Alan Johnson and his deficit thoughts
Alan Johnson doesn't need a detailed plan to cut the deficit. When you're several years from a general election, it's the government's job to provide details, and the opposition's to respond.
That is probably just as well, because on the basis of his speech today, Mr Johnson doesn't have a plan. Instead he has a series of thoughts about the economy and the deficit, which do not necessarily add up to a coherent whole.
Thought number one, as Nick Robinson has said, is "Tiaa": There Is An Alternative to the government's approach. This argument goes: we do not need to cut borrowing as fast as the coalition suggests - indeed, it may not even be possible to do so, given the possible downside effect on economic growth.
That is, of course, the big debate - which has been thrashed out many times at this blog - see, for example, The case for Mr Osborne's austerity, The case against Mr Osborne's austerity and Austerity plans: Where do you stand?.
But note one key part of his argument is that the government's plan "has more to do with the date of the next general election than the economic cycle".
That is true. If there were no such thing as elections, there would be no obvious reason to eliminate the structural deficit in four years, rather than six. But this is a Parliamentary democracy, and that makes the electoral cycle highly relevant to investors when they assess whether a country's plans to cut borrowing are credible.
Rightly or wrongly, supporters of the government's approach think that investors only look at what governments commit themselves to doing before the next election. They do not think much of commitments to cut after that, when somebody else may be in control.
In the chancellor's view, he had to prove he was serious about cutting the deficit, or else risk a loss of confidence in Britain's public finances and a big rise in UK borrowing costs. The best way to show he was serious was to promise to get the hard work done before the next election.
So yes: there were political reasons to let the Parliamentary term set the timetable for cuts. The government would like to have room for some good news - probably tax cuts - in time for the next election. But its focus on the markets gives it an economic reason to do so as well.
Thought number two: it would be good for the recovery to cut public investment less than the coalition currently plans. That is a perfectly intelligent position, which many business groups would agree with - see my piece below.
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As Mr Johnson points out, the Office for Budget Responsibility (OBR) estimates that cuts in capital investment hit the economy much harder than either cuts in current spending or tax rises. It reckons that a 1%-of-GDP fall in public investment will cut national income by 1% as well, but if you save that money by raising taxes, the hit to the economy in the short term would be only 0.3%, or slightly more in the case of VAT. A 1%-of-GDP fall in current spending would hit national income by around 0.6% - see the table on page 95 of the June Budget document.
Given this background, the shadow chancellor is naturally shocked to discover that the government plans to cut capital spending by 33% in real terms by 2014-15. As it happens, Alistair Darling planned to cut it by about 31%. Presumably he's shocked by that as well.
He wants to cut by half that amount - that is, around 17%. According to the government, that would cost about £10bn. He says around £5bn of that would come from taxing the banks, which would be on top of the roughly £2.5bn a year that the coalition is hoping to raise from the same source.
Thought number three: Labour will not oppose all of the benefit cuts proposed by the coalition, but Mr Johnson doesn't see many that he likes. There's a thumbs-up for reforming the Disability Living Allowance ("provided it is done properly"). That raises just over £1bn. He also says, oddly, that he would endorse a short-term move to uprate benefits in line with the consumer prices index (CPI) instead of the retail price index (RPI), but only "ensuring that benefits do not fall behind earnings in the next few years".
I say "oddly" because the decision to uprate in line with CPI almost guarantees that benefits rise more slowly than earnings. That's why it saves so much money. The index of average earnings across the economy rose 38% between 2000 and 2009. Over that period, the RPI rose 43 % - slightly faster. The CPI rose by 19%.
The speech is being read as an endorsement of the change to CPI, at least for the next few years. Perhaps that is because earnings are expected to grow more slowly over this period than they have in the past. That is quite possible. But it's a big caveat to add if you want to pocket the nearly £4bn a year in savings that this proposal would bring.
Finally, there is thought number four: Labour would stick to Mr Darling's plan to halve the deficit by 2013-14, but with departmental spending cuts of 8% over four years, not 14% - or 10%, as per Mr Darling. And there will be no increases in personal taxes "beyond those already announced".
