[DaveO]

Re: Coalition to break? : Thu Aug 16, 2012 12:40 am  

XBrettKennyX wrote:

No, actually I think I will cite the fact that the UK debt interest is forecast to double by 2015 to around £70bn, directly as a result of Labours spending.

Since Labour isn't spending anything that would be a neat trick.

There are two parts to the deficit that increases the national debt and thus interest due. The structural deficit that is the spending on things like health, education and infrastructure - public spending to invest in the country. The cyclical deficit such as the money you have to spend to fund a recession like we are in now. So given Labour isn't in power whatever amount of borrowing the government engages in now is a result of THIS governments need to borrow money at this time. Given the government is cutting public spending but the deficit continues to be at extremely high levels it's clear this is because of the cost of the recession is a massive drain on the finances.

Put another way since 2008 National Debt has increased because of recessions not public spending in terms of spending in infrastructure. Anyone suggesting otherwise is an idiot. We are not running the deficit we are because we are building railways or schools. We have had lower tax receipts personal and corporation and higher spending on unemployment benefits. Stamp duty also fell a lot due to falling house prices. This situation has not changed. We are still in recession or bumping along at the bottom and so despite its austerity plans to try and deal with structural deficit this government has to continue to fund the post-2008 recession driven costs the country faces by borrowing more.

Therefore if the government has to continue to borrow at high levels such that the national debt increases thus resulting in increased interest payments, it will be due to this governments borrowing requirements not past Labour spending. In other words the governments failure to get growth in the economy will be the reason borrowing will continue to be at such high levels because even if they could eliminate the structural deficit tomorrow that won't come even come close to eliminating the total deficit it faces.

Of course the debate is whether nor not trying to eliminate the structural deficit makes sense at this time anyway when government borrowing costs are so low. If cutting it back decreases revenues still further then its catch 22.

Re: Coalition to break? : Thu Aug 16, 2012 4:50 pm  

XBrettKennyX wrote:

...Would you like me to start with £20bn (See how easy it is DaveO?) on implementing an NHS IT system that is "questionable" to say the least.

Your numbers overstate by about 80% ... but a waste, quite definitely.
Nice to see the Tories have learned sooooo much from this (not).

XBrettKennyX wrote:

...Or maybe selling off our gold reserves for c. $270 an ounce (current price more than $1000 dollars, money wasted around £7bn)..

A complicated one, this, involving the Maastricht treaty (signed by a Tory administration) which rather forced Brown's hand to buy Euros.
You can nominate almost any number of billions as the amount that the gold was "undersold" by, and compare the price against any year at random and come up with fifferent value for how much was "lost".
Bear in mind it was sold at auction, not at some knockdown price (unlike when the Tories sold off all those companies).
Also bear in mind that most of gold's subsequent rise in value has been since the global downturn.

XBrettKennyX wrote:

...Perhaps the £3bn ovepaid in benefits in 2008/09 (Source DWP: Fraud and error in the benefits system).

i.e. approximately half of what Vodafone alone have been let off in their tax bill (under the current tory administration).

XBrettKennyX wrote:

...Or even maybe giving away the rebate to the EU that Thatcher won for the UK. - say £7bn p.a.

Oh dear, this old chestnut.
The rebate wasn't given away.
Some of the rebate was reduced until 2013, providing it didn't go to the CAP, providing the CAP was re-organised, providing the other states matched it for value and providing all the extra dosh thus raised went to new EU members to help bring them up to a level where they could be a market for all the rest of the EU.
Where your £7bn figure comes from is anyone's guess.

XBrettKennyX wrote:

...No, actually I think I will cite the fact that the UK debt interest is forecast to double by 2015 to around £70bn, directly as a result of Labours spending.

Nope.
Borrowing is rising because GDP (and consequent tax-take) is falling.
If that is your main argument, it's an epic fail.


I note that you haven't even mentioned the second part of my question... i.e. the cost of the bank bailout.
The same bank bailout that Osborne criticised and about which he has never ever said in public what he would have done instead.
The same banks that he had previously said needed to be less heavily regulated.
The same banks whose regulation he still hasn't addressed.
Odd that, don't you think?

Re: Coalition to break? : Thu Aug 16, 2012 11:40 pm  

Re Government spending, it should be remembered that a very large proportion is locked in due to previous governments. You cannot turn the tap on and off annually. It is factually correct to say that structurally, a large proportion of the current debt position is due to policies implemented by labour over a number of years. Just as its also true that they themselves inherited a fiscal position from the Tories before them.

The one lesson from all this - which will sadly seemingly never be learned - is that Governments should seek to save money when times are good, and use some of those savings when times are bad. Instead we tend to see governments of all stripes spending any excess like a drunk at a casino when times are good, with almost no concern at all for the future.

[DaveO]

Re: Coalition to break? : Fri Aug 17, 2012 12:50 am  

BrisbaneRhino wrote:

Re Government spending, it should be remembered that a very large proportion is locked in due to previous governments. You cannot turn the tap on and off annually. It is factually correct to say that structurally, a large proportion of the current debt position is due to policies implemented by labour over a number of years.

