Economic Decline of Britain,what has caused it?
Discussion
Having read a lot of articles relating to the economic decline in Britain and how we are heading towards a recession, I was interested to hear what your views are on this subject?
Do you belieive it is due to the global economy? Mis-management of the UK by government?
Personally, I see it as a result of manufacturing jobs amongst others been shipped out to China / India, and the UK government over-spending on civil servants / silly projects when really they should have been saving for when this hit.
Just interested to hear other points of view
Do you belieive it is due to the global economy? Mis-management of the UK by government?
Personally, I see it as a result of manufacturing jobs amongst others been shipped out to China / India, and the UK government over-spending on civil servants / silly projects when really they should have been saving for when this hit.
Just interested to hear other points of view
Where can you start, although a little think called the economic cylce explains a lot.
Listen to Brown you think it didn't exist, well it does, and it means things go up as well as down.
Isn't really economic end of Britain, things will get better, just means the next 12-18 months are likely to be pretty nasty.
Listen to Brown you think it didn't exist, well it does, and it means things go up as well as down.
Isn't really economic end of Britain, things will get better, just means the next 12-18 months are likely to be pretty nasty.
Being no financial or economic expert, from my view point the problems arise from:
The overheating of the housing market and the associated silly lending to people who really couldnt manage the debt. This imho was fuelled by the promise of riches from house price rises, which in turn were not reined in by a judicious use of interest rate rises.
The gov in the years of plenty, spent it all on their great socialist plan, leaving nothing in the pot for the bad times.
At the same time as reaping in the tax from a growing economy, they raised taxes so that now when the revenue from a tax rise is needed there is no scope for it, and the Chancellor has accepted the public wont/cant accept further rises.
Basically Brown's prudence has been show to be utter s
te. It is easy to stick to your spending plans when the economy is booming. The real test is when things go wrong, like now, and lo and behold the treasury are revisiting their rules.
The overheating of the housing market and the associated silly lending to people who really couldnt manage the debt. This imho was fuelled by the promise of riches from house price rises, which in turn were not reined in by a judicious use of interest rate rises.
The gov in the years of plenty, spent it all on their great socialist plan, leaving nothing in the pot for the bad times.
At the same time as reaping in the tax from a growing economy, they raised taxes so that now when the revenue from a tax rise is needed there is no scope for it, and the Chancellor has accepted the public wont/cant accept further rises.
Basically Brown's prudence has been show to be utter s
te. It is easy to stick to your spending plans when the economy is booming. The real test is when things go wrong, like now, and lo and behold the treasury are revisiting their rules.we are affected by the worldwide downturn for sure. The Banks are hugely to blame for being so greedy when they knew the bubble would eventually burst. The governement are to blame for allowing the banks to run a mock when they need to be regulated more strictly! the gov are also to blame for such poor money management! new stelath taxes are constantly being introduced at the moment it seems because the government doesnt have enough money to run all the crazy 'nanny' schemes that it has running! Its all down to poor financial managment on this governments behalf.
runway78 said:
Isn't really economic end of Britain, things will get better, just means the next 12-18 months are likely to be pretty nasty.
Just because things have historically got better, it doesn't mean that they are guarenteed to the next time.If Labour continue to screw up for another two years, the uK may reach a tipping point, with no funds to resue it's failing transport infrastructure, a massive civil service tax burden I think that the next 10 years will be pretty nasty TBH.
The Credit Crunch has already had a much worse effect on the banking sector than 9/11 did, or indeed any event since the end of WWII.
Bing o said:
runway78 said:
Isn't really economic end of Britain, things will get better, just means the next 12-18 months are likely to be pretty nasty.
Just because things have historically got better, it doesn't mean that they are guarenteed to the next time.If Labour continue to screw up for another two years, the uK may reach a tipping point, with no funds to resue it's failing transport infrastructure, a massive civil service tax burden I think that the next 10 years will be pretty nasty TBH.
The Credit Crunch has already had a much worse effect on the banking sector than 9/11 did, or indeed any event since the end of WWII.
I also think high taxation is having a larger effect on the joe public's finances than the credit crunch although thats what Labour will tell you is causing the hardship
Bing o said:
runway78 said:
Isn't really economic end of Britain, things will get better, just means the next 12-18 months are likely to be pretty nasty.
Just because things have historically got better, it doesn't mean that they are guarenteed to the next time.If Labour continue to screw up for another two years, the uK may reach a tipping point, with no funds to resue it's failing transport infrastructure, a massive civil service tax burden I think that the next 10 years will be pretty nasty TBH.
The Credit Crunch has already had a much worse effect on the banking sector than 9/11 did, or indeed any event since the end of WWII.
BOE let inflation get out of control (economics 101).
They did this by defining inflation as core cpi, which apart from missing several important elements, took all the deflationary benefits of China and Indias economies immediately (cheap goods) and delayed all the inflationary results of China and Indias economies until later (expensive commodities)
The Fed made a similar and more extreme mistake as they also took pretty much all risk premium out of the market for 2 years whilst raising rates at a steady 25 bps. This IMHO was on of the major contributors to the credit crunch, the fed contributed to credit being so cheap and now they can clean up the mess.
It was obvious 2+ years ago and it was said 2+ years ago.
Seperately there were a lot of things going on in the Uk and US mortgage markets that were plain stupid and driven by greed.
They did this by defining inflation as core cpi, which apart from missing several important elements, took all the deflationary benefits of China and Indias economies immediately (cheap goods) and delayed all the inflationary results of China and Indias economies until later (expensive commodities)
The Fed made a similar and more extreme mistake as they also took pretty much all risk premium out of the market for 2 years whilst raising rates at a steady 25 bps. This IMHO was on of the major contributors to the credit crunch, the fed contributed to credit being so cheap and now they can clean up the mess.
It was obvious 2+ years ago and it was said 2+ years ago.
Seperately there were a lot of things going on in the Uk and US mortgage markets that were plain stupid and driven by greed.
It's just the usual economic cycle - the government have little or no control over when a recession happens, all they can hope to do is affect the scope and scale of it. The obscene levels of personal debt in this country at present, mostly driven by a grossly overvalued housing market, probably mean we will be hit harder by the recession than countries with lower debt levels.
The global (or at least western world) economic cycles seem to have been pulled into sync with each other by increasing globalisation of commerce, which means the entire western world is entering recession together, which will be interesting.
The key word is "cycle", things get worse, then they get better again... anyone who's been sensible with their finances (ie has saved enough money during the boom to ride out the bust) shouldn't be hit tooooo hard by it and will be able to reap the benefits from those who didn't save enough once we get back on the up-slope.
The global (or at least western world) economic cycles seem to have been pulled into sync with each other by increasing globalisation of commerce, which means the entire western world is entering recession together, which will be interesting.
The key word is "cycle", things get worse, then they get better again... anyone who's been sensible with their finances (ie has saved enough money during the boom to ride out the bust) shouldn't be hit tooooo hard by it and will be able to reap the benefits from those who didn't save enough once we get back on the up-slope.
Edited by kambites on Wednesday 6th August 09:18
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