Budget

Greavswasthegreatest

Greavswasthegreatest

Vital Football Legend
Excus my ignorance in matters of economy, (was educated as a geologist and worked in IT)

What difference does austerity and miniscual (by comparison) cuts in public services actually make to a debt of

£1,717,566,790,335 as at 9:47:03 on Wed 8t March 2017.

...this figure is so far removed from the reality of almost everyone that it is almost unbelievable monopoly money...i.e not real, not 'feelable', not 'tangible'.

Also to whom do we owe this 'almost fictitious' sum of money and what happens if they come knocking at the door and saying ...you have 30 days to repay the debt or we are sending in the boys!

What happens as we obviously defaulting, are we declared bankrupt ..and what happens then? Are our govt not allowed to run a country anymore (ha ha)

My comments show how ridiculous this all seems to the uninformed, like moi!
 
No idea but this BBC link (live updates on today's budget) may explain.....

http://www.bbc.co.uk/news/uk-politics-39196579
 
ok thanx Tino ...but I also fully expect Spursex and 80 to name but two on here, to come back with the explanations in this regard........asfrom part posts, they seem wordly wise in areas financial. :7:
 
Many people make the mistake of not differentiating between our National debt (the long term sum of all our debt as a nation that the government has issued i.e. borrowed from every source imaginable such as pension funds - a fav with them to hold gilts, foreign countries, hedge funds etc) and the "deficit" - which is the amount we're borrowing every year above and beyond our governments income to meet our public sector commitments / bills...

It wasn't so long ago that prior to the 'last labour government' the outgoing conservative government left them with a very healthy surplus and we were actually reducing as a percentage of gdp our long term debt, they then went on a massive 13 year spending spree and handed over the worst peacetime deficit in our history.

The issue with continued borrowing is the interest costs which is now equivalent to our spend on our National defence - an uheard of situation, and one that has to end - we are living beyond our means and just like home budgets, sooner or later you get stuffed as your credit starts costing too much or worse still gets refused.

We cut too little too late, and are still doing that imho.
 
But to answer you key question, if the questions you ask ever do arise, we'd have to go cap in hand to the IMF to bail us out and they'd impose public sector spending cuts much like the Greeks are suffering now...or we go bust as Argentina did not so long ago, or as Turkey did in the (from memory) early '80's...

It takes and will take Greece probably 40-50 years before they can stand on their own two feet again.
 
Just to start reducing the UK debt the ANNUAL reduction (cuts in government programs) in spending would have to be larger than 60 BILLION pounds.

Every year.

With aging infrastructure, a frayed NHS and very little political appetite to fix things something radical needs to happen.

Here is the 2012 debt ownership graph:

 
We either allow inflation to take off, we grow faster, or we spend less - it's as simple as that.

We need a Singapore type renewal once we throw off the shackles of the EU., of course the left think you can tax your way out of it, but every time a tax rise has been tried, capital floods away, investment drops and the smart people move away - of course most of us are all for closing the loopholes that the digital economy has brought about, most especially in Europe, where Ireland has been acted like a low tax through put land of convenience that's pretty much so far thwarted everyone that's tried to deal with these issues.

The one really great thing that Osborne did was to lead the charge to end international tax evasion but global companies, it took forever to get the Americans on board, we've now got to build on that, unless of course Trump sidelines this as a matter of America First.

The UK had to leave the EU if it ever hoped to bring down it's balance of trade imbalance and in turn to achieve higher levels of growth.
 
You can't inflate your way out of it. It will kill foreign investment. And you need that.
 
80deg16minW - 8/3/2017 18:28

You can't inflate your way out of it. It will kill foreign investment. And you need that.
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I agree, the only real way out of this is combining growth with reduced state spending.
 
Here's a taste of what we'd be seeing if the IMF had to step in, what's really interesting is that Germany are now getting tougher in their rhetoric towards Greece than ever before - they're almost telling them to leave the Euro now:

http://www.thetimes.co.uk/edition/world/greek-farmers-storm-ministry-as-austerity-protests-turn-violent-68m6mz2lm

Greek farmers storm ministry as austerity protests turn violent
Anthee Carassava, Athens

March 8 2017, 12:00pm, The Times

Farmers clash with riot police outside the agriculture ministry in Athens. Many of the protesters had travelled from Crete
Orestis Panagiotou/EPA


Wielding sticks, shepherds’ staffs and throwing stones, thousands of Greek farmers clashed with riot police today during anti-austerity protests.

The clashes erupted after the country’s agriculture minister refused to meet a 40-member delegation of farmers demanding that the government repeal a range of tax and pension reforms that international creditors have prescribed as part of attempts to fix the failing Greek economy.

The farmers retaliated by trying to storm the ministry, battling squads of riot police deployed around the building in central Athens.

The farmers smashed the windows of two parked vans, and running battles ensued, with riot police firing tear gas and stun grenades.

The police reported no injuries but live television footage showed at least one protester being hit and hauled across a street in a brutal display of force.

