Tory economic plans: Cutting spending?

Having read Ms Flanders report there is no need for this blog!

Oh - the simple ideas work except when they are put forward simpletons.

Labour as usual preaching the economics of the madhouse. If I keep spending on my credit cards, sooner or later my bank will say enough. Cumulative Public Sector Borrowing is now over 90% of GDP, the markets will soon say enough and this will mean the Govt will have no choice other than to reduce spending, and also interest rates will rocket.
It is a shame that the political parties all seem unable to say it straight - we are in a dreadful pickle and need to cut spending radically. I think people would have more respect if they did have the guts to say it, or are the electorate so stupid they can't see this....

Either way Nick, the politicians have to go before the electorate this year. None of the parties want to enter elections telling their supporters that cuts are going to hurt.
The poor British people have had the indignation of a collapsed economy which is only just beginning to recover (if you can call it that). They still see high unemployment; increased cost of living; and an insecure future.
Any political party is going to have to convince the voter that they have the solution to this mess the country is in. They are going to have to talk tough about the banks lending to small and medium sized companies.
In short they will have to show that they can govern the country, and not be held hostage by the financial institutions who appear to believe that they control the economy rather than the Chancellor or the Treasury.

To the various political parties:

Government spending in the next tax year is currently projected to be £200 billion higher than tax receipts.

So one could:

1) Severely cut public expenditure, but that means a lot of the public sector job losses
Cancel infrastructure and other projects, but that means private sector job losses
Cut benefits and pensions, which will hurt some of the poorest in society

2) Try and borrow it by issuing gilts, but evidence suggests there isn’t the demand for £200 billion worth of them, and even if there was, the UK would end up in a compound debt trap and likely default in the end.

3) Substantially increase taxation, but then most would spend less in the private sector to compensate for it and the UK would fall into a compound tax spiral with more private sector job losses.

4) Get The BOE to print another £200 billion to fund the shortfall like last year, but then sterling’s value will likely fall further, and facing the problem is only delayed another year in any event.

What no political party of any persuasion has yet spelled out is which option they intend to take.

But ultimately one or more of the above must be undertaken.

Any political leader prepared to grasp the nettle?

Or even a political journalist for that matter.

Because it's about time someone did.

How is the BBC a credible potential reporter of this issue when the BBC itself is thought by many to be one of the most likely potential areas for government spending cuts?

Flagrant party politics is waht the BBC is found to be playing, yet again. this is a wholly inapproriate discussion for a BBC representative to suggest. NR is prejudiced from the very outset.

The BBC is guilty of the same woeful inability to grasp the nettle as the government;

God, let me good, but not yet.

Call an election.

One way of getting around the fear factor would be to make a guarantee that no public sector worker earning less than £30,000 a year would be made redundant in the first two years of the next government.

I know this is anathema to the Conservatives who would much rather keep paying the Sir Humphrey's of the world a six figure salary for sitting around doing nothing while all of the front line staff find themselves on the dole but this is the only effective way of cutting public expenditure without adversely effecting front line services and more importantly, without making people afraid that there are going to be cuts in these services.

Keep the nurses, teachers, police officers and the like and get rid of the army of administrators and consultants who are swallowing up huge amounts of our resources.
Combine this with an all round cut in paperwork and they could also increase efficiency at the same time.

I can't find the source but I recently read a report that showed several other European countries have about 200-400 people working in their department of education central offices while in the UK our department of education has over 5,000 people working in Whitehall.
The crazy thing was that these other countries were all ahead of us in the international league tables !

Other than creating a load of paperwork for our schools to complete, what are these people actually doing, how much are they getting paid for it and what do their combined efforts achieve ?

These are the sorts of cuts I want to see being made and I may even consider voting for the Conservatives if they announce plans to do just that.

Good afternoon Nick

Thanks for this blog. There does seem to be some shuffling and dissembling between politicians as to what they will do about the deficit. Labour have continued to spend but promise to reform and thr Tories make promises of reform but are then vague on detail.

There are many economic matters which need sorting if we are to go forward. I have found many good suggestions on https://notayesmanseconomics.wordpress.com which are refreshing from the same old debate again in my view.

The thing is, this might matter if any of this was the basis of future policy - but both positions are about what make good soundbites to get them elected, not about what they'd actually do if they were.

"Labour, of course, argues that government spending promotes growth and therefore reduces the public spending cuts needed in the future."

Eh?! But that goes against all laws of maths and economics. It's like saying "If I give you 20 quid then you end up with an extra 30 quid in your pocket immediately" - it's patently untrue.

Government spending, by definition, increases the debt and means that you need to take yet more money from the tax payer to pay for it. All it does is increase the debt bubble. It creates fake temporary growth (not real growth).

It doesn't increase real growth at all; all it does is increase the size of the public sector based on a debt bubble.

Talk about repeating the same mistakes over and over again; labour's economic analysis defies all logic.

With such complete idiots in charge who don't understand the most basic maths/economics, we need an election immediately.

Cameron's right; with this kind of blatent lying/stupidity by the government, the economy is destined for oblivion.

Brown's answer to everything is "spend more money and thereby fake the figures, and pretend that everything's ok; it doesn't matter that it's going to lead to a complete economic disaster (again)"

Nick; can't you bring this up with labour politicians? What they're telling you just doesn't make logical sense. They're telling you that 2 plus 2 equals 5. Tell them that you understand basic maths and that they're wrong/stupid/lying.

This complete inability to understand basic maths/economics is what created that 0.1% "growth" - we spent/printed over a trillion pounds of money we never earned to produce that fake figure.

Brown's figures/logic are simply on another planet which doesn't seem to live under the same laws of physics as our planet.

Brown/Nick/BBC: There is *NO SUCH THING AS GOVERNMENT MONEY* - it all ultimately comes from the private sector, and it has to be paid in the end. Simply spending ever-increasing amounts of money that we don't have can not work; it's like doubling your stake at the roulette wheel on every spin and continuing to play/double even when you win.

You could argue over the finer points of whether the Tory plans or the Labour plans will be marginally worse for the economy. But the inescapable fact remains that whichever plan you go with, the economy is seriously screwed for a great many years to come.

should the headline not read

Labour economic plans: unsustanable tax rises, unsustainable spending rises

why is the emfirsie on the tory posiiton rather than what the HMG position is ?

There are likely to be cuts that CAN be made now that are unlikely to have hardly any effect on the recovery.

Making cuts now doesn't mean you make ALL the cuts now.

So Nick choices choices what to write about huh, must be difficult.

We could go for yet another economics story about cuts growth Tories Labour he said she said blah blah story which has been pretty much done to death.

On the other hand we could do Chilcot enquiry, restricted information, unwelcome advice from the Attorney General, chinese whispers - he'll say its legal and then a late decision to go to war with just a month to go before we go in. By the way, how long does it take to prepare for an invasion? Would it be about a month?

Even let slip - you could make a case that the war was legal. Make a case? This is participating in the invasion of another country, not whether to go shopping on Saturday.

Then on the radio at lunchtime a BBC R4 programme about horrifically disabled soldiers.

There's a few people who ought not be able to sleep at night.

Still, roll on Friday, maybe you're saving it all up for a blockbuster.

