OBR put the (deserved) boot into Cameron.

[Digga]

johnfm said:

Amazing that years after presiding over 13 years of borrow and spend, labour are now saying borrow to invest in capital projects,

Far be it from my intention to support Liebour's woeful investment record, but previous governments, for decades, have ignored the pressing issues (usually by trotting out various 'green' excuses) regarding the UK's infrastructure.

johnfm said:

The answer to growth and deficit reduction isn't ever 'simple', or they would have done it by now...

But against constant anecdotal evidence from business, especially SMEs the government has been almost entirely flat-footed. I cannot fathom what they're waiting for - did they actually beleive that QE would solve it?

As for tax cuts, not only low earners but also businesses need to benefit - this in intself will provide an instant boost to the economy and might even bring some private investment projects out of mothballs.

[hornet]

hidetheelephants said:

The administrative overhead of making sure everyone is a good little boy and pays off debt before spending will cost most of the £60bn, and what counts as debt? Personal loans, student loans, mortgages? Just give everyone with a NI number a grand and be done with it.

Broadly agree, I was just linking to the idea, not seeking to flesh it out

I don't pretend to understand economics in too much depth, but Keen is an interesting person to listen to. The fact he's gone from fringe to mainstream suggests the idea is gaining traction.

[Caulkhead]

good40 said:

Caulkhead said:

Oh, I see. You have no idea. That's fine.

What an utterly childish comeback!

I'll take that as a compliment from someone who starts such idiotic threads as this:

http://www.pistonheads.com/gassing/topic.asp?h=0&a...

[Caulkhead]

Mr Snap said:

And Caulkhead has only made 4,700+ (somewhat shouty, right wing) contributions in the last 24 months.

I refute that claim entirely - I never post with caps lock.

[johnfm]

Digga said:

johnfm said:

Amazing that years after presiding over 13 years of borrow and spend, labour are now saying borrow to invest in capital projects,

Far be it from my intention to support Liebour's woeful investment record, but previous governments, for decades, have ignored the pressing issues (usually by trotting out various 'green' excuses) regarding the UK's infrastructure.

johnfm said:

The answer to growth and deficit reduction isn't ever 'simple', or they would have done it by now...

But against constant anecdotal evidence from business, especially SMEs the government has been almost entirely flat-footed. I cannot fathom what they're waiting for - did they actually beleive that QE would solve it?

As for tax cuts, not only low earners but also businesses need to benefit - this in intself will provide an instant boost to the economy and might even bring some private investment projects out of mothballs.

Well, reducing business taxes for SMEs could be included in 'taxes for the poor' as I really don't think a small business making less than £20k for its owner should be taxed much, if at all.

The gist of it is that those vast swathes on lower incomes generate more economic activity than the 1% of top earners who are paying the lion's share of direct taxes.

If I can be bothered one day, I will do an analysis, but I expect the lower earners drive the economy and generate demand. While business owners lay claim to 'creating growth', I think that while they undoubtedly respond to demand by creating jobs to provide goods and services (and generate employers NI, corp tax and rates revenues), they never ever do this in an economic vacuum. The powerfully built, goatee wearing directors need the demand of the masses - and this will come if you cut their taxes (both direct and indirect).

[cardigankid]

MarshPhantom said:

Everybody knows that, on any level, the Tories economic plan isn't working.

Denied twice by Cameron in yesterday's speech, the Boss of the OBR has put the PM in his place.


http://www.guardian.co.uk/business/2013/mar/08/obr...

Total bullst, what you would expect from pen pushers and the Grauniad.

What I can tell you, from the coal face, is that the economy is recovering. Banks are at last lending. The private sector is on its way back, and what it needs is for the public overhead to be reduced, not increased. DC has, against the odds, and leading a moderate coalition government, succeeded.

[jules_s]

johnfm said:

Well, reducing business taxes for SMEs could be included in 'taxes for the poor' as I really don't think a small business making less than £20k for its owner should be taxed much, if at all.

The gist of it is that those vast swathes on lower incomes generate more economic activity than the 1% of top earners who are paying the lion's share of direct taxes.

