The real state of the UK economy?

[BoroB]

I keep finding myself going back to this as a truer reflection of how things are today. http://www.huffingtonpost.co.uk/ramesh-patel/growth-cameron-austerity_b_2007552.html I know the HP has its problems but so does the DM, The Sun, The Telegraph, The Independent and other sources of opinions people try and use to back up their views.

 

As to why we are where we are today, I keep going back to Labour's Liam Byrnes brutally honest statement in May 2010: 'I'm afraid to tell you there's no money left'.

[I1L2T3]

As to why we are where we are today, I keep going back to Labour's Liam Byrnes brutally honest statement in May 2010: 'I'm afraid to tell you there's no money left'.

 

Then where does Osborne get the money from?

[BoroB]

Then where does Osborne get the money from?

 

Obviously not from any reserves that Labour left behind from their time in office.

[Mecky]

As to why we are where we are today, I keep going back to Labour's Liam Byrnes brutally honest statement in May 2010: 'I'm afraid to tell you there's no money left'.

 

It doesn't answer the HP response though. And the question remains, How come the tories borrowed more money in 2.5 years of government than Labour borrowed in 3 whole terms, but the tories still blame Labour?

[BoroB]

It doesn't answer the HP response though. And the question remains, How come the tories borrowed more money in 2.5 years of government than Labour borrowed in 3 whole terms, but the tories still blame Labour?

 

Are you saying that the economy would be better now if Labour were in power?

 

As thousands of payday loan borrowers are finding out, if you borrow money that you can not afford to repay out of current income and your expenditure keeps rising then you are heading for one hell of a mess.

 

Same principal applies to Governments.

[I1L2T3]

Obviously not from any reserves that Labour left behind from their time in office.

 

Stupid argument. The Tories never leave reserves either. As the article states the Tories left Labour a 42% debt to GDP ratio in 1997.

 

The article also states that the Tories rely on economic illiteracy

 

---------- Post added 21-11-2013 at 10:35 ----------

 

Are you saying that the economy would be better now if Labour were in power?

 

As thousands of payday loan borrowers are finding out, if you borrow money that you can not afford to repay out of current income and your expenditure keeps rising then you are heading for one hell of a mess.

 

Same principal applies to Governments.

 

Not really.

 

The interest rate on pay day loans can touch 4000%. Long-term gilt yields are low single figures. Most UK government debt is in long-term gilts.

 

Also, if a household gets into trouble it can't print itself a wodge of cash.

[Mecky]

Are you saying that the economy would be better now if Labour were in power?

 

As thousands of payday loan borrowers are finding out, if you borrow money that you can not afford to repay out of current income and your expenditure keeps rising then you are heading for one hell of a mess.

 

Same principal applies to Governments.

 

Are you going to answer my question?

[Obelix]

Are you going to answer my question?

 

Pot kettle and black spring to mind here.....

 

He did answer your question though - it's the end result of the abject disaster that Labour led us into that has pushed up borrowing to it's current figures.

[BoroB]

Are you going to answer my question?

 

Recession starts in 2008, UK Income goes down with less tax receipts, expenditure carries on rising. Hence the need to borrow more.

 

Are you saying that Labour can/would have done better?

 

---------- Post added 21-11-2013 at 10:59 ----------

 

Stupid argument. The Tories never leave reserves either. As the article states the Tories left Labour a 42% debt to GDP ratio in 1997.

 

The article also states that the Tories rely on economic illiteracy

 

---------- Post added 21-11-2013 at 10:35 ----------

 

 

Not really.

 

The interest rate on pay day loans can touch 4000%. Long-term gilt yields are low single figures. Most UK government debt is in long-term gilts.

 

Also, if a household gets into trouble it can't print itself a wodge of cash.

 

Interest rates do not matter if you borrow more than you can afford to repay.

 

Borrowing with a 1% interest rate will still increase if repayments are not made.

[I1L2T3]

Recession starts in 2008, UK Income goes down with less tax receipts, expenditure carries on rising. Hence the need to borrow more.

 

Are you saying that Labour can/would have done better?

 

---------- Post added 21-11-2013 at 10:59 ----------

 

 

Interest rates do not matter if you borrow more than you can afford to repay.

 

Borrowing with a 1% interest rate will still increase if repayments are not made.

 

But the government does make its payments. There is no indication that it can't, even with Osborne applying the biggest fiscal stimulus this country has ever seen. Even if interest rates rise we have predominantly long term debt. We have a very efficient debt management service. And we can print.

 

The real problem is not the existing debt which is managed quite well but rather the chance that we may lose the ability to borrow more money at the current low rates of interest. That is why Osborne's deficit reduction failure is so critical - it requires us to keep borrowing way too much.