In the meantime recession, triumphant, best placed, return to growth, Tory cuts blah blah blah...

if they had started the "cuts" or efficiency saying measure more than 2 years ago, we would not be in half the mess we are in now , so what chance is there anybody with a CSE Arithmetic grade 4 or above will
think that NU_LIEBOUR are prepared to do what is required.

They have been profligate with everybody elses very hard ernt monies,

perhaps if GB actully called the election , then the tories and other can then firm up there preposal, but in any case will not be able too
unless they see the state of the cooked books. They make that Daily Mirror owner look competant with finances

In the end it is simple economics. Indeed, in the beginning it is simple economics. Economics boils down to arithmetic. The present 'recovery' is entirely artificial being created only through a combination of extraordinary fiscal and monetary measures. This does not imply that these steps are, or indeed were, wrong, but they will have to end - that is the way of arithmetic - the piper has to be paid in the end.

GB is unwilling to talk of when we have to pay the cost. DC has so little experience of economics that he does not realise there is a cost. Both are lying to the country. Both are politicians so that is what we all expect.

GB will makes us all pay a higher cost later over a longer period of time. DC wants us to take the medicine now. Both solutions may kill the patient, indeed we are arithmetically unable to avoid being scourged.

Which will the country choose? It actually will not matter much in twenty to thirty years time when this is all unwound and normal service resumes. (This I think is how long it will be until we have recovered from the economic experiment started by Mrs Thatcher. Going by the 1873-1896 property driven depression as an historic model.)

And then there is inflation. If only the inescapable logic of 'printing money' (QE /zero interest rates) was understood - it leads to inflation and if it does not it leads to stagnation and an 'L' shaped depression going on for decades. I do wonder if inflation would not be the better option!!!!

We have to get the price of assets in the economy to a level where society can function properly. Mrs Thatcher said there was no such thing as society and she them destroyed what remained of it. If we want a country a feral children bread by single women living in poverty we need to carry on as we are going at present - if that is not the model of society we want then we have to make single average income sufficient to pay for housing and expenses of a family again as it was for a generation or so till the mid sixties, at the same time as paying a decent return to savers and investors.

Unfortunately as the policies of both parties are direct descendants of Mrs Thatcher's policies and share her vision of society we are most likely to see the further disintegration of the Nation, before we regain equilibrium and see that Mrs Thatcher's philosophy was the destructive cause of our problems, repent and start caring for one another again!

I hope we can learn quickly! A National Maximum Wage would be a start (set at a multiple of the National Minimum Wage)! Make families economic and people will live in families - keep them uneconomic as they have become (mainly through the lending of absurd multiple of income (or lied about income!) at absurdly low interest rates) and there is nothing but destruction. (Hence interest rates must go up to 5 to 6 percent and mortgage multiples of 3 to 3.5 times must be the rule.)

#10 I think its going to be 10-15 years to correct the mess, what your guess then

and

would you want to actually win the next election unless it was via a landslide?

Robin @ 5 wrote
How is the BBC a credible potential reporter of this issue when the BBC itself is thought by many to be one of the most likely potential areas for government spending cuts?

As I understand it, the only income from government is direct compensation for the reduced licence fee for over-75s. It's a fairly small percentage of their overall income - much less than they make from their commercial enterprises.

Are you really arguing that the BBC is pro-Labour because they're trying to keep the Tories out and protect their income? Given the likelihood of a Tory victory, it would make more sense to be pro-Tory to minimize aggravation.

Sounds like the usual right-wing bleat about BBC bias. You've already got the Murdoch press singing from your hymn sheet. Are you all so spineless that you can't handle a few other voices?

Cutting the deficit....what exactly does that mean...Will that produce more jobs? Will it make more people unemployed? Who benefits....maybe the banks? Niether the government nor the banks understand that the people understand why this all occured and the role both played in the financial collapse. Now they posture as if they had nothing to do with it and are here to save the day....more like pulling old furniture out of a house they burned down. As neither the government nor the banks can be believed the figures they toss out are meaningless.

Nick

again I will ask the same question

Which is the greater threat to the British economy?

Sovereign debt crisis and Stirling crash

or

Double dip recession


The magnitude of a debt crisis and a run on Stirling are not in the same league as a double dip recession and should be avoided at ALL costs.


Anyway things are moving and this may now be out of our hands.

We are now likely to see the double dip in the next Q1 figures

and

The world's biggest buyers of bonds warned that the UK was a "must to avoid" for his investors as its debt was "resting on a bed of nitroglycerine".

This may be the start of something that has been happening to the Greeks and that is short selling of its guilts. If they then turn to us and short our bonds Labour will have pushed us over the edge and there will be no way back.

All in the name of electoral gain.

THESE LABOUR POLITICIANS REALY ARE DISPICABLE

I remember the early 70s, when I was employed by British Aerospace. We each received from the unions (I think) a beautiful glossy booklet that argued that we should be retained, not made redundant. We were making Concorde, which nobody was prepared to buy. The argument was that without Concorde thousands of us would be redundant, which would knock on to tens of thousands more in local services and more distant contractors, and hence onward. I approved of the campaign because my job was involved. But I had to concede secretly that, like the miners and steelers, our jobs would be hollow if we sold nothing. Pretend jobs are destructive.

Hi Nick, good blog on an important subject.

My tuppence worth:

You say ...

"they are nervous of Labour's repeated claims that they would cut "deeper and faster" - words that the Tories have not, as far as I can discover, used themselves"

But it's not so much "deeper and faster", it's more "too hard and too soon" - thus sending the economy into a tailspin from which it might take decades to recover. This is the risk with the Tories. And it's not really them who should be nervous ... it's Us.

Nick

Labour, of course, argues that government spending promotes growth and therefore reduces the public spending cuts needed in the future.

If this is the case then we should all work for the government we could all have massive growth if we all move into the public sector and had your sort of benefits.

Why stop at 50% of the economy why not let the government control 100% imagine the growth we would get.

The private sector is just a massive drain on the state.

Meanwhile back on earth the private sector is buckling under the strain of supporting this massive state hump on its back

#15 ah blame thatcher again , she was just a re-action to the mess
that the last labour governement of more or less 15 years left us with.

In which case you should blame Wilson/Callaghan and Roy jenkins
and it was Roy Jenkins whom started us on the road to family distruction.
With his and other active lifes outside there own relationships. There is not such thing as free love , there is a massive cost to society.

Agree with your point about single household incomes etc. whoever.

I laughed at "the hole in the road - of fixed size". Obviously politicians in blue suits know nothing of weather deterioration and vehicle damage then, and watching the hole get much bigger unless, of course, you attempt some short term repairs.

As #18 points out, the villains of this deception in the cities of Westminster and London, cared nothing of the deficit they were building as they blew away their hefty bonuses and expenses!

Now we learn that the Revenue and Customs computer programmes are useless, sending out inappropriate personal tax codes to PAYE customers. What's the chance that the country has a mass of money stuffed under someone's mattress and not accounted for in Treasury calculations? What's the chance that George and Dave know as much about running an economy as they knew about pension and benefit amounts?

The country needs jobs and lots of them. How are we going to create those jobs given that private money isn't that keen in investing in Team UK? Need a general election do we? I'd say we need a completely different kind of political structure in the UK with politicians prepared to stand up and back UK companies and put the foreign interests in their places.

