the police scarily wide ranging powers, and set up a giant database that records every single email and phone call we make. Then you've pretty much got that level of control when you could introduce rationing or do pretty much anything else.
Fortunately, it'll never happen in this country, because we value our freedoms too much. Don't we?
Complain about this comment
#7
engage your brain pleeeeez
Complain about this comment
Hants-gw
A lot of your description of the problems facing any new chancellor is right however what you have not factored in is what the real economy effects will be if a new government does attempt to reduce public spending . There are at the moment a lot of bookkeepers with their pocket calculators advocating drastic cuts whereas in reality the level of cuts being proscribed will inevitably pitch the country into a deep recession. The W described by the CEO of HSBC does not properly describe the side of a mountain the economy will tip over.
There is no clarity from any politician what the sustainable level of long term public spending should be, nor is there any real clarity over what is the level of total dept is sustainable for our size of economy. All that seems is apparent we need to be able to be able to sell government bonds - if we can do that and reflate the economy without high interest rates (sic) we should all be fine.
Unfortunately for the bookeepers a lot of increases in public spending have been spent on trying to make up for the effects of the deindustrialisation of Britain in 1981, the then following disinvestment in public sector buildings and staff. Although many have been able to share in the profits of growth since then our society has grown increasingly unequal - this will have potentially damaging long term effects, which no big sticks will solve. Any government which does not focus on the disaffected underclass will simply be throwing our money, our childrens and our grandchildrens money away - as well as being inhumane.
Of course what this means is that there is little room for manouver - it is not about efficiency it is about effectiveness, the truth we all know is that we need higher levels of tax* to make up the deficit, we probably also need an economy that does not rely so heavily on the financials. We also need a government any government which will not be run by public opinion. I can't see any out there at the moment.
*especially from people like me that own over 50K
Complain about this comment
At 09:24am on 07 Oct 2009, Vimeiro (28) wrote:
"You're joking that you were a Supply Teacher?" about SuffolkBoy2 (15)
Unfortunately he probably isn't joking and nor has he worked out why you made your comment.
We oldies at the chalk face find it all quite depressing. Sigh.
Complain about this comment
#27 hants_gw
Yes, the high levels of personal debt are a big concern, and it is the total British debt that really matters, not just Government debt in isolation.
One factor that needs to be taken into account though is that each debt is owed to some creditor somewhere - and I'm not talking about the banks (which are just intermediaries) but the net savers in the banks, or the wholesale money funds which have lent to the banks, or indeed whoever it is that has put money in those wholesale money funds.
And I think who this money is owed to is of great significance. If it's owed externally - eg to the Chinese - then we haven't got a lot of choice and we're going to have to pay it back.
However a lot of the money is owed internally within our own economy. Perhaps to rich individuals (including the bankers and landowners who have made so much money during the preceding bubble). Perhaps to our own pension and insurance funds. Where the money is owed internally, then we can actually do something about it - by using the tax system to redistribute wealth and/or income and thus reverse the inequalities which have developed over the past couple of decades (and which should be seen as an underlying cause of our current problems).
Complain about this comment
It is very difficult to discern from the broad/general statements by Osborne the impact of cuts/changes on the population and on public services. In relation to pensions there are sub-groups who have been hard hit by changes of recent years -for example, a woman born in 1955 had an expectation until a couple of years ago that she could retire in 2015 with a state pension -ur if she had been careful she might have planned to have a modest occupational pension to begin at 60- having seen that date slip to 2020 under Labour, it now seems, under Osborne proposals that she might find that she will have to work until 2021 (perhaps not as there seemed to be some fudge at eleventh hour) or even later if some future Chancellor decides to take a further shot at the state pension. Does Osborne think that few women in their 50s are Tory voters?
I am worried that when it comes to cuts in public services some potential Ministers don't seem to have a clue (they have not thought about it)about the detail. I saw Chris Grayling interviewed by Paxman last night on Newsnight -he ended up spouting some nonsense about Forces sharing helicopters but would not answer on police overtime (does he even know what the spending on that is?). Given that Cameron has not ring-fenced the Home Office, Grayling should have been examining H.O. budgets minutely but appeared pretty clueless.
However, I am a lot less gloomy than many contributors - near financial disaster was last year (and actually Labour did quite well on averting that). When I was a lad in the 60s earning £12 per week in my first job I paid income tax at the standard rate of 8s3d in the £ , or at 42.5p in new money and got by okay - so there is a lot of scope for tax rises without the wheels completely falling off.
Complain about this comment
Dear old Sam Johnson once said `There is nothing like a prospect of a hanging to concentrate the mind'. He was right.
It is quite apparent from the chaos and misery expressed on this and other blogs that it is starting to dawn on the population at large that the country is not just in deep doo-doo up to its chin, that there is quite possibly no way out which does not involve swallowing several unpleasant mouthfuls.
It would seem that the expectation to date is that unemployment, dispossession and poverty was the preserve of some mythical other; some statistic, or someone who can be simply dismissed as incontinent or deviant in one way or another. No: if you are lucky misery will just be the property of someone close to you.
In meeting the challenge of the government by fleshing out simple propositions and the methodology for cuts in a very moderate and minimal way, Osborne has opened the doors in the public's mind as to what a fiscal deficit of GBP 200 billion actually means.
Now the government must begin to become more frank in how it will dispose of this huge deficit, as putting it off until tomorrow is not an answer. This deficit was GBP 175 billion earlier this year but it is now nearer GBP 200 billion: the price of doing nothing is very expensive.
Sacred cows will have to be slaughtered and illusions consigned to that cliche-ed dustbin marked history.
The country is just beginning to wake up to the reality. The economic, social and political elite have failed fundamentally. It is no longer a case of a couple of bad years followed by a slow recovery; this time it will be a number of bad years which might be followed by a slow recovery or by something a lot worse.
To fail to do something promptly about the deficit - and we have to accept that Osbornes proposals are very moderate, probably inadequate and are going to be implemented too late - will lead directly to a run on sterling, inflation, large increases in interest rates (Barclays wrote to me today offering me a deal on savings of 5.25% over five years: obviously they expect interest rates to be higher than that then), a collapse in domestic demand, an economic slump with very high unemployment coupled with the prospect of malnutrition and even starvation is some quarters (don't forget we import 40% of our food).
It will get worse if we are not very careful. It will get worse if we don't do something very soon. If Osborne scares you, then you ain't seen nothing yet. What scares me is that the government is away dancing with the faeries.
Complain about this comment
33 DisgustedOfMitcham2
"Fortunately, it'll never happen in this country, because we value our freedoms too much. Don't we?"
So very true. I could believe it might happen under the Tories, but never under a Labour government, no way........
Complain about this comment
If George Osborne really wanted to convince me that "we're all in it together", then how about announcing a new higher rate of inheritance tax for large estates: say 95% on any estates over £1 million? That would certainly help to reduce the deficit (I have no idea how much, but even if it's not significant in the grand scale of things, every little helps), and is also the fairest of taxes, as dead people don't need any money.
But given the enormous wealth of David and Samantha Cameron's parents, that's not really going to happen, is it?
Once again, we see that politicians are only interested in looking after their own.
Complain about this comment
Sorry I did not refer directly to George Osborne's plans, they miss one essential point which is we have over the last 30 years been paying far too little tax. The prevailing political paradigm shaped by the 79 and 83 governments constructed a perception that we could have good public services without paying any tax. TSArthur is right we simply do not pay enough tax. All the cuts, efficiencies and different way of doing things are a chimera in dealing with the size of deficit we have. They are peddled by liars we all know that but we were stuffed so full of jam we cannot bear the idea of real social responsibility.
oops I did it again what I should have said was he has only talked about a sliver of what is needed to be done. His pan to keep the inheritance tax showed that he is a coward, and his party are not ready to take the decision a government needs to.
Complain about this comment
stanilic (#39) Yes. I hope this is a sign of you coming round. Some of those sacred-cows have rather vitriolic defenders in these blogs and elsewhere. The problem Si, it's not just the very young and rather old which have the cognitive ability of children, many adults come close to being ineducable beyond a point and need to have their behaviour managed by others. How many people are prepared for that in our, non-defering, liberal, society? How did it ever come about, and are we all in this together?
Complain about this comment
No 37 "However a lot of the money is owed internally within our own economy. Perhaps to rich individuals (including the bankers and landowners who have made so much money during the preceding bubble). Perhaps to our own pension and insurance funds. Where the money is owed internally, then we can actually do something about it - by using the tax system to redistribute wealth and/or income and thus reverse the inequalities which have developed over the past couple of decades (and which should be seen as an underlying cause of our current problems)."
The pension funds have already been looted and pillaged once by Our Glorious Leader in his guise as the Chancellor !! To loot it more by re-distributing its "wealth" when pensionable age will be raised to 66 and beyond will be quite unacceptable to the near-pensioners and there will be a revolt (electorally, if not physically) !!
As for looting little old ladies' meager savings.....
Complain about this comment
No 38 "When I was a lad in the 60s earning £12 per week in my first job I paid income tax at the standard rate of 8s3d in the £ , or at 42.5p in new money and got by okay - so there is a lot of scope for tax rises without the wheels completely falling off."
But at that time, the maximum tax was 112.5% (22s 6d), made up of 19s 6d top rate tax plus 3s in a quid Investment Income Surcharge on top of that; i.e. you paid the government for the "privilege" of invest or saving your money !! That was what destroyed the savings culture in this country !!
From what you have written, I gather that your annual income would be about £625 and at that time your single person personal allowance (assuming that you didn't get married at 16) would be £475 per year leaving a taxable income of about £150 per year.
At 42.5% tax, it would mean your tax would be about £63 15s per year or £1 4s 6d per week, not 8s 6d !! Still, you would have had more than £10 per week which was much more that I got when I had to do such sums on a mechanical calculator before Sir Clive brought out his electronic one !!
Complain about this comment
#44 ishkandar
"The pension funds have already been looted and pillaged once by Our Glorious Leader in his guise as the Chancellor !! To loot it more by re-distributing its "wealth" when pensionable age will be raised to 66 and beyond will be quite unacceptable to the near-pensioners and there will be a revolt (electorally, if not physically) !!"
Well I beg to differ. The tax exemptions on pensions are a huge and regressive aspect of our tax system - ie they disproportionately benefit the better off.
Scrap all tax exemptions on pensions, use the savings to double the State Pension, and you would still have billions per year left over to pay down the National Debt.
There's been a lot of talk about clawing back middle-class benefits and subsidies. Well this is the biggest of the lot. Subsidising the pensions of the rich, while the poorest part of the poulation rely on an utterly inadequate State Pension.
Complain about this comment
No 41 "...say 95% on any estates over £1 million? That would certainly help to reduce the deficit (I have no idea how much, but even if it's not significant in the grand scale of things, every little helps), and is also the fairest of taxes, as dead people don't need any money."
That will help lose them all the Outer Boroughs of London (their strongholds) !! £1 million *doesn't* buy a terribly fancy property in the Outer Boroughs !!
Just as NuLabour dumped £billions trying to shore up bankrupt Scottish banks and starve off losses to the SNP, the Tories will not want to lose their Outer Boroughs strongholds !!
Complain about this comment
No 46 "Scrap all tax exemptions on pensions, use the savings to double the State Pension, and you would still have billions per year left over to pay down the National Debt."
It's all very good in theory but in practice, all the savings will be used elsewhere for various politicians' pet projects and the state pension will be as poorly as ever !!
Complain about this comment
Addendum to No 48 - Scrapping gold-plated final salary pensions for Civil Servants will claw back much more that scrapping tax exemptions for private pensions !! There are significantly more of them than there are of people paying for large private pensions. Small private pensions are usually held by the very people that you want to help and scrapping their tax exemptions will defeat the purpose of the exercise !! Think of all those small shopkeepers and self-employed tradesmen !!
Complain about this comment
I'm truly amazed that families earning over £50000 a year are actually getting benefits at all. They are hardly living in poverty.
Just shows the huge giveaway by Gordon Brown over the last few years to those who don't need the money but arem't going to refuse it either. But of course he was wooing the middle classes whilst starving those at the bottom. What a chump he is.
I keep thinking of that figure of £60 billion pounds every year. How badly it would be needed over the next few years to alleviate the harsh bite of never ending cuts. It should be stressed over and over again that this is through Brown's inept handling of our economy.
£60 billion pounds of our hard earned money handed over to those who saved rather than spent and are happy to lend to us for a nice return for doing nothing and we see nothing for it. £60billion pounds of our hard earned money going up in a puff of smoke.
That is the biggest disgrace of all and Brown should be constantly reminded of that.
Complain about this comment
35. balancedthought wrote:
"the truth we all know is that we need higher levels of tax* to make up the deficit, we probably also need an economy that does not rely so heavily on the financials."
Just as you noted earlier in your post with spending cuts having knock on effects elsewhere, much is the same with taxation.
In many cases higher levels of tax lead to lower total tax revenues.
The best way to increase tax revenues is through systemic (non-bubble) growth.
Whilst we certainly need a more diverse economy, we need to be able to produce those things better and more efficiently than can be done elsewhere.
The simple fact is, public spending has increased too rapidly to be supported by our underlying economy.
Its a shame, in his first few years a chancellor, Brown did actually show prudence and was a decent custodian of the economy. However, labours 2nd and 3rd terms have been an unmitigated disaster, the demands to throw money and be seen to throw money at any and all problems eventually held sway and expenditure surpassed revenue even in the bubble fuelled boom years.
Some of this expenditure was in all probability done with the best of intentions, some had the flavour of trying to buy political capital. We've all heard the "X% more spent on this that and the other" drivel in response to virtually any question.. they still don't get it - its about results, throwing money at areas doesn't guarantee improved results; especially when so much is wasted by moving the goal posts with a new initiative for every headline.
