Global Debt Storm - Osborne

[MrSmith]

Really? You know, I've lost count of the times they've banged on about the mess that Labour left them. And until today I've not heard them once acknowledge that our debt issues are partly due to a global banking crisis.

 

They have done what political parties do and focus on the problems that can be blamed on their opposition, but they have acknowledged and talked about the global problems, they talked about it during the elections and when it happened.

 

 

David Cameron on the financial crisis

Tuesday 30 September 2008

 

The Conservative leader promises to support the government to help Britain avoid a US-style financial crisis

[ricgem2002]

They have done what political parties do and focus on the problems that can be blamed on their opposition, but they have acknowledged and talked about the global problems, they talked about it during the elections and when it happened.

 

 

David Cameron on the financial crisis

Tuesday 30 September 2008

 

The Conservative leader promises to support the government to help Britain avoid a US-style financial crisis

promises promises eh

[I1L2T3]

They have done what political parties do and focus on the problems that can be blamed on their opposition, but they have acknowledged and talked about the global problems, they talked about it during the elections and when it happened.

 

 

David Cameron on the financial crisis

Tuesday 30 September 2008

 

The Conservative leader promises to support the government to help Britain avoid a US-style financial crisis

 

Well, they seemed to have stopped doing that after the election. But like you say they did have an agenda - getting the cuts through by blaming Labour was perhaps easier than blaming the need for cuts on external factors.

 

Until recently it seems when the debt is increasing and spending can't be controlled we suddenly have a global problem again - it couldn't possibly be that Osborne is just as unsuccessful as Labour was in those areas, ahem, because of external pressures.

[donkey]

I'm not splitting hairs. My words are perfectly clear and concise. The overwhelming majority of individuals and corporations were perfectly able to meet their repayments before, during and after 2008.

 

To expand; if governments had properly regulated banking, and not overspent themselves, a good deal more individuals and corporations would still be able to. Sadly, many have suffered through absolutely no fault of their own, but at the fault of aforementioned governments and banks.

 

Cause and effect - an overriding principle of the entire universe - should be remembered. The effect known as the 'banking crisis' was caused. It was caused by governments like New Labour's who simply couldn't keep it in their trousers (metaphorically speaking). Once we accept that simple fact we can put right what was and is wrong.

 

The regulation you speak of (or lack of it) concerns splitting banks into two distinct departments. One for business and personal banking (savings and loans) and the other concerned with speculation.

 

You are right to say that the failure to impose this regulation was largely the cause of the debt crises. The biggest drain for UK banks was the toxic debt they bought from the US. Because there was no seperation, this debt automatically drained the entire resources of the banks, so that even personal savings were in danger.

 

That much is true, but then you go way off track by trotting out all that crap the Tories made up to hoodwink the gullible before the last election.

 

George Osbourne, has recently announced that he will not bring in the very regulation (the lack of which you yourself explicitly stated was the cause of the UK debt crisis) until 'after the next election' (which basically means never).

 

Furthermore, before the credit crunch, the Tories were utterly uncritical of Labour's economic policies. Their protestations only came after it had already become very obvious there was a serious problem. They then diligently used this 20/20 hindsight to make party political capital, not to get to the root of the problem.

 

Osbourne's buckling to pressure from the bankers concerning these regulations - the ones which you blame the labour government for not bringing in - once more goes to show where the real decisions are made, whatever party is in power.

 

Unfortunately this is a situation which is set to continue while so many people are so easily distracted by the partisan party crap fed them by salesmen and spin doctiors. Meanwhile, behind the scenes, the truly significant political changes are taking place, as financial and industrial concerns increasingly expand their influence over the regulating/legislating of governments across the globe.

[mj.scuba]

Well, they seemed to have stopped doing that after the election. But like you say they did have an agenda - getting the cuts through by blaming Labour was perhaps easier than blaming the need for cuts on external factors.

 

Absolutely right. Even if there was no global banking crisis, budgets would still have had to be cut at some point...because Labour's public spending was being funded by increasing our debt.

 

I'm not ideologically opposed to having a deficit when appropriate, but Labour ramped up record deficits during an economic boom when tax receipts were at a high. Record deficits are something you might expect during a recession, when you might expect the country to go into the red, not at a time when the cash from an economic boom is flowing in.

[I1L2T3]

Absolutely right. Even if there was no global banking crisis, budgets would still have had to be cut at some point...because Labour's public spending was being funded by increasing our debt.

 

I'm not ideologically opposed to having a deficit when appropriate, but Labour ramped up record deficits during an economic boom when tax receipts were at a high. Record deficits are something you might expect during a recession, when you might expect the country to go into the red, not at a time when the cash from an economic boom is flowing in.

 

There's absolutely no doubt Labour overspent and I would never deny it. But the scale of the debt was inflated massively by financial interventions after 2007.