We could start by building the affordable houses and flats we need for pity sakes, invest in the public transport interfaces, and rebuild the communities we have lost in the past three decades.

18 Ghostofsichuan

You are correct in that the amount of Britain's outstanding debt has been increased dramatically by having to bail out the banks. I fear however that you may be falling into the Governments trap, by referring to the "deficit" in the same breath. This is the amount that we as a Nation are spending in excess of the amount we are raising in taxation and in my honest opinion is entirely laid at the door of G Brown Esq both as chancellor and as PM. I do acknowledge that the interest on the amount of the bank bail out will add to the deficit. All the Government are doing is to promise that they will halve the deficit over the period of a parliament. ie at the end of 5 years we will still be borrowing significantly more than we are at the present time and the national debt will also be significantly higher.

Other posters have pointed out that we are in a catch 22 position in that we are in a mess which ever way we go. Therefore it seems logical to this simple mind that we start the process of reducing deficit asap and look to reduce the structural debt, over the period of a parliament, to a level where it can be afforded by future generations.

I am truly sorry that as a result of the action that needs to be taken people will lose their jobs and our services will no doubt be reduced or impaired.Unfortunately the flack for this may have to be dealt with by the doctor (The next Government) not by the cause of the disease (The current Government and to an extent the bankers who made hay whilst the Government collected the revenues generated by the City) Surely this is better than the international community calling in our debts and effectively bankrupting the nation.

What scares me is that we are no further on with putting any measures in place to remove the tax payer guarantee to the banks, and are in fact sitting back watching them make profits based on the self same guarantees that give massive bonus's to the select few "experts" who got us into this mess in the first place......

Now as much as i hate to say this there are only one set of people at present who can do this, it is in their power to do it and they haven't....

So please tell me ONE good reason why i should vote for them to continue on blindly throwing money into the bankers pensions and bonus pots while the rest of us have nothing good to look forward to for a generation ????

Though the Conservatives may want to make dramatic cuts the reality is that an increase in the numbers of unemployed means an increase in government expenditure on benefits, which should be avoided at all costs as it is counterproductive.

The trick therefore is to first freeze and then gradually reduce salaries over a longer period.This means that people stay productively in work and don't have a major upset to their lifestyle.

A freeze on government expenditure means that there are no new projects to spend money on and existing projects can be reviewed with a view to saving costs.

A massive increase in criminal and civil fines is a positive way to make crime pay for the community.

Small changes like say a 1% increase on the base rate income tax will over a number of years yield benefits without causing great hardship.Such changes can be monitored and if there are unpredicted adverse consequences action can be taken early to remedy them.

Getting the unemployed back to work is a task that needs to be addressed in a major way.The unemployed are already being paid benefits for doing nothing and this needs to change.

Only the medically unemployable should be exempt from attending a training course to gain skills,from accepting an apprenticeship, from doing public works, from getting work experience in a required job or from setting up their own businesses with government aid.There needs to be a greater co-ordination and organisation between the worlds of government, education and work.

With good planning, over time, the numbers of unemployed will fall and the benefits released can be used to both address the deficit and swell government coffers.

Solving this problem is not going to happen overnight and so by reducing government expenditure and increasing government income steadily and gradually by a variety of means over a longer period will protect everybody.

Government, unions and workers need to pull together for both the individual and national good.

24 - "Now we learn that the Revenue and Customs computer programmes are useless, sending out inappropriate personal tax codes to PAYE customers."

Indeed. So many decent, ordinary teachers, nurses and so on paying too much tax and can you believe it, there are some on these message boards who doubt the worth of tax advisors! I'm in the process of getting a tax rebate to a young schoolteacher.....nearly £700 in overpaid tax she would NEVER have known she'd overpaid without my help. I think of myself as a protector of the innocent from the cruel overbearing taxman.

If it wasn't such a serious issue I could have laughed out loud when I heard Gordon Brown try to put a positive spin on the failure of the NI negotiations. Still it got him out of having to answer tricky questions about the (in) significant bounce in the economy at PMs (Never Answer A)Question Time.

"Angel_in_Transit wrote:
I laughed at "the hole in the road - of fixed size". Obviously politicians in blue suits know nothing of weather deterioration and vehicle damage then, and watching the hole get much bigger unless, of course, you attempt some short term repairs."

My understanding was that far from the Tories comparing the deficit to a hole in the road it was actually Nick trying to use a metaphor to describe the situation.

In other words you are attacking the Tories based on the terminology used by a journalist to describe their policies to people who might not otherwise understand them

The ironic thing is that the Tories are doing what you suggest - making some short term repairs, while Labour are out there with their jackhammers making the whole bigger.

We need to tackle the deficit. Labour in the PBR dodged the issue and said they'd let us know how they will do it. This is the government for goodness sakes and they are hiding the truth - AGAIN!
When to cut is the issue but we are not even out of recession. 0.1% growth is not growth, it's seasonal spending/VAT reduction spending. It's nothing.
If the boom hadn't been wasted we wouldn't be in this mess now though just remember this everyone

23 IRIS

and while you're at it Margaret Thatcher is not to blame for the hobbling of the unions; it was Barbara Castle who tried to introduce 'In place of strife' under Harold Wilson in the sixties. Had she and her governemtn had the guts to carry it through maybe we would not have had the crippling dislocations of the nineteen seventies followed by the extreme anti union legislation of the eighties.

This, is why the debt situation must be dealt with now and not later. Prolonging the end of the pain will require even more severe medicine later.

'God, let me good, but not yet' cannot be allowed to be the standard by which we live.

Call an election.

Didnt think it would take you long to get back to normal, Nick.

I mean you couldnt go slagging Gordon off for coming back from NI empty handed, could you?

Nothing still about Chilcott, about Straw's evidence being at variance with what was given yesterday.

Why dont you just come out of the closet and do your next peice to camera wearing a red rose in your button-hole and have done with it?

Like watching TASS-TV.

The crunch for the whole structure of the economy will be just as soon as the next government is elected. The few minutes after a leader gets into power, our currency and the credit rating of the country will either stand or fall. I listen a lot, and I think if Mr Cameron wins, without having spelt out before the election day his plans for the economy, we will be abandoned by international investors, shunned by most European states & the USA. We will not even be able to bring back the troops from Afganistan who we will not be able to afford to victual. If he and Mr Osbourne cannot spell out what they will do and do it soon, we may even be in a crisis as soon as the election date is announced. Nick is right, he and other journalists must hold all parties to account on their plans for the economy now and not later.

I thought Michael Heseltine spoke wise words when he said that parties should not talk of any new policies while the country was skint.

Any new policy disclosed could be past its sell by date before it gets started.

For the next term we have too many policies already which are costing money and aren't working. We could probably be better off tidying up and streamlining those that work and getting rid of those that don't. That would save a bob or two.

Of course everything depends on the ability to borrow huge amounts of money over the next five years. If the debt can't be sold there will no longer be an argument over cuts. It will be a case of what can we salvage.

Wrong question.

We need to take the pain and balance the budget. In doing that, this nation will learn to export again, and live within it's means.

Then we need a balanced budget law that sends those in politics to jail if broken; this is the only incentive to not defer the pain to the next generation.

