Public sector job losses equalled by Private sector job loss
Discussion
I'm confused, where are we taking money out of the economy? My limited understanding was that wealth is created by the production of goods/services in the private sector. By cutting public spending are you not putting money back in to the economy. I.e. the wealth doesn't just go round in circles it has to come from somewhere. Maybe I've mis-understood, and the way out of recession is to spend more money expanding the public sector.......
I wrote my reply on my phone and in a rush and I managed to say the exact opposite of what I meant to say.
Essentially my point was that cutting public spending is taking money out of the economy is nonsense. Cutting public services is putting money back into the real economy through lower tax burdens.
Essentially my point was that cutting public spending is taking money out of the economy is nonsense. Cutting public services is putting money back into the real economy through lower tax burdens.
Surely if your in a job in the private sector that relies on work coming directly from the public sector,
e.g. you supply stationary only to the council exclusively, and the work 'dries up', well are you not indirectly employed by the public sector?
Business is all about diversifying and survival of the fittest, if your business takes a high percentage of it's work from the public sector now is the time to look at other markets.
Public sector cutbacks mean a leaner economy which is a good thing IMO of course!
e.g. you supply stationary only to the council exclusively, and the work 'dries up', well are you not indirectly employed by the public sector?
Business is all about diversifying and survival of the fittest, if your business takes a high percentage of it's work from the public sector now is the time to look at other markets.
Public sector cutbacks mean a leaner economy which is a good thing IMO of course!
This talk of 'savage cuts' and massive reductions in public spending' are amusing.
I am shocked at Cameron's inabilty to communicate the fact that public spending is budgeted to INCREASE year on year for this parliament.
That's right. These MASSIVE CUTS are in fact a reduction in the increase of spending.
Just looked at the figures for 2010 to 2015 abstracted from the PBR:
Years to end end-March 2010 2011 2012 2013 2014 2015 Total 2010-2015
A: Nominal GDPa £ bn 1409 1472 1544 1635 1735 1841
B: Govt. Spendingb £ bn (676) (706) (716) (734) (752) (776) (4360)
C: Tax Take £ bn 498 530 576 617 656 694 3570
D: Surplusb £ bn (178) (177) (140) (117) (96) (82) (790)
E: End-year PSNDb £ bn 799 986 1139 1270 1379 1473
F: Line E divided by line A 56.7% 67.0% 73.8% 77.7% 79.5% 80.0%
a: PBR, Table B 1, page 165
b: PBR, Table B13, page 189
Yes, there is inflation, but we have been fed this massive cuts line, when in fact they are pretty small cuts (circa 3.6% of the annual spend per year).
I am shocked at Cameron's inabilty to communicate the fact that public spending is budgeted to INCREASE year on year for this parliament.
That's right. These MASSIVE CUTS are in fact a reduction in the increase of spending.
Just looked at the figures for 2010 to 2015 abstracted from the PBR:
Years to end end-March 2010 2011 2012 2013 2014 2015 Total 2010-2015
A: Nominal GDPa £ bn 1409 1472 1544 1635 1735 1841
B: Govt. Spendingb £ bn (676) (706) (716) (734) (752) (776) (4360)
C: Tax Take £ bn 498 530 576 617 656 694 3570
D: Surplusb £ bn (178) (177) (140) (117) (96) (82) (790)
E: End-year PSNDb £ bn 799 986 1139 1270 1379 1473
F: Line E divided by line A 56.7% 67.0% 73.8% 77.7% 79.5% 80.0%
a: PBR, Table B 1, page 165
b: PBR, Table B13, page 189
Yes, there is inflation, but we have been fed this massive cuts line, when in fact they are pretty small cuts (circa 3.6% of the annual spend per year).
derestrictor said:
MilnerR said:
Cutting public services is putting money back into the real economy through lower tax burdens.
Except the likelihood of any form of tax or rate thereof being reduced in consequence is precisely nil.johnfm said:
I am shocked at Cameron's inabilty to communicate the fact that public spending is budgeted to INCREASE year on year for this parliament.
That's right. These MASSIVE CUTS are in fact a reduction in the increase of spending.
A ruse to get people to think the worst now but then be relieved when things don't turn out to be too bad?That's right. These MASSIVE CUTS are in fact a reduction in the increase of spending.
My Mum's a Bursar at a school and some of things they waste money on are ridiculous! They don't need to cut jobs, they just need to stop buying Nintendo Wiis, remote control cars and mobile phone top up vouchers for the kids just for turning up to lessons! I put my fingers in my ears when she talks about work now.
grumbledoak said:
Corsair7 said:
At last someone has relaised that if you take many billions out of the economy...
Wrong, dumb, and wrong again.I am amazed at the patience of those who've answered you more seriously than I can be bothered to.
I thought we'd heard the last of this crap when Liebor lost the election. This is aboslute Mad hatter's Tea Party talk.
Let's get this f
king straight: To spend on public services you take money out of the (real) economy (by taxation).blueg33 said:
I know of a private company that is cutting its workforce by 25% as a result of public sector cuts...well they are not even cuts but a restructure of the relevant part of the public sector has delayed projects by about 2 years so they have no choice.
