anywebsite Posted January 25, 2012 Share Posted January 25, 2012 Which part of that suggestion hasn't the country gone into debt to pay for over the past 20 years? The problem with debt it spirals out of control and the only way to keep spending to have ever expanding debt. Only if you're not earning more from the projects than you're paying for the loan. Bear in mind that current government bond yeilds are: http://www.bloomberg.com/markets/rates-bonds/government-bonds/uk/ So the government can get 2 year loans at under 0.5% interest pa. 30 year loans are only just over 3% pa. They'd have to be wasting it on some pretty bad stuff to make less than those rates. Link to comment Share on other sites More sharing options...
MrSmith Posted January 25, 2012 Share Posted January 25, 2012 Only if you're not earning more from the projects than you're paying for the loan. We’ve already proven that we would earn less from the projects than their cost, because we have done it before and all it does is postpone the inevitable. Link to comment Share on other sites More sharing options...
anywebsite Posted January 25, 2012 Share Posted January 25, 2012 We’ve already proven that we would earn less from the projects than their cost, because we have done it before and all it does is postpone the inevitable. There are savings accounts that pay more than the government has to pay to borrow money. It's really not that hard to get more than 2% pa average ROI on a 10 year project. Link to comment Share on other sites More sharing options...
MrSmith Posted January 25, 2012 Share Posted January 25, 2012 There are savings accounts that pay more than the government has to pay to borrow money. It's really not that hard to get more than 2% pa average ROI on a 10 year project. And despite that, successive governments fail to get a good return for anything they do. Link to comment Share on other sites More sharing options...
anywebsite Posted January 25, 2012 Share Posted January 25, 2012 And despite that, successive governments fail to get a good return for anything they do. Last time it happened it took a World War & the huge rebuilding projects after it to sort the economy out, we had to go over 250% GDP in debt to get back to any real growth. Didn't something like 60 million people die worldwide in that? The longer we leave it, the worse it gets & the more it costs to fix. Link to comment Share on other sites More sharing options...
MrSmith Posted January 25, 2012 Share Posted January 25, 2012 Last time it happened it took a World War & the huge rebuilding projects after it to sort the economy out, we had to go over 250% GDP in debt to get back to any real growth. Didn't something like 60 million people die worldwide in that? The longer we leave it, the worse it gets & the more it costs to fix. The sooner we allow the economy to crash the smaller the crash will be, the longer we postpone it with debt the harder the fall will be. The problem is that the crash has been postponed for too long and it will require a hard fall and a drop in living standards to correct it. The alternative is we just plod along with no growth for a long time. Link to comment Share on other sites More sharing options...
Mecky Posted January 25, 2012 Share Posted January 25, 2012 The sooner we allow the economy to crash the smaller the crash will be, the longer we postpone it with debt the harder the fall will be. The problem is that the crash has been postponed for too long and it will require a hard fall and a drop in living standards to correct it. The alternative is we just plod along with no growth for a long time. The economy has already crashed Link to comment Share on other sites More sharing options...
Tony Posted January 25, 2012 Share Posted January 25, 2012 The OP seems to have a mistaken belief that a new government can make the profligacy of the previous government disappear in a couple of years. From memory and without checking, Osborne's pre-election estimate was that HMG debt would reach around £1.4t before it begins to fall back. Osborne was brutally honest about all this stuff just before Christmas AND we're still waiting for the Eurozone to unwind. Hold tight. Link to comment Share on other sites More sharing options...
anywebsite Posted January 25, 2012 Share Posted January 25, 2012 The sooner we allow the economy to crash the smaller the crash will be, the longer we postpone it with debt the harder the fall will be. The problem is that the crash has been postponed for too long and it will require a hard fall and a drop in living standards to correct it. The alternative is we just plod along with no growth for a long time. We've already had the biggest crash since 1929, which mainly people believe lead to WW2, after similar policies were followed & a worldwide depression followed, much like we're seeing now. We didn't recover until the 1960s. How bad do you want it to get? It's WW3 in 5 years if governments around the world keep following these economic policies. Link to comment Share on other sites More sharing options...
MrSmith Posted January 25, 2012 Share Posted January 25, 2012 We've already had the biggest crash since 1929, which mainly people believe lead to WW2, after similar policies were followed & a worldwide depression followed, much like we're seeing now. We didn't recover until the 1960s. How bad do you want it to get? We have had the crash it was postponed by quantitative easing. I have been self employed for twenty years, my income goes up and down, if I always spent my income I would have boom years and bust years. I haven’t done that I have kept my spending stable so my life style doesn’t change, I don’t feel the effect of the boom but more importantly I don’t feel the effect of the bust. The problem with governments is they don’t do that because they can only see as far as the next election. We have had the boom and the bust must follow. It's not about how bad I want it, it’s about how bad it has to be. The bigger the boom the bigger the bust, the boom was massive and the bust as so far been a blip. Link to comment Share on other sites More sharing options...
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