If I can be bothered one day, I will do an analysis, but I expect the lower earners drive the economy and generate demand. While business owners lay claim to 'creating growth', I think that while they undoubtedly respond to demand by creating jobs to provide goods and services (and generate employers NI, corp tax and rates revenues), they never ever do this in an economic vacuum. The powerfully built, goatee wearing directors need the demand of the masses - and this will come if you cut their taxes (both direct and indirect).

I'm not sure reducing business taxes on SME would work in the short medium term as they would invariably just bank the money for a 'rainy day' or future capital investment. I certainly don't know of many business people who would instantly start spending increased (less taxed) revenue, as they want to protect themselves against cash flow issues etc.

As for low earners generating demand? The low earners I know are really living hand to mouth, so they might stop buying Tescos value a little less often with more cash in pocket, but hey...I wouldn't call that 'demand' as such

We're taking around the subject in hand again

[Digga]

jules_s said:

I'm not sure reducing business taxes on SME would work in the short medium term as they would invariably just bank the money for a 'rainy day' or future capital investment. I certainly don't know of many business people who would instantly start spending increased (less taxed) revenue, as they want to protect themselves against cash flow issues etc.

Well in a way you are correct, but then you need to consider the broader issues for these SMEs. The majority I've spoken to since 2009 have, by various means, had a reduction in the amount of captial at their disposal, due to the contraction of bank lending.

If all the tax cuts did was provide a bit of 'spare' for cashflow, that would still have a positive effect.

Reducing income taxes on lower paid owrkers also reduces the gross cost of employment, which should also help a little.

I'd agree with Johnfm that it is the lower income brackets which spend the highest proportion of their incomes, that have also been hit hardest by inflation and to whom the tax cuts should generally be directed.

[Mr Snap]

cardigankid said:

MarshPhantom said:

Everybody knows that, on any level, the Tories economic plan isn't working.

Denied twice by Cameron in yesterday's speech, the Boss of the OBR has put the PM in his place.


http://www.guardian.co.uk/business/2013/mar/08/obr...

Total bullst, what you would expect from pen pushers and the Grauniad.

What I can tell you, from the coal face, is that the economy is recovering. Banks are at last lending. The private sector is on its way back, and what it needs is for the public overhead to be reduced, not increased. DC has, against the odds, and leading a moderate coalition government, succeeded.

The OBR was officially set up by George Osborne as one of his first acts when gaining office. So, whether it produces useless bullst or not, it would seem to be a home goal, indicating a spectacular lack of judgement.

As for the dispatch from 'the coal face'. Laughable.

[Mr Snap]

Mr Snap said:

cardigankid said:

MarshPhantom said:

Everybody knows that, on any level, the Tories economic plan isn't working.

Denied twice by Cameron in yesterday's speech, the Boss of the OBR has put the PM in his place.


http://www.guardian.co.uk/business/2013/mar/08/obr...

Total bullst, what you would expect from pen pushers and the Grauniad.

What I can tell you, from the coal face, is that the economy is recovering. Banks are at last lending. The private sector is on its way back, and what it needs is for the public overhead to be reduced, not increased. DC has, against the odds, and leading a moderate coalition government, succeeded.

The OBR was officially set up by George Osborne as one of his first acts when gaining office. So, whether it produces useless bullst or not, it would seem to be a home goal, indicating a spectacular lack of judgement.

As for the dispatch from 'the coal face'. Laughable.

News from the 'coal face'....

http://www.telegraph.co.uk/finance/economics/99240...

[Andy Zarse]

Mr Snap said:

cardigankid said:

MarshPhantom said:

Everybody knows that, on any level, the Tories economic plan isn't working.

Denied twice by Cameron in yesterday's speech, the Boss of the OBR has put the PM in his place.


http://www.guardian.co.uk/business/2013/mar/08/obr...

Total bullst, what you would expect from pen pushers and the Grauniad.

What I can tell you, from the coal face, is that the economy is recovering. Banks are at last lending. The private sector is on its way back, and what it needs is for the public overhead to be reduced, not increased. DC has, against the odds, and leading a moderate coalition government, succeeded.

The OBR was officially set up by George Osborne as one of his first acts when gaining office. So, whether it produces useless bullst or not, it would seem to be a home goal, indicating a spectacular lack of judgement.