And?I know of an engineering firm that, for the last year, has workers turn up only if and when there is work to do. Private sector driven cuts.
Government spending cuts will have private sector knock-on effects. No one ever said otherwise. This is not a surprise, this is not a reason to avoid cutting.
derestrictor said:
Dracoro said:
...not cutting will have to result in higher tax rises or a real collapse of the economy.
We don't have an economy; we have a dead vessel, flailing around in the dark awaiting the Oriental executioner's fatal blow.Digga said:
blueg33 said:
I know of a private company that is cutting its workforce by 25% as a result of public sector cuts...well they are not even cuts but a restructure of the relevant part of the public sector has delayed projects by about 2 years so they have no choice.
And?I know of an engineering firm that, for the last year, has workers turn up only if and when there is work to do. Private sector driven cuts.
Government spending cuts will have private sector knock-on effects. No one ever said otherwise. This is not a surprise, this is not a reason to avoid cutting.
A thin line needs to be walked on cuts because of the impact on the economy. If more people are out of work those of us working have to pay more tax to cover the benefits, that means we will have less to spend, which means fewer sales and more redundancies. It becomes circular.
There are many ways public sector spending could be reduced without resorting to tens of thousands of job cuts. I work on the interface between public and private sector, and the money the public sector wastes of trivia has to be seen to be believed!
Paying someone, for example, £10k a year on benefits (and remember, it won't be forever) is cheaper than paying them £20/30k plus pension, expenses to employ them etc.
Basically the cost of paying benefits is far outweighed by the savings.
For those that end up unemployed, it's not great for sure and I sympathise. However, we need (to hope) the private sector can grow and flourish then they can get jobs again (helping to create wealth to the economy rather than draining it).
On that note, this is where the govt. have to be careful not to rush too much so that the balance is wrong. Time will tell. Ultimately though, if the money isn't there to pay them, it's not there to pay them! i.e. there is no choice.
Basically the cost of paying benefits is far outweighed by the savings.
For those that end up unemployed, it's not great for sure and I sympathise. However, we need (to hope) the private sector can grow and flourish then they can get jobs again (helping to create wealth to the economy rather than draining it).
On that note, this is where the govt. have to be careful not to rush too much so that the balance is wrong. Time will tell. Ultimately though, if the money isn't there to pay them, it's not there to pay them! i.e. there is no choice.
Dracoro said:
Paying someone, for example, £10k a year on benefits (and remember, it won't be forever) is cheaper than paying them £20/30k plus pension, expenses to employ them etc.
Basically the cost of paying benefits is far outweighed by the savings.
For those that end up unemployed, it's not great for sure and I sympathise. However, we need (to hope) the private sector can grow and flourish then they can get jobs again (helping to create wealth to the economy rather than draining it).
On that note, this is where the govt. have to be careful not to rush too much so that the balance is wrong. Time will tell. Ultimately though, if the money isn't there to pay them, it's not there to pay them! i.e. there is no choice.
Or we could alternative instead of giving them benefits pay them to be a TV watcher and then claim tax back off them as well... would be cheaper in the long run.Basically the cost of paying benefits is far outweighed by the savings.
For those that end up unemployed, it's not great for sure and I sympathise. However, we need (to hope) the private sector can grow and flourish then they can get jobs again (helping to create wealth to the economy rather than draining it).
On that note, this is where the govt. have to be careful not to rush too much so that the balance is wrong. Time will tell. Ultimately though, if the money isn't there to pay them, it's not there to pay them! i.e. there is no choice.
Dupont666 said:
Dracoro said:
Paying someone, for example, £10k a year on benefits (and remember, it won't be forever) is cheaper than paying them £20/30k plus pension, expenses to employ them etc.
Basically the cost of paying benefits is far outweighed by the savings.
For those that end up unemployed, it's not great for sure and I sympathise. However, we need (to hope) the private sector can grow and flourish then they can get jobs again (helping to create wealth to the economy rather than draining it).
On that note, this is where the govt. have to be careful not to rush too much so that the balance is wrong. Time will tell. Ultimately though, if the money isn't there to pay them, it's not there to pay them! i.e. there is no choice.
Or we could alternative instead of giving them benefits pay them to be a TV watcher and then claim tax back off them as well... would be cheaper in the long run.Basically the cost of paying benefits is far outweighed by the savings.
For those that end up unemployed, it's not great for sure and I sympathise. However, we need (to hope) the private sector can grow and flourish then they can get jobs again (helping to create wealth to the economy rather than draining it).
On that note, this is where the govt. have to be careful not to rush too much so that the balance is wrong. Time will tell. Ultimately though, if the money isn't there to pay them, it's not there to pay them! i.e. there is no choice.
Adrian W said:
Corsair7 said:
Those that have been saying all along that the private sector will absorb these job losses need to wake up and smell the roses, because they are not going to. Money goes round in cricles in our economy, break that circle and everyone gets affected.
Nope! in our economy money goes to China and the low cost regions, thats a huge part of the problemGassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff