Increasing borrowing to reduce borrowing.

[I1L2T3]

But we are taking on long term debt to pay wages, benefits and pensions. There's no sense in that and that's why the loans we have come with a requirement to cut borrowing. There is no guarantee infrastructure projects will deliver economic benefits but some are better than others. Broadband seems a cost effective investment but High Speed Rail looks like chucking money away. Nuclear power would seem to be a better investment. But whatever we invest in borrowing to pay wages is just plain daft.

 

I agree about not financing day to day government expenditure with long-term debt. Couldn't agree more. I'm not advocating that.

 

As I've stated earlier in the thread and many other threads I'm a supporter of cuts, but only well-targeted joined-up cuts that deliver genuine efficiencies. I really don't like the ill-thought out hack and slash approach of the last two years. Although we may differ on the scale of services we want the same thing - a smaller and more efficient public sector. We should all want that really.

 

As for infrastructure projects I totally agree they have to be good ones and I agree that they are hard to identify. You mention one - broadband. We should also be investing in green technology. We also need to be focusing on R&D, house building etc...

 

All of this costs money of course and we can't pay for it with reduced tax receipts. That is Osborne's failing because of the failure to promote growth. He should also be called to account for some of the dangerous ideas that are doing the rounds at the Treasury, e.g. 100 year bonds, perpetual bonds, renewed use of PFI. Not forgetting of course the conversion of the post office pension scheme into a annual pension liability for the treasury (in return for the one-off hit of £28bn in assets)

[Jim Graham]

I agree about not financing day to day government expenditure with long-term debt. Couldn't agree more. I'm not advocating that.

 

As I've stated earlier in the thread and many other threads I'm a supporter of cuts, but only well-targeted joined-up cuts that deliver genuine efficiencies. I really don't like the ill-thought out hack and slash approach of the last two years. Although we may differ on the scale of services we want the same thing - a smaller and more efficient public sector. We should all want that really.

 

As for infrastructure projects I totally agree they have to be good ones and I agree that they are hard to identify. You mention one - broadband. We should also be investing in green technology. We also need to be focusing on R&D, house building etc...

 

All of this costs money of course and we can't pay for it with reduced tax receipts. That is Osborne's failing because of the failure to promote growth. He should also be called to account for some of the dangerous ideas that are doing the rounds at the Treasury, e.g. 100 year bonds, perpetual bonds, renewed use of PFI. Not forgetting of course the conversion of the post office pension scheme into a annual pension liability for the treasury (in return for the one-off hit of £28bn in assets)

 

The problem with the public sector is it is just too big. It is hard to target good cuts when the management are so weak and politically motivated. The Tories approach has always been to reduce funding and hope the management make things leaner. Labour's approach has always been to throw money unconditionally at massively inefficient organisations and hope something good comes of it. Neither approach has worked because the management play games and the regulators are more lapdog than guard dog.

 

The bottom line is that the economy is sliding to the point where those who are working simply cannot pay enough tax to prop up the entire weight of a bloated, bureaucratic, overgenerous state and its ever increasing debts. I sense desperation at the Treasury trying to find new ways to squeeze more money from the people without actually looking like that's what they are doing. They were quickly sussed over the Granny Tax and I'm sure they are dreaming up more technical taxes.

 

I agree with a lot you say but I am not buying the green argument. That in itself is pushing up taxes. We have a looming energy problem but throwing lots of money at schemes that produce small, variable, unpredictable amounts of energy and pinning our economic future on them seems reckless.

[Mecky]

The problem with the public sector is it is just too big. It is hard to target good cuts when the management are so weak and politically motivated. The Tories approach has always been to reduce funding and hope the management make things leaner. Labour's approach has always been to throw money unconditionally at massively inefficient organisations and hope something good comes of it. Neither approach has worked because the management play games and the regulators are more lapdog than guard dog.

 

The bottom line is that the economy is sliding to the point where those who are working simply cannot pay enough tax to prop up the entire weight of a bloated, bureaucratic, overgenerous state and its ever increasing debts. I sense desperation at the Treasury trying to find new ways to squeeze more money from the people without actually looking like that's what they are doing. They were quickly sussed over the Granny Tax and I'm sure they are dreaming up more technical taxes.

 

I agree with a lot you say but I am not buying the green argument. That in itself is pushing up taxes. We have a looming energy problem but throwing lots of money at schemes that produce small, variable, unpredictable amounts of energy and pinning our economic future on them seems reckless.

 

That must be why there's been massive queues at airports etc, which is set to get much much worse with the 33% of staffing cuts just around the corner.

 

I'm not sure that's the case. If people/industry paid their taxes like they are supposed to, instead of stashing it in tax havens, perhaps the public services would be like they should.

 

EDIT:

 

And to prove the point: http://www.bbc.co.uk/news/business-17993945

[MrSmith]

I agree about not financing day to day government expenditure with long-term debt. Couldn't agree more. I'm not advocating that.

 

As I've stated earlier in the thread and many other threads I'm a supporter of cuts, but only well-targeted joined-up cuts that deliver genuine efficiencies. I really don't like the ill-thought out hack and slash approach of the last two years. Although we may differ on the scale of services we want the same thing - a smaller and more efficient public sector. We should all want that really.

 

As for infrastructure projects I totally agree they have to be good ones and I agree that they are hard to identify. You mention one - broadband. We should also be investing in green technology. We also need to be focusing on R&D, house building etc...