Set VAT rate = Income tax rate = inheritance tax rate = corp tax rate = saving rate = capital gains rate and set the rate yearly to balance the books. Economic cycle is a red herring.

Then we can look our children and grandchildren in the eye with honesty.

Personally I believe in a mixed economy, but the tories seem a bit behind the times.

The whole idea of our economy running on private owned industry manufacturing things is long gone. This is increasingly a service based economy.

What the tories don't seem to have spotted is that much of those services (health, education, law & order) are state run. Huge numbers of people are employed by them. The NHS alone is the worlds second largest employer. As the tories beloved private sector failed badly in its prime role - creating wealth - the public sector carried on. If anyone bought a new car last year, it wasn't someone from the private sector.

Now the tories are talking about huge cuts. Not only are they risking halting the upturn once they are elected, I would argue they are halting the upturn now. Why did the upturn start then falter? Why are we lagging behind other countries?

Would a nurse or a teacher buy a new car today? - Knowing they may be out of work by the end of the year?

Are the tories spreading fear and hitting confidence amongst workers in our biggest organisations?

#15 john_from_hendon

It is worth reading the entire article by Margaret Thatcher since it's addressing the question to what extent we can blame problems on "society", where society is an analytical construct independent of the millions of men and women that make up that society.

The piece continues:
"There is no such thing as society. There is living tapestry of men and women and people and the beauty of that tapestry and the quality of our lives will depend upon how much each of us is prepared to take responsibility for ourselves and each of us prepared to turn round and help by our own efforts those who are unfortunate".

So Nick, although you seem to have toned down the pro-Labour rhetoric there's still no description of how the government wasting less of our money and letting us spend more how we see fit can possibly be a bad thing.

Families are being squeezed. Pay increases are small (if indeed they are anything at all) while the cost of living rises. Taxes are rising and will have to continue to rise to repay the hundreds of billions of pounds the government is borrowing. What is a family supposed to do, except cut their spending?

So if instead the government cuts borrowing, taxes less, and lets hard working families keep more of their hard-earned cash to spend as they choose, how can that be anything other than a good thing?

Unless, of course, you're desperate to spin the economy and Labour's appalling track record of managing it (again) into something that looks good. But let's be frank, polishing things that are brown and unmentionable in polite company makes very little sense.

17#

Dont be such a plank, mate.

The difference is that you can CHOOSE whether you subscribe to Sky, you can CHOOSE whether you want to buy a Murdoch newspaper.

There are Labour tribal heartlands (particularly Liverpool) where The Sun is that big yellow thing that they see once every summer and Sky is the grey stuff above the post-industrial wastelands in which they eke out an existence.

You CANT legally choose NOT to buy a TV license, even if you dont want to watch the BBC.

Incidentally, you might not have been around at the time, it might have been in your long, distant, dyed in the wool tory voting days - last year, when Nick was on holiday, Laura Kuenssberg managed to achieve this seemingly impossible feat of writing thoughtful and discussion provoking blogs that didn't have the whiff of bias all over them.

So, if she can do it, why cant our erstwhile editor? Why dont you ask him whether he's got jelly cubes instead of vertebrae?

#32 labour and guts just do not go together, but labour and control does

@ 21

Oi! I was only pointing up the risk of the Conservatives cutting public spending too hard & too soon, thus sending the economy into a tailspin from which it might take decades to recover. And, pursuant to that, stressing that it's not them who should be nervous ... it's Us.

That's BANG on topic.

You can't go suppressing debate, you know - slippery slope, that is. Gulag beckons.

33 Perry Neeham

Congratulations on getting you NI dig past the moderators. I tried on my 29 and was moderated.

No bad language nor was it libelous as far as I am aware. It seems that it is ok to criticise Nick Robinson but not Gordon Brown and his not answering questions at PMQs

34#

"Nick is right, he and other journalists must hold all parties to account on their plans for the economy now and not later."

But thats the problem, they DONT! The lobby system is such that they have grown fat and lazy and dependent on what they get given. British journalism is riven with this kind of complacency. Its not just him, its endemic.

sagamix..


can we have your calculations for paying down debt with 0.09% growth (for that was the real number) please?

better you don't answer - as debt will continue to grow with this rate of GDP growth.

Debt can only ever be repaid through real cuts in sepnding and all pretensions to the contrary are false.

which is why newlabour policy remains...God, let me good, but not yet.

Call an election

@33 Perry Neeham

Here here! Funnily enough, I sent a complaint with similar wording to the BBC this morning.
If I want bias news there are plenty of sensationalist channels/websites/blogs out there.
One of the reasons I don't mind paying a license fee is for a news source/reporting that does not have an obvious agenda (that and the nature programs).
And if all we're going to get for the next few months is 'a party political broadcast for the Labour Party' I'm going to find it hard to take BBC journalists seriously.

P.S. Just got your name! I was kicked there once it REALLY hurt!

Goodness me, Nick, yet another Slam The Tories blog? Your whole tone is negative, as is the careful choice of picture.

You're saying that because the Tories can't be specific on the detail - what will be cut, where - this means they're mired in confusion and lack credibility.

Even if I thought you had a point (Tony Blair was hardly detailed in Opposition, was he?), how about a blog on the Government's position or record for a change? Perhaps I can take a crack at one for you:

- Labour spent most of last year denying any public sector cuts; they were continuing to invest in public services; remember Brown's dismissive Mr 10% Cut taunt against Cameron?
- Suddenly, after the conference season where the Tories did their best to lay out honestly to people the country's dire financial situation, many on the Labour side realised they'd have to start being more honest or they'd lose whatever little credibility they had left
- But the PM kept trying to peddle the same old investment line until last month's attempted coup clipped his wings and forced him to finally change his tune
- As for being specific, for the first time in history, December's spending review did not provide any detail about departmental spending; Labour said the economic outlook was 'too uncertain.'

Seems a bit odd then to keep hammering the Tories for not being able to be specific when even the Government of the day with all their access to civil servants and specialists can't be specific!!

As for cutting harder and earlier, the case has been clearly made by the Tories. The private sector is being hammered again and again by heavy tax rises. This stops people employing and investing and leads to a vicious circle whereby tax revenues fall further, so creating the need for yet higher taxes . . . It is the increases in tax and useless regulations under this Labour government that have hamstrung this country's ability to recover. Nothing else.

So the only answer is to set the private, wealth generating sector free again. This will create wealth, and generate over time the higher taxes we need. This is what the Tories will do.

Labour will just continue to cripple, tax and regulate the private sector, destroying our economy and people's lives in the process. This is why Britain continues to suffer more and for longer than any other OECD country.

That picture looks like the David Bailey one of the Kray twins!

Yeah Nick - yawn, yawn, ANOTHER non story - what about Clown failing in N.I. - WHEN will u ACTUALLY ask a Liebour Politician some HARD and HONEST questions???? - never probably, given who your immediate relations r. For anyone interested just do a blog - the answers will not surprise u and WILL explain the Liebour bias.

Stephanie Flanders summary on the other blog is well worth reading, and addressed both economic and political issues (perhaps she should double-up as BBC political editor).

Since most people won't read it before commenting I'll quote from it:

"The "right" answer on whether to when to start squeezing the budget is even less clear. Last month the FT asked 71 top economists whether they thought the government should tighten this year - or leave it til 2011. Thirty-three said wait. Thirty-one said make a start this year. (Though, it should be said, a large majority thought that the tightening from 2011 onwards needed to be faster and deeper than the chancellor's current plans.)"