As for the dispatch from 'the coal face'. Laughable.

Speaking as a conservative, a proper one, not a plastic one like CMD, the Govt's economic plan continues to fail.

As Snap, who I'd normally disagree with on principle , correctly says, bank lending has actually fallen since the launch of the FLS. So now, according to today's leak in the FT we are going to be subject to the FLS "put on steroids".

If we consider its original stated aim; "The FLS works by providing banks with cheap funds in return for commitments to lend to businesses and households", I think we are entitled to ask precisely what the bloody hell has gone wrong!

Looking at the other levers they've been pulling, and you see an utter mess.

- The pound has fallen 25%.
- Inflation has run well above target for all but (I think from memory) 6 months in the last five years.
- Production is down. Today’s numbers from the Office for National Statistics; "Production on a seasonally adjusted basis fell by 2.9% in January 2013 compared with January 2012. Manufacturing on a seasonally adjusted basis fell by 3.0% in January 2013 compared with January 2012". So if 2009 is 100, we had reached 97.1 by the end of 2012.

In 2007/08 Merv was banging on that a devalued Pound would lead to a "rebalancing of the economy" away from services into manufacturing. I had assumed he'd meant this would entail some economic growth, but it seems not! So five years on and we are left with yet another big fat Merv fail.

And still Osborne is too st scared to do anything root and branch to reform the banks and the sysstem they operate in, or to do anything to change the supply side. He really does deserve to be sacked in my opinion.

[Digga]

Andy Zarse said:

And still Osborne is too st scared to do anything root and branch to reform the banks and the sysstem they operate in, or to do anything to change the supply side. He really does deserve to be sacked in my opinion.

Bang on.

It's been clear for a very long time that QE was not going to help the economy (that wasn't ever it's purpose anyway) and that short of a miracle of new entrants to the banking industry, lending was going to be subdued at best. Nothing this or the last government has done has helped to provide alternative stimulus to the economy.

My opinion is that if there is a recovery, even with stimulus such as tax cuts, it will likely be a creditless one, and therefore very slow.

[loafer123]

QE is simply about deleveraging the UK public debt, in just the same way as the US are doing the same.

It's working perfectly, even if most people have no idea, yet.

[Andy Zarse]

loafer123 said:

QE is simply about deleveraging the UK public debt, in just the same way as the US are doing the same.

It's working perfectly, even if most people have no idea, yet.

You mean by stoking inflation? As opposed to via debt monetisation?

[Digga]

loafer123 said:

QE is simply about deleveraging the UK public debt, in just the same way as the US are doing the same.

It's working perfectly, even if most people have no idea, yet.

But my point was that it was never going to solve the bank's lending to SMEs, was it? It was never intended to, but there seemed to be some implicit hope, on the part of the government and possibly even Merv, that it would.

[Andy Zarse]

Digga said:

loafer123 said:

QE is simply about deleveraging the UK public debt, in just the same way as the US are doing the same.

It's working perfectly, even if most people have no idea, yet.

But my point was that it was never going to solve the bank's lending to SMEs, was it? It was never intended to, but there seemed to be some implicit hope, on the part of the government and possibly even Merv, that it would.

The problem with QE is that it was originally a tactic used by The Badger to negate the effects credit crunch particularly on the banks. It did that, I suppose, after a fashion.

Sadly, the tactic has now become a full blown strategy in its own right. It was never intended to be so I suspect, but Merv and the MPC became hooked on it. And now it's become an inflationary doomsday machine. A bit like a bike that injects you with cholesterol as your pedal along, it a very unhealthy cycle

[cardigankid]

Mr Snap said:

cardigankid said:

MarshPhantom said:

Everybody knows that, on any level, the Tories economic plan isn't working.

Denied twice by Cameron in yesterday's speech, the Boss of the OBR has put the PM in his place.


http://www.guardian.co.uk/business/2013/mar/08/obr...

Total bullst, what you would expect from pen pushers and the Grauniad.

What I can tell you, from the coal face, is that the economy is recovering. Banks are at last lending. The private sector is on its way back, and what it needs is for the public overhead to be reduced, not increased. DC has, against the odds, and leading a moderate coalition government, succeeded.