 

All of this costs money of course and we can't pay for it with reduced tax receipts. That is Osborne's failing because of the failure to promote growth. He should also be called to account for some of the dangerous ideas that are doing the rounds at the Treasury, e.g. 100 year bonds, perpetual bonds, renewed use of PFI. Not forgetting of course the conversion of the post office pension scheme into a annual pension liability for the treasury (in return for the one-off hit of £28bn in assets)

 

You’ve still not addressed how we increase tax receipts without encouraging people to take on huge debts to pay for a lifestyle they can’t afford, which is the reason we had high tax receipts and growth over the past decade.

 

When the banks stopped lending and people stopped spending it was inevitable the tax receipts would drop. How would you increase tax receipts without increasing prices and debts for the consumer.

[anywebsite]

You’ve still not addressed how we increase tax receipts without encouraging people to take on huge debts to pay for a lifestyle they can’t afford, which is the reason we had high tax receipts and growth over the past decade.

 

When the banks stopped lending and people stopped spending it was inevitable the tax receipts would drop. How would you increase tax receipts without increasing prices and debts for the consumer.

 

Take on government debt, pay people to build infrastructure projects. Those people stop claiming benefits, start paying taxes & spend their money with businesses that pay taxes, those businesses can then take on more people, who stop claiming benefits, start paying taxes & spend their money at other businesses that pay taxes...

 

Then once the infrastructure projects are complete they should make our businesses more competitive (better educated & healthier workforce, cheaper energy, transport & communications), so they can sell more & pay more taxes.

 

Either that or force the banks to lend with a fixed ratio to their reserves, have fractional reserve banking, rather than lending based on 'confidence in the economy' (which they control). Problem is that the banking & financial industry is likely to move abroad if we try to regulate it in the UK & it's still a large proportion of our GDP.

 

The Bank of England can just print the money to fund any extra government debt, while the banks aren't lending it should have little effect on inflation as it's just replacing the money that the commercial banks used to lend. If we can't regulate the commercial banks effectively then we need the government & boe to step in to compensate for the boom/bust effect caused by the varying amounts that commercial banks lend.

 

It has to be better than paying 2.65 million people to do absolutely nothing, like we are now.

[MrSmith]

Take on government debt, pay people to build infrastructure projects. Those people stop claiming benefits, start paying taxes & spend their money with businesses that pay taxes, those businesses can then take on more people, who stop claiming benefits, start paying taxes & spend their money at other businesses that pay taxes...

 

Then once the infrastructure projects are complete they should make our businesses more competitive, so they can sell more & pay more taxes.

 

Either that or force the banks to lend with a fixed ratio to their reserves, have fractional reserve banking, rather than lending based on 'confidence in the economy' (which they control). Problem is that the banking & financial industry is likely to move abroad if we try to regulate it in the UK & it's still a large proportion of our GDP.

 

The Bank of England can just print the money to fund government debt, while the banks aren't lending it should have little effect on inflation as it's just replacing the money that the commercial banks used to lend.

Alternatively the government borrow money for infrastructure, and a foreign company wins the contract, they employ some UK workers but also some foreign workers, the increased tax revenues aren’t sufficient to cover the interest on the loans and when the money is spent we now just have higher debts to pay out of the dwindling tax revenues.

 

 

It has to be better than paying 2.65 million people to do absolutely nothing, like we are now.

 

There’s plenty for them to do we just need a government will the balls to get them doing it.

[dutch]

I know several people that have gone ill and stressed, divorced, misserable, unhappy because they work too much. Worked too hard and not enough time to live a decent live after work.

After years of hard work to fulfill their desires they never reach their goal because every time a goal is reached a bigger goal far away is desired.

 

People working have stolen the available time for unemployed to work and what is made available for unemployed is often slavelabour for next to nothing.

 

When the work is not there and it is not created. people must reduce their hours to make work available for unemployed. Or they have to create more jobs but if that does not work everybody should get equal chances.

[anywebsite]

Alternatively the government borrow money for infrastructure, and a foreign company wins the contract, they employ some UK workers but also some foreign workers, the increased tax revenues aren’t sufficient to cover the interest on the loans and when the money is spent we now just have higher debts to pay out of the dwindling tax revenues.

 

I'm not sure how high you think profit margins are in the construction sector. It wouldn't really make much difference, most of the money goes on labour, energy & materials, which would often be easiest to source in the UK. What is a 'foreign company' these days anyway? Most large companies are multinational, public listed companies owned by shareholders from all over the world. UK companies aim to be 'tax efficient' & hide their profits in offshore tax havens, maybe foreign companies would end up paying more tax without knowing all the loopholes.

 

Besides we're not completely independent from the rest of the world economy, if other countries do better then we do better too.

 

We could encourage other countries in a similar situation to start doing similar things & UK companies could compete for those contracts.

 

Also, they'd be 'borrowing' money from the Bank of England, who just created it out of nothing, like the commercial banks used to do when they lent money they didn't have. I'm sure they could arrange a favourable interest rate.

 

There’s plenty for them to do we just need a government will the balls to get them doing it.

 

That's what I was saying.

[I1L2T3]

You’ve still not addressed how we increase tax receipts without encouraging people to take on huge debts to pay for a lifestyle they can’t afford, which is the reason we had high tax receipts and growth over the past decade.

 

When the banks stopped lending and people stopped spending it was inevitable the tax receipts would drop. How would you increase tax receipts without increasing prices and debts for the consumer.

 

Tax receipts can be increased by getting people into work. Also by clamping down on aggressive tax avoidance and tax evasion.

[MrSmith]

Tax receipts can be increased by getting people into work. Also by clamping down on aggressive tax avoidance and tax evasion.

 

I agree as long as the wage isn't paid out of taxation.

 

Maybe a lower higher rate tax threshold would stop companies looking for legal ways to avoid paying tax, and the public can easily punish companies that don’t pay what is considered to be fare tax.