Is that possible? Start by thinking about what that deficit target would mean. The latest OBR estimate for borrowing in 2009-10 is 11% of GDP, so Labour would need to bring that down to 5.5% of GDP by 2013-14, compared to the 3.5% now forecast by the government. That gives the shadow chancellor roughly 2% of GDP to play with - or about £30bn in spending cuts over the next four years that he does not need to find.
Mr Johnson reckons that cutting departments by 8% instead of 14% means cutting public services by £27bn less than the government, of which £10bn would come through more generous plans for capital investment. It is difficult to make this comparison, because the 14% applies to 2014-15, not 2013-14. For what it's worth, I get £25bn, but we're in the same ballpark.
However, he still has to give us a sense of where that 8% - or roughly £30bn - in spending cuts that he would support would come from. Especially when Labour has rejected the £6bn in spending cuts that the coalition has found for 2010-11, and rejected at least £6bn of the £11bn the government is looking to raise from the benefit system by 2014-15.
Mr Johnson says that Mr Darling had already explained where £20bn in spending cuts would come from, in the March Budget. He didn't. He provided around £10bn in concrete reductions, including a freeze in public-sector pay. The rest were "efficiency savings" which, as the Institute for Fiscal Studies commented at the time, did not mean anything until the implications were spelled out for individual budgets.
If he is going to "spend" most of the room that a looser deficit target brings him, the shadow chancellor has also to explain how he is going to avoid the government's £12bn VAT hike with only a £5bn increase in bank taxes and "no personal tax increases other than those already announced."
But that would be an alternative Budget. As I said at the start, a shadow chancellor doesn't need one this far from an election, and just two days before the government's own spending review is announced.
The big message of today's speech is that Labour would cut the deficit more slowly than the government, and that would give it room to cut spending by around £30bn less than the government plans between now and 2014-15 - if Labour is right that it could loosen borrowing by that much and not send the government's cost of borrowing through the roof.
For my money, the hidden message is that if Mr Johnson did have to come up with an alternative Budget, at short notice, he would find it difficult to do so without swallowing some or all of that "terrible" rise in VAT.
I'm 
Comment number 1.
At 19:11 18th Oct 2010, jim3227 wrote:Miss Flanders is doing a good job of championing the Labour parties line as usual .Its true they dont need to come up with a budget . But I think if they want us to take them seriously they will have to give us an alternative to any cuts they do not support.
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Comment number 2.
At 19:26 18th Oct 2010, MetalGasket wrote:The big message of today's speech is that Labour would cut the deficit more slowly than the government, and that would give it room to cut spending by around £30bn less than the government plans between now and 2014-15 - if Labour is right that it could loosen borrowing by that much and not send the government's cost of borrowing through the roof.
Mr Johnson
It may not be too late. Before the brainwashing, you may have already received from the idiots that teach mainstream economics, infects you completely, please spend a day being debriefed.
http://bilbo.economicoutlook.net/blog/?cat=11
There are about 20 primers here. Start with the oldest.
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Comment number 3.
At 19:35 18th Oct 2010, watriler wrote:Consistency is the preoccupation of the small man. Labour should not be burdened by the many transgressions of the New Labour administration even if the current line up has some who share the guilt. The important thing is to not just to fail to harm the recovery but to use the public sector to foster it. Just how many of the 35 signatories supporting G Osborne have plans to create thousands of jobs that redundant civil servants (and others)can move to? Labour should be ready for the kill when it becomes clear that nose diving the public sector economy does real harm to the private sector smothering the recovery.
Furthermore Labour should be warning the public that what this government is all about is destroying the consensus on the welfare state - that even survived Mrs Thatcher. Cleggmeron and Osborne are in the business of reinventing the poor law and Americanising our social policy. The deficit argument is essentially a trojan horse for the extreme free market red necks.
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Comment number 4.
At 19:44 18th Oct 2010, BluesBerry wrote:As you say Alan Johnson is several years away from a general election.
"Tiaa"! "There Is An Alternative to the government's approach".
But Tiaa in my opinion is not cutting till the country bleeds; in short, it is not Mr. Osborne's austerity program.
Tiaa is FTT (Financial Transaction Tax) and/or FAT (Financial activity tax). Neither of these transactions taxes will wound the huge investment banks as much as average people will be wounded by spending cuts, especially to social programs.
In in the chancellor's view, he had to prove he was serious about cutting the deficit on
- the backs of the taxpayers and
- the backs of social benefit recipients, I would need to ask him" What about hitting the investment banks, the financial institutions that caused this economic distress?