What the public sector needs is balance and stability, can't we reach a consensus on core elements that are required, ensure these areas have clear objectives, prioritise funding them, minimise other areas (subject to the political winds and available funds) and reduce political [and by extension union] interference in core services delivering our needs.
Surely we don't "need" all of the new regulations that have sprung up in recent years, and by extension, if we don't need a regulation, we don't need people to write, publicise, monitor and enforce it.
When I'm paying for a service I want to see I'm getting something for it - okay I'd prefer not to use some services, but I want to know what I'm paying for it is being well spent.
The problem with a democracy is that those who are taking have an equal (and with the boundaries favouring labour often a greater) say in how things are done... so, in an extreme hypothetical situation, if you have 49% of the population work as virtual slaves to support the lifestyles of the other 51% you have a good chance of being elected (depending upon the morality of the 51%... increase it to 60% and self interest is likely to win the day).
We now have one of the highest proportions of the population dependent upon the state for the majority of their income in our history.
We used to support our standard of living and wealth through owning (and exploiting) businesses around the world, yet now many of our businesses are owned by foreign investors.
As such, we do not have the safety net to fall back on anymore, we need to import, and to fund this we need to do something other countries want... which other than aid and EU fees the public sector isn't very good at.
As previously stated, balance is the key, and as it stands the public sector exceeds our means to pay for it... a reality check is required, but then socialism has always been more about dreams and principles than reality and practical workability.
Complain about this comment
45. Ishkandar-you are quite right, I was not a big contributor to the Exchequer in the 60s, but there were many older workers at the top of the scale for the job (about £1400 I think)who paid that rate on a much higher proportion of their income-and many of them were Labour voters. My more general point was that people have lived, reasonably happily, with higher direct taxes in the relatively recent past. I also realise that comparisons are not straightforward, we have higher NI contributions now, and also VAT at a high rate takes more than the old purchase taxes do (not sure about relative levels of exises). However I would suggest a rough comparison would be 42.5% then compared to 20% standard rate now plus VAT 17.5% x 0.8 (ignoring exemptions and assuming income consumed) = 34% - with other taxes in both periods balancing each other out - suggesting that for the general population back then, taxes were relatively higher, and as you note taxes on high earners were definitely higher.
Complain about this comment
#43 JJ
I am not `coming round'. There is nothing in my post 39 which I have not said or implied before.
Politics is by definition the art of the possible. At least we now have some in the political class who are taking some note of the harsh realities that our country faces. This allows everyone to move on in their thoughts as the potential of the possible is now extended. We are no longer screaming impotently at a studied indifference. Yet, for as long as the government remains in denial then matters can only deteriorate.
I remain as I have always been a non-believer in the state, even the social-democratic state which in my view is an hypocritical construct. I have offered you the intellectual basis of that position in the past but you are unable to accept it. I don't care if you don't accept it; people can always agree to disagree, but what I am unable to accept is your continued and very abusive denial of my intellectual reality.
Lastly, to me there are no sacred cows but we still need the milk of human kindness to bind our society together. You and others talk about revolution. I have seen revolution and I have seen aborted revolution: neither are worth the time spent thinking about them as all that happens is the innocent get hurt. We need to allow our politics to evolve as circumstances change, we need to be pragmatic and allow our preferred dogmas to take second place to what is practical. Survival is the first criterion before other more pleasing criteria can come into play.
Complain about this comment
#49 ishkandar
I was suggesting removing tax exemptions on all pensions - public pensions, company pensions and private pension.
Actually many public sector pensions belong to low paid workers (eg in the NHS) whereas private sector pensions are havily scewed towards high earners. To wuote the Government figures:
• 21 per cent of men and 32 per cent of women with gross weekly earnings of less than £300 were members of an employer-sponsored pension scheme, while
• 76 per cent of men and 82 per cent of women on gross weekly earnings of £600 and over belonged to an employer-sponsored pension scheme.
The reason why more low-paid women are in pension schemes than men is precisely because they are employed in the public sector.
Complain about this comment
A principal often used as a basis to promote efficiency is "Keep it Simple"..
Unfortunately legislation is rarely planned in a structured way, it evolves with bits bolted on here, there and everywhere to respond to new circumstances, omissions in the original legislation and random "political initiatives". Sometimes these rules and objectives don't even follow a consistent theme.
The public sector has in turn evolved in response to legislation and fluctuating policies, in light of this, is it any wonder the public sector is inefficient?
Unfortunately the hierarchical nature of the civil service and the associated bureaucratic working practices mean that there is limited flexibility, old structures and methodologies are kept in place and used to tackle new problems for which they are not suited.
In many ways the size of many public sector organisations is what limits their ability to respond quickly to new circumstances.
The fact that the public sector is often seen as a secure job for life encourages a certain mentality, can suppress energy and innovation and get people into a rut of just following rules and procedures and not questioning anything. People know many such rules and procedures are pointless and wasteful, but the culture dictates following them rather than challenging them to change things for the better.
In many cases public sector departments are extensions of academia, people going into them from school or university and remaining there; which probably explains the "be seen to tow the line" approach and the sometimes somewhat blinkered outputs, people not having seen other potential approaches. The fact the public sector is often seen as a secure and "cushy" career path, also inevitably has an impact on the profile of people who often apply.
I somehow doubt that if we were building the public sector from scratch it would take its current form (except perhaps to maintain ministerial "empires"), but change tends to be resisted tooth and nail especially by the unions.
Pay someone for the job they do, not the number of years they've been doing it; perhaps then it would encourage flexibility, people entering from outside industry and (other than the inertia enforced by the pension schemes) giving civil servants an opportunity to work outside the public sector.
I think the phrase is "root and branch" review - and its what the public sector needs, but would any such review be truly objective?
Consultants are paid to tell those who engage them what they want to hear to justify actions that are already planned, civil servants would have an interest in defending the status quo...
The public sector needs to change, and change rapidly, we can't afford it as it is, and those who have looked at the demographics will know that its going to get a lot tighter in 20 years time.
Complain about this comment
Stanilic #53
"Politics is by definition the art of the possible." That's your definition, originally coined by a German conservative with the name Bismarck. Like many conservatives, he had a direct interest in seeking to restrict politics to what he thought was possible, and in his case, as the first chancellor of unified Germany, he was in a strong position to keep wider perspectives off the agenda.
I prefer to think of politics as who gets what, when and how. That focuses attention on the use of politics to maintain the prevailing distribution of resources. You might get a different answer if you think like that.
Complain about this comment
No 52 "...(about £1400 I think)... "
WOW !! Filthy rich sods. I was on £400 per year plus 3s Luncheon vouchers per working day !! Looks like you were a damn sight better off than I was !! :-)
Complain about this comment
No 55 "The fact that the public sector is often seen as a secure job for life encourages a certain mentality, can suppress energy and innovation and get people into a rut of just following rules and procedures and not questioning anything. People know many such rules and procedures are pointless and wasteful, but the culture dictates following them rather than challenging them to change things for the better.
In many cases public sector departments are extensions of academia, people going into them from school or university and remaining there; which probably explains the "be seen to tow the line" approach and the sometimes somewhat blinkered outputs, people not having seen other potential approaches. The fact the public sector is often seen as a secure and "cushy" career path, also inevitably has an impact on the profile of people who often apply."
In one word, "Jobsworth" !!
Complain about this comment
#53 stanilic. You are so right, and yet so wrong. Yes politics is the art of the possible, and sadly it proved possible for the political apparatus to be captured by financial oligarchs.
"We" cannot allow our politics to do anything as "we" have no control at all. Look at facts - do you really think the people were demanding that we invade Iraq? What are we doing in Afghanistan? Ask 6 people and you will get 7 different answers.
The probable reason that we are in Afghanistan is because of a fear of the fall of Pakistan. Did we, the people, allow AQ Khan to develop and sell this weapons technology? The answer is no - but someone did. Someone working for an agency that is notionally under democratic control, but not for any practical purpose. Why did they do that, and how are they going to be held accountable? Answer we will never know and they will never be held accountable.
Did we the people allow RBS to develop a balance sheet equal to the entire GDP of the nation? Did we have any idea what they were up to until it all went wrong? How can you have any form of control or choice when one single company is notionally as large as the entire country.
You are absolutely right that revolution merely hurts the innocent,and I have also seen first hand some of the horrors that you allude to. But understand this: We have been subject to a hidden revolution and we are going to get hurt without ever understanding why.
Many people will not survive what is happening and what is coming. Just because at the moment the death, misery and agony are not in your street, don´t be under any illusion that it will remain that way.
Look at mainstream political parties - all lining up to compete as to who can beat the poor over the head the hardest. Meanwhile the US Treasury, the US Federal Reserve, and the US Congressional Budget Office all issue reports that serve to confirm the unavoidability of financial meltdown. Even with this knowledge "our" leaders cannot resist taking one last kick to the heads of the poor.
Yes we need the milk of human kindness to bind our society together, that is our only hope. But you will get none of that from the captued political classes - like ravenous parasites they will devour the milk of human kindness faster than it can be produced. And like parasites they will not depart the host until it is dead. Yes revolution is terrible - but what do you suggest as an alternative? We have gone past the stage where stealing some poor persons pension will resolve our problems.
Complain about this comment
58. ishkandar wrote:
"In one word, "Jobsworth" !!"
lol - a lot more to the point, but I thought I'd use a lot more words to justify a case with some basic psychology and the fact it is a combination of nature and nurture.. the public sector environment often suppressing positive behaviour.
...................
As to those advocating tax rises, remember not only do we have massive and growing public sector debt, we also have unprecedented levels of private debt.
For balancing the public purse, the public sector debt and underlying deficit is obviously a priority.
However, when considering the economy as a whole, perhaps our total level of indebtedness including future commitments under PFI, public sector pensions etc) and private debt is equally significant.
We need to generate income to finance all kinds of debt, and if taxes rise substantially to close the public sector deficit, it means less of an already dwindling pot is available to service private debt.
Driving defaults higher is unlikely to have a beneficial effect on the financial system.
When you combine that with potentially being considered a hostile place to do business, driving more businesses under, etc such measures need to be looked at very carefully.
Even then, why should people in the private sector pay more to subsidise those in the public sector with total remuneration packages far in excess of their own?
Especially if they aren't seen to get value for money from their contribution.
Perhaps the public sector would show improved efficiencies by employing people with the specialist skill sets to perform roles with excellence rather than the internal processes where people without those skills are transferred around at their existing grade and then left to learn on the job, leading to prolonged learning curves at considerable cost.
The "public sector experience" required, tag applied to many roles also speaks of a closed mindset and defensive attitude.
Its a shame that the private sector can't withhold tax in relation to waste and poor service, after all, they're not getting what they paid for, so why should they pay for it? They wouldn't in many other deals.
At least the threatened public sector strikes create the possibility for a few more savings. although no doubt people will be allowed to claim the days missed as "sick" and then paid overtime rates to make up missed time and do work they conveniently allow to pile on the days they attend.
Perhaps those who strike should be denied the right to overtime for a month or so afterwards.
Of course the threats of strikes due to a pay freeze (which doesn't apply to the lowest paid), when others who foot the bill are experiencing the same or even pay cuts, says much of the unions' commitment to services.
Perhaps it should be those who pay to run the country who decide how their money is spent, they might insist on value for money.
(and please nobody use the "public sector workers pay tax too" line - it would be a strange job where they paid more in tax than they received, they are therefore net recipients and as such paid for by the private sector).
Complain about this comment
#47:
"That will help lose them all the Outer Boroughs of London (their strongholds) !! £1 million *doesn't* buy a terribly fancy property in the Outer Boroughs !!"
Maybe it didn't in 2007, but it sure does these days. Still, I'm sure you're right that the Tories are not going to want to alienate their core supporter (ie rich people).
#50:
Nice post. I particularly like your use of the word "chump": presumably in the Mandelsonian context?
Complain about this comment
56. verymuchso wrote:
"I prefer to think of politics as who gets what, when and how. That focuses attention on the use of politics to maintain the prevailing distribution of resources. You might get a different answer if you think like that."
Its more the art of doing whatever you have to to get re-elected.
Being a convincing liar is certainly useful in this given that people want to believe in positives and until you (repeatedly) prove the error they have made, they are likely to want to believe you.
Some people come into politics with the best of intentions, but the need to be re-elected tends to take over, as does complacency and taking the people for granted, (plus the tendency to have lots of new "initiatives" to be seen to be doing something) hence the decline in standards the longer a party has been in power.
Since their first term labour have been going downhill rapidly especially in terms of the economy with internal dogma gaining precedent over the needs of the country.
Complain about this comment
Stephanie,
From your article:
'So, roughly speaking, both the government and the Tories have signed up to £9bn in tax rises between now and 2014. But even on the government's own plans, that still leaves a roughly £36bn cut in public spending between now and 2014 relative to what you might have forecast before the crunch.
Today Osborne set out his stall. But even if all of George Osborne's plans were adopted tomorrow - and achieved that £7bn a year cost saving by 2014 - you'd only be one fifth of the way to the total squeeze in spending that the government has pencilled in for the next parliament.'
If the Government's own plans leave £36bn to be cut in the next 5 years and Osborne's plans achieve £7bn per year by 2014 ie 5 years, does that not equal £35bn by 2014 or do Osborne's savings only save £7bn in the last year before 2014? I do not understand your sums on this one.
It is either £7bn savings in total by 2014 or if it is £7bn per year, then the Government and Osborne's savings are the same.
Complain about this comment
63. saltfordman wrote:
"If the Government's own plans leave £36bn to be cut in the next 5 years and Osborne's plans achieve £7bn per year by 2014 ie 5 years, does that not equal £35bn by 2014 or do Osborne's savings only save £7bn in the last year before 2014? I do not understand your sums on this one.
It is either £7bn savings in total by 2014 or if it is £7bn per year, then the Government and Osborne's savings are the same."