Nick - Why is the uk in a financial mess
What was the uk annual borrowing figure for the ten years prior to the financial meltdown.
What are labours borrowing/spending cuts after the election.
Give us some background Nick so we can comment on your blog

#30 Mark_WE

The crucial words, which the Tories likened the hole (not whole) to, are "It is, also, about how you stop the hole growing". Now this metaphor appears to be the one that Mr Robinson believes the Tories to be using... and really Mark you should know better than to dig when you are in one...

As for my attacks, which you presume to be against the Tories, I am equally queasy about New Labour too. You see both represent the awful spectre that brought us to this junction - capitalist dogma - whereupon a certain Tony, whilst admiring a certain Margaret, decided to move several degrees of longitude to the Right. This movement, as unsubtle as it was, threw blue and red together to make purple or mauve. So instead of a clear left and right we now have an unholy mess in the middle. Dave and George, or Gord and Alistair, it really don't matter a hoot - we are doomed as someone might say.

And the tragedy, that we do not get to vote on, is the survival of those who made money for a decade in the City of London, plunging this country into debt by over valuing assets. Will they pay - like hell they will!

#38. johnharris66 wrote:

Mrs Thatcher's economic philosophy (along with Milton Friedman etc.) took no account of the need to ensure that economic restructuring did not make families uneconomic (as I define above). This is her true legacy and this legacy has been the sine-qua-non of all governments since. She made it intellectually respectable to destroy the economic basis of society. We are paying the the price of this error. This is how she destroyed society. Her chosen agent of destruction was through such legislation as 'right-to-buy' etc..

By cursing Mrs Thatcher I am not just cursing the Tories but Labour too as they carried on with her destructive policies. Remember, if a house in not a family home housing a family with a sound economic basis there will be no next generation - and population replacement is critical for the continuation of the Nation!

"sagamix wrote:
@ 21

Oi! I was only pointing up the risk of the Conservatives cutting public spending too hard & too soon, thus sending the economy into a tailspin from which it might take decades to recover."

Too late, Labour have already done it! In fact things are so bad that Labour have told us that they don't even expect to be able to correct the spin in 5 years!

Just think things are now so bad that in 5 years we will still be spinning just at half the speed we are spinning now!

Nick: I would suggest you click on the Daily Politics section of the BBC site and refresh your memory on what Michael Heseltine said on today's programme. He was absolutely right to point out that unless we have a proper plan to cut the structural deficit straight after the election we will be in deep, deep trouble. Bill Gross has already told investors not to buy gilts because the UK economy is "resting on a bed of nitroglycerine". Whether we like it or not, if we lose the confidence of people like Mr Gross and the credit rating agencies the decision on when and how much to cut will be taken out of the hands of the government, whether Labour or Conservative.

The crucial fact is that Brown and his crazy spending splurge has landed us in a situation where we have to reduce the structural deficit and that means making cuts in public spending.

And sirbarrbarr @ 34, if you change the names in your post from Cameron and Osbourne to Brown and Darling you have it about right. The disaster will be if they win the next election.

9. At 2:34pm on 27 Jan 2010, getridofgordonnow wrote:
"Labour, of course, argues that government spending promotes growth and therefore reduces the public spending cuts needed in the future."
Eh?! But that goes against all laws of maths and economics. It's like saying "If I give you 20 quid then you end up with an extra 30 quid in your pocket immediately" - it's patently untrue.
Government spending, by definition, increases the debt and means that you need to take yet more money from the tax payer to pay for it. All it does is increase the debt bubble. It creates fake temporary growth (not real growth)."

Your understanding of economics is prehistoric,not merely pre-Keynes but pre Marshall.It is simply not true that "Government spending increases debt."

If you have unused resources of men or material,then spending puts people to work who pay taxes and buy goods so investment rises creating more jobs and consumption.

The idea you can leave economic growth to the market died between 1929 and 1932, when at any level of prices there was no demand for goods and services.US output fell by 25%,German by 50%,international trade shrunk by 2/3rds.Hitler and the Naz`s crawled from the wreckage of the German economy,the economic issues arising from the great depression were only resolved by WW2.The world now recognizes this by spending its way out of depression,you do not.

There is a public spending dilemma raised by the present level of debt but it is not answered by one-sided rants.Cut too early,too deep and you risk the recovery,too little, too late you jeopardize the currency.There is no right answer,it`s knowledge of economics, and judgement.

People who lack information on which to base their political judgements become victims of the voices in their head, and any demagogue who flatters their prejudices.

Cuts that could be made.

Cancel ID cards (OK not money spent yet but is in the pipeline)

Defer Trident until we can afford it. (Again not yet spent but in the pipeline)

Suspend all spending re target setting in Police Force, NHS and Education. Maintain amount spend on delivery of service by police, doctors, nurses, teachers etc. Lets see how well they can do without big brother looking over their shoulder. I think that we will be pleasantly surprised.

Freeze pay of all but the lowest paid in the Public Sector (The Tories have already proposed this.)

Suspend all spending on equal opportunities commission, race relations commission etc and any other organisation that is there for the benefit of its workers rather than the public. Let us see if existing laws are sufficient to stifle some of the worst injustices in society.

Pay family allowance for only the first two children born after the next election. Means test the allowance.

Means test the cold winter payments to pensioners (pay the allowance to some of the poorest in society perhaps - therefore neutral.)

Taxes to raise.

Tobacco - all funds raised to be earmarked for NHS
Booze - Ditto (Ban sale of alcohol in super markets. Tesco etc can sell it but from separate off-licence premises to stop loss leader sales. Re introduce closing time of 11pm for all pubs, bars etc.) The last lot won't raise funds but will have long term benefits for heath and therefore reduce NHS Cost

Unhealthy fast food a modest levy on burgers etc with proceeds earmarked for the NHS.

Introduction of a temporary tax band of 25% for earnings over £25k up to 40% band. Increase nil rate band to £6,000.

HMRC - To tax all UK earnings of non doms as if they are UK resident.

Introduce a principle that from 10/11 any earnings are to be taxed and that any scheme designed to reduce tax via loopholes, may be the subject of retrospective sanction. ie if you earn an amount in excess of the nil rate band it is taxed no matter how or where it is received. Loss of benefit and seizure of goods for anyone found to be supporting the black economy.

Suspension of ISA allowance for 10/11

No idea how much the above would raise and no doubt some of the suggestions are naive, but i believe that on the whole they are fair and would spread the pain amongst those of us that can afford to take it

"Angel_in_Transit wrote:
#30 Mark_WE

The crucial words, which the Tories likened the hole (not whole) to, are "It is, also, about how you stop the hole growing". Now this metaphor appears to be the one that Mr Robinson believes the Tories to be using... and really Mark you should know better than to dig when you are in one..."

Yes, as I said this is a metaphor that Nick is using to try and explain the deficit - the Tories are not the ones who are comparing the deficit to a hole.

Just to be clear the Tories are not using metaphors Nick is.

And as to your comment about "knowing better than to dig" when you are in a hole - obviously that would depend on the purpose of the hole. If the hole isn't deep enough you keep digging to it is.