As you say: Osborne will not "risk a loss of confidence in Britain's public finances".
Why?
A little tax on the financial transactions or financial activity would hardly be felt by the huge investment banks. Why are politicans so afraid to touch the investment banks?
Depending on the G-20 decisions, the the government may have good news for the average worker sooner than the next election. I'm sure FTT and FAT will be a topic of much concern in Seoul.
If the Labour Party is about Labour, about the working people, why isn't Alan Johnson hyping the FTT and FAT, explaining them, supporting them? Isn't he eager to help the investment banks pay their full share of taxes?
It is thought that either a FFT or a FAT, or both could raise trillions per year while it acted to slow down computerized trading as well as provide audit trails for transactions that eventually prove questionable - like betting against sovereign debt.
There is also something honourable in allowing financial institutions to bail-out the public; after all the public bailed out the the banks too big to fail.
For my money, the hidden message is that if Mr Johnson did have to come up with an alternative Budget, at short notice, he should be lauding financial taxes, making it a platform item.
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Comment number 5.
At 20:22 18th Oct 2010, John1948 wrote:The point about the speed of recovery is dictated by the date of the next election hides another important point about the next election. Labour hasn't got to come up with anything coherent before then. Not even the most ardent admirers of George Osbourne could claim that he had a coherent policy for much of his tenure as Shadow Chancellor. Alan Johnson and the rest of the Labour party can bide their time, they do not want to peak too early. All they need to do is to keep on reminding the public that they are considering alternatives.
Labour's first task isn't coming up with a coherent economic policy, it is showing the public that they listen and care. An economic policy could be a vehicle for that. David Cameron has given them time to rebuild. If he hadn't said that this would be a 5 year parliament, Labour would have been rushing to rebuild fearing a snap election. They may have been a more vocal opposition, but they may not have been the thoughtful one which they have an opportunity to build.
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Comment number 6.
At 20:42 18th Oct 2010, John_from_Hendon wrote:Why do we need a Labour party when we have a socialist in No 10?
I am referring to 'fairness at the heart of govenrment'. Something that the last government forgot under New Labour and David Cameron seems to have remembered (at least rhetorically!)
It is interesting to think about the role of an opposition in economic times such as we are in now (at the probable start of a depression - a long depression).
The Labour Party should really be part of a National Govenrment of all three parties the economic situation is really so dire. (As we will learn on Wednesday.) This was what I argued for over a year ago. As it is, the opposition can afford to stand on the sidelines are point for a couple of years and watch how bad it gets.
My economic policy would be to get the debt deflation over as quickly as possible - something neither party /party-group seems to want to do. They are all for keeping the whole country on the rack for a generation. Sooner or later they will all realise, as the Japanese should now know, that QE and zero priced money dig the hole deeper and do not provide any kind of solution to the economic malaise.
The problem is not the public debt mountain it is the private debt mountain which is far more difficult to tackle, but it must be tackled and reduced for the country to recover. All present policy seems predicated on increasing the private debt to reduce the public debt, when both have to be reduced.
No party is in the position to do the right thing so I optimistically can only foresee a long depression. I fear the break down of the entire post-war social compact.
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Comment number 7.
At 20:49 18th Oct 2010, Ian wrote:All Labour will have to do is surf the waves of anger and disgust that will undoubtedly characterise life in this country over the next few years, especially when the bankers bonus season gets under way. Lead on tax avoidance by the wealthy as Vince Cable used to be so effective at doing. We will shortly be hearing stories about people having to wait for surgery. It doesn't matter if the the sums don't add up precisely, at this stage they are the only opposition in British politics, unless you count Alex Salmond. At some point people will realise they have been had and that Govt economics is nothing like domestic finances or your personal credit card and that growth comes from investment, lots and lots of it.
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Comment number 8.
At 20:51 18th Oct 2010, stanblogger wrote:Labour should have immediately rejected Osbourne's call for early cuts, instead of saying that they would do the same, but more slowly. The distinction is far too subtle for the average voter, and Alan Johnson is not to be envied as he tries to make it.
It would not have been difficult to explain that making cuts before the economy can take up the extra slack so created is not a good idea, if the Labour government had not already started doing so. The argument was lost through typical New Labour "me to-ism", and there will be catastrophic consequences for many people, particularly young people coming onto the labour market for the first time.
