Fuel Strike Theory..........

[martin84]

fido said:

You think Incapability Brown would have done any better?

Back to the 'Osborne is amazing due to being slightly less st than the alternative' argument again are we? Anytime Osborne receives criticism on PH he's defended with a horrifically weak 'Labour would be worse' argument which hardly makes the Tories worth voting for.

fido said:

By what criteria is it not working?

Public spending is increasing. The deficit is not falling. The economy is not growing. Unemployment is not falling. Even the Chancellor himself believes 2012 will be bad and some Government back benchers have admitted to being absolutely terrified, their words not mine.

fido said:

Look at the PIGS as to why you cannot spend your way out of a recession

Where did I say we should spend more money? Everybody seems to think I've said that but you'll struggle to actually find a quote of me doing so. The previous Government - and indeed several others around the World - attempted to spend their way out of a global recession. Such tactics can work with a national recession but not when so many of the problems are out of your control. By the same token you cannot tax your way out of a stagnant economy. Theres plenty of money in this country, Newsnight estimated recently UK business is sat on almost £800billion which they're afraid to move, we need to get money moving.

The only way to get the economy to grow is to cut taxes, reduce the Governments share and let that money spread and multiply, eventually yielding the Treasury a higher return. Cuts have to be targeted to areas which will not cause long term damage, theres no point in making the public sector unemployed to save on their salary if it means paying them out the same in benefits due to business not creating enough jobs. Its been proven throughout history that a high tax economy does not grow without Government throwing money it doesnt have at it, we cannot do that. The Government taking £10 in tax means they get £10, but if they left it alone to grow and multiply they could eventually yeild £40 and lower outgoings.

My criticism of this Chancellor is he doesnt have the balls to make such decisions. His current plan will see the economy get no better but probably not much worse. You could give him until 2050 and we'd still be exactly the same as we are now.

[smegmore]

martin84 said:

Where did I say we should spend more money? Everybody seems to think I've said that but you'll struggle to actually find a quote of me doing so. The previous Government - and indeed several others around the World - attempted to spend their way out of a global recession. Such tactics can work with a national recession but not when so many of the problems are out of your control. By the same token you cannot tax your way out of a stagnant economy. Theres plenty of money in this country, Newsnight estimated recently UK business is sat on almost £800billion which they're afraid to move, we need to get money moving.

The only way to get the economy to grow is to cut taxes, reduce the Governments share and let that money spread and multiply, eventually yielding the Treasury a higher return. Cuts have to be targeted to areas which will not cause long term damage, theres no point in making the public sector unemployed to save on their salary if it means paying them out the same in benefits due to business not creating enough jobs. Its been proven throughout history that a high tax economy does not grow without Government throwing money it doesnt have at it, we cannot do that. The Government taking £10 in tax means they get £10, but if they left it alone to grow and multiply they could eventually yeild £40 and lower outgoings.

My criticism of this Chancellor is he doesnt have the balls to make such decisions. His current plan will see the economy get no better but probably not much worse. You could give him until 2050 and we'd still be exactly the same as we are now.

Good post.

[speedy_thrills]

martin84 said:

The previous Government - and indeed several others around the World - attempted to spend their way out of a global recession. Such tactics can work with a national recession but not when so many of the problems are out of your control. By the same token you cannot tax your way out of a stagnant economy. Theres plenty of money in this country, Newsnight estimated recently UK business is sat on almost £800billion which they're afraid to move, we need to get money moving.

The problem is that you can't tax-cut your way out of a budget deficit that is over 8% of GDP either .Agreed on the inaction being a problem though, the urge of government to constantly hedge bets in the middle ground to avoid confronting Morton's fork. Next two budgets will be severe if they are to stay on target, so far they've not deviated much from that last governments spending plan.

As for balance sheets laden with liquid assets it's part of the cycle. Companies benefit from super-low tax rates and returning profitability but have little to do with that capital until consumption picks up. Consumption won't rise as real incomes are falling (Due to corporations cutting staffing costs and increases in taxation).

I suppose there is a strong argument there for an organised transfer of wealth but it isn't going to happen any time soon. Although people on different sides of the political spectrum would argue that:
- The right would argue that healthy companies will pay people more which will eventually drag the UK out of recession (Which is the current plan and to be fair it isn't working as well as we'd have liked so far).
- The centre would argue that there needs to be a more even distribution of wealth between consumers and corporations to keep the economy ticking along.
- The left would argue that people need the wealth to buy the shiny things that companies make and drive profits.

My view is that the quality of life for ordinary people (those earning around £26244 with about 1.95 children and almost 0.53 cars) must be improved constantly. Otherwise have failed to harness economic activity for the benefit of ordinary people.