"As for my attacks, which you presume to be against the Tories"

Well your comments were attacking the Tories for a logical flaw in a metaphor made about their policies by a third party - doesn't take much to persume you were talking about the Tories. True we have this weird mix of three mainly centre parties fighting over the same ground - but I would rather the election was fought on the middle ground rather than the extremes of either side (and I hate to break it to the left-wingers the extreme left is just as bad as the extreme right)

Been reading this blog for a few days and a clear pattern seems to be emerging?

Nick posts articles that are provocative, biased towards one political party or sometimes both.

A number of people add informed contibutions.

A few people regularly add posts to demonstrate their (apparently very strong) political loyalties. This often leads to them saying essentially the same thing whatever article Nick posts.

It may be entertaining (for a while), but this political chanting tends to undermine the informed debate. Not sure how to move on beyond this without Nick taking the lead. Problem is I don't see much evidence of him playing an active part in the blog after he has posted the article. Does he ever read the comments?

HELLO NICK. ARE YOU THERE?

Why on earth has my comment 51 been referred to the moderator. What on earth is happening.

From a financial report I received today:

"The UK is a must avoid. High debt with the potential to devalue its currency present high risks.”

- Bill Gross, Fund Manager, Pimco, quoted on Reuters, Tuesday

“Growth is slow and inflation is rising, and weakness of the exchange rate has to happen. We are massively bearish on the pound.”

- Hans Redeker, Head of FX, BNP Paribas, speaking to Bloomberg, yesterday .

I predict that very soon the UK's economic direction will be out of our hands, and whether we cut sooner or later, deeper or shallower will become academic. The financial markets will force a margin call on the UK's account with the rest of the world, as we are far too highly leveraged, and we will be forced to do whatever they require of us. These markets will care not one jot whether the necessary measures cause high unemployemnt, social strife, whetever - just so long as they get their money back.

It all could have been avoided if Brown as Chancellor (and later as PM pulling Darling's strings) had been sensible with the amount of money he was spending on public services, but he wasn't. And we all know who will be paying for his profligacy for years to come.....

"(...) none of the key players has laid down a clear plan." (Stephanie Flanders)

To be fair to the Tories, their point that it is vital to restore confidence in the Blighty economy by making a start on sorting out the UK's public finances would appear to be one which has the support of the International Monetary Fund, which has been stressing that the governments of states whose public finances are increasingly preoccupying, not to say alarming, distressing or even bizarre, should be getting on with devising and communicating credible exit strategies, as increasing anxiety about budget deficits could destabilize financial markets and endanger the recovery (such as it may be in the case of the UK) by causing the cost of borrowing to rise for households and businesses.

Frankly, the UK economy appears to be so fragile that having to expose it at this juncture to months of general-election party politicking so that one set of rascals can be cast out in favour of another set is quite likely to be damaging in itself. It is not a battle royal between the parties that is needed right now, arguably. It is a cease-fire, consensus and a coalition for the duration of the recovery.

Are things really that bad? What does it look like to you? But hey, don't let me spoil your fun. Carry on firing. Just remember who will be benefiting from the disaster towards which the UK appears to be charging with the blind resolution of the Light Brigade. Into the valley of Death . . .

60. At 5:06pm on 27 Jan 2010, telecasterdave wrote:
Why on earth has my comment 51 been referred to the moderator. What on earth is happening.
------------------------------------
I have been following several BBC blogs today and all have more referrals than usual. Either there is a more hardline moderating policy today or we may have a malicious complainer causing trouble. Interesting to see if the comments end up permanently removed or not.

60 & 63

You are right. Up until today I was proud of my record of just 2 referrals in around 9 months of posting on this blog. I have had two referred today. Many more posts that are less connected to the subject under discussion have been allowed.

For the life of me I cannot see that either post was offensive and both were at least close to being on topic. ie the prime minister being unavailable to answer economy questions at PMQs due to his failed NI talks.

#61 Conedia

The markets have made their mind up already and all that remains to be decided is what reason they will give for why whichever plan from Labour or the Tories was not enough to retain their confidence.

Robin @ 32

"it was Barbara Castle who tried to introduce 'In place of strife' under Harold Wilson in the sixties. Had she and her government had the guts to carry it through maybe we would not have had the crippling dislocations of the nineteen seventies followed by the extreme anti union legislation of the eighties"

Read that once - twice - three times - and yes (!) it IS. It's two sentences from the Rock, one coming immediately after the other, with which I can find little fault.

Or is it? Should I have gone to Specsavers?

It has been reported today that the Gap between Rich and Poor is at it's widest in the last 30-40 Years, and also perhap wider since WW2.

Therefore, any attempts by any Government to reduce ANY Public Spending in any shape or form, WILL further effect the Poorest in the UK the most by if anything making those that have been already being Classed as amongst the Poor, even Poorer than they are at this present time.

For however hard or not any past Government to our present day Government have tried they have thereby completely failed in their attempts to reduce the Gap between the Rich and Poor for any substainable long-term, althought we have put in place intervention methods such as the Minimum Wage in trying by not letting the divide between the better off and the Poor from getting wider, but however this intervention appears not to have worked to bridge the gap.

Perhap therefore, we should now also think about introducing an Maximum Wage Policy whereby those at the highest paid levels in Society can only earn up to a Maximum level in earning with as completely regardless as to whatever their employment status in the work-place is.

If of course nothing is done then the current gap between both Rich and Poor can and will only get wider, for we have failed to bring everyone up to higher Standard of an exceptable levelled expectation of earning so let try this in reverse by closing the Gap from the top-down.

cone @ 61

"And we all know who will be paying for his profligacy for years to come ..."

I'm going to hazard a guess ... our grandchilden?

46#

Gordon and his mates are kicking us there every day brother and you kinda go numb after a while! :-)

My goodness, if i had run my buisness like this government i would have gone bankrupt several times over & been jailed! I think we are "Up the Proverbial Creek"i'm sad to say.

#58

I am not sure that we need left, right or centre Mark. I think we need to start again with the idea that politicians actually represent people, ALL people. That would be a brilliant idea for 2010 wouldn't it? Of course, Conservatives, New Labour and Lib Dems need not apply.

#61 conedia

From a financial report I received today:

"The UK is a must avoid. High debt with the potential to devalue its currency present high risks.”

- Bill Gross, Fund Manager, Pimco, quoted on Reuters, Tuesday

“Growth is slow and inflation is rising, and weakness of the exchange rate has to happen. We are massively bearish on the pound.”

- Hans Redeker, Head of FX, BNP Paribas, speaking to Bloomberg, yesterday .

I predict that very soon the UK's economic direction will be out of our hands, and whether we cut sooner or later, deeper or shallower will become academic. The financial markets will force a margin call on the UK's account with the rest of the world, as we are far too highly leveraged, and we will be forced to do whatever they require of us. These markets will care not one jot whether the necessary measures cause high unemployemnt, social strife, whetever - just so long as they get their money back.

It all could have been avoided if Brown as Chancellor (and later as PM pulling Darling's strings) had been sensible with the amount of money he was spending on public services, but he wasn't. And we all know who will be paying for his profligacy for years to come.....

+++++++++++++++++++++++++++++++++++++

Sounds like Mr Gross is looking to make a killing if his attemps to undermine the pound comes to fruition.

