anywebsite 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. Keynes spent most of his life arguing for governments to borrow, spend & cut taxes during a recession, no matter what. That was what his entire economic theory was based on. If you just read a few sentences of Keynes (rather than only one) you can see that straight away. It makes this thread ridiculous, particularly [c], Keynes was the person who first explained how that happens. The quote in the middle of the post, if taken in proper context, totally contradicts the rest of the OP. The BBC's political editor could do with reading some economics too. It doesn't matter who should or shouldn't have done what in the past, we can't change that. We can only change the future. Link to comment Share on other sites More sharing options...
Jim Graham Posted February 27, 2012 Share Posted February 27, 2012 Keynes spent most of his life arguing for governments to borrow, spend & cut taxes during a recession, no matter what. That was what his entire economic theory was based on. If you just read a few sentences of Keynes (rather than only one) you can see that straight away. It makes this thread ridiculous, particularly [c], Keynes was the person who first explained how that happens. The quote in the middle of the post, if taken in proper context, totally contradicts the rest of the OP. The BBC's political editor could do with reading some economics too. It doesn't matter who should or shouldn't have done what in the past, we can't change that. We can only change the future. You are being deliberately selective with your economic theory. Keynes also says that during the good times you pay off debt accumulated during the bad times. What Keynes could not have forseen is that fools like Brown would think they knew better and could create artificial good times by borrowing taxing and spending to the point where Keynes' sound economic ideas would be rendered useless in the face of cripplingly large debts at the end of the good times. Keynes economics are based on having genuine economic good times not artificially created, politically motivated so called economic miracles. The problem for Osborne is that borrowing even more and cutting taxes will not work because interest rates will rise as lenders lose confidence in our ability to pay back the £1Tr we already owe. Rising interest rates will negate any progress made by cutting taxes and borrowing more. Greece's interest rate is currently 28%. Labour's plans are to push us down that road. Yes, we can only change the future but cutting our own throats by borrowing more isn't much of a future. The people who will suffer are the ones at the bottom. If you think it's bad now.................... Link to comment Share on other sites More sharing options...
WeX Posted February 27, 2012 Share Posted February 27, 2012 and we are not going into recession, so its all good so far. The government teat sucking parasites are being starved off and the country is getting back to work. well done I say. Link to comment Share on other sites More sharing options...
Cyclone Posted February 27, 2012 Share Posted February 27, 2012 It doesn't matter who should or shouldn't have done what in the past, we can't change that. We can only change the future. It matters if you want to identify it and avoid the same mistake again. Link to comment Share on other sites More sharing options...
Jim Graham Posted February 27, 2012 Share Posted February 27, 2012 It matters if you want to identify it and avoid the same mistake again. Like Labour learned from their 1979 disaster you mean? Surely Labour Learning is one of those oxymorons isn't it? Link to comment Share on other sites More sharing options...
Mecky Posted February 27, 2012 Share Posted February 27, 2012 Like Labour learned from their 1979 disaster you mean? Surely Labour Learning is one of those oxymorons isn't it? Smirk !! Link to comment Share on other sites More sharing options...
anywebsite Posted February 27, 2012 Share Posted February 27, 2012 You are being deliberately selective with your economic theory. Keynes also says that during the good times you pay off debt accumulated during the bad times. What Keynes could not have forseen is that fools like Brown would think they knew better and could create artificial good times by borrowing taxing and spending to the point where Keynes' sound economic ideas would be rendered useless in the face of cripplingly large debts at the end of the good times. Keynes economics are based on having genuine economic good times not artificially created, politically motivated so called economic miracles. The problem for Osborne is that borrowing even more and cutting taxes will not work because interest rates will rise as lenders lose confidence in our ability to pay back the £1Tr we already owe. Rising interest rates will negate any progress made by cutting taxes and borrowing more. Greece's interest rate is currently 28%. Labour's plans are to push us down that road. Yes, we can only change the future but cutting our own throats by borrowing more isn't much of a future. The people who will suffer are the ones at the bottom. If you think it's bad now.................... Is clicking a link & reading it too hard? Here it is again... https://en.wikipedia.org/wiki/Keynesian_economics Keynes′ theory suggested that active government policy could be effective in managing the economy. Rather than seeing unbalanced government budgets as wrong, Keynes advocated what has been called countercyclical fiscal policies, that is, policies that acted against the tide of the business cycle: deficit spending when a nation's economy suffers from recession or when recovery is long-delayed and unemployment is persistently high—and the suppression of inflation in boom times by either increasing taxes or cutting back on government outlays. He argued that governments should solve problems in the short run rather than waiting for market forces to do it in the long run, because, "in the long run, we are all dead."[14] I'm being selective am I? Vague Boy can't even quote a full sentence without it contradicting him. I challenge you to find me a Keynes quote that says we should cut spending & increase taxes when the economy is in a bad state & we have high unemployment. It's the absolute opposite of everything that he said. Link to comment Share on other sites More sharing options...
Cyclone Posted February 27, 2012 Share Posted February 27, 2012 Is clicking a link & reading it too hard? Here it is again... https://en.wikipedia.org/wiki/Keynesian_economics I'm being selective am I? Vague Boy can't even quote a full sentence without it contradicting him. I challenge you to find me a Keynes quote that says we should cut spending & increase taxes when the economy is in a bad state & we have high unemployment. It's the absolute opposite of everything that he said. If he said that on the assumption that it would reach the recession/problem time without having already run up a huge debt though then the ideas are no longer valid because we are not in that situation. Link to comment Share on other sites More sharing options...
anywebsite Posted February 27, 2012 Share Posted February 27, 2012 If he said that on the assumption that it would reach the recession/problem time without having already run up a huge debt though then the ideas are no longer valid because we are not in that situation. He said that when the UK was vastly more in debt than it is now, this is theory from the 1930s The policy that worked after the war to temporarily take us up near 250% GDP in debt & then bring it right down to the historically low levels we've seen since the 1970s. http://www.ukpublicspending.co.uk/downchart_ukgs.php?chart=G0-total&year=1900_2011&units=p&state=UK Link to comment Share on other sites More sharing options...
Jim Graham Posted February 27, 2012 Share Posted February 27, 2012 He said that when the UK was vastly more in debt than it is now, this is theory from the 1930s The policy that worked after the war to temporarily take us up near 250% GDP in debt & then bring it right down to the historically low levels we've seen since the 1970s. http://www.ukpublicspending.co.uk/downchart_ukgs.php?chart=G0-total&year=1900_2011&units=p&state=UK You are assuming anyone would be prepared to lend us money up to 250% of GDP. That seems unlikely as any calculation would have to add in the government's existing liabilities for such things as public sector pensions and PFI deals, levels of personal debt and savings. Then you are assuming we can create an economy capable of paying back that huge amount. The UK is not the economic powerhouse it used to be. It is unclear what a post industrial UK economy will look like and where the wealth will be generated. We already have 6m people not working and that is set to rise. When you put these two things together the UK is not a great investment bet but it is better than some. So that means interest rates will go up as the risk rises for those lending the money. The idea that we can or should borrow up to 250% of GDP is laughable. The context of today is completely different than after WWII. Link to comment Share on other sites More sharing options...
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