Many big businesses will do well, because the labour market conditions will keep wages low, even when the government causes inflation by continuing to use QE and negative real interest rates in a desperate effort to restart the growth it has choked off. A perfect recipe for bumper profits for the likes of ASDA.
The ConDems are presumably relying on the conventional political wisdom that voters have short memories and will have forgotten the fear and misery, that they will suffer in the next year or two, by the time of the next general election. But young voters will not easily forget being denied an opportunity to get started on a decent career and will not be able to forget the enormous debts that many will have if they go to university.
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Comment number 9.
At 21:38 18th Oct 2010, watriler wrote:Yes let's have a wealth tax and it can be done by creating two extra bands of council tax for the million plus properties (Vince I know you are gagging for this) and reduce the council support grant by the amount of extra income produced. No need for the taxman to return to the famous Beetles number "nineteen for me and one for you" but how about a 60p/pound rate for the £250K + earners. 40% VAT on luxury items - like cars costing more than £50K. I am sure there is no shortage in way of making the pips scream!
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Comment number 10.
At 22:10 18th Oct 2010, DebtJuggler wrote:This comment was removed because the moderators found it broke the house rules. Explain.
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Comment number 11.
At 22:43 18th Oct 2010, jr4412 wrote:Stephanie Flanders.
even if Mr Johnson had no thoughts of his own he'd still win any arguments with a government that proposes to stop electrification of major rail links.
http://www.londonwired.co.uk/news.php/100040-Spending-Review-1bn-rail-electrification-faces-cuts
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Comment number 12.
At 22:55 18th Oct 2010, Chris London wrote:Sorry of lead but thought it makes interesting reading
Quote from the FT;
"Auditors under Brussels scrutiny
A shake-up in Europe’s audit profession is on the cards after top European Union officials expressed concerns about its independence and the dominance of the ‘big four’ accountancy firms"
How ironic when they have not been able to get their accounts signed off for more than sixteen years. Perhaps they should get their own house in order first.....
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Comment number 13.
At 23:35 18th Oct 2010, sagrith wrote:Where did Alan Johnson acquire the ability to be parachuted suddenly into the Treasury? Is it a necessary progression from postman and postal union official rather than have knowledge of economics,statistics and accountancy? Given the habit of transferring ministers from one government department to another it is obvious that most governmental positions don't need any expertise as they rely almost totally on the permanent officials of the various departments. Should Alan Johnson (heavan forbid) ever be the Chancellor of the Exchequer is it possible he will understand the minutia of the budget he will present (read out)?
The problem seems to be politicians are largely reliant on the permanent mandarins in depth knowledge of their departments. This reminds us of Lord Douglas Hume who, it is said, needed treasury figures explained with matches! Oh to have a job with all the brainwork done by others!
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Comment number 14.
At 00:36 19th Oct 2010, foredeckdave wrote:Politically Labour does not need to have a fully fledged alternative plan. The Coalition will provide them with so much amunition that they can almost sit back and adopt a "what a mess you are creating" approach in the same way the Blair did when in opposition.
Economically, there is a great need to prepare a viable alternative approach. However, it will have to be significantly different from that being presently persued by the government. I doubt even sticking to the Darling proposals will be seen by the electorate as being significantly different.
I disagree with Stephanie in her assumption that they have 5 years in which to develop an alternative set of policies. Politically, the ability to attack both the coalition policies and to bring the administration down by attacking the LibDems will be just too tempting. Economically, the global situation is likely to be very volitile over the next 2 years at least and policies will have to be flexible.
I still believe that many of the proposals are idealogically driven and they will be opposed not just in parliament but also in the street. Osbourne would do well to remember the Poll Tax riots.
One thing for sure is that thre will not be a Socialist alternative forwarded in parliament as there is no socialist party there.
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Comment number 15.
At 02:28 19th Oct 2010, BobRocket wrote:Alan Johnson and His Thoughts Deficit
Alan, did you come up with that yourself or did you listen to the scientific advice and then dismiss it out of hand.
Alan Johnson = No Credibility
Sorry Alan.
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Comment number 16.