+++++++++++++++++++++++++++++++++++++

Hans Redeker, Head of FX, BNP Paribas, is the same idiot who predicted, at the begining of December, that the pound will be below parity with the euro by Christmas, then the new year.

Until you realise conedia, that these people are only trying to manipulate the market with scare stories, in order to make profit for themselves and their money masters, you will always be fearful of any such prediction. The danger is that they may have enough influence to manipulate the market in this way, and the one thing for sure is that they have not interest in the British economy other than how much they can make out of it. Once they trash our's, they'll move onto another.

#71 angel

Con, Lab, & Libs, need not apply. So are you standing? Who will you represent? Everyone? If so, how will you reconcile the wants of the capitalists and the needs of the workers?

eye wish at #72:

"....that these people are only trying to manipulate the market with scare stories, in order to make profit for themselves and their money masters, you will always be fearful of any such prediction. The danger is that they may have enough influence to manipulate the market in this way, and the one thing for sure is that they have not interest in the British economy other than how much they can make out of it. Once they trash our's, they'll move onto another."


And that is my point. These people WILL manipulate the markets, with no concern for our interests. Which is why whoever forms the next government is going to have to deal with that. And the measures to deal with that may not be in the best interests of the country from a social or societal perspective, or even from a long term financial perspective, but only from a short term financial perspective that enables the country to continue to trade in world markets.

I wonder where George Soros is right now......

Talk of the economy, re cuts, debts, how soon how far on here is always divisive.

The doom merchants are always talking about the IMF knocking at the door and downgrades from credit rating agencies blah blah (ironic considering the culpability of credit rating agencies in re the banking crisis)

But I recommend the following balanced (IMO) article re debt levels to add a bit of perspective.

apologies if already been discussed.

For those who dont look here's an excerpt

"But again, is the outlook for the UK's debt position much worse than that of other major economies?
"It is hard to single out the UK," says Gilles Moec, senior European economist at Deutsche Bank. "In 2011, the UK and the eurozone are projected to have exactly the same debt to GDP ratio."
In fact, according to the IMF, the UK's debt levels as a percentage of its economic output will be 98.3% in 2014, lower than the US (108.2%), Italy (128.5%) and Japan (245.6%), and only fractionally higher than France (96.3%).
Repaying these high levels of debt will force countries to cut spending and raise taxes, with potentially serious implications for their inhabitants.
But it's hard to avoid the conclusion that the UK is being penalised simply for having a low level of debt in the first place."

https://newsvote.bbc.co.uk/1/hi/business/8415703.stm

#67 londonharris wrote:
"we should now also think about introducing an Maximum Wage Policy"

Yes, and we could also think about public spending cuts to compensate for the loss of tax revenue.

I suppose Manchester United could move to Dubai.

#73

Capitalist workers would do it. It would be nice to have cooperatives instead of massive corporations that hide massive corporations that hide and so on....

And no, I will not be standing, I am much too good at sitting down! But, if you play your cards right, I may be persuaded to get up.

67. london harris.
Perhap therefore, we should now also think about introducing an Maximum Wage Policy whereby those at the highest paid levels in Society can only earn up to a Maximum level in earning with as completely regardless as to whatever their employment status in the work-place is.

excellent stuff. its moral, correct, and obvious.

conedia

I agree with you in that that is the problem. The question is what are you prepared to see happen, to counter these parasites?

72 eye wish

Speculators will only attack a Market that is already weak and agreed can make thinks worse.

Bill Moss who works for PIMCO, with Ed Balls' brother by the way, has effectively bet against UK Gilts on the behalf of his investors, (not his masters - which sounds rather sinister doesn't it) which could include you if you were so inclined. I believe that the units are freely available. As I understand it he has sold his holdings rather than shorted them and so will not make a killing by buying back to close should prices fall.

#77 angel

Capitalist worker.

I like the sound of that.

80 me

Should of course be Bill Gross

#80 oldreactionary

You see I remember when PIMCO stood for;

Portsea Island Mutual Co-Operative, which of course had only members with one share each. No external investors.

75 EatonRifle wrote

"It is hard to single out the UK," says Gilles Moec, senior European economist at Deutsche Bank. "In 2011, the UK and the eurozone are projected to have exactly the same debt to GDP ratio."

This information complements the fantasy that the UK entered the recession with higher debt than other nations,when it was lower.

The problem for the UK,as a trading nation,is that if a devil`s brew of fund managers,trading floor executives and investment bankers can persaude the international community the British economy is uniquely weak, they can attack the pound,force devaluation and a credit re-rating from which they stand to make billions.

If these self interested rumours are amplified by the tabloids and elements of the opposition they become self fulfilling prophecies.It will happen because enough people believe it will happen rather than being justified by the fundamentals.The pound will be sold short and we will all be poorer.

Bankers and financiers have lost all moral authority,all patrotism,(cut our bonuses we will leave).Given the catastrophe their greed and irresponsiobility has induced, the least they can do is remain silent

78. At 7:28pm on 27 Jan 2010, lefty10 wrote:
67. london harris.
Perhap therefore, we should now also think about introducing an Maximum Wage Policy whereby those at the highest paid levels in Society can only earn up to a Maximum level in earning with as completely regardless as to whatever their employment status in the work-place is.

excellent stuff. its moral, correct, and obvious
-----------------------------------------------------

Not to mention dogmatic, idealistic and completely and utterly destined to fail with spectacular consequences.

You've got more chance of knitting fog than getting a global agreement on any such policy. If you didnt have global consensus, your high earners would vanish overnight. Not just bankers, your musicians, actors, footballers, entrepreneurs, people who start businesses from nothing. Chances are, they would probably take their businesses with them as well.

Say nothing of the global ones who can move at will anyway.

Bye bye Honda, Toyota, Nissan, BAe, Bentley, Rolls-Royce, Aston Martin, Jaguar; Economically inactive would reach 12-14 million inside 2 years as these businesses left.

Pension schemes, be it public sector or private or state would collapse.

So not only would you have a collapse in income tax revenues, you'd have a collapse in corporation tax and capital gains tax.

Just how are you going to give more money to the poor when you've got a fraction coming in of what you had before? Say nothing for how you are going to run public services such as education and health, let alone social security, let alone the dole - where are the jobs going to come from? Do you have the slightest comprehension just how much tax revenue is generated by the high earners and by the large industries, particularly the financial services sector? Before the bubble burst, it 20% of GDP just from the City.

You'd go from what was the worlds fourth largest economy to Cuba or Zimbabwe inside 18 months. You wouldnt be able borrow from anywhere apart from maybe the Russians or the Chinese and there would be punative measures attached to it.

Its dogmatic bulldust, a pipe dream and it would never, ever work.

oldreactionary:

Of course there are government programs that could and should be eliminated but one must understand that many of these were political creations and have some patron that will protect them at the expense of worthy services. There is a lack of confidence in the political system, in both major parties, as they were both responsible for the banking mess and sat by while it drove off the cliff with other people's money in their pockets. No one apparently has a plan, little tweaks here and there, but no real plan. They are all waiting for something good to happen, that is the plan.
No one wants to sacrifice, especially the ones who caused it. Some national effort that citizens believed was fair and equitable, sharing the burden would work, but no one beleives that the wealthy would not be given advantages and others with political influence and the burden would once again fall on the middle class. That is the problem, a lack of faith in the political system as a process that can work for the well being of the nation and not the priviliged few. There is a way there is just no will.

