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Pre Budget Report
Public sector net debt figures from the treasury. Subtitle 'We Are So . . . .'
In 1997 they predicted net debt to stay around 40% of GDP, wasn't this one of brown's 'golden rules'?
In 2000 they had actually stuck with major's spending plans and thus brought it down to 33% ish - at that time forecasted keeping things that way but 'prudence' brown started spending faster than the economy was growing.
The pre budget report just published reveals the following 2008 - 44%. 2009 - 55%. 2010 - 65%. 2011 - 72%. 2012 - 75%. 2013 - 77%. And these are based on badger brows overly optimistic growth predictions such as a six point jump in GDP 2009-2011. The treasury has always, always over estimated growth for the purposes of budgets but this STILL leaves us with banana republic finances. We are so fkd.
In 1997 they predicted net debt to stay around 40% of GDP, wasn't this one of brown's 'golden rules'?
In 2000 they had actually stuck with major's spending plans and thus brought it down to 33% ish - at that time forecasted keeping things that way but 'prudence' brown started spending faster than the economy was growing.
The pre budget report just published reveals the following 2008 - 44%. 2009 - 55%. 2010 - 65%. 2011 - 72%. 2012 - 75%. 2013 - 77%. And these are based on badger brows overly optimistic growth predictions such as a six point jump in GDP 2009-2011. The treasury has always, always over estimated growth for the purposes of budgets but this STILL leaves us with banana republic finances. We are so fkd.
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And to think that when Labour took over in 1997 Brown was called the Iron chancellor for rigidly sticking to the Tory monetory policy. If they are defeated at the general election Cameron has almost promised his chancellor will stick tightly to a strict fiscal policy. So how is he likely to achieve this?
1. Benefits will be reduced or removed except for the seriously ill and infirm.
2. Workers will be under a pay freeze
3. He has already announced a reduction of MPs
4. Whitehall staff cut.
5. Salaries of ministers will be cut.
6. Health and Transport will be seriously curtailed.
But even this will not solve the problem.
Meanwhile countries who put less reliance on the banking sector will flourish.
1. Benefits will be reduced or removed except for the seriously ill and infirm.
2. Workers will be under a pay freeze
3. He has already announced a reduction of MPs
4. Whitehall staff cut.
5. Salaries of ministers will be cut.
6. Health and Transport will be seriously curtailed.
But even this will not solve the problem.
Meanwhile countries who put less reliance on the banking sector will flourish.
BM - it was really an extension of my comment on Sammo's donation thread below. Ha, it rained all 'barbeque' summer here never mind winter. Oz are running less than 25% deficit by the way.
The latest OECD report (which historically is a bit more accurate than HM Treasury) has predicted our deficit to reach 92% next year and 99% in 2011. http://www.oecd.org/d...83901_1_1_1_1,00.html They don't even include the promises to cover the banks bad debt in that.
We need radical ideas to sort ourselves out so suggestions please. Forget taxing the rich because the top 10% of earners (everyone grossing over 50K per year) could give their entire salaries to the state and it would still not cover the interest on our debt.
Rov - you missed inflation, the way most govts have solved a debt crisis for the last hundred years. http://en.wikipedia.org/wiki/Inflation_tax
The latest OECD report (which historically is a bit more accurate than HM Treasury) has predicted our deficit to reach 92% next year and 99% in 2011. http://www.oecd.org/d...83901_1_1_1_1,00.html They don't even include the promises to cover the banks bad debt in that.
We need radical ideas to sort ourselves out so suggestions please. Forget taxing the rich because the top 10% of earners (everyone grossing over 50K per year) could give their entire salaries to the state and it would still not cover the interest on our debt.
Rov - you missed inflation, the way most govts have solved a debt crisis for the last hundred years. http://en.wikipedia.org/wiki/Inflation_tax
Rojash, here's why I am blaming our economic genius. Who in fact is a history grad who doesn't pay attention to economic history.
Brown brought in the tripartate financial regulation system and the top man who was employed for political reasons rather than any actual ability.
He covers bankers losses with money from the taxpayer but let them keep the profits. The taxes paid over the last ten years would cover all depositors guarantees so in the worst case scenario of all banks ceasing trading there would be no real public loss. The shareholders would lose but the banks all still hold massive assets so wouldn't go out of business, just split themselves up. Itself a bonus.
He has been printing money at unprecedented levels for this country, mainly to aid govt borrowing.
He has borrowed massively to try to escape a market crash/correction due to too much borrowing.
We will see high inflation over the next few years limiting economic growth and making everybody suffer.
cont'd
Brown brought in the tripartate financial regulation system and the top man who was employed for political reasons rather than any actual ability.
He covers bankers losses with money from the taxpayer but let them keep the profits. The taxes paid over the last ten years would cover all depositors guarantees so in the worst case scenario of all banks ceasing trading there would be no real public loss. The shareholders would lose but the banks all still hold massive assets so wouldn't go out of business, just split themselves up. Itself a bonus.
He has been printing money at unprecedented levels for this country, mainly to aid govt borrowing.
He has borrowed massively to try to escape a market crash/correction due to too much borrowing.
We will see high inflation over the next few years limiting economic growth and making everybody suffer.
cont'd
contd
Now here's some history. It's from the Bank of Englands own website http://www.bankofengl...inflation/map/map.htm pity merv hasn't read it.
"Argentina 1980's
* During the 1980's inflation averaged 750% a year, reaching a peak of 4,924% in December 1989.
* The main cause of inflation was a persistent government budget deficit.
* This was financed by the country's central bank that led to high inflation."
This is what happened to kick start these problems
"... deregulation of the financial markets, removing checks on banks and transferring responsibility for any bad loans to the state, which took charge of their debt as needed. . . .and budget deficits (increasingly "off the books") skyrocketed."
I don't think we will see that kind of inflation but there are plenty more examples before we get to Weimar and Zimbabwe.
Now here's some history. It's from the Bank of Englands own website http://www.bankofengl...inflation/map/map.htm pity merv hasn't read it.
"Argentina 1980's
* During the 1980's inflation averaged 750% a year, reaching a peak of 4,924% in December 1989.
* The main cause of inflation was a persistent government budget deficit.
* This was financed by the country's central bank that led to high inflation."
This is what happened to kick start these problems
"... deregulation of the financial markets, removing checks on banks and transferring responsibility for any bad loans to the state, which took charge of their debt as needed. . . .and budget deficits (increasingly "off the books") skyrocketed."
I don't think we will see that kind of inflation but there are plenty more examples before we get to Weimar and Zimbabwe.
and no, I don't think any of our liblabcon all the same policy parties have got leaders with the neccessary cajunas and thick skin to have done much better. We're going to need somebody who doesn't mind being hated by the population, flamed in the press, cursed by unions and bankers.
I reckon there are several contenders right here on answrbnk ;o)
I reckon there are several contenders right here on answrbnk ;o)
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