At 03:27 19th Oct 2010, BobRocket wrote:George Osbourne, Aliaster Darling and Gordon Brown, as chancellors, and with the complicit knowledge of their leaders, implemented (and continue to do so) IMF policy.
(start to read the IMF website, read the news section for items that stand out rather than the usual stuff)
Dominic Strauss Kahn and his department produce reports.
Dom is rated as being the next EuroPres.
Eu policy is being driven by IMF policy.
So the questions are:
What is the IMF policy as regards me, here in the UK, an ordinary worker ?
Do I get first or third world privileges and when were you going to let me know ?
It's all very well those in charge having a grand plan but I've got plans as well
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Comment number 17.
At 06:00 19th Oct 2010, MetalGasket wrote:10. At 10:10pm on 18 Oct 2010, DebtJuggler
Yuk. A jealous Daily Mail reader. Careful Steph, he's stalker material.
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Comment number 18.
At 09:24 19th Oct 2010, John_from_Hendon wrote:#12. Chris London wrote: précis: UK Auditors are good - the EU is bad
Chris, The Auditing business in the UK is far too concentrated and far too connected with selling its own consultancy services. Because of these faults they kept quiet about the terrible risks the banking industry has been running for decades. They we far to reliant on the assurances from the directors of the companies and they failed to provide the service they should have provided to the members of the company and the public.
The British government has this week dismantled most of the competition commission and OFT leaving only the EU level of regulation for large businesses so it is right, proper and appropriate that they should investigate the industry.
As to you snide comment that the EU should get its own house in order first - the accounts of the EU fail to get approval mainly because of the activities of the member governments in failing to provide an adequate audit trail for delegated expenditure.
Would it not have been better for all of us if the big four UK auditors had been more robust in auditing the UK banks during the last decade as this might have caused the banks to have properly understood the risks in their funding structures which could have prevented the liquidity crisis?
If the UK auditors had been auditing the EU to the same standards of the UK banks we would know nothing about the problems in the EU's accounts! Which is better knowledge or ignorance?
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Comment number 19.
At 09:37 19th Oct 2010, Kit Green wrote:This is not a politics blog but an economics blog "for discussion of the UK economy, how it relates to the rest of the world, and how it affects us all."
If that is the case then instead of an examination of the differences and similarities between the political parties here Stephanie should be analysing the experiences of those around the world.
What should sway any interested reader would be that true analysis initially perhaps covering Ireland, Greece, Germany and Japan.
We really are not an island and do not have to reinvent the wheel whenever trouble appears.
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Comment number 20.
At 10:00 19th Oct 2010, duvinrouge wrote:Tiaa - it is socialism.
Not the social democracy (let capitalism make money, tax it & redistribute it), which did the post-war Labour & Tory governments well, but can no longer be afforded.
This is the key point the Labour Party needs to wake up to.
There are millions of people looking for a political force that will improve their lot.
A political movement that champions their interests.
But the Labour Party is so lustful for power & so scared of the right-wing press that they don't want to frighten the 'middle-classes'.
Well now the 'middle-classes' are suffering.
Unfortunately, when they suffer they look to scapegoat immigrants.
The Labour Party cannot offer the people a better future because they don't understand the theory of how capitalism works.
They either haven't read Marx or not understood it.
So they can't see that social democracy (soft capitalism) is not an option.
The only hope for people & the planet is the public ownership of the means of production through direct democracy - & it has to be worldwide.
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Comment number 21.
At 10:24 19th Oct 2010, Dempster wrote:No significant actions can be taken to end this recession/depression, until such time as control of the creation of money rests with the Government, and the Government utilises the same in creating productive employment.
Up to press no one in the media has mentioned the proposed act of parliament introduced by Douglas Carswell to take back control of the creation of money from private banks, why?
http://www.positivemoney.org.uk/
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Comment number 22.
At 10:51 19th Oct 2010, Christopher Clarke-Williams wrote:We are where we are entirely because the previous government consistently spent too much and through PFI saddled the Health service with fixed building costs that would not be flexible in the future. Mismanagement pure and simple born out of the socialist belief that the world owes us a living.
The trouble is because of the democratic 'cycle' we seem to work to once the present government gets things back on track, history will repeat itself.
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Comment number 23.
At 10:57 19th Oct 2010, jr4412 wrote:foredeckdave #14.