Unfortunately as I understand it we need to reduce the deficit (annual gap) by £36bn... so debt is increasing by £36bn p.a. more than "pre-crunch" forecasts.
So that's £180bn over 5 years and Osborne has "found" £7bn p.a. versus the £36bn currently claimed by labour to appear eventually.
And £36bn p.a. isn't the entire deficit, its the increase in the annual deficit (in real terms).
The hole is getting deeper and deeper and these cuts are just looking to reduce the rate of descent, not stop it.
Complain about this comment
After much searching on the ONS & HMT web-sites (which are best described as user-hostile (but maybe that's the point!)) I found a set of numbers which make for chilling reading and which underlines Stephanie's contention that much more will need to be done.
The UK's GDP is £1270bn. Government expenditure accounts for some 53% or £671bn of this. Government income is only £496bn leaving a gap of £175bn in this year alone. I.e. the Government is spending 35% more than it gets in income. Total government debt is £800bn and will rise to £1300bn by 2013 as further annual deficits arise and will continue rising unless Government income increases by more than 35% or cuts of more than 25% are made to Government expenditure (or some combination of the two). And that's before we even consider how to repay (even a proportion of) the £1300bn national debt. If say, the political sentiment is to get back to a national debt to GDP ratio of 40% (remember the "golden Rule") over 20 years the Government will also be repaying an average of £50bn p.a. So the real gap that needs to be closed over the economic cycle is the budget deficit + the repayment of some of the national debt a figure in excess of an average of £200bn p.a for some time to come.
So where does £200bn p.a. come from? (1) hoping that the current fiscal policy will eventually lead to economic growth which will result in increased tax receipts to close some of the gap (but the financial services industry is on its knees and no longer the "Golden Goose"); (2) raising tax rates, but even a whooping (and hugely unpopular) increase of say 20% on income tax and NI receipts only raises £48bn; (3) severe cuts in public expenditure, but even if Social Protection, Social Services, Education & Health (which accounts for 64% of total spend) was cut by 10% this saves only £43bn. No doubt there are many other ways of cutting the income and expenditure cake but you keep coming back to the same conclusion there will need to be a notable rise in tax receipts (economic growth + higher tax rates) and some very tough cuts in public spending.
This assumes, of course, that in the meantime we can continue to borrow from willing lenders at sensible rates because we retain our AAA credit status. But that AAA credit status is predicated on fiscally responsible government (whatever its complexion) and is already under review by the international credit reference agencies.
Even if you view this analysis as pessimistic (although it is based on officially published numbers which have already been shown to be optimistic) it demonstrates that both the Labour, Liberal & Conservative parties have a lot more to do to explain how the UK will recover from this economic culder-sac! But if the UK doesn't face up to some harsh realities in the next election the global markets will do it for us. The pound will slide against other currencies, import costs will rise driving inflationary pressures (e.g 40% of our food is imported) although our exports should also rise (if only we had a significant export industry), lenders will want higher interest rates and re-payment in their own currency (and not a devalued pound) and maybe we'll even be back at the doors of the IMF?
I'd appreciate other contributors views on the economic realities and the real choices we have to make.
Complain about this comment
RE 64. Reaper_of_Souls
"Unfortunately as I understand it we need to reduce the deficit (annual gap) by £36bn... so debt is increasing by £36bn p.a. more than "pre-crunch" forecasts."
Are you sure about that? This year's borrowing projection is around £180 billion - about 12% of GDP. If the extra borrowing attributable to the recession is just £36 billion, that implies that about £144 billion would be "normal", but it wasn't. Pre-crash government borrowing was typically in the £30-35 billion range.
To put this in context £180 billion is about £3,000 for every single person in the country - and that's just this year.
There is an assumption that a lot of this deficit will just "go away" as the economy recovers. That is reasonable up to a point. The trouble is that if the deficit halves in that way (to about £90 billion) it will still be three times the pre-crash level.
The size of these numbers make me sceptical about whether any current proposals mean very much. There are various people posting here who quite eloquently argue for either tax rises or public spending cuts. My concern is that I don't think many people grasp just how big these numbers really are and therefore just how big the tax rises/spending cuts will have to be if they are going to succeed.
Complain about this comment
Just had the calculator out again and I conclude that George Osborne's plans do not add up. They are all politics and very little arithmetic, but isn't that we expect from a politician?
The weasel words are on interest rates - the threat from David Cameron is that unless we take to bad medicine interest rates will have to rise. This is so blatantly stupid as a statement as it suggests that interests will not rise from zero. Now what this actually means is that the Tory party is not planning for a recovery at all, as unless and until interest rates rise there can be no genuine recovery as the price on money is set at such a level as to make it virtually worthless. The only recover will be in the price of houses - and that is exactly what caused the crash in the first place!
Punishing the people to continue to protect the bankers is simply not a path to a real economic recovery.
In essence my sums indicate that George Osborne needs to raise three times as much, and very much sooner just to pay off the debts so far run up and there is no indication that the Bank of England will stop quantitative easing any time in the foreseeable future.
Further without raising interest rates there will very soon come a time that the coupon rates on government bonds will not be high enough for the government to be able to sell the bonds in the market. (I also note Australia put up its interest rates yesterday.) Sterling is likely to come under severe pressure quite soon too and this will also blow away his already faulty calculations. Joining the Euro at parity will seem like it would have been a good idea in a year or so's time I am afraid.
Finally, will the Tories be the party to get rid of the pound and join the Euro? That should get the lunatic warmongering xenophobes going!
Complain about this comment
# 66 Hants_gw wrote
"Are you sure about that? This year's borrowing projection is around £180 billion - about 12% of GDP. If the extra borrowing attributable to the recession is just £36 billion, that implies that about £144 billion would be "normal", but it wasn't. Pre-crash government borrowing was typically in the £30-35 billion range."
I was using Stephanies comment below as my reference:
"that still leaves a roughly £36bn cut in public spending between now and 2014 relative to what you might have forecast before the crunch."
However, your figures appear more realistic and representative of the £36bn is the underlying systemic deficit. Although given that £30-£35bn was typical in the good times and that more public sector commitments are coming into force all the time, combined with an ever increasing demand for services; it would seem that £36bn is somewhat optimistic; especially if we consider the additional cost of servicing the ever increasing debt.
Apologies, it serves me right for taking a journalists commentary at face value, without checking my sources :P
Complain about this comment
# 67
John_from_Hendon
I couldn't agree more... the fact is low interest rates aren't stimulating the "real" economy (other than maintaining house prices and supporting the banks) at all, because rates for businesses are vastly higher and finance is severely restricted.
For now the government is able to sell bonds due to the combination of insisting on banks strengthening their balance sheets and quantitative easing - meaning really the debt is being "financed" by "printing" money, while paying the banks commission for making the arrangements.
Of course once the banks are seen as "stabilised" or the creation of currency drives sterling even lower...
& you're also right as to the cuts announced by Obsborne being the tip of the iceberg compared to what is necessary to right the ship; its a mere fraction of what is required but unfortunately Labour has recklessly and unrealistically raised expectations meaning people are over committed on the basis of unsustainable levels of spending; it is perhaps with a view to reigning in these excesses gradually in order to in part soften the impact that a gentler approach then is merited is being advocated, with the result of course, that in the meantime, the debt continues to soar.
Complain about this comment
#65
I'm going to be simplistic because its to easy to get to 'to trident or not to trident'
A household would have to change its ways. Stop doing something. Eventually it would have to stop having foreign holidays or nice new kitchens or buying iphones or yet another pair of shoes manufactured overseas. It might have to turn off the lights when not in the room or turn the thermostat down.
So fundamentally government has to change its ways too. Its needs to be more frugal. It needs to stop think that it can solve every human problem and protect us all from each teeny little harm. Life ain't guaranteed - death and taxes are.
Clearly, there have to be some huge sweeping changes but I'm in favour of starting a list of simple, consistent, easy to achieve proposals..
a) turn off street lights between midnight and 6am. (when did this become necessary? what is the cost to the public purse of being seen from space?
b)increase duty on alcohol and significantly reduce licencing hours (this would raise some revenue, reduce the need for policing and the stress on accident and emergency departments and redirect personal expenditure)
c) tax sugar and fat based products and their artificial substitutes (its ludicrous that there is no VAT on food and obesity is growing)
d) prevent use of consultants by public bodies. (If the managers aren't capable of doing their job, we need new managers - perhaps there's a saving)I distinguish between consultants and contractors.
e) stop paying people to be on the boards of the hundreds public bodies. (If these mutually self appointed individuals aren't prepared to operate voluntarily as they would have done in the past one has to question their motive). Stop paying allowances to councillors for the same reason.
f) no bus passes or travel cards until you are 70. (Is it reasonable that any woman over 60 can travel for free on the bus anywhere in the country).
g) get rid of the child trust fund
h) stop any re-building contract that has not been approved
i) cut all budgets for catering, conferences, overseas trips or other jollies from all public sector budgets
j) rebase all salary budgets (in a dim and distant past, after three years of blood letting, we were still finding slack in salary budgets)
k) no overtime, no agency staff. If there is work to be done, employ someone on standard rates.
l) include all the employees of the nationalised banks in any scheme to limit pay rises in the public sector (they are now classified as public sector employees)
OK, the cuts might seem like peanuts but I'd guess we'd get to at least a billion per annum maybe two - five billion per annum.
The taxes could bring in somewhat more.
I might then ask
what is trident designed to keep us safe from
or why do we feel that we should be involved in foreign conflagrations when some other nation might benefit from the exploitation of resources
or do we really need 80,000 people working for the MOD
or are MPs pension arrangements reasonable (let alone expenses)
or is there any reasonable reason why a civil servat shouldn't contribute to their long term security by contributing to a pension scheme like the rest of us
or whether winter fuel payments are actually needed by all those that get them
or which of these quangos is actually adding any value
OK there's a start.
Its not theoretical or even numerical but possibly achievable
Complain about this comment
OutAtSea
The answers lie here:
a) Private debt write-offs
b) Income tax increases based on mandatory loan interest rate restrictions
If you want more info post again
Complain about this comment
RE: 65. 0utatSea
"I'd appreciate other contributors views on the economic realities and the real choices we have to make."
That's a really good post. Well researched.
Looking at how desperate Brown was to avoid admitting to any kind of cut in public spending, and now the outraged response of so many to Osborne's proposals - which are in fact far too modest to address the debt problem - I'm left with the impression that the fundamental problem is that the majority of people are still unaware or in denial.
Ironically, this means that things will probably have to get a lot worse before enough of the electorate are willing to face facts. Which is, of course, precisely what is happening.
I wish I had something more constructive to say.
Complain about this comment
Very interesting comments, observations and analysis! But before we all start crying in our beer, looking for the nearest exit, cutting 20/30/40% of the public sector budgets or whatever let's put our situation into perspective.
Firstly we need to look closely at our European parteners situations. In reality we need to look at France, Germany and Italy ( though an examination of Holland and Spain could also be useful). Let's look at their 'real' debt obligations in relation to GDP and how they propose to fianance it or repay it. Our situation is bad, I am not denying it, but I want to know just how bad it really is. Who's Treasury door is the Grim Reaper going to knock on first?
The second analysis is perhaps more complex. We really need a dispassionate analysis of the US economy and its prospects. As far as I can see this has not yet been undertaken.
Thirdly we need the same critical examination of China's economic position. A shed load of foreign debt is no use if the foreign goivernments can't/won't pay. An overheating economy is a dangerous thing when the world stagnates into long term economic depression. So what is the true picture for China?
Things have to change that is beyond question. Re-inflating the bubble is no answer for anybody. But until we are all looking at the truth (or as close as we can get to it) then unilateral economic remedies are bound to fail. Even if the final decision is, "look to yourselvs, defend yourself at all times and come out fighting".
Complain about this comment
No 65 "...and maybe we'll even be back at the doors of the IMF?"
What you have written is quite correct. However, the IMF route is the last thing that is desirable because that means that the cuts are not deep enough. The IMF is well know for demanding very, very deep cuts as part of their loan conditions !! It would be the most painful of options !!
Complain about this comment
#71 frankSZ
Private debt write-offs is probably THE LAST thing that we shold do! All that would do would be to inflate the biggest bubble the World has ever seen.
We desperately need to address the inbalances in global trade and the economic and social inbalances that exist within our own economies. We need to completely overhaul the structures and mechanics of international trade - if necessary prohibit commodity exchanges from speculative dealing.
Complain about this comment
No 70 "...death and taxes are."
My dad always told me that there are only two jobs that are truly guaranteed for life - a taxman and a funeral director !! :-)
"a) turn off street lights between midnight and 6am. (when did this become necessary? what is the cost to the public purse of being seen from space?"
Turning off every other light on motorways will go some way towards saving a fair bit and helps the environment too !!
"c) tax sugar and fat based products and their artificial substitutes (its ludicrous that there is no VAT on food and obesity is growing)"
Food should not be taxed but abuse of food should be punished by not treating its symptoms on the NHS !!
"d) prevent use of consultants by public bodies. (If the managers aren't capable of doing their job, we need new managers - perhaps there's a saving)I distinguish between consultants and contractors."
If they are not "fit for purpose" then they should be replaced by some one who is !!
"g) get rid of the child trust fund"
Better yet, get rid of the CSA !!
"...do we really need 80,000 people working for the MOD..."
Well, some one has to hand out leaflets telling them that "smoking is bad for their health" just before they go out on foot patrol looking of roadside bombs and IEDs !!
"...which of these quangos is actually adding any value..."
Surely, you jest !!
Complain about this comment
No 75 FDD - "if necessary prohibit commodity exchanges from speculative dealing."
