The next Tory recession?

[unbeliever]

They are not though. The Gini coefficient has been falling in the UK for some time now....

 

Not to mention that fact that the pursuit of the goal of getting down the difference between rich and poor is, for want of a better word, stupid.

Surely what matters is what policies make the poor better off. It shouldn't matter whether they're better off relative to the rich, just whether they're better off.

[El Cid]

They are not though. The Gini coefficient has been falling in the UK for some time now....

 

 

I am surprised, I shouldnt believe all those headlines

 

The top fifth continue to dominate the income spectrum, taking almost half the income before and after the crisis.

 

Inequality in 2011-12 was lower than before the recession. This was due to falling incomes at the very top of the distribution and increases at the very bottom, largely from social security payments.

 

 

That doesnt really make sense; the poor are richer due to "social security payments", is that because they increased inline with prices - whilst wages increased at a lower rate or not working makes you better off

 

https://www.equalitytrust.org.uk/how-has-inequality-changed

[Obelix]

I am surprised, I shouldnt believe all those headlines

 

 

 

 

That doesnt really make sense; the poor are richer due to "social security payments", is that because they increased inline with prices - whilst wages increased at a lower rate or not working makes you better off

 

https://www.equalitytrust.org.uk/how-has-inequality-changed

 

Probably. I'm not sure though I've not had a chance to look through the figures.

[El Cid]

This one has a chart on p202 that shows you very clearly what quantitative easing is supposed to do. It raises asset prices. The Bank of England described it like this back in 2011: “Purchases of financial assets financed by central bank money should initially increase broad money holdings, push up asset prices and stimulate expenditure by lowering borrowing costs and increasing wealth.”

 

Print money in the way that the Federal Reserve, the Bank of England, the Bank of Japan and the European Central Bank have been doing and house prices, bond prices and equity prices all go up. That’s not an opinion. It’s a fact. And the more they go up, the richer people who hold assets become and the more millionaires the UK gets. But the BoE report doesn’t stop with telling us what loose monetary policy does. It also tells us what happens when it ends: there is an “adjustment phase” and real asset prices fall. Raise interest rates (and one day someone’s going to blink) and large parts of the wealth the number crunchers at Barclays have been so busy adding up could just vanish (it looks as if it might have begun earlier this week).

 

http://www.theguardian.com/commentisfree/2015/aug/28/recently-became-millionaire-quantitative-easing-inflated-value-homes?CMP=fb_gu

[I1L2T3]

What are you suggesting should have happened? Genuine question.

Should the deficit have been immediately eliminated in 2010 by drastic cuts in public spending?

 

Osborne could have stuck to his plan for a start. He borrowed way more than he should have and used it for non-productive means like masking the fact he practically killed off growth for three years.

 

The other parties wanted to reduce the deficit at a slower rate but borrow to boost growth. Boosting growth would have created a positive loop where more money flowed to the treasury helping reduce borrowing.

 

Experimental expansionary fiscal contraction didn't work did it. It left us with a doubled national debt and nothing to show for it. The alternatives could have at least left us with some improved and new infrastructure.

[unbeliever]

Osborne could have stuck to his plan for a start. He borrowed way more than he should have and used it for non-productive means like masking the fact he practically killed off growth for three years.

 

The other parties wanted to reduce the deficit at a slower rate but borrow to boost growth. Boosting growth would have created a positive loop where more money flowed to the treasury helping reduce borrowing.

 

Experimental expansionary fiscal contraction didn't work did it. It left us with a doubled national debt and nothing to show for it. The alternatives could have at least left us with some improved and new infrastructure.

 

Borrowing to supposedly promote growth is what got us into this mess in the first place.

Capital spending, which is actually useful for growth was increased compared with Labour's plans.

We've had steady growth almost without interruption since Osbourne became chancellor all the while increasing spending after inflation but reducing it as a fraction of GDP.

You're advocating exactly the same neo-Keyensian rubbish which failed under Labour. A traditional Keyensian approach is pretty much what we have now. The neo-Keyensian lie that all public spending pays for itself in increased growth has been thoroughly discredited.

[drummonds]

Osborne could have stuck to his plan for a start. He borrowed way more than he should have and used it for non-productive means like masking the fact he practically killed off growth for three years.

 

The other parties wanted to reduce the deficit at a slower rate but borrow to boost growth. Boosting growth would have created a positive loop where more money flowed to the treasury helping reduce borrowing.

 

Experimental expansionary fiscal contraction didn't work did it. It left us with a doubled national debt and nothing to show for it. The alternatives could have at least left us with some improved and new infrastructure.

 

more borrowing. that's what they tried in greece. it seems to be labour's answer to everything. borrow more tax more spend more. it is why labour are in opposition.

 

Any political party that wants to be elected must be trusted with people’s money. Labour does not have that trust.

Edited August 30, 2015 by drummonds

[Vague_Boy]

The other parties wanted to reduce the deficit at a slower rate but borrow to boost growth.

 

Well that all sounds lovely doesn't it?

 

The devil, as they say, is in the detail, something woefully lacking from all 3 main parties in 2010:

 

£30bn hole in party election pledges

 

Britain’s three main political parties all have a £30bn hole in their manifestos that will have to be plugged with huge tax rises or spending cuts after the election, according to Financial Times calculations based on their policy pledges.

 

The scale of the budget gap amounts to a quarter of spending on the National Health Service, half the cost of basic state pension provision or tax increases for the average household of £1,100 a year.

 

LINK [Financial Times, April 14, 2010]

 

We know that George Osborne's promises were based on smoke and mirrors, do you seriously believe that Labour (with its track record) was being honest with the figures?

 

Haven't you learned by now that politicians will tell you what you want to hear? And those who are foolish enough to maintain misplaced loyalty to these parties are the most easily duped of all.

[El Cid]

We've had steady growth almost without interruption since Osbourne became chancellor all the while increasing spending after inflation but reducing it as a fraction of GDP.

 

A growth in population will mean more growth, but it that does not mean everyone is getting richer, or happier.

[unbeliever]

A growth in population will mean more growth, but it that does not mean everyone is getting richer, or happier.

 

Immigration is clearly out of control. But that's a different matter.

 

Economic growth has increased substantially more rapidly than population.