"Politically Labour does not need to have a fully fledged alternative plan."
perhaps not, but wouldn't it be good if they did? I cannot be alone in wanting politicians to act principled and with conviction, instead of being purely opportunist.
btw, are you going to answer the question asked by ifigeniaa, I'd love to read the answer.
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Comment number 24.
At 11:15 19th Oct 2010, Richard35 wrote:It seems that Mr.Johnson has calculated something of a wish list budget and has safely kicked many of the problems into the future. Whilst this may be convenient for his political future this policy of "kicking the can down the road" appears to be going rather wrong in Greece.According to notayesmanseconomics.
"So if you factor the problems with tax collection with the way it appears that Greece has improved expenditure by not paying the bills you get a completely different picture for Greece’s fiscal situation, from that given by her government. By the time that Eurostat issues its report on Friday it will be plain to everyone that at the end of the current aid package Greece will be even more insolvent than it appeared as recently as May 2010."
Unfortunately reality has the inconvenient habit of popping its head up from time to time...
http://notayesmanseconomics.wordpress.com
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Comment number 25.
At 11:26 19th Oct 2010, MetalGasket wrote:23. At 10:57am on 19 Oct 2010, jr4412
jr I need to know how you make that link you clever thing,
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Comment number 26.
At 11:51 19th Oct 2010, Endgames wrote:A very interesting exposure last night on Dispatches C4 about members of the Tory Cabinet using Tax Havens to invest their millions and avoid paying UK Tax. No surprise really.
There is an estimated £200 Billion languishing in offshore accounts in the channel islands and an unthinkable amount in the Caymen Islands and British Virgin Islands.
The savings that Philip Green suggested could be made by better Government spending are indeed born out by his own savings, a £1.8 Billion share of his company was put into his wife's name, who resides in Monaco, thereby avoiding a potential payment of £245 million to the Inland Revenue.
The outgoing Labour Government had received a request from the Caymen Islands for a £200 million loan from the British Taxpayer at the time of the Global crash. It was eventually agreed but on condition that the introduction of Direct Taxation would have to be considered in the Caymens.
Shortly into the Coalition term, another request was made for a further £100 million loan, this also went through and at the same time the condition for Direct Taxation was dropped altogether.
Of the 80 or so Tax Havens worldwide some 50% are either Ex British Colonies or are politically connected with Britain. It seems to be quaint old custom.
But a custom which is now outdated and will have to stop, given the times we live in, it is morally indefensible to expect the poor to shoulder these debt burdens when these practices are carrying on unchecked.
"We are all in this together" the Tory rallying cry. We all know it's not actually true, but the levels of hypocrisy are rising.
If Nick Clegg is serious about dealing with Tax Evasion, then he needs to upset a significant proportion of the men sitting around the cabinet table with him.
Will he even try? Will he be crushed like an ant? Will he join the club?
I wish him luck, he's going to need it.
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Comment number 27.
At 11:58 19th Oct 2010, jr4412 wrote:MetalGasket #25.
"..I need to know how you make that link.."
easy, go on the post of your choice and right-click on the timestamp, select 'Copy Link Location', in your text insert a HTML <A> tag, and paste the link into the 'href' attribute.
hth
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Comment number 28.
At 12:18 19th Oct 2010, dj_gandy wrote:The offshore tax whining gets boring. Stop your envy. These businessmen may have a wad else where, but they generate plenty of tax revenue for the country.
They are creating jobs for thousands of people, which is more than people sat on benefits ever do.
How much tax do you think employing 10,000 people pays?
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Comment number 29.
At 12:22 19th Oct 2010, Peter White wrote:I have to wonder at all those people saying that all Labour have to do is wait until the coalition are unpopular because of the cuts and they'll be swept into power.
In 1979 after the 'winter of discontent', Margaret Thatcher came to power amid the need to sort out the country because Labour had left it in a mess. Although she was very unpopular during these cuts, she managed to hold on for another three terms because everyone knew that Labour couldn't be trusted.
The electorate really aren't as stupid as you might imagine.
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Comment number 30.
At 12:35 19th Oct 2010, Labourboy wrote:Whether or not the debt is reduced Britain will be in a hell of a social mess in 18 months time- with millions unemployed- and living standards of the poor driven to unsustainable levels- and it will have been deliberately created and avoidable.