It is difficult to prohibit speculative dealing because it is difficult to (a) define what is or isn't speculative dealing, and (b) how to identify what is or isn't speculative dealing !! It is far easier to ban all support for organisations that deal in such "markets" like investment banks and hedge funds and any others who indulge in such activities like borrowing on short terms for long term lending (i.e. Northern Rock) !!
Complain about this comment
#76
jest indeed
I am considering establishing a new voluntary body called the "Office of Frugality". Ideas on a used napkin please.
Taxing food is tricky I'd agree but Coke, mars bars, biscuits, cakes, chips, crisps?
And have you checked to see how much sugar and fat is put into sliced bread these days and what about sugared cereals or ready meals?
A bag of tate and lyle or pat of butter, I might let pass.
And stuff the various interest and lobby groups.
Alternatively, given our common concerns, perhaps there is a market for domestic bunkers. The concept is in its early stages - sort of based on the anderson shelter but with much more storage and emergency generators or solar power, optional extras would include tunnels and wells.
Yrs
Mrs Bloggs
Complain about this comment
#77 ishkandar,
I agree with you that the definition and policing of speculative dealing is extreemely difficult. However, if we take no action against it then investment banks/ hedge funds/ etc. will only continue to do it under another guise!
How would you go about ensuring that support was removed from organisations that were participating in speculative trading?
Complain about this comment
#73 foredeckdave. You want to know about the prospects for the US, here they are
http://www.moneyandmarkets.com/three-government-reports-point-to-fiscal-doomsday-4-35722
You want to know what China intends doing, read this:
http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html
You want to know about Europe, try this on Spain.
http://www.safehaven.com/article-14360.htm
Or try this on Latvia
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6263039/Banks-brace-for-Latvias-collapse.html
You can be pretty certain that the EU core states will be fully occupied trying to bail out their near neighbours.
The subject is covered, it is just that no-one is paying attention.
Complain about this comment
Mrs Bloggs,,
Surely you have nothing against our American cousins do you? You only mention US brands in your foods to be taxed!!
You really do have it wrong with your price increases on booze - only the 'health gestapo' feel that they have any evidence that price controls consumption. Their Scandinavian evidence totally ignored the local 'vodka shops' as they are supposedly illegal - but never seem to get raided!!
Complain about this comment
#80 armagediontimes
It's loose analysis as per your first link that makes comparative analysis so difficult. What is actually claimed in that article is NOT what was said in the publications referenced.
As for Fisk. then a lot of what he has previously claimed as fact in the Middle East has later proved to be wishful- thinking. I reserve jusdement thanks!
That Europe, at least the EU, will have to concentrate its efforts on supporting itself is I feel a given.
Complain about this comment
76. ishkandar wrote:
"Better yet, get rid of the CSA !!"
I believe that's actually happening, although of course it will be "replaced" by the Child Maintenance and Enforcement Commission.
Complain about this comment
More anti-Jewish stuff from JadedJean (#43) connected by links within links to racist drivel posted on other blogs and external websites.
Moderators, do you actually read or cross reference any of this? Do you speak to your colleagues on other BBC blogs?
Do you ever wonder why, whatever the topic, JadedJean manages to keep coming back to her pet subject?
Complain about this comment
#81
Dear Dave
My food and drink taxation possibilities were income generators based on consumption which have potential side effects that might reduce costs. I'd not dream to take on the role of nanny.
Yrs
Mrs Bloggs
Complain about this comment
No 78 "Alternatively, given our common concerns, perhaps there is a market for domestic bunkers."
I'm not so sure that there will be a market for such. It will be much easier for those in international demand to "fold their tents and depart" !! Of course, this will leave behind a greater proportion of those incapable of satisfying international demand, thus making it much harder for the economy to recover.
Jingoism cannot match the harsh realities of "food on the table" !! Unless something is done *NOW* to reduce or solve the problems of poor industrial output and exports on the one hand and ever mounting national debt on the other, "food on the table" reality will come to pass and it will be ever more painful as time goes by.
Deep swingeing cuts are needed with total disregard to entrenched interests. If entrenched interests win out, Britain will soon become a Third World country. Zimbabwe, once the food bowl of Africa, has mass starvation and galloping inflation because entrenched interests took precedence over economic reality. It is but a very short step for Britain to go the same way !! One hundred trillion quid notes ?? This way, please !!
Complain about this comment
No 79 "How would you go about ensuring that support was removed from organisations that were participating in speculative trading?"
Cue Northern Rock, HBOS, RBS, etc. Just yank the rug out from under their feet and collect back every penny loaned to them. That will "encourage others" not to go the same route !! The Romans used to decimate their legions to "encourage" them. We still have banks that haven't "taken the Queen's shilling", so we can do the same, too !!
Complain about this comment
You might find this interesting..
http://www.nytimes.com/2009/10/07/opinion/07kaplan.html?_r=1&scp=1&sq=kaplan%20afghanistan&st=cse
US...debt...China...raw materials... Afghanistan... US....debt....
Mrs Bloggs
Complain about this comment
No 81 "Their Scandinavian evidence totally ignored the local 'vodka shops' as they are supposedly illegal - but never seem to get raided!!"
According to my Norweigian friends, more central heating equipment is sold than can be accounted for by housing needs. One (reliably) rumoured reason is that they make excellent stills !! Of course, I know nothing about this !! :-)
Complain about this comment
No 83 "I believe that's actually happening, although of course it will be "replaced" by the Child Maintenance and Enforcement Commission."
Get rid of them too !! Let's get back to court-appointed administrators. That worked out far cheaper than the billions wasted in IT, moneys not collected, moneys collected but not handed out, massive salary bills, massive expenses, etc.
Complain about this comment
No 88 "Kandahar and other areas will most likely fall to the Taliban, creating a truly lawless realm that wrecks China’s plans for an energy and commodities passageway through South Asia."
Err....
(1) Afghanistan has a fairly large border with China, especially in Xinjiang (Chinese Turkestan). It does not need the North-west Frontier to reach Pakistan and India.
(2) During the Sino-Indian war in 1962, the Indians concentrated their troops to guard the (perceived) traditional route from China - i.e. the North-west Frontier. The Chinese troops came *OVER* the Himalayas !! That route has just been reopened a few months ago !!
(3) Traditionally, most of the China-India trade came through the Southern-most Silk Route - by sea, via Majapahit (Java), Palembang (Sumatra), Ceylon (Sri Lanka) and Calicut (still there to this day) !! Singapore now sits in the most strategic position and gleefully rubs its collective hands together watching the trade pass along that route !!
(4) The traditional Jade Road, unfortunately passes through basket-case Burma (Myammar) and cannot be counted on as a conduit of free-flowing goods !!
Therefore, stability in Xinjiang is more important to the Chinese than stability in Kandahar and the Helmand Province. OTOH, American (and UK) supplies that have to be routed through Pakistan needs the Helmand Province to the sufficiently stable to allow the flow of material to their more Northerly placed troops !! Air supply through Central Asia is dodgy, at best, and prohibitively expensive, at worst !!
More importantly, that war will suck Britain dry as surely as Vietnam sucked America dry and that will not help solve Britain's national debts !! Look up the Nixon years and see how America's debts soared during the Vietnam War !!
Complain about this comment
http://news.bbc.co.uk/1/hi/business/8296079.stm
Just to add to the fun and games, the Americans, too, are under pressure to make extensive cuts. Therefore, for Britain to hope that exports alone can help recovery and save the economy is unrealistic since the US is Britain's largest trading partner !!
When America stops "buying British", the British had better start selling elsewhere or have deep swingeing cuts !! This becomes even more important when the Yankee dollar goes tippy-toeing off to the sunset dragging the quid with it !!
Complain about this comment
#92 ishkandar,
"US is Britain's largest trading partner"
No. The EU acounts for over 50% of all UK exports.
Complain about this comment
Message 56 verymuchso
I have no idea as to what Bismarck may or may not have said. He was a very competent German Chancellor as the country went off the rails as soon as his generation passed on.
That apart, the context I was using is that set by Bernard Crick in his book The Art of Politics. In politics there is little point in setting out to get what is impossible: you need to work by compromise appreciating that the process is a never-ending dialogue. History is always happening.
Complain about this comment
59 armagediontimes
There is a risk of losing a sense of proportion.
Political success requires that the most important thing is to get the people on board without frightening them. Many years ago when I was an activist I was taken to one side by my then employer and advised that in Britain so long as you kept your nose clean, worked hard, kept quiet then all things will come your way. He was trying to buy me off my activism.
Do you think though that his definition was correct? This was in the early Seventies and possibly his view was valid then. It isn't now and hasn't been for many folk for at least the last fifteen years. I agree that it has got a whole lot worse in that time.
Yet you and I are the politically informed. We know these things but the ordinary people don't. They still think in deferential terms. I have had people explain to me that they know nothing about politics and so they leave it to the government. This is madness but it is going on.
We need to reshape our politics by bringing ordinary people back on board. We need to expropriate it from the political parties through public engagement in the issues. In this way we will begin to redefine the landscape of our society.
However, if you run about crying woe and the end is nigh you will either frighten people away or allow politics to be hijacked by a bunch of nutters. That is always assuming the nutters (Blair, Brown, Balls)haven't already hijacked it.
Complain about this comment
#95 stanilic
Great post!
As barriesingleton (over on the NN blogs) has often commented; cleverness has never been a substitute for experience and wisdom (and never will be).
[No slight on armagediontimes btw]
You just can't read this sort of stuff anywhere else!
Complain about this comment
No93 "No. The EU acounts for over 50% of all UK exports. "
Possibly my info is outdated !! Still, the US accounts for a large portion of the exports !!
Complain about this comment
No 94 "In politics there is little point in setting out to get what is impossible"
I think a certain Ernesto Guevara will disagree with that statement !! Seven different governments didn't spend much of their effort trying to stop him or kill him for nothing !!
Read about how he started in "The Motorcycle Diaries" !! And while you are at it, try reading "The thoughts of Chairman Mao" aka The Little Red Book !!
Complain about this comment
97 ishkandar,
I wasn't just trying to be clever - honest. UK exports to the USA have been falling in both volume and value for over 25 years.
Some of that decline could be due to the reltively high price of UK manufactures but a critical proportion of it is due to UK exporters looking towards other markets.
Complain about this comment
ishy,
Oh no! NOT the Little Red Book? Not the longest journey bit - AGAIN?
Complain about this comment
ACTIVISM AND SPIN
stanilic (#95) "However, if you run about crying woe and the end is nigh you will either frighten people away or allow politics to be hijacked by a bunch of nutters. That is always assuming the nutters (Blair, Brown, Balls)haven't already hijacked it."
Hold on, these are the people who have been running/ruining the country. They are the ones who keep frightening people. Pointing out the facts of the matter isn't ever the problem, it's spinning/lying about facts which causes trouble. See California's problems in the context of the above, which is, second to Madison Avenue, the home of the spin industry.
Here the on going political debate continues to focus within about 10% of the real debt problem rather than facing up to the major demographic problem which the 'nutters' created. Miliband stated at he Labour Part Conference that the starting point of their politics was that all men and women are created equal. That' false. This week, the Shadow Conservative Education Secretary said they would sack Head Teachers of 'failing schools' - but the important question to ask is what is a failing school? Is it a large group of failing pupils (poor intake)? Is it teachers unable to behave as alchemists? Are kid all created equal and is how they turn out dow to nurturing and teaching? Large numbers of the non-political live and think like children, that is true. That's a function of low numeracy and literacy (IQ). But you have still not taken on board the facts from behavioural genetics have you? Look up Plomin et al. and think again. The evidence has changed since the 70s, but many adults posting here, and serving in political parties etc have not. :-(
Complain about this comment
98 alexander
Ernesto Che Guevara is dead. The reason he is dead is because he believed his own claptrap. The Cuban Revolution succeeded more to do with the simple courage and fortitude of the last surviving twenty comrades from the Granma and the total incompetence of the Batista regime than it ever did on revolutionary theory.
I have the full collected works of Mao on my bookshelves: so I do not need the Little Red Book. They were a personal gift many years ago from a Maoist faction who were tenants of an old employer. Their offices were broken into, I dealt with the alarm call and helped them sort out the mess. They were foreigners, quite harmless people who were so grateful for my assistance they gave me the full set. That was forty years ago and I have never read them.
Complain about this comment
No. 70 .......... it's a start but not enough. As for Trident, that's another subject that needs intelligent debate given the current context (and not post WWII thinking).
No. 71. a) merely moves the problem to the banks and as we've seen ultimately the tax-payer thus increasing the public sector deficit. Ref b) sounds like tinkering to me when what we need are some bold changes.
No. 73. Part of the problem for the UK is that it is not part of a huge currency block. The opinion of the markets is that the €zone countries - as a bloc - are better positioned than the UK hence the fall in the £ to € exchange rate. Who famously said that a strong currency was the sign of a strong economy (ergo a weak currency is the sign of a weak economy?
No. 74. I agree that going to the IMF is the worst option because you loose your national sovereignty and the right to decide your own (immediate) future.
To the more general point, that "politics is the art of the possible" I agree with the sentiment BUT electorates can take tough decisions if the facts are presented honestly and there is an intelligent debate about choices - the problem we have now is that no political party is really being honest about the facts or the choices. However, if the electorate doesn't take the tough decisions (head in sand) the global markets will intervene in any case to correct the imbalance and who knows what the outcome would be?
Finally, the government could always solve the funding gap by printing more money and paying it's bills that way but then you're on the road to a serious inflationary problem ......... will history repeat itself???
Complain about this comment
101 JJ
We are on about facts again, aren't we? In politics facts can be arguable because despite Fabian claims to the contrary there cannot be a political science. This is how we have acquired spin because some people think the way of delivering the message is more important than the message itself. They delude themselves as all they achieve is to bewilder and confuse. This is another reason for the common disaffection from politics: people do not understand and so naturally feel excluded.