If the current debit position was solely the structural deficit we wouldn't have a problem. As I said the deficit in 2007 before the crash was thirty odd percent of GDP. It's been a heck of a lot more than that since the crash. Therefore trying to fix the problem by tackling the structural deficit won't work. It is not a big enough proportion of the current deficit for that. Under normal circumstances you would at some point work to eliminate the structural deficit but the idea we are where we are due to Labour running a structural deficit for six years pre-2008 is a complete joke. The structural deficit also tends to exists for positive reason. Investment in the country.

The one lesson from all this - which will sadly seemingly never be learned - is that Governments should seek to save money when times are good, and use some of those savings when times are bad. Instead we tend to see governments of all stripes spending any excess like a drunk at a casino when times are good, with almost no concern at all for the future.

There is nothing wrong with borrowing money adding to the structural deficit if you think doing so will generate greater wealth for the country in the long term. If a government thinks a new high speed rail system will help the economy deferring funding for that because we are in the "good times" and running a surplus is not necessarily good thinking (assuming any surplus isn't enough to fund it outright). The idea you shouldn't do this in the "good times" also implies you have a crystal ball as to when the bad times will return.

Nearly all the recessions bar one (I think) since the end of the second world war have been caused by things occurring out of the blue such as the banking crisis in 2008 or the oil crisis when I was young! Regardless of all that I do not think any party has ever had a plan to run a perpetual deficit position.

Re: Coalition to break? : Fri Aug 17, 2012 9:37 am  

DaveO wrote:

If the current debit position was solely the structural deficit we wouldn't have a problem. As I said the deficit in 2007 before the crash was thirty odd percent of GDP. It's been a heck of a lot more than that since the crash. Therefore trying to fix the problem by tackling the structural deficit won't work. It is not a big enough proportion of the current deficit for that. Under normal circumstances you would at some point work to eliminate the structural deficit but the idea we are where we are due to Labour running a structural deficit for six years pre-2008 is a complete joke. The structural deficit also tends to exists for positive reason. Investment in the country.

There is nothing wrong with borrowing money adding to the structural deficit if you think doing so will generate greater wealth for the country in the long term. If a government thinks a new high speed rail system will help the economy deferring funding for that because we are in the "good times" and running a surplus is not necessarily good thinking (assuming any surplus isn't enough to fund it outright). The idea you shouldn't do this in the "good times" also implies you have a crystal ball as to when the bad times will return.

Nearly all the recessions bar one (I think) since the end of the second world war have been caused by things occurring out of the blue such as the banking crisis in 2008 or the oil crisis when I was young! Regardless of all that I do not think any party has ever had a plan to run a perpetual deficit position.

DaveO why do you assume that ALL elements of the "structural" deficit are positive? They need not be.

Paying £20bn for the IT NHS farce for example.

Re: Coalition to break? : Fri Aug 17, 2012 9:57 am  

XBrettKennyX wrote:

Paying £20bn for the IT NHS farce for example.

For starters, I don't know where you get a figure of £20bn from, even the Mail only has it at £12.7bn and how much of that figure is wasted?

Re: Coalition to break? : Fri Aug 17, 2012 10:16 am  

Him wrote: For starters, I don't know where you get a figure of £20bn from, even the Mail only has it at £12.7bn and how much of that figure is wasted? http://www.telegraph.co.uk/news/uknews/ ... llion.html But let's not argue about £8bn. £12bn is bad enough.

Him wrote: For starters, I don't know where you get a figure of £20bn from, even the Mail only has it at £12.7bn and how much of that figure is wasted? http://www.telegraph.co.uk/news/uknews/ ... llion.html But let's not argue about £8bn. £12bn is bad enough.

Re: Coalition to break? : Fri Aug 17, 2012 10:22 am  

XBrettKennyX wrote:

http://www.telegraph.co.uk/news/uknews/1473927/Bill-for-hi-tech-NHS-soars-to-20-billion.html

But let's not argue about £8bn.

£12bn is bad enough.

Ah, the 2004 article quoting an unnamed official talking to someone else. Well let's just call that a tad unreliable shall we?
The Guardian, the BBC and the Mail all have it at a maximum of £12.7bn, and I'll ask it again, how much of that was wasted?

Re: Coalition to break? : Fri Aug 17, 2012 10:26 am  

Him wrote:

Ah, the 2004 article quoting an unnamed official talking to someone else. Well let's just call that a tad unreliable shall we?
The Guardian, the BBC and the Mail all have it at a maximum of £12.7bn, and I'll ask it again, how much of that was wasted?

The Grauniad and the BBC.............. enough said.

The Mail is a comic.

Even so, as I said £12bn is bad enough. As for how much is "wasted", then the truth is we don't know. However, it's fair to say that with hindsight, the project would never have been started. It's an example of Labour waste.

Re: Coalition to break? : Fri Aug 17, 2012 10:28 am  

Him wrote: Ah, the 2004 article quoting an unnamed official talking to someone else. Well let's just call that a tad unreliable shall we? The Guardian, the BBC and the Mail all have it at a maximum of £12.7bn, and I'll ask it again, how much of that was wasted? Not a lot, according to THIS

Him wrote: Ah, the 2004 article quoting an unnamed official talking to someone else. Well let's just call that a tad unreliable shall we? The Guardian, the BBC and the Mail all have it at a maximum of £12.7bn, and I'll ask it again, how much of that was wasted? Not a lot, according to THIS