Vague_Boy Posted February 27, 2012 Share Posted February 27, 2012 Osborne: UK has run out of money In a stark warning ahead of next month’s Budget, the Chancellor said there was little the Coalition could do to stimulate the economy. Mr Osborne made it clear that due to the parlous state of the public finances the best hope for economic growth was to encourage businesses to flourish and hire more workers. “The British Government has run out of money because all the money was spent in the good years,” the Chancellor said. “The money and the investment and the jobs need to come from the private sector.” Mr Osborne’s bleak assessment echoes that of Liam Byrne, the former chief secretary to the Treasury, who bluntly joked that Labour had left Britain broke when he exited the Government in 2010. He left David Laws, his successor, a one-line note saying: “Dear Chief Secretary, I’m afraid to tell you there’s no money left”. LINK "because all the money was spent in the good years" Economist John Maynard Keynes said that you should save money during the good times. However, avowed Keynesian (in reality pseudo-Keynesian) Gordon Brown knew better. Chile's president has told Gordon Brown how her country "saved in the good times" in order to spend in the bad. Michelle Bachelet's comments came at a joint news conference as the UK prime minister was in Chile as part of a pre-G20 summit support-building trip. BBC political editor Nick Robinson said Ms Bachelet's comments echoed Tory criticisms and she appeared to be unaware of how unwelcome they would be. The Tories said Mr Brown was getting lessons on managing public finances. LINK I eagerly await the inevitable comments from those who [a] Think that the country's debt problems began in April 2010 Think that living within your means is some kind of Tory trick [c] That real growth can be achieved and paid for with borrowed money or with money created out of thin air. This is not a "normal" recession but a major shift in the Western way of life. These professional economists with their jabber about QEs and "financial repression" and bond-term "twists" and debt-to-GDP ratios are missing the point. The advanced industrial nations will not be re-jiggered onto any "growth" runway. Rather, we're entering the rutted wagon-road of de-industrializing and un-advancing. What awaits us in a "time-out" from hyperbolic technological progress. Everything that the finance ministries and treasuries and central banks are affecting to do is mere shadow theater performed in support of wishful thinking. LINK Link to comment Share on other sites More sharing options...
anywebsite Posted February 27, 2012 Share Posted February 27, 2012 Even if you don't save in the good times, the Keynesian response to a recession or a depression is high deficit spending. Then you pay down the debt when times are better. Keynes studied how to avoid & get out of another big depression after the last one. Ideally we would've saved in the good times, but we can't go back 10 years to change it. Sweden, Germany & the USA took notice of Keynes, adapted their government polices & came out of the depression faster than most other countries, including ours, we didn't recover from the 1928 bust until the 1960s. If we do the same again then I'll be close to retirement age (if I'm lucky enough to live that long) by the time things start getting better, that's if I don't die in the war. As for running out of money, that's total nonsense, money has never been cheaper for our government to borrow. You should read Keynes if you're eagerly awaiting responses to those questions. Here's a quick summery: http://www.maynardkeynes.org/maynard-keynes-economics.html or buy the book Link to comment Share on other sites More sharing options...
Mecky Posted February 27, 2012 Share Posted February 27, 2012 LINK "because all the money was spent in the good years" Economist John Maynard Keynes said that you should save money during the good times. However, avowed Keynesian (in reality pseudo-Keynesian) Gordon Brown knew better. LINK I eagerly await the inevitable comments from those who [a] Think that the country's debt problems began in April 2010 Think that living within your means is some kind of Tory trick [c] That real growth can be achieved and paid for with borrowed money or with money created out of thin air. This is not a "normal" recession but a major shift in the Western way of life. LINK In other words he totally has no idea and is causing pain and suffering for nothing, like we all know the tories ever do/have done ... and people are still thick enough to vote for them. Link to comment Share on other sites More sharing options...
anywebsite Posted February 27, 2012 Share Posted February 27, 2012 Vague_Boy, in future if you're going to come out with stuff like this you should read a little on the subject first to avoid looking foolish. If you can't afford to buy the book & can't be bothered to read it all then you can try Wikipedia: https://en.wikipedia.org/wiki/Keynesian_economics Link to comment Share on other sites More sharing options...
I1L2T3 Posted February 27, 2012 Share Posted February 27, 2012 From 2008 the USA maintained a sustained stimulus package. We cut ours dead in 2010. For economists it's a fantastic case study. Two quite similar economies (structurally) taking divergent paths in dealing with a deep recessionary environment. Only one of the countries will have got it right. Based on the gradually gathering signs of US economic recovery the indications are it isn't us. BTW Vague Boy you will soon come to realise that Osborne doesn't have any clue what he is doing. Link to comment Share on other sites More sharing options...
INTERVIEWER Posted February 27, 2012 Share Posted February 27, 2012 Why is George Osbourne taking from the poor in a rich country, the UK, and giving the proceeds to the rich in poor countries? Link to comment Share on other sites More sharing options...
anywebsite Posted February 27, 2012 Share Posted February 27, 2012 Why is George Osbourne taking from the poor in a rich country, the UK, and giving the proceeds to the rich in poor countries? To try to persuade them to buy our exports & set up trade deals. To try to gain influence in that country. It's a bit like bribery. He's hoping that more will come back to our country when they buy our goods & services. Link to comment Share on other sites More sharing options...
Jim Graham Posted February 27, 2012 Share Posted February 27, 2012 Nice thread Vague Boy. This should get the lefty loons going. I look forward to some interesting support for Labournomics. Here's a wild guess at some of the arguments we'll get 1. It's all someone else's fault 2. If you pay everybody to work in the public sector what's the problem? 3. The Tories are nasty and horrid and smelly 4. Thatcher took my dad's job away 5. Gordon Brown was an economic genius. 6. Let's eat the rich 7. Let's go back to the good old days whenever they were. 8. Deport all foreigners etc etc ad nauseam Link to comment Share on other sites More sharing options...
anywebsite Posted February 27, 2012 Share Posted February 27, 2012 Jim, you just have to read some economics, specifically that written by John Maynard Keynes, as mentioned in the OP. It'll set you straight. The original post makes absolutely no sense, yours doesn't either. It's not even worth arguing anything, the original post defeats itself. Link to comment Share on other sites More sharing options...
Cyclone Posted February 27, 2012 Share Posted February 27, 2012 The OP is arguing that labour shouldn't have spent the entire government income + some, during the boom years and that they are thus to blame now. I can't see how that position is self defeating. Link to comment Share on other sites More sharing options...
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