I doubt very much if Milliband agrees with the proposition that all are created equal. He did not get where he is today without being the son of a famous leftie politics professor, did he? The Labour Party is the party of the middle-class apparat who have never had the moral courage to go out and make a living for themselves. What use is a political or social theory if you have not gone out into the wider world and put it into practice?
Consequently I no longer have a need for academic theorising. I accept I would not have got where I am without determining a theory or two but after a while theories and authorities are just not enough. They have to stay seated on the bookcase whilst you have to get your hands dirty with the grime of real life.
My libertarian values derive in part from an intellectual appreciation of the ideas, in part from moral instruction from a young age, in part from being close from childhood to many articulate libertarians of both Left (Orwell) and Right (Hayek) and in part from setting up and running organisations within industry and commerce based on the same ethical standard. My theories are no longer theories; they work and they work well.
I would recommend to any political, social and economic theorist that they go out into the world and set out to try and change just a little bit of it according to their stated principles. By struggling with reality, moderating or strengthening aspects of belief, recognising that you won't get it all but you can get most, you can get there and make an enduring mark. If you don't then what are you? Just a fantasist, at the end of the day.
The problem with the schools is simple: it is not money, it is not the teachers, it is not the pupils. It is that nobody actually runs them except some bureaucratic entity. Consequently nobody is responsible. To my mind empowering the teachers is the place to start as without teachers there can be no school.
Complain about this comment
#95 Stanilic. I understand and appreciate the sentiment. However the real risk is not that we lose a sense of proportion, but that we fail to gain a sense of proportion.
The US/UK are run by a cabal of war criminals, as that crime was defined at Nurnberg. I very much doubt that the moderate voices operating in the 1970´s had any idea that their country would, in the space of 30 years, be hijacked by a criminal gang.
The criminality is all encompassing and extends to habitual market manipulation through activities such as high frequency trading, through to autocratic changes to accounting rules so as to allow large corporations to hide their losses and mislead investors a class of person that, in many cases, has been unilaterally extended to encompass everyone. Look at Enron - a criminal corporation whose key officers and directors were indicted and convicted of criminality. Then look for meaningful differences in their modus operandi from the modus operandi of the UK government.
I don´t know whether the current government are nutters, but they most certainly have a powerful criminal case to answer.
But they have no inention of exposing themselves to such scrutiny. They are out of control and fully intend to commit larger and more audacious crimes. Actions have consequences, and the consequences this time around are most likely going to be terminal for a large swathe of humanity.
Only people can stop them. For the reasons that you explain any form of popular action is most unlikely. Visible collapse comes slowly, but the unseen undercurrents preceeding collapse move with great rapidity. There is no time for the orderly reshaping of politics that you envisage, and in any event the oligarchs will never voluntarily relinquish power. (For a small example see the Irish being forced to vote twice on the EU, because the first vote displeased the oligarchs).
You are probably correct in what you say and, with your words and your appealing conventional wisdom, you extinguish the final flicker of hope.
Complain about this comment
#102 stanilic,
Moa is also dead. His Long March and ultimate victory over Chiang Kai-shek, had more to do with the latter's incompetency as well!
Strange that revolutions that do succeede appear to do so in spite of themselves :-)
Complain about this comment
FANTASISTS
stanilic (#104) "In politics facts can be arguable because despite Fabian claims to the contrary there cannot be a political science."
Science has moved on. We now have behaviour science which includes behavior genetics. When one does the numbers based on the evidence it creates its own politics. Mark those words.
"This is how we have acquired spin because some people think the way of delivering the message is more important than the message itself. They delude themselves as all they achieve is to bewilder and confuse. This is another reason for the common disaffection from politics: people do not understand and so naturally feel excluded."
That may well be true, but back in 1900 the British population was about 41 million, the USA about 76 million, and Russia 136 million. By 1910 these had increased to 45m, the USA 97m and Russia 160m. Before the universal franchise in Britain in the early part of the C20th, he electorate comprised about 7 million people (male). This was selective, it was largely people who understood what they were voting for. Extending the franchise dumbed down the electorate, literally, and in time, genetically too.
"I doubt very much if Milliband agrees with the proposition that all are created equal. He did not get where he is today without being the son of a famous leftie politics professor, did he? The Labour Party is the party of the middle-class apparat who have never had the moral courage to go out and make a living for themselves. What use is a political or social theory if you have not gone out into the wider world and put it into practice?"
What he believes is irrelevant. He said it was the starting point of their politics and this is in fact reflected in our schools, perniciously. We hear of 'underachievers' and 'failing schools'.
"Consequently I no longer have a need for academic theorising. I accept I would not have got where I am without determining a theory or two but after a while theories and authorities are just not enough."
Translation - you have stopped updating what you know.
"They have to stay seated on the bookcase whilst you have to get your hands dirty with the grime of real life."
That's an excuse to remain bigoted. I doubt you have the education to make sense of what you have been told from the questions you asked in the past about heredity.
"My libertarian values derive in part from an intellectual appreciation of the ideas, in part from moral instruction from a young age, in part from being close from childhood to many articulate libertarians of both Left (Orwell) and Right (Hayek) and in part from setting up and running organisations within industry and commerce based on the same ethical standard. My theories are no longer theories; they work and they work well."
They are all anarchists, all the names you mention are anarchists. That is very politics which brought about the economic crisis which we are now enduring the consequence of. You will contribute nothing useful so long as you ignore what you are told. Theories are, to some (bigoted) people, everything which is not their own personal, necessarily limited, experience!
"I would recommend to any political, social and economic theorist that they go out into the world and set out to try and change just a little bit of it according to their stated principles."
How do you know those that you give your recommendations to are not more world-wise than you?
"By struggling with reality, moderating or strengthening aspects of belief, recognising that you won't get it all but you can get most, you can get there and make an enduring mark. If you don't then what are you? Just a fantasist, at the end of the day."
It may well be a description of you if you don't update what you know!
"The problem with the schools is simple: it is not money, it is not the teachers, it is not the pupils. It is that nobody actually runs them except some bureaucratic entity. Consequently nobody is responsible. To my mind empowering the teachers is the place to start as without teachers there can be no school."
It's the intake. The gene-pool. We know it's the intake. It's why the CVA regression model used by the government is heavily weighted for prior attainment, which is predicted by CATs etc. We know that intelligence is genetic. Is that so hard to grasp along with its deductive consequences?
Complain about this comment
105 armagediontimes
I can agree that there is a great similarity between modern political parties and criminal gangsters. The internal dynamics of the groups are very similar. Often a board of directors can emulate the same patterns and I don't just mean Ronnie & Reggie's Pension Fund.
It is legitimate to suggest that there is a conspiracy of interests at work in the world on the same basis that turkeys don't look forward to Christmas.
There is a massive difference in perspective between the rich, the poor and those in between and it is legitimate to suggest that the commonality of a certain perspective can cause a particular view to prevail.
Also cultures ebb and flow. I wrote a dissertation many years ago on cultural change defining the high spot as when the established perspective considers itself invulnerable. The Greeks called this hubris and usually the decline sets in at that point. The greatness in a culture is how it struggles to define itself. Look at our art and you can see the decrepitude that surround us.
There is not doubt that our prevailing culture is in decline. However, what will be the shape of the decline and how will it work through into a new paradigm are the things to work for now.
By all means be dystopian but this does not mean one should give up hope. By not giving up we redefine and turn the decline into something more hopeful.
Complain about this comment
107 JJ
I thought I could get you going and I have.
Sorry, JJ I learned from an early age to deal with authoritarian personalities and you are a classic. You are so right, so righteous but you can't stand the thought that most of us just don't care what you think.
We have had the conversation as to whether behaviour genetics is proveable. I cannot see how you can separate and measure conditioned behaviour from genetic behaviour. It is all too behavioural, if you see what I mean: which you won't.
You seem to have a fascination for academic research. No doubt this reinforces your intellectual status in your own eyes but what is the purpose? I update myself by pushing forward the boundaries of my lived experience. It is called meeting challenges and you measure your development against the outcomes. I could call this researching in practical reality but I am not the pretentious sort.
I have learned to love your rants about anarchists. You are so ignorant of a topic I have lived and breathed for most of my life. JJ: I am an anarchist, a real one and I don't have a bomb. Of course people like you hate me (us) for the simple reason I (we) represent something you cannot control.
Yet even I accept that anarchism is a dogma and all it presents in real terms is a definition of human and animal behaviour. As I have said the species homo sapiens has lived in Europe for about 45,000 years. We managed without government for most of that time so the last 2,000 years looks like a bit of behavioural conditioning to me.
You will think otherwise of course but then that is the privilege people like me have bestowed on people like you: it is called freedom. Aren't we a pain!
Complain about this comment
stanilic (#108) "I can agree that there is a great similarity between modern political parties and criminal gangsters. The internal dynamics of the groups are very similar. Often a board of directors can emulate the same patterns and I don't just mean Ronnie & Reggie's Pension Fund."
Do you anarchists learn anything anymore, or does your hubrism (narcissism) insist that you just 'agree'? ;-)
"Also cultures ebb and flow. I wrote a dissertation many years ago on cultural change defining the high spot as when the established perspective considers itself invulnerable. The Greeks called this hubris and usually the decline sets in at that point. The greatness in a culture is how it struggles to define itself. Look at our art and you can see the decrepitude that surround us."
The Greeks also called it narcissism. Psychologists treat narcissism and psychopathy as closely related as they are on Axis II, Cluster B of DSM-IV. These (extremes of normal human personality) share half their Factor Structure. I have repeatedly pointed out that the narcissism and celebritism which dominate Liberal-Democracy is Jewish in origin and that this disorder is both central to predatory, yet ineffective (but very expensive) psychoanalysis, whilst also being promoted by (again largely Jewish) anarchists who criticise/subvert Western Culture see The Frankfurt and Austrian Schools. It's been cleverly done whilst Chicago School Neocons have gone on Jihad.
"There is not doubt that our prevailing culture is in decline."
And who has engineered that?
"However, what will be the shape of the decline and how will it work through into a new paradigm are the things to work for now."
But the very regulation (statism) which prevents such dysgenesis has been vilified by the very anarchists which you and others still revere! I suspect you honestly don't see this.
"By all means be dystopian but this does not mean one should give up hope. By not giving up we redefine and turn the decline into something more hopeful."
The only hope is to reverse the anarchism which people such as yourself have helped to encourage (unwittingly maybe). A first step towards doing that, is, I suggest, to recognise the nefarious rhetoric which you and others like you are so prone to peddle. Are you interested in doing that? Hint, it is like fiction writing - look out for intensinal idioms. Fiction reads well because it's detached from real world constraints. cf. Harry Potter, or David Cameron's speech today.
This may be a lot for some to take on board, but it appears to be true. :-(
Complain about this comment
stanilic (#109) "Sorry, JJ I learned from an early age to deal with authoritarian personalities and you are a classic."
For those who don't know, the main author of 'The Authoritarian Personality' was Theadore Adorno, a member of The Frankfurt School! Another was Herbert Marcuse. These are some of the fathers of Political Correctness. The term 'lived experience' (erlebnis) is a Phenomenological notion, central to Husserl and Derrida (deconstructivism)....it refers to unconceptualised, subjective, pre-logical, solipistic (narcissistic) experience - e.g. the experience of infants.
This is Jewish anarchism, and it has served free-market financial services just dandy, as it took people's eyes off empirical reality and social responsibility which requires empathy, mitwelt not eigenwelt experience ;-)
You see stanilic, I know this stuff too. Possibly better than you do. The problem is that it is not benevolent tuff, it is predator and destructive. The vulnerable are the ones who lose out.
It's time for you to grow/wise up. Have a look at the ETS report. Have a look at some of the behaviour genetics work, (there's a 5th edition of Plomin et. al's textbook out).
Our politicians are clueless as it suits business for that to be so. I suspect the Chinese leaders are not clueless at all. :-(
Complain about this comment
JJ 110
`Psychologists treat narcissism and psychopathy as closely related as they are on Axis II, Cluster B of DSM-IV.'
No doubt they do all of that but similarly it might be MC5: KOTJ-MF.
I note you use the word `engineered' in reference to my comment as to cultural decline.
It is not engineered as this implies a purpose and that in turn implies an agent to engineer. There isn't a purpose: it has just happened.
Nobody is in control! How many more times do I have to tell you!
Complain about this comment
#111 Jadedjean. So you suspect that Chinese leaders are not clueless at all. Is this suspicion based on evidence or is it that you are reverting to an unconceptualised, subjective, pre-logical, solipistic writing style.
Try this. It may help you to see more clearly through the thickening fog of your own verbosity.
http://globaleconomicanalysis.blogspot.com/2009/10/competitive-currency-debasement-look-at.html
You see it is full spectrum meltdown that awaits
Complain about this comment
111 - Garbage.
http://en.wikipedia.org/wiki/Anarchism
Complain about this comment
No 99 "I wasn't just trying to be clever - honest. UK exports to the USA have been falling in both volume and value for over 25 years."
Oh, I accept that my info in that direction may be out of date because I had not been paying too much attention to that direction. For various professional and personal economic reasons, I had been focused far more on the East, especially the Far East. Just this morning, I received some info that might result in some dosh, enough to buy a few beers !! :-)
Complain about this comment
Obviously I wouldn't want to argue with all the moralising and criticising going on here, but I'd just like to point out that after the Second World War Britain had a national debt of over 400% of GDP. At no point were we threatened by the prospect of not being able to borrow, and it was only after the war, when the american's called in the loan, that Britain had to seriously consider it's position.
Debt is a problem, but it is not an immediate one. The idea that we need to act now with a deficit of 40-60% rising to 80-100% of GDP under conservative predicitions from the national statistics office is completely absurd. Have we forgotten the success of the conservative govt in bringing about an end to all this austerity after Atlee's rationing, and how by encouraging free-spending Britain grew out of her obligations? A national debt of this magnitude is not all that large by international standards. What is more, panicking and cutting spending and raising taxes will put a lot of pressure on a weak recovery.