#80 oldreactionary

I meant to say that I don't agree they only "attack", you word not mine, markets already weak.

Interesting you say they work together to make things worse.

If no market was in such a position, and who decides this? do you think speculators just go and hibernate? No, they create an illusion of trouble and then profit from the slump in, what is called confidence.

What creative benefit do these speculators have for any economy? They are just parasites and should be eradicated.

Incidentally, George Soros, another of the parasites, tried to trash the British economy just over a year ago. Claiming that the pound was finished and he had sold the lot. Of corse since then, the pound has risen from 1.03, as I think it was at the time he was talking and is now roughly 1.15, (against the euro).

What sort of crystal ball do these people use?

75/84#

Ah, well, that makes it alright then.

Just buy a million handcuffs and gags for everyone working in a London EC postcode and tell the governor of the BoE to keep them printing presses going full speed.

I'm sure Gordon can find another lame duck corner of the world to throw another 100 billion of or monopoly money at.

Dunno what we were all panicking about, eh?

83 eye wish

I believe that you are mistaken

PIMCO

History

The PIMCO Group (PIMCO) is an institutional money manager specializing in fixed income management, headquartered in Newport Beach, California. PIMCO was founded in 1971 as a subsidiary of Pacific Mutual Life Insurance Company (now known as Pacific Life) to expand the services of its parent to include separate account management of employee benefit plans, foundations and endowments. By 1982, PIMCO was operating independently from Pacific Mutual and was located at separate premises.

On 5 May 2000, Allianz SE (formerly Allianz AG) of Munich, Germany purchased a majority stake in PIMCO's parent, PIMCO Advisors L.P., today known as Allianz Global Investors of America L.P. ("AGI"), leaving Pacific Life with a minority interest. As of 30 June 2005, Allianz owns approximately 97% of Allianz Global Investors of America L.P., leaving Pacific Life with approximately 3%. With the closing of the Allianz transaction in 2000, PIMCO became the global fixed income management leader for Allianz, though PIMCO operates as a separate, autonomous subsidiary.

As fixed income markets have specialized and globalized over the last 38 years, PIMCO has expanded its depth and coverage. Today, we have expertise and significant resources committed to virtually every sector of the global bond market, and have offices in Newport Beach, New York, Singapore, Tokyo, Hong Kong, London, Sydney, Munich, Amsterdam, and Toronto.

PIMCO has enjoyed a stable organization throughout its 38-year history. Many of the professionals who were instrumental in PIMCO’s founding and subsequent growth are still active in its management, including the three founders.

#85 Perry Needham

William Wilberforce said, "We should abolish the slave trade".

The international slave traders replied, "You have more chance of knitting fog, Billy boy".

37. At 4:01pm on 27 Jan 2010, jon112uk

Great stuff. If I understand you correctly, the reason for the poor growth figures just published is "it's the Tories fault, for being Tories"

Is that a fair summary?

Nothing to do with the current party in power?

Rifle @ 75

Yes Eaton, indeed so. Let's have some perspective, shall we? Self flagellation is enjoyable - of course it is - but it's no substitute for a Conservative economic policy.

90#

Regardless of the moral position, you're not exactly comparing like with like are you? Pre-industrial revolution vs 21st Century economy?

No. Not even close. Try again. Try thinking of an idea that might actually work this time.

I think that Brownandout might be the stupid one.

There is absolutely no need to cut public spending at all.

In fact we can increase it.

According to the inequality figures published today if you capped the wealth of a household to five hundred thousand pounds and took the excess as tax i.e. a one off average tax of 41% for the top 10% of wealthiest in Britain only; then you would gain around 805 billion pounds (US billions).

Considering that the current debt is around 750 billion pounds (US billions) then we would have a surplus of about 55 billion to spend.

We could then also tax properly in the future with a 70% tax on any earnings above five hundred thousand pounds a year. We could then spend more instead of having to get into debt to do it; as currently we are not spending enough but what we are spending, we're having to borrow to do so.

Of course this would never be allowed by the rich out of sheer greed, the very greed that has got us into the mess that we're in.

The top 10% (including Fred Goodwin) would be perfectly happy to watch the rest of us suffer spending cuts, poorer public services and a rise in pension age just so that they can have their expensive cars, yachts and extra houses which they claim they earned yet were gained at the expense of the economy now.

87 eye wish

You may not like Mr Gross and PIMCO but where would we be if there was no market, primary or secondary, for our Debt. Perhaps your Cooperative Society could find the funds to lend to our profligate Government. Surely its up to them if they want to avoid UK Debt.

PS I have no beef with Co-ops. In particular I think that the John Lewis Partnership is a perfectly good business model. It takes all sorts to make a balanced economy.

Just watching 'My Boy Milliband' talking about how we need to support Yemen followed by Gordon rattling on about supporting Afghanistan at the same time reading what an awful mess we are in here at home.

Why oh why are we carrying on pretending we are a global power? Yes we have a financial services legacy but apart from that we are 'yesterday's nation'.

Ok, lets just forget the past and think about the future. We are talking about saving OUR country here. Leave the middle east / africa to others. Stop paying aid to India/Pakistan/China. Lets pull our troops back home. Put it down to experience.

Say farewell to Gordon. Its over. lets get on with re-building this country. Now!

Oh by the way, if my company launches a new product, will you give it the same airtime as Apple and the ipad? Why not?

#89 oldreactionary

I beg to differ.

PIMCO (Portsea Island Mutual Co-Operative Society) was founded in Portsmouth in 1873, by ex London dock workers who had moved to the town.

They had experienced the benefits of co-operation and set their own one up in their newly adopted town.

PIMCO now in it's new guise of Southern Co-Operatives is still thriving and has no intention of undermining the British economy, or any other.

#93 perry

You are ignoring the general point aren't you. Just because it seems a huge task, and against perceived vested interests, it can be done.

You just need a bit of backbone, a vision for the future and a willingness to take the jibes of doubters on the chin.

Plus of course, it helps not to part of the vested interests, which might cause greed to colour your judgement.

97 eye-wish

My apologies I seem to have had a sense of humour bypass this evening

#84 Bryhers

Your statement about the debt is correct, but on its own gives a misleading impression (as I've pointed out before, Gordon Brown answers every question on the deficit by referring to the debt).

The debt itself reflects the relative prudence of UK governments over time (including Brown himself from 1997-2001).

The deficit reflects the structural deterioration in the UK's public finances before the recession, and the effect of the recession itself. We may excuse some or all of the latter, but not the former.

My argument, that I've made before, is that the UK structural deficit was excessive at the "boom" stage of the economic cycle, i.e the years from 2001 to 2007.

As measured by the OECD, in 2007 the UK had the 2nd largest structural deficit in the G7, and the 4th highest of 26 industrialised countries. Half of these countries went into the recession with a structural surplus (source:IFS)

Gordon Brown's bluster about the UK being uniquely well-placed to weather the recessionary storm was the fantasy politics of the recession; just as abolishing boom and bust was the fanatasy politics of the period before the recession.