The protests involved more than 2,000 farmers who descended on the Greek capital from far-flung corners of the country, including the island of Crete, the Peloponnese and northern Greece, to demonstrate against austerity reforms. They plan to march to the office of Alexis Tsipras, the prime minister, to deliver a letter.

Farmers are angry at increases in their tax rates and social security contributions, part of the income and spending cuts Greece’s left-led government has implemented to meet bailout budget targets demanded by creditors.

Having enjoyed generous tax breaks and subsidies from the European Union for decades, farmers claim their already meagre incomes are being hit hardest. They say pension reforms have raised their social security contributions by as much as 400 per cent and their income tax rates have doubled from 13 to 26 per cent.

The government insists that 90 per cent of the country’s farming community remains unaffected by the belt-tightening measures.

There are heated protests almost every day as Athens and its eurozone creditors have agreed to press ahead with further reforms in a bid to ease a long-running stalemate in talks over Greece’s continued bailout.

Failure to conclude those talks could keep lenders from disbursing a fresh slice of aid to Greece, pushing it to the brink of bankruptcy as early as July when €7 billion in debt loans are due.

On Tuesday, Wolfgang Schäuble, the German finance minister, warned that Greece should finally decide whether it wants to remain in the euro zone or not.
 
Where are you going to cut 60 billion just to break even?

You will need higher revenues to reduce the debt. That will take a couple of years until the Brexit thing settles down.
 
So has austerity since the 2008 worldwide crash made a serious dent in the UK % of debt to GDP?
NO,
It is continuing to rise (although not as steeply)and the rich continue to get richer and the poor the converse.
 
Austerity is bullshit.

Cuts can be made and efficiencies found to reduce spending without compromising programs. Do that first and then decide what else is unnecessary.
 
Freeze budgets then get the people who know where the waste is to fix the problems. Offer a bonus of half the first full year of savings to employees who come up with cost savings ideas that don't affect the level ( or improve) of quality of the programs.

If it is internally driven it will happen very quickly and there will be a lot less resistance to the changes.
 
80deg16minW - 9/3/2017 12:56

Freeze budgets then get the people who know where the waste is to fix the problems. Offer a bonus of half the first full year of savings to employees who come up with cost savings ideas that don't affect the level ( or improve) of quality of the programs.

If it is internally driven it will happen very quickly and there will be a lot less resistance to the changes.
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In the private sector, I'd agree with you, they're well used and sensible techniques and methods that yield results, however in the public sector (across the World) it's a different organisational culture (the sense of entitlement that public sector employees have is a huge psychological barrier to 'normal' cost management programs, so the obvious answer is bring into the organisation, non-related, private sector managers - which is often tried, but ultimately fails through absolute sheer bloody mindedness and intransigence down stream.

In the UK the NHS needs a complete reboot and re-think, as does most if not all our public sector services., only then will there be any hope of reducing overheads and improving efficacy.

Sadly, in the UK we tend to tinker rather than do what we know needs to be done, the only time that really changes and we have a radical agenda is when the party of government has such an over-whelming majority that it can do the unpopular early on in their term, and prepare and make changes (if necessary) as the elections loom.

We need a big majority win, and a very uncomfortable radical agenda - and Brexit may be just the spark that causes this to happen, if it doesn't then in the very near future the UK will sink under the sheer weight of it's debt repayment burden.
 
Nick Real Deal - 9/3/2017 12:03

Have they broken their election manifesto by increasing NI contributions for self employed ?.
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No, the devil is in the detail, the tax-lock legislation only specifically referred to no increase in paye NI contributons, not the self-employed.

Its' within the law, within their outline manifesto, if perhaps not quite within the spirit of it.

I'm very comfortable with it.
 
I think you'd find it would work. Recognition and publication of the ideas that work and their rewards would accelerate a change in thinking.

The people that wouldn't respond positively to it are the problem. There are also good people in government who would take the opportunity to do the right thing.
 
80deg16minW - 9/3/2017 14:05

I think you'd find it would work. Recognition and publication of the ideas that work and their rewards would accelerate a change in thinking.

The people that wouldn't respond positively to it are the problem. There are also good people in government who would take the opportunity to do the right thing.
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In many public services some form of it has been tried for years, I suspect (and I understand why) you aren't quite seeing the huge and intransigent opposition that the public service union(s) create when these issues/concepts/ideas are aired.

They'll only work when the overwhelming majority of a government can face up to potentially years of strikes, walk-outs and disruption and is prepared to legislate to bring them to heel once and for all.
 
No. I am seeing it. I think it can be overcome. There will be battles.

The first step is to freeze budgets and staff numbers. If someone retires they can be replaced if necessary.

The second step (year 2) is to cut ALL budgets by 5% with the mandate that there is to be absolutely no disruption to service delivery. All reductions in expenditures should come from operating efficiencies. Not staff or service cuts. How can the unions argue with that?

Year 3 implement the bonus program. The reduction in staffing requirements will happen through retirement. This is the perfect time to do that.

Sounds simple. Now we all need to find a leader that can deliver on this and motivate the electorate to buy into it.
 
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