If we are not careful we could see a return to the stagnation of the interwar years when spending cuts led to very sluggish growth in Western Europe. Keynes warned us, we should really know better by now than to trust in the self-correcting market mechanism. I don't want cuts in national spending now. We need to wait. We can pay off the debt when the economy is booming again, not while unemployment is still rising. The Bullingdon Club might not suffer all that much if general taxation rises but ordinary people will. I don't buy into all this false bravado from the politicians. They want to look as if they are taking tough choices. They are not. They are taking weak choices, they are bowing to the will of the city and the firms that want to see high yields on government debt amongst other things. The ratings firms say Britain needs to improve it's balance sheet to maintain its AAA rating. These are those same ratings firms that labelled mortgage securities as AAA. They were happy to do it then when they were bullish. Now they are overreacting the other way.
The money we pay back now will go towards improving balance sheets and increasing city pay packets and bonuses, it will go to shoring up company finances and maintaining profit margins, but it won't help the rest of the economy. The financial markets, the politicians, the multinational firms, the rich mogul-owned newspapers; all of them are in lock-step over this.
Why? Because this is a false economy. It will bring hardship on us to repay the mistakes made by the rich executives. They want to maintain the profits from boom time in a recession. They fired their workers, they lose staff at a drop of the hat, yet they pay themselves the same over-inflated salaries. Yet they want us to bear the brunt of the cost. We shouldn't tolerate it. They should have to make sacrifices too, i.e. corporate profitablity should fall, staff should be kept on. We should hold onto those bank shares until the market is booming again, not sell them at the first opportunity. Life is returning to the corporate world. They want the government to sell off all it's assets to the private sector so they can ride the recovery while taxpayers pay off the debts left behind. We should say no. Not yet. We'll pay back our debt when we can best afford to, until then we will simply meet the interest payments, no more. Our city compatriots aren't stupid, we shouldn't be either. When they needed help they got money, they got time. They should afford the public sector the same luxury.
Complain about this comment
No 100 "Oh no! NOT the Little Red Book? Not the longest journey bit - AGAIN?"
In keeping with the times, I thought I'd bring this up since they just celebrated 60 years of Communist rule over China !! Strange how capitalist they all look !! :-)
Complain about this comment
JJ 111
I always preferred Alex Fromm myself but with a name like that I expect you would have burned his work.
I see we are now into phenomenology as well. I prefer to avoid these long words as they tend to confuse. But it is a good idea, isn't it as it defines your research in the infantile terms in which you seek to possess it.
Might I suggest that the only use for excrement is to let it rot and then spread it on the fields as fertiliser.
Complain about this comment
No 102 "That was forty years ago and I have never read them."
Perhaps you should make some small effort at reading them. If you cut out all the turgidity and the political claptrap, his thoughts on strategy and tactics are actually quite excellent. The fact that he openly admitted that he nicked most of them from historic writings and events is merely a very Chinese way of giving his thoughts some semblance of scholarship and validity !!
Most of those strategic and tactical concepts and lessons are *STILL* applicable to businesses to this day. On book that all good Chinese businessmen possess or have read/studied is "The Art of War" by Sun Tzu !! To the East Asians, "Business = War by other means" !! The same applies to the economy.
Complain about this comment
No 103 "the problem we have now is that no political party is really being honest about the facts or the choices. "
Wasn't there some old saw about politicians and honesty being mutually exclusive ?? :-)
"Finally, the government could always solve the funding gap by printing more money and paying it's bills that way but then you're on the road to a serious inflationary problem ......... will history repeat itself???"
Perhaps this government will get good economic advice from another bunch of good Socialists - the Zanu-Piaf. They have a huge economy. Why, they have $100,000,000,000,000 notes (one hundred trillion)!! :-)
Complain about this comment
No 104 "My theories are no longer theories; they work and they work well."
When all is said and done, there's no substitute for the School of Hard Knocks !! Been there, seen it, studied there !! :-)
Complain about this comment
ishkandar (#121) "When all is said and done, there's no substitute for the School of Hard Knocks !! Been there, seen it, studied there !! :-)"
Clearly not in some people's cases. Life does indeed put dents in most normal people's infantile/adolescent narcissism, just not that of anarchists (free-marketeer libertarians). These are the chosen ones. Their bombs are conceptual. Front line staff in education, the CJS and NHS etc have to deal with a self-centred, violent, demanding public spawned by decades of these anarchists on a aily basis, and those responsible remain largely clueless, if not proud of their behaviour!
Complain about this comment
No 108 "Also cultures ebb and flow. I wrote a dissertation many years ago on cultural change defining the high spot as when the established perspective considers itself invulnerable."
For more than 5,000 years, the fortunes of both India and China have ebbed and flowed !! As you rightly pointed out, the point of failure begins when they have maximum belief in their own invulnerability !! The point of maximum hubris !!
The trouble is that at that point, they are at their least willing to listen to contrary views. Hubris kicks in even as the barbarians are hammering down the gates !!
Perhaps this applies to Pax Americana as we are seeing the "Decline and Fall of the American Empire" !!
Complain about this comment
No 166 "Obviously I wouldn't want to argue with all the moralising and criticising going on here, but I'd just like to point out that after the Second World War Britain had a national debt of over 400% of GDP."
I would like to point out that this is a totally misleading statistic !! After WW2, Britain still had the wealth of the empire to draw on !! Therefore, comparing the empire's debt to local GDP is meaningless.
"I don't want cuts in national spending now. We need to wait. We can pay off the debt when the economy is booming again, not while unemployment is still rising."
Perhaps but will the creditors be willing to wait ?? What guarantees are there that their loans will be worth anything at all by the time you get round to paying them back. This is where the specter of quantitative easing (printing money) comes back to haunt us !! Boiled down to its basics, can any one trust us when our actions send out a contrary message ??
Complain about this comment
INFANTILE DISORDERS
armagediontimes (#113) "So you suspect that Chinese leaders are not clueless at all. Is this suspicion based on evidence or is it that you are reverting to an unconceptualised, subjective, pre-logical, solipsistic writing style."
Yes, I hear they'r trained in engineering etc. They don't take any old riff-raff inThe party you know! Intelligence comes in handy when planning and running stuff. You can bet stanilic doesn't tell doctors, dentists, engineers etc that he isn't impressed by all their science stuff (anarchists are are two-faced and have poor self-perception, it's an aspect of their grandiosity)
PS. Look up erlebnis and solipsism, and whilst you're at it, separation-individuation in development - it's a growing up thing.
Complain about this comment
ishkandar (#123) "Perhaps this applies to Pax Americana as we are seeing the "Decline and Fall of the American Empire" !!"
You're really not paying attention are you? ;-)
Sometimes, what seems like theory, is just concrete processes which one is personally unfamiliar with.....like a foreign language....
Complain about this comment
119 alexander
Mao was an exceedingly poor general. He likes to talk about his military genius but he never actaully commanded a successful army in the field. He was fortunate in having some exceptional generals in his party.
Mao was a brilliant politician but his economics was far, far worse than his generalship.
I understand a grandson of his is now a general in the PLA. I doubt if the PLA are pinning their success on genetic behaviouralism.
Complain about this comment
120 ishkandar
`Zanu-Piaf'?
Are they the section of Zanu that regrets nothing?
Complain about this comment
Ishkandar. The creditors are the world's financial markets. There is no shortage of demand for government debt because:
a)The British Government doesn't default on it's loans; it never has and it is seen as the safest form of investment for that reason. No matter how stupid a mess any govt may get us into we have a perfect record on this score. The Tory scares about losing bond rating were just that - scares. I don't think they believed it themselves, they were using it to highlight the story. No credible source agreed with that assertion (although some journalists did which is an indictment of the way media can be relied on to make stories out of non-stories)
b)In a recession govt debt in the form of bonds tends to rise in value as investors look for a safe haven. We have secured a lot of funding capacity but now investors are recovering confidence and moving back into equities.
There is no danger that creditors will demand debt back, that is just a silly scare story employed by our city friends. Any academic economist will tell you this, but most of our economic coverage comes from the financial markets these days as economists are loathe to make predictions given their appalling track record, and hence hold little media attention, the city however has no such qualms.
You also suggest that the empire gave us huge wealth. In fact the empire was a huge drag on funds, we had to maintain embassies, consulates, standing armies to keep order and a whole lot more, and it was our dire financial strait after the second world war which gave such momentum to all the independent states created shortly afterwards.
Nowadays Britain is a much larger economy and actually has many more assets, hard as it may be to believe. But the point is this. As a nominal figure the debt is a record one. But in proportion to our assets it is actually not that large, certainly not by historic standards. The best analogy is if you assume our country is a house, it now has a much larger mortgage than before, say £1 trillion for argument's sake. However, it is now worth £6 trillion. Our annual income is in the region of £200 billion say, and our expenses are £222 billion or an 11% deficit. The cost of financing our debt (included in our expenses figure) is probably around £30 billion.
If we don't address the situation then our debt will continue to grow, and we will see the deficit very slowly rise. But the interest rate is very low, only a couple of percent and it is long term, so we don't have to pay any back yet. And when it comes to the time that we do we could simply refinance and issue more government bonds. However, while the debt is not that variable our tax income and expenditure is. While we are running a large 11% deficit at the moment, a lot of that is due to the countercyclical nature of our system - i.e. higher benefits payments as people are out of work, lower taxes for the same reason, special funds to bail out banks etc. There will be a substantial swing in our fortunes as the economy turns around because our payments are designed to rise in a recession and fall in a recovery. But they do lag the recession itself as unemployment is a lagging variable, it changes after the event.
All the Parties are talking about cutting expenditure and raising taxes, and the Tories want to do it now. This is needless and potentially damaging. To their credit Labour have said they will wait but even they are moving the schedule forward and giving in to the doom mongering arguments. The simple fact is we don't have to pay yet, so we shouldn't We should not give in to the pressure from the financial markets who want the yield to rise on these bonds as the government repays early. And we should wait for tax revenue to recover to see how much we actually need to pay, because there is a chance that the economy will fair better than people are predicting, and all the cuts will be needless pain. If we behave as the markets want we will reassure those few who genuinely believe there is some doubt as to the resolve of the government to tackle the problem of growing national debt. Some argue that will restore confidence. But the real way to restore confidence is to restore growth, and that means spending money to stimulate new investment.
If we give money towards these schemes we will reinforce the markets faith in government funds. But it doesn't need reassuring, because our finances are solid. And the cost of doing so will be to harm the less well protected areas of our economy. In doing so we will satisfy large creditor organisations at the expense of the day to day businesses that rely on higher govt spending, and at the expense of consumers and businesses that need consumer spending as we reduce the purchasing power of the public sector. Keynes said that an uncertain future causes people to hold on to money that they would otherwise spend in a confident economy. His liquidity theory has been perfectly demonstrated in this crisis. Banks stopped lending to each other because they were no longer sure that people would be able to pay them back. This had a knock on effect. If the government responds in a similar vein and cuts spending or reduces the purchasing power of others then short-term business will suffer. And that will cause people to lose confidence in the short-term future. We would put our recovery at risk.
If we wait for a genuine recovery then we can recoup the money when it will dent confidence less, e.g. when markets feel that consumer spending is strong. The stock market has risen a lot recently and in the financial markets there is a growing feeling that economic recovery is well under way. But stock markets are leading indicators, they are ahead of real businesses in the recovery and don't have an accurate picture of the current situation. When they put pressure on the govt to sure up its position they do so without perfect information, and in so doing threaten to undermine the fragile recovery seen so far. We should wait. It is not imperative to satisfy the demands of the debt-averse conservative financiers when they are being unreasonably pessimistic about govt finances. The markets overreacted one way, now they have gone the other way. In the long term our finances are in no trouble, and we should not jeopardise long-term public sector projects to satisfy short-term sentiment-driven market opinion. They lent us the money, they were willing to lend at the returns offered then. They want it back to take advantage of cheap assets in the marketplace, but we need to protect our public sector projects instead of feeding the markets whims.
Complain about this comment
125 JJ
I have told my doctor to go forth and multiply: but not in the biblical sense if you understand my meaning. But then you probably won't.
My dentist is a bit leary about me but being a paying patient he puts up with my, to him, strange humours.
I don't have problems with engineers as they speak plainly and as one professional to another I recognise the value of their skills. To revert to yet another biblical analogy: the labourer is worthy of his hire.
Sadly for you, I have not time for cranks. Who on earth would employ a crank?
Complain about this comment
#125 Jadedjean. You are not paying attention are you. The Chinese are also heavily into money printing - the only thing that engineers will bring to the party is the ability to mend the money printing machines and hence print faster.
It is full spectrum meltdown.
Complain about this comment
#129 How do you know that the interest rate is very low? You never heard of deflation? Walmart have!
Complain about this comment
stanilic (#127) "I understand a grandson of his is now a general in the PLA. I doubt if the PLA are pinning their success on genetic behaviouralism."
It's behaviour genetics. I suggest you read some of Plomim et al.'s text book (5th edition).
China passed eugenics legislation in 1995.
As a Stalinist, Mao gets bad press from anarchists and many other Jewish persons. Stalinists regulate and are bad for business. Like Hitler in the 1930s, Stalin gave his 'cosmopolitans' a bad time. It's essentially why Neocons (anarchists/Trotskyites/free-marketeers) went on jihad across the globe against 'auhoritarians' whilst undermining statism at home. It was good for their economy ;-)
Would they want to employ 'cranks' likely to blow their cover whilst on Jihad against 'terrorists'? Probably not, but a few more are now just a bit wiser as to what your anarchistic friends were up to. Note how the 'war on terror' is fading?