 

To get a flavour Labour inherited a debt as % of GDP of 42% in 1997. In 2007, immediately before the crisis it was 44%. It's not quite the massive inflation of debt through public spending you think.

[mj.scuba]

Economist article - Britain: Spent, spent, spent 19th Nov 2008

 

BRITAIN has been spared a big budgetary drama for many years. The closest shaves the Labour government has experienced in over a decade in office have been about specific taxes, such as the protests against high fuel duty in 2000. More recently Gordon Brown’s reputation took a battering when it emerged that his last budget as chancellor would leave 5m poor families worse off, forcing a humiliating U-turn to try to make amends.

 

But the real crises occur when governments lose control over the public finances. That is what threatens in 2009 as a weakening economy pushes the exchequer into the biggest deficit since the mid-1990s. That earlier loss of fiscal control wrecked the Conservatives’ low-tax reputation as they had to push up taxes in order to plug the hole. The budgetary crisis of 2009 will prove just as damaging to Labour’s credibility as a governing party able both to deliver high public spending and to keep the nation’s finances in good shape.

 

Britain’s fiscal difficulties have surprisingly little to do with the big banking rescues the government has mounted. As financial transactions, these are not counted in the usual measure of the budget deficit, although they have raised national debt since the Treasury has borrowed to finance its capital injections and banking liabilities have been placed on the public books to reflect state control. Taxpayers are at risk from loan losses, but the bail-out’s impact on the deficit will be small.

 

Rather, the budgetary crisis of 2009 has its roots in Mr Brown’s increasingly unsound management of the public finances. Emboldened by an early big surplus, he let spending rip. When the budget moved back into deficit, he failed to push up taxes enough to plug the gap. Mr Brown’s imprudence sapped the nation’s finances. Whereas other European economies, such as Germany’s, restored fiscal order, Britain stayed in the red even when the economy was booming. By 2007 the deficit as a share of GDP was the second highest among the 15 old members of the European Union.

 

This has left the exchequer vulnerable to the down*turn. Britain’s public finances are in any case especially sensitive to the business cycle because so much revenue comes from finance and property. As a result, they will be hit particularly hard by a recession concentrated in those two sectors. The deficit in the fiscal year from April 2009 to March 2010 could easily reach 6% of GDP, the highest for 15 years.

[I1L2T3]

Economist article - Britain: Spent, spent, spent 19th Nov 2008

 

What caused the recession?

 

I do agree though that Labour were caught in a bad position when the crisis started. As Tony Blair said, and I think it might have been mentioned somewhere on here, fiscal discipline should have been greater from 2005 - by the time Labour had decided to address the deficit in 2007 they were overtaken by global events. But....had the crisis and subsequent recession not happened there is no reason to suggest things could not have been brought back under control - after all the Tories had some success in that area after '92. The simple fact is you cannot consider where we are today without considering the global financial crisis, no matter what an economist article from three years ago says.

[grafikhaus74]

The elites aren't responsible for our ignorance, but they really love to use it against us. We're surrounded by 'bread and circuses' as a means of distracting us from political insight and there's only us that have the power to change that situation. Labour, Liberal, Conservative are three names for one body, when you work this out all of the political in fighting becomes completely spurious within your understanding of the world.

 

Yes, I'd agree with that but the in-built bias/stupidity of some people will always keep the status quo going. Ah! Here we are!

 

Just the same old rubbish rebranded by the Tories. When they fail to drive the UK forward, and they will/are doing, as recognised by a Tory whip the other day and even their own propaganda media have turned against them, no doubt it will be all Labour's fault again, probably around the time of the election. The tories are predictable to the last.

[MrSmith]

Well, they seemed to have stopped doing that after the election. But like you say they did have an agenda - getting the cuts through by blaming Labour was perhaps easier than blaming the need for cuts on external factors.

 

Until recently it seems when the debt is increasing and spending can't be controlled we suddenly have a global problem again - it couldn't possibly be that Osborne is just as unsuccessful as Labour was in those areas, ahem, because of external pressures.

 

November 19, 2006

George Osborne is planning a range of necessary measures to tackle Britain's personal debt mountain.

Tories plan 'cooling-off' period on store cards to cut spiralling debt

 

30 September 2005

A Labour of liabilities, by George Osborne

Gordon Brown's fiscal rules were invented to win his party credibility, but he has changed their definitions so often that unless they are independently scrutinised we face a borrowing disaster

 

March 12, 2006

The debt worriers include Liberal Democrat shadow chancellor Vince Cable, who warned last week that growing numbers were “drowning” in debt, and has devised a 10-point plan to tackle it. They include George Osborne, the Tory shadow chancellor, who has accused Gordon Brown of being the pusher who has created Britain’s “debt addiction”.

 

There were plenty of warning before the crash, every man and their dog knew the country and its population was addicted to debt which was encouraged by the government.