The OBR was officially set up by George Osborne as one of his first acts when gaining office. So, whether it produces useless bullst or not, it would seem to be a home goal, indicating a spectacular lack of judgement.

As for the dispatch from 'the coal face'. Laughable.

You, my friend, are full of it. I am in construction and I know what the word 'recession' means. So kindly don't lecture me. As far as G.Osborne setting up the OBR is concerned, so what, that is politics. You give someone a job. They get too big for their boots and stab you in the back. What dimension of reality do you inhabit? Do you think everything works the way it says in the storybooks?

[Mr Snap]

cardigankid said:

Mr Snap said:

cardigankid said:

MarshPhantom said:

Everybody knows that, on any level, the Tories economic plan isn't working.

Denied twice by Cameron in yesterday's speech, the Boss of the OBR has put the PM in his place.


http://www.guardian.co.uk/business/2013/mar/08/obr...

Total bullst, what you would expect from pen pushers and the Grauniad.

What I can tell you, from the coal face, is that the economy is recovering. Banks are at last lending. The private sector is on its way back, and what it needs is for the public overhead to be reduced, not increased. DC has, against the odds, and leading a moderate coalition government, succeeded.

The OBR was officially set up by George Osborne as one of his first acts when gaining office. So, whether it produces useless bullst or not, it would seem to be a home goal, indicating a spectacular lack of judgement.

As for the dispatch from 'the coal face'. Laughable.

You, my friend, are full of it. I am in construction and I know what the word 'recession' means. So kindly don't lecture me. As far as G.Osborne setting up the OBR is concerned, so what, that is politics. You give someone a job. They get too big for their boots and stab you in the back. What dimension of reality do you inhabit? Do you think everything works the way it says in the storybooks?

Construction? Gosh! I'm so impressed, I used to love playing with Lego.

http://www.telegraph.co.uk/finance/economics/99249...

[loafer123]

Andy Zarse said:

Digga said:

loafer123 said:

QE is simply about deleveraging the UK public debt, in just the same way as the US are doing the same.

It's working perfectly, even if most people have no idea, yet.

But my point was that it was never going to solve the bank's lending to SMEs, was it? It was never intended to, but there seemed to be some implicit hope, on the part of the government and possibly even Merv, that it would.

The problem with QE is that it was originally a tactic used by The Badger to negate the effects credit crunch particularly on the banks. It did that, I suppose, after a fashion.

Sadly, the tactic has now become a full blown strategy in its own right. It was never intended to be so I suspect, but Merv and the MPC became hooked on it. And now it's become an inflationary doomsday machine. A bit like a bike that injects you with cholesterol as your pedal along, it a very unhealthy cycle

Deflation is a bigger worry than inflation, particularly for indebted nations, corporates and individuals.

The additional money supply simply goes some way to compensating for the slower velocity of money as a result of the credit crunch, and the boomtime velocity of money is highly unlikely to be revived as the economy recovers due to tougher bank regulation.

That leaves us with a weaker currency which helps to rebalance the economy and make us competitive, a bit of inflation to erode the real value of our indebtedness, and a pile of self-owned gilts which are effectively already cancelled, it is just we haven't said so yet.

Hardly an inflationary doomsday machine.

[cardigankid]

You get your information second hand from the papers, which are full of crap. I can tell you that people are busy, and getting busier. I can tell you that I can get credit wher 12 months ago I couldn't. You keep reading your comics and believe what you are told. There's a born every minute, and you are the proof.

I am not saying that inflation is not an issue. I am not saying that the UK's debt position is not serious. Do you seriously think that in 3 years any Government can turn round 60 years of financial misconduct? Yes, they have fiddled the figures, and yes, they haven't actually saved much yet, but they are trying. So the pound has fallen? What decade are you in, the 1890's? In this situation they are playing poker with the Germans, who like a strong currency. A weaker pound in this scenario means a boost to exports.

The papers shoot the breeze to anyone who will listen, and love to peddle bad news. What the current lot are doing is working. And what they need to do is kep screwing down the overheads, then reduce taxes. Where we are is very simple, we are carrying too many passengers. No other party has anything to offer but opening the taps to pay their supporters. If you think differently, tell us what you would do.

Edited by cardigankid on Tuesday 12th March 20:39