Complain about this comment
armagediontimes (#131) "You are not paying attention are you. The Chinese are also heavily into money printing - the only thing that engineers will bring to the party is the ability to mend the money printing machines and hence print faster.
It is full spectrum meltdown."
The PRC is socialist, not capitalist. The USSR also experimented with capitalism in the late 1920s (the NEP). Next thing you know, the USA's financial system crashed..... ;-)
Complain about this comment
stanilic (#118) "I always preferred Alex Fromm myself but with a name like that I expect you would have burned his work."
I read Eric Fromm. I don't know of Alex....
Complain about this comment
No 129 "The British Government doesn't default on it's loans; it never has and it is seen as the safest form of investment for that reason"
It is not default that most creditors are scared of by devaluation of the currency. It is the total value of the loan and interest that counts and not the interest alone or the repayments. That's why the interest rates vary according to the perceived risks of not getting back the value of the loan and some increase in terms of interests.
"You also suggest that the empire gave us huge wealth. In fact the empire was a huge drag on funds, we had to maintain embassies, consulates, standing armies to keep order and a whole lot more, and it was our dire financial strait after the second world war which gave such momentum to all the independent states created shortly afterwards."
Firstly, there are *NO* embassies and consulates within the empire !! There were Governors and Civil Service !! And the wealth from the empire far outweighed the cost of maintaining it.
Secondly, there were very few instances of the colonies breaking away through armed conflict. Most were given independence through a smooth transition process. The most spectacular breakaway of a colony occurred on or after 1776 when those colonials across the pond decided that they didn't like tea and dumped a lot of it into the harbour !!
"But the interest rate is very low, only a couple of percent and it is long term, so we don't have to pay any back yet."
well, the interest rate by the BoE may be low but the Gilts cannot be based on BoE rates if it wants to attract foreign creditors. Otherwise, it becomes an ever decreasing spiral down to oblivion when locally printed is used to buy Gilts which are then used to support printing more local money. And the International markets demand interest rates commensurate with the perceived risks of the Gilts.
Furthermore, most Gilts are, by definition, short to medium term instruments. Long term Gilts are rare and getting rarer. There is simply not the demand for long term Gilts. The future is too uncertain and the risks are too high, so the interest rate has to be high enough or there will be no demand.
"The simple fact is we don't have to pay yet, so we shouldn't We should not give in to the pressure from the financial markets who want the yield to rise on these bonds as the government repays early."
First you say that "The British Government doesn't default on it's loans" and then you are suggesting that they do that very same thing. Not paying means defaulting !! The only way not to pay out money, as opposed to not paying off the loan, is to roll over that loan in the markets, i.e. borrow more money in order to pay off the old loan and the accompanying interest(s). To do that, the new loans have to bear the rates as is currently perceived and, therefore, will not be low.
"And we should wait for tax revenue to recover to see how much we actually need to pay, because there is a chance that the economy will fair better than people are predicting, and all the cuts will be needless pain."
This is very similar to maxing the mortgage and credit cards and then telling the bank to wait while the house appreciates in price !!
"But the real way to restore confidence is to restore growth, and that means spending money to stimulate new investment."
To spend money, there must be money available to spend. When the creditors are not repaid, they will be unwilling to lend more. Having maxed the mortgage, the bank will not lend you more to spend !! Not repaying the loans is what sub-prime mortgages are all about !! To lend more on top of a sub-prime mortgage is just what any bank or creditor do not want to do any more !!
"Banks stopped lending to each other because they were no longer sure that people would be able to pay them back. This had a knock on effect. If the government responds in a similar vein and cuts spending or reduces the purchasing power of others then short-term business will suffer. And that will cause people to lose confidence in the short-term future. We would put our recovery at risk."
And by not repaying the loans, Britain will be put at risk with the international markets and that will have a knock on effect in any ability to import the raw materials needed for manufacturing goods for export. No raw materials = no manufacturing = no exports = no recovery !!
"The stock market has risen a lot recently ..."
But there was no account taken of the devalued quid. When that is factored in, the rises are not that significant at all. Furthermore, stock markets prices are perceptions and not absolute reality. As the saying goes, it can go down as well as up !! And it can change swiftly from one day to the next.
When RBS was perceived to be going down the tubes, its price hit rock bottom but when the "rescue package" was announced, it shot back up !! All this without the bank announcing any concrete profits or losses in that intervening time.
Finally....
"They lent us the money, they were willing to lend at the returns offered then. They want it back to take advantage of cheap assets in the marketplace, but we need to protect our public sector projects instead of feeding the markets whims."
The creditors cannot withdraw their loans before their terms are up. However, when their terms are up, they have a right to be repaid or the debtor will be in default. It does not matter what they do with their money, they still have to be repaid what is due to them.
If you don't like what they do with their money, then you shouldn't have borrowed from them.
Complain about this comment
The Oxford english dictionary has several different definitions of anarchy
absence of government in a society
social and political disorder
doctrine that all governments should be abolished
Liberal also has several meanings
Directing to broadening of mind
Giving freely
favourable to democratic reform and individual liberty
Progressive
Benefitting the free man
There will be other definitions used by any given individual
Are the debates here using the same meanings for words?
Its my impression that they are not, sometimes.
If one uses the definition of anarchy to be social or political disorder, it is quite possible to see that there is disorder... 'we want to reduce CO2 emissions and we want a return to sustainable growth' or 'we want to reduce red tape and we want all of you to produce HIP packs when you want to sell your home' or 'we want an environment that's good for business but we'll increase employers national insurance contributions'.
These are simple examples but what are we supposed to make of these inconsistencies. Its not ordered.
Alternatively, if we use the definition of an absence of government we could all say we're drowning in legislation and regulation and therefore how could this be anarchic.
You can do the same sort of thing with liberal.
Yrs
Mrs Bloggs
Complain about this comment
Another anti-Jewish link from JadedJean at #133
The House Rules say that the BBC reserves the right to 'fail' messages that "are considered likely to disrupt, provoke, attack or offend others", "are racist, sexist, homophobic, sexually explicit, abusive or otherwise objectionable" or "contain links to other websites which break our Editorial Guidelines"
Moderators. have you properly read JadedJean's comments with continued references to Jews (and earlier to the Black community) whom she apparently blames for the problems of the world? Have you looked at some of the links? How much more 'racist' or 'otherwise objectionable' does it actually have to get?
For those who support unfettered "free-speech", there are plenty of other places where people can peddle their racists nonsense. The BBC, however, has a policy that what is written on its website is subject to some very basic rules.
I don't really know what is worse; reading these types of comments in the first place or concluding that the BBC apparently finds them acceptable.
Complain about this comment
#110 stanilic
bloody hell!...you were disected there....but perhaps you should feel privelidged that you were diesected by JJ.
You are both clearly very intelligent people.
You seem, like I consider myself, more of a real world person....but the intellect and logic of JJ is just incredible...she's like Dr. Spock.
Her historical and political knowledge is formidable. Never mind the genetic and epidemiological knowledge. The range is remarkable...don't you agree...it's almost bizarre!
Is she perhaps really...David Irving?
I'm sure she has a medical background.
Complain about this comment
#138 DistantTraveller. The BBC House rules also mention something about failing messages that are off topic. This is a blog about economics. Your post seems to be primarily concerned with Jews and censorship.
Why not enquire into the censorship that exists with regard to the balance sheets of large banks?
Complain about this comment
mrsbloggs13c2 (#137) I'm teaching you some real world politics.
Go and have a look at the www.mises.org site. Start with people like Von Mises, Hayek (watch The Road To Serfdom cartoon and look up the BBC two part Hayek video on youtube in elation to Thatcher). Then look up Murray Rothbard. The Mises site is the home of economic anarchism aka libertarianism.
Then try the Chicago School. Its also where the Neocons came from.
This is what drove the economic and political philosophy of the last 30 odd years or so. It's enemy is statism - as in Command Economics. It brought us deregulation, wars and economic disaster.
It may be unfamilir to you, but if you do as you are advised, you'll see I haven't been misleading anyone. This is why posts have not been pulled.
Complain about this comment
BankSlickerminustheR (#139) Stick to the analysis ;-)
Complain about this comment
DistantTraveller (#138) What do you make of this?
Do you have a problem with facts if they are unpalatable?
Complain about this comment
#143 Jadedjean. Why would you possibly think that the record of the British Parliament at a time of war would be likely to contain "facts" that by themsleves explain the origins and progress of the Russian revolution?
You may as well cite Hansard to prove that Iraq contained weapons of mass destruction.
As for Russia I have told you before "Russian cannot be understood with the mind" Tyuchev
Complain about this comment
#140 armagediontimes
I also raised the point about messages that are 'off-topic', (see #186, House Prices: Too good to be true). Yet these 'off topic' messages keep coming, complete with racist comments or links.
On that occasion (#192), you accused me of "sanctimonious ravings" and trying "to deny other people the access to the truth".
This is indeed supposed to be a blog about economics, hence my questions to the moderators about why they allow this off-topic bile repeatedly to hijack new threads. But ironically you see no problem with those types of comments - only anyone who questions them.
Complain about this comment
armagediontimes (#144) Churchill (1919) was citing Ludendorff. The facts are corroborated by many sources, the Bolsheviks were largely Jewish anarchists, many went over from NYC. Stalin changed the composition of the party in the 1930s, it became National Socialism. That's when US Jews started to turn against the USSR and towards Trotskyism (under Schactman) which later became Neoconservativism (university of Chicago), i.e what we've seen as economic anarchism/deregulation over recent decades. It's why the Muslims became so 'unpopular'.
Complain about this comment
#143
I note that JadedJean does not deny her earlier comments or links are anti-Jewish (eg #133).
She simply appears to justify them as "facts" (in her view).
Complain about this comment
DistantTraveller (#145) There's no bile, just careful analysis and history. These forces account for the economic crisis so are very much on topic. Group competition is not always done consciously. You have to look at outcomes. Have you looked at the demographics of NYC? Trying to censor this will do nobody any good, except, perhaps, those who created/profited from this mess. Where did it start?
As an aside, who were Blair and Brown's main fund managers?
Complain about this comment
#145 DistantTraveller. I believe in free speech, not least because a number of my forebears have died so that I may speak freely. It would be somewhat odd for me to seek to deny others a right that I claim for myself.
Most of what is written is rubbish, and most people have no problem identifying it for what it is. So, what is the problem?
Do you find it offensive? If so why do you not find it offensive that the Prime Minister of the UK welcomes the King of Saudi Arabia to London saying our two cultures share many interests and values. This in the full knowledge that the Saudi regime imprisons female rape victims and throws women back into burning buildings for no other reason than they are not wearing appropriate Islamic headress.
You tell me which is the greater problem?
Elsewhere on the BBC this evening you have some guy writing in to say we should stop killing Afghans because we can´t afford it. We could of course step up the killing if only the Americans would pay us for our efforts.
There is just too much to go around.
Complain about this comment
136
Hold on, I'm not suggesting we default on our loans. I'm not suggesting we don't meet the obligations of the loans. We have to pay that money back. What I mean is just as if we had taken out a low rate mortgage and we have an opportunity to max out our credit cards or cut our investments to zero to pay it back early doesn't mean we should. The rate we pay for our govt debt is low. We shouldn't repay the loan early by cutting our public sector investment which will earn a much greater return. That's just stupid.
Debt is not always a bad thing. There are many people who are making out like owing money spells financial ruin for Britain. It doesn't. We should pay back the minimum amount required for the time being. It isn't our creditors who are asking for the money back anyway. It's the financial "experts" who say we have a large debt and "quick we need to pay it before people lose all faith in the UK!" This is just not true. Debt is not some kind of pariah watchword in international financial markets. The US runs a huge structural deficit and the markets have never yet called time on it even with such patently idiotic spending plans as the ones instigated by the Bush presidency.
I agree that there was a lot of wealth in the empire. But we couldn't use it. We actually went to Congress to beg for a loan following the end of the war. The reason was we couldn't afford to continue financing our empire operations. Empire meant a large military and naval force. It meant trying to maintain the world's reserve currency. Congress dictated harsh terms to us in return for a loan - no more empire, no more reserve currency status for sterling, give British technology to the US. We lost the empire because we had to, because it cost too much. The empire was a financial burden by the end, and we couldn't afford it after the war because then we truly were on the verge of bankruptcy. Unlike now. Which is my point really. The austerity period after the war, the rationing the wage negotiations, trying to maintain a strong pound - all these strategies were employed by the postwar govt and they failed and Britain's growth lagged that of the rest of the Western world, even in an unprecedented golden age for growth under the fixed exchange rate system.
Right now the pound is weak and it is helping to allow some recovery in our battered manufacturing sector. Right now public sector spending is helping to keep people in work and keep spending at a reasonable level. And as the markets recover new investment will start to reemploy all the spare capacity left over from the recent recession. But if we act to correct public finances we will shoot ourselves in the foot - we will weaken domestic demand at the same time as weakening foreign demand by strengthening the pound. We will push our own consumers towards shopping abroad and limit demand for exports. We need to learn our lesson and accept public finances will be worse for a while, and concentrate on getting things moving again before tackling the issue of structural deficits, because tackling them now will only cause us more pain. Let us wait for the threat of inflation and use our deficit reduction scheme to reduce demand when it is too strong, not reduce it now when it is already weak. It's basic Keynesian economics, and whatever the monetarists may say it is still the best practice of modern political economy when recessions occur.
Complain about this comment
#141
Dear JJ
I have read The Road to Serfdom amongst other things.
My last comments were purely to suggest that some words used in entries here seem to be interpreted differently.
This does not help communication.
Yrs
Mrs Bloggs
Complain about this comment
STINKY GREEN SENTENCES
armagediontimes (#149) "Most of what is written is rubbish, and most people have no problem identifying it for what it is. So, what is the problem?"
