Austerity - how long now?
Discussion
How long it should go on for, and how long it will go on for are two different things I think.
I fancy once the recovery is stronger and more sustainable the political will to continue will fall away and whichever party is in charge will start talking about driving down the deficit through growth.
I would imagine tax cuts will come about 6 months before the next election, and the ConDems will be preaching 'mission accomplished'.
I fancy once the recovery is stronger and more sustainable the political will to continue will fall away and whichever party is in charge will start talking about driving down the deficit through growth.
I would imagine tax cuts will come about 6 months before the next election, and the ConDems will be preaching 'mission accomplished'.
I heard lots of bonds will mature around 2015; that is we will be in the position Greece is in today (our debt position really is no better than theirs). We will have trouble repaying the principal on those, having to sell vast issues of new debt to cover the old ones. That obviously wont happen, so we'll print a trillion of so of new money, the pounds value will plummet.
My guess is the whole house of cards comes crashing down around then. Austerity will be the last thing on peoples minds. Just getting a tin of beans will be most peoples main concern. The public sector wont get their darned pensions, the civil service will start getting paid in Gherkins and Toilet rolls, like the Russian Civil service did in 1998, and it will all be blamed on the tories.
My guess is the whole house of cards comes crashing down around then. Austerity will be the last thing on peoples minds. Just getting a tin of beans will be most peoples main concern. The public sector wont get their darned pensions, the civil service will start getting paid in Gherkins and Toilet rolls, like the Russian Civil service did in 1998, and it will all be blamed on the tories.
Despite having the handicap of being a member of the labour party even this bloke understands the reality.
Alan Milburn said:
The truth is this: the era of big public spending is over. Austerity is the new normal. It is not a temporary phenomenon. Fiscal conservatism is the order of the day.
12gauge said:
I heard lots of bonds will mature around 2015; that is we will be in the position Greece is in today (our debt position really is no better than theirs). We will have trouble repaying the principal on those, having to sell vast issues of new debt to cover the old ones. That obviously wont happen, so we'll print a trillion of so of new money, the pounds value will plummet.
My guess is the whole house of cards comes crashing down around then. Austerity will be the last thing on peoples minds. Just getting a tin of beans will be most peoples main concern. The public sector wont get their darned pensions, the civil service will start getting paid in Gherkins and Toilet rolls, like the Russian Civil service did in 1998, and it will all be blamed on the tories.
The average life of a UK bond is 14 years, according to the Debt Management office the UK government issued £23.7 billion between 2000 and 2002. £23.7 billion sounds like a lot, but the company I work for turns over more than that, to a government it's chicken feed. The above situation is very unlikely to happen, our gilt exposure is mainly long term up to 50 years or more at very low interest rates. The bonds maturing now are for relatively small sums of money as they too are relatively long term (in 1997 all issued government bonds were worth about £250 billion). My guess is the whole house of cards comes crashing down around then. Austerity will be the last thing on peoples minds. Just getting a tin of beans will be most peoples main concern. The public sector wont get their darned pensions, the civil service will start getting paid in Gherkins and Toilet rolls, like the Russian Civil service did in 1998, and it will all be blamed on the tories.
In 2015 beans will still be plentiful and we'll all be on PH doom mongering about the next threat to civilisation.
p.s. My estimate is that austerity, in terms of a trimmed public sector and higher taxes, will last until Labour regain power and then the cycle of cock-up followed by repair will continue. So 2015 or 2020. If it's 2020 then Labour will inherit an economy growing it's way out of austerity, they'll ride the growth until about 2030 it'll all go tits up and we'll start again
PugwasHDJ80 said:
indeed- we haven't had any "austerity" yet- nothing more than a brief tug on the financial reins to try and slow the racing horses of doom.
austerity would be a 40% haircut in spending and even that wouldn't be too bad.
What he said ^ ^ ^ austerity would be a 40% haircut in spending and even that wouldn't be too bad.
If you want to see 'austerity', look at Greece at the moment.
[Basil Fawlty]I haven't started yet![/Basil Fawlty]
hornet said:
Can't really answer the question without first defining what we mean by "austerity". I was under the impression overall public spending was still increasing, just not as quickly as previously? I'd hardly call that austere.
^^^ This.... You have to be a very special kind of tit to think that we are enduring anything remotely resembling austerity! It is all but laughable, we need an ENORMOUS cull in spending and mostly in the public sector and social servies area and you know what it will be very very hard when it happens I think the likes of student protest and poll tax riots will seem like convivial dinner disagreements!
When you grant people the ability to feather their nest from the largesse of the public purse they and their followers who were granted such largesse to keep those in power who granted it will revolt and it will be bloody!
Edited by heppers75 on Monday 27th February 21:39
crankedup said:
Anyone care to have a stab at predicting just how many years the U.K. will be under the austerity program, assume until deficit is acceptably down at sensible levels. I'm going for 2021 for no other reason then gut instinct.
As said, it's not started yet. Hopefully the UK economy gets a boost from not being in the Euro and works out that it needs to be a trading partner with the US and Asia, not the EU commies, and they can cut public spending when the private sector starts to grow.12gauge said:
I heard lots of bonds will mature around 2015; that is we will be in the position Greece is in today (our debt position really is no better than theirs). We will have trouble repaying the principal on those, having to sell vast issues of new debt to cover the old ones. That obviously wont happen, so we'll print a trillion of so of new money, the pounds value will plummet.
My guess is the whole house of cards comes crashing down around then. Austerity will be the last thing on peoples minds. Just getting a tin of beans will be most peoples main concern. The public sector wont get their darned pensions, the civil service will start getting paid in Gherkins and Toilet rolls, like the Russian Civil service did in 1998, and it will all be blamed on the tories.
As long as we repay the interest, and investors think we will repay the interest, then you roll the bond principal into a new tranche. Everyone does this.My guess is the whole house of cards comes crashing down around then. Austerity will be the last thing on peoples minds. Just getting a tin of beans will be most peoples main concern. The public sector wont get their darned pensions, the civil service will start getting paid in Gherkins and Toilet rolls, like the Russian Civil service did in 1998, and it will all be blamed on the tories.
crankedup said:
Anyone care to have a stab at predicting just how many years the U.K. will be under the austerity program, assume until deficit is acceptably down at sensible levels. I'm going for 2021 for no other reason then gut instinct.
Sounds about right.We have precedent. Ten years is how long it took after the 1970's Labour government.
Don
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Robsti said:
The papers today telling us the country has turned the corner!
Try telling that to the man on the street!
Is this the man on the street who is realinsing that 25k a year wage for paper shuffling is not enough to support 2 foreign holidays a year, Sky, a plasma telly and a new car every 3 years?Try telling that to the man on the street!
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