It s a bit rich to attack Allan Johnson for holes in his figures when the coalition has absolutely no reflationary policy- yes they can cut cut cut- every progressive piece of social and economic investment developed over the last 15 years- none of which they agree with- thats the easy bit- How about examining the fallacies in the Governments economic thinking. I would not expect an economic analysis to recognise the social impact of these cuts- but when there is serious unrest it will impact on investment decisions- and wise foreign investors I know are already making those decisions- because they don't want their families growing up in the social wasteland being created by the Tories.
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Comment number 31.
At 12:46 19th Oct 2010, MetalGasket wrote:Thanks
Lets hope it works
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Comment number 32.
At 12:52 19th Oct 2010, Endgames wrote:In response to DJ Gandy Quote;
The offshore tax whining gets boring. Stop your envy. These businessmen may have a wad else where, but they generate plenty of tax revenue for the country.
I can assure you that I am not in anyway envious of people with large amounts of money, I happen to be content with what I have.
What I take exception to is unjust practices and hypocrisy.
It is estimated that for every £1 that goes to countries in Foreign Aid another £10 goes into Offshore Accounts.
Large scale Tax Evasion is now being realised as a priority problem in Europe,.
What we require is a level playing field.
Greed is accepted as being a driver of the Capitalism but greed also caused the crash.
If our so called leaders are to be taken in anyway seriously, they cannot be taking part in these practices.
Believe me sonny boy, I am not whining,I am just voicing things as they are.
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Comment number 33.
At 12:59 19th Oct 2010, jr4412 wrote:Peter White #29.
"The electorate really aren't as stupid as you might imagine."
the fact that 'the electorate' thought (in 1979) that all the ills of the society could be blamed on the Labour government would suggest otherwise. and things haven't changed yet either.
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Comment number 34.
At 13:31 19th Oct 2010, foredeckdave wrote:#23, jr4412
"btw, are you going to answer the question asked by ifigeniaa, I'd love to read the answer."
Now I know that my eyesight is not as good as it used to be but I don't even see a post by ifigeniaa on this thread! So I don't know what I am suposed to be answering!
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Comment number 35.
At 13:34 19th Oct 2010, foredeckdave wrote:#29 Peter White,
aren't you forgetting the little issue of the Falklands War?
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Comment number 36.
At 13:47 19th Oct 2010, jr4412 wrote:foredeckdave #34.
"Now I know that my eyesight is not as good as it used to be but I don't even see a post by ifigeniaa on this thread!"
click on the name, it's a link to his (her?) comment on the previous thread, #53 on http://www.bbc.co.uk/blogs/thereporters/stephanieflanders/2010/10/america_first_time_among_equal.html
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Comment number 37.
At 17:04 19th Oct 2010, foredeckdave wrote:#36 jr4412,
To both you and ifigeniaa.
Look at the impetus US military expenditure (the majority of which is domestically spent) and then look at the trade deficit that the USA carries. Cutting their defence buget by the levels suggested by ifigenia would be highly unlikely to produce a stimulous to their domestic economy.
OK?
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Comment number 38.
At 19:31 19th Oct 2010, jr4412 wrote:foredeckdave #37.
"OK?"
Temper, temper, mon-capitan (with apologies to the Q Continuum), I didn't ask the question and only looked forward to the answer.
turns out though that the answer you gave is so unspecific, I wonder why you bothered.
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Comment number 39.
At 21:41 19th Oct 2010, foredeckdave wrote:#38 jr4412
Sorry that you felt that way. There was no temper intended -perhaps smileys would be useful :)
Sure my answer was unspecific. Partly because I couldn't be bothered to look up the stats and also because, in genral terms, US military spending has become one of the bedrocks of the US economy. It doesn't take a genius to undertsand that if you cut say 3-4% of that budget, you will not achieve an equivalent increase in local production to compensate for it.
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At 22:09 19th Oct 2010, jr4412 wrote:foredeckdave #39.
cool, no harm done.
the economies of the US of A and the UK are very similar in the way that most of the productive parts of the agricultural and manufacturing market sectors have been outsourced, ie the UK can not afford to make real cuts in defense either.
http://en.wikipedia.org/wiki/Military_budget_of_the_United_States#Comparison_with_other_countries
unfortunately, people cannot live on DU shells. :-(
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