Rubbish is not a erm use din logic or science, just rhetoric. It's used to smear something people don' usually like, for whatever reason. It's like calling a sentence or statement a nasty name, that's all.
If you are going to assert that statements are false, true, or logically meaningless, all well and good, but you then have to show how and why that is so, in order to makea a useful contribution, otherwise it's just empty, (usually ad hominem) nefarious rhetoric. Go easy on calling sentences 'rubbish', as it's rather like calling them, 'stinky', 'beautiful', 'brilliant' or 'green' etc - i.e it's just bad English - OK ? ;-)
Complain about this comment
GAVAGAI AND ENTRYISM
mrsbloggs13c2 (#151) "My last comments were purely to suggest that some words used in entries here seem to be interpreted differently."
I'm sure you are correct. However, plenty of context (as shown by the inline links) has been provided to make what I post clear, and sometimes, it's heuristically useful to let others hoist themselves by the own petards in order to teach them useful lessons. That many people reading these blogs do not understand the nature of anarchism is something which is regularly exploited by anarchists, who are prone to giving themselves makeovers - they don't like being exposed.
Outside the sciences, language is prone to interpretation and abuse.
Complain about this comment
153 JJ
Many people on these threads point out to you quite politely that your definition of anarchism is at best eccentric. I find it incredible that someone who presents themselves as intelligent can actually be so utterly ignorant about a term they use so enthusiastically.
Personally I find your use of this word abusive yet as your rightly say this hoists you on your own petard.
This all allows observations to made as to your mindset which I suspect is different to your colleagues than what appears here. I have long felt that there is a sense of phoneyness in what you present. The question is which is phoney: what you state here and what you present to your colleagues?
Complain about this comment
135 JJ
You spotted one of the deliberate mistakes then. Good work!
Complain about this comment
139 BankSlickerminustheR
I cannot be sliced up in argument because I am not in this to win. I am not a competitive person and I despise the grinding of axes.
To the contrary JadedJean's political and historical knowledge is quite pathetic for the simple reason it displays a set of arrant prejudices which undermine any academic credibility. All it does is intimidate and abuse. I have known someone similar to this before and it could be the same person but I follow a simple standard of no names no pack-drill.
I have suggested that the said person takes a more relaxed approach and seeks to enjoy their subject more, but that seems impossible for someone so permanently trapped in such a desparate emotional state they refuse to accept that they inhabit.
If life can't be fun then what is the point of it?
Complain about this comment
stanilic (#156) "To the contrary JadedJean political and historical knowledge is quite pathetic for the simple reason it displays a set of arrant prejudices which undermine any academic credibility."
With whom? You will note that I reference my posts. You do not.
"If life can't be fun then what is the point of it?"
Life is not about fun, and it doesn't have a point either, unless that is reproduction. This is now below replacement level across the anarchistic democracies except amongst non liberals. You need to learn what 'reinforcement is (especially negative reinforcement), it's not co-extensive with hedonism/reward.
However, you clearly won't be instructed, i.e. you will not learn. You are prejudiced and abusive to those who induce you to change in the light of empirical evidence.
The above is demonstrably true. The evidence is your verbal behaviour, and its recalcitrance.
Keep making your deliberate mistakes. It's a sign of narcissism, which, as I have said elsewhere, goes hand in hand with anarchism. Perhaps others will learn vicariously.
Complain about this comment
RE TheWalrusandtheNasriator
"a)The British Government doesn't default on it's loans; it never has and it is seen as the safest form of investment for that reason."
100% wrong. The British government most definitely has defaulted on its loans. It did so after the First World War and the consequences persisted into the Second. It would have defaulted in the 70s but for an IMF bailout.
"No matter how stupid a mess any govt may get us into we have a perfect record on this score."
Nope. Not even close.
"We have secured a lot of funding capacity but now investors are recovering confidence and moving back into equities."
Which should worry you, because while we may have secured a lot of funding up to this point, we will need to continue to do so out into the future - to the tune of at least £500 billion. Let's hope lending to the British government looks a better bet than investing in equities or other more financially secure countries.
"There is no danger that creditors will demand debt back,"
It's not a "danger", it's daily reality. Government bonds are repayable after fixed terms. They are being repaid all the time. The real danger is that the government won't be able to find buyers for the half a trillion pounds of debt that it is already committed to raise.
"Nowadays Britain is a much larger economy"
Relative to the world economy it is actually much smaller.
" and actually has many more assets, hard as it may be to believe."
That's because things that are false are hard to believe. Britain has been running a massive balance of trade deficit for decades. That's why so many of Britain's "assets" are in fact foreign owned.
"The cost of financing our debt (included in our expenses figure) is probably around £30 billion."
That's optimistic. It assumes that interest rates will remain at their present historic lows. That isn't likely but suppose they do. £30 billion is £500 from each and every person in this country - annually until the debt is repaid. And it's at the extreme low end of the likely cost.
"But the interest rate is very low, only a couple of percent and it is long term, so we don't have to pay any back yet. And when it comes to the time that we do we could simply refinance and issue more government bonds."
The "when it comes to the time" is complete nonsense. The time is now. We are already refinancing debt that the government ran up in the past - as well as piling up new debt at the rate of more than half a billion pounds per day.
"However, while the debt is not that variable"
It is increasing at the rate of nearly £200 billion per year. That's not what I would call "constant".
You have an amazingly complacent view of the state of both the public finances and the economy in general. We are in serious trouble and the situation is getting worse. There is a real paradox here. It is true that all the borrowing and money printing - oops, quantitative easing - are propping up the economy in the short term but that term is a lot shorter than you seem to realise. This leaves us with very few choices and they are all nasty. Re-paying the debt will hurt. Continuing to borrow, leads to some combination of currency crisis, inflation and IMF bailout, which itself is likely to lead to savage public spending cuts. You are clinging to the idea that there is some painless way to keep borrowing until "growth" solves all our problems. It's a fantasy.
Complain about this comment
hants_gw (#158) "That's because things that are false are hard to believe."
No, that's false. Things which are false are much easier to believe. See Harry Potter books, TV soaps, economists, politicians giving conference speeches and anarchists posting here. What's hard to believe is what's true (see some of my posts ;-). Pursuit of Truth (aka science) is very hard work and often unpalatable, so it's very hard to believe. One has to be bright and hard working to do science - it demands arduous training in tolerating getting stuff wrong most of the time, as well as inviting criticism from others.. OK?
Complain about this comment
RE: 159. JadedJean
"hants_gw (#158) "That's because things that are false are hard to believe."
No, that's false. Things which are false are much easier to believe."
How about if I change it to ...
"That's because things that are self-evidently false are hard to believe."
But then lots of people claimed to believe Brown's fairy tales about never cutting public sector spending ...
OK. You win.
"See Harry Potter books, TV soaps, economists, ..."
Harry Potter? False? You must be crazy. The current plan is to have magicians conjure money out of thin air. How could that work if Harry isn't real?
Complain about this comment
159 jj
Hantsgw writes an excellent on-topic post in response to soem sloppy and wishful thinking in a previous post. You choose to spin off on a single remark of his/hers, only to reveal that you have not taken care to appreciate or understand the context in which the poster made it.
"Pursuit of Truth (aka science) is very hard work and often unpalatable, so it's very hard to believe. One has to be bright and hard working to do science - it demands arduous training in tolerating getting stuff wrong most of the time, as well as inviting criticism from others.. OK?"
Possibly the most curious yet revealing thing you've ever said.
Complain about this comment
Stanilic (154) "Many people on these threads point out to you quite politely that your definition of anarchism is at best eccentric."
Such people are deluded. As a Behavioural Economist I go by what animals do, te outcome of their actions, not by what they like to describe themselves as doing. Many people are clueless about their own and others' behaviour. I am educating you. You are a poor learner.
The Austrian, Chicago and Frankfurt Schools are anarchistic. Go and study the Von Mises site and the USA/Liberal-Demoracies more carefully.
Complain about this comment
ThorntonHeathen (#161) "Pursuit of Truth (aka science) is very hard work and often unpalatable, so it's very hard to believe. One has to be bright and hard working to do science - it demands arduous training in tolerating getting stuff wrong most of the time, as well as inviting criticism from others.. OK?"
Possibly the most curious yet revealing thing you've ever said.
Does this mean that we can expect more sense from you in the future? I very much doubt it, but we'll see...
You are way out of your depth.
Complain about this comment
163 JJ
Some words of wisdom sent from my shallows, autumn sunlight rippling over the stones, way way down to the dark depths where you exist, a barnacle clinging to the rusting wreck of Mechanism:
2 quotes from Moral Clarity (Susan Neiman), found not after a lifetime of "science" (i.e. that which you purport to do) but after about 5 minutes on Google:
"Truth tells us how the world is; morality tells us how it ought to be" (Kant)
"Ideals, then, are irreducible. They are not things in the world like tables or chairs; they are not reducible to self-preservation or, its more developed form, self-interest; and, try as evolutionary psychologists might, they cannot be explained away by some genetic urge to propagate the species. Rather, the idealistic impulse is precisely the transcendence of what is, be it our biology or our environment. Idealism defines our humanity."
Complain about this comment
#152 Jadedjean. This is a blog not an intellectual journal. There is no imperative that I write in precise scientific terms. My words were easy enough to understand - you understood without a problem.
If you want to know what the rubbish (as that term is used in the vernacular) is, fair enough.
You have only the most basic grasp of Russian history, and rely almost exclusively on selective and obviously tainted sources to inform your knowledge. Read some proper history.
You admiration for the PRC makes no allowance for the fact their economy also faces a lot of problems, and that a lot of mistakes have been made in their allowing themselves to get so deeply sucked into the "US $ trap" They will probably get out of it, but not without a lot of pain.
As if to prove my point, you write in #157 "Life is not about fun" Well you can think what you want, but you have absolutely no right to assume that others do or should follow this stricture. You are as bad as the censorship brigade. if I want to have fun then I will, and for so long as I cause you no harm it is not your business. You want to be miserable then you can be - it´s not my business.
Why do you keep writing about Jews? I know a lot of Jewish people, they are like everyone else, some are OK some get on my nerves. So Jewish people tend to know other Jewish people, and sometimes they act in groups to do things that are designed to advance their own self interest. Wow! What an insight. Imagine if you were a native American you could have a field day with the conspiracy of the white European. it would all be true - but that doesn´t mean that white Europeans are sitting around constantly plotting to do harm to Native Americans or that white Europeans glory in the near extermination of that race. it is just part of history, albeit an unpeleasant and disturbing part of history.
Even if everything you say is true, what solutions does it offer? None at all is the amswer, it is the ultimate in nihilsm. This is meltdown, here and now, today, not in the future. It is all here today. Even if the problems were in a generations time you still have no solutions. Nothing that you argue is radically different from things like the GIA. All very intersting in theory, but absolute inanity when given any parctical manifestation. There are loads of examples.
Why write in the public domain using your own personal language. No-one recognises your unique definition of "Anarchy" - so why use it, other than to confuse and to bother people?
You have some useful insights, and you draw out the doublethink that a lot of people seem to have subliminaly slipped into. That is why I said "most" and not "all."
As someone else has told you, those of us that believe in freedom grant you the right to write what you wish, say what you wish and to think what you wish. Should your ideas be given practical manifestation I would be one of the first people to be put up against the wall and shot. But it bothers me not at all.
Complain about this comment
162 JJ
This reminds me of that old story about the Ulster Rifles being welcomed home after the First World War. There were 599 men marching in step but one. The mother of that one shouted `Look at how clever is our Jimmy, he's the only one marching in step'.
You complain that I do not reference my posts. Why should I as I am writing within a general frame of reference? This is a forum for the exchange of opinions not the pursuit of an academic discipline. Perhaps you feel that you have to evidence your arguments because you are seeking to impose a wholly contrary view. That is your choice: although having followed a few of your references through I am just puzzled as to what you are trying to say. Perhaps too much information confuses!
I am here as an equal to anyone else seeking an exchange of opinion. This allows one to see other people's point of view and perhaps accomodate their opinion in with one's own. This place exists within the context of human conversation; this means discussion, negotiation and compromise. Even humour is allowed from time to time.
Unfortunately JJ you have an attitude that comes across as more than a little bit arrogant. There is no negotiation or compromise when discussing with you as we are all just shouted down. Your expectation seems to be that others have to conform to what you want. I am sorry JJ, but what is so special about you?
For an obviously intelligent adult you can be astonishingly childish. Now please take this as an opportunity, as I have suggested to you before, to try to round off the sharp edges and rejoin the human race. I have never given up hope on anyone as we all have a good side. I can only ask you not to be too scared to show it.
Complain about this comment
INTENSIONAL OPACITY
armagediontimes (#165) "You have only the most basic grasp of Russian history, and rely almost exclusively on selective and obviously tainted sources to inform your knowledge. Read some proper history."
(#144) "As for Russia I have told you before "Russian cannot be understood with the mind" Tyuchev"
A tall order don't you think?
People and intensions eh? Who'd 'ave 'em? ;-)
Complain about this comment
stanilic (#166) "I am here as an equal to anyone else seeking an exchange of opinion....
//
Unfortunately JJ you have an attitude that comes across as more than a little bit arrogant. There is no negotiation or compromise when discussing with you as we are all just shouted down. Your expectation seems to be that others have to conform to what you want. I am sorry JJ, but what is so special about you?"
The point you're not grasping is that I'm not opining, I'm posting facts (most of the time). There is an important difference. When I'm not doing that, I'm pointing out logical and empirical errors which all too many others are prone to make in our sadly anarchistic/confused times.
Do you want to learn the error of your (and others') intensional ways or not? That's the easy bit. That hard part is the behavioural genetics and demographics. I warn you, the latter is quite dull. Explanatorily powerful, but dull. In fact, I've already covered the gist of it.
Complain about this comment
View these comments in RSS