Is it true or more papers filing inches | Page 10 | Vital Forums

Is it true or more papers filing inches

Kenny Morris

Vital Squad Member
I think you are mistaking the defecit for the national debt, it's an easy mistake to make (i've heard politicans not know the difference) but very signigicant differance.

The defecit is the amount of money we spend above what we earn every year on public spending. The debt is the amount we owe in total. So effectively the defecit in the amount of of new debt we add to the existing national debt every year plus interst on top.

If politican try and do faux outrage saying 'the Torys put up the debt despite all this austerity' they are deliberetely trying to mislead or don't understand what they are talking about. As when any governement inherited a 150b defecit (with the note of 'there is no money left') they have to chip away at getting that down and every year no matter how much they chip away at the defecit until it's back to a surplus the national debt unavoidably goes up signigicantly. Due to the amount of national debt ran up before the Torys came in by 7 years of silly defecit spending by Blair and Brown in the boom years and then the crash we got into a position where we pay 40b in interest annually. So no matter what we do the only way national debt can go down is if the government turned that 150b defecit into a 40b+ surplus and obvious that is going to take some time. In the past 9 years or so we've only got through 4/5ths of the defecit it was that big of a task. Also bare in mind we basically didn't do any real austerity as the government spending never decreased and in fact increased year on year - we just reprioritised funds. So if people say the Torys have done it wrong he only way we could've got the defecit down quicker would've been do actually decrease government spending year on year quite signigicantly. But it feels like we've had loads of austerity despute the government spending never being cut overall, so imagine what it would've been like if we actually did deep cuts.

Whoever would've inherited the mess the Torys picked up would've almost certainly been in the same boat and foreced to make similar choices - although i'm sure different governments would've protected and prioritised different things - if they didn't want the country to end up like Greece the last 9 or so years were a necessity.
The debt wasn't run up by "silly spending", the debt and deficit were less in 2008 than in 1997 and public services improved, new hospitals, schools etc being built. The global crash created by greedy bankers created the deficit and debt, not the policies of the Labour Government. The biggest mistake the Labour Party made was in not refuting enough the lies spread by the Tories and their media allies about the debt. Bt drip, drip feeding the information over a number of years the general population have come to believe it as fact, when it is total nonsense.
 

king_dezeeuw06

Vital 1st Team Regular
Again, in your opinion, which doesn't make it fact. Just as my opinion doesn't. However I believe my opinion is more realistic than yours and has basis in fact rather than rhetoric you have read in the biased media , who are run by people who have made fortunes out of the current system and are scared of losing out on the gravy train
Even Corbyn and McDonnell admit they are planning for mass capital flight so that tells you a lot about their economic policy.

They want to hit businesses extremely hard, putting up corp tax 11%, 10% of company value into shares to employees, min wage increase, then suggestion of 4 day week requing businesses to pay same wage for 80% of work. Most business profit margins aren't massive and you dont need a lot of economic knowledge to know all of those policies all at once will cause many business in the UK to close down, leave for the EU, make loads of lay offs, prices to rise, unemployment rise, benefits burfen rise and tax revenue fall.

Then hink about it the levels of borrowing they plan to do. They want to borrow something like a trillion quid or more in one parlimemt that is half of the amount of debt the country built up in the rest of it's existance put together. That will make interest on the debt alone become something like 60b a year. We currently have 35b left of the defecit to pay off from the 150b defecit ran up by Blair and Brown. The levels of extreme borrowing Corbyn is talking about will make the defecit bigger than it ballooned to at the height of the financial crisis in his first year and then add that again every single year in office. There is no way in Gods green earth that any amount of investing no matter how successful can possibly generate returns to ever cover those costs. Corbyns borrowing will put us beyond what Greece did and think about the crippling levels of austerity that will be an absolute must to even cover the add debt repayments alone he will pile on.

There is nothing more selfish than us borrowing levels of money we cant ever afford to repay and then handing that bill to our kids and grandkids and expect them to suffer to pay for our irresponsibility.

Your right all the businesses are very worried, but they aren't worried because suddenly things will be fair for the worker they are worried because the plans are economic suicide for us all.
 

Made in Wigan

Vital Squad Member
Most professions or jobs these days require some form of degree qualification, even when the job or profession doesn't actually merit it. We can blame Blair for that with his drive to get more into university, manydoing pointless and irrelevant degrees in media studies or similar crap.
However when it comes to politicians there is no requisite whatsoever. Quite remarkable really when you think about what their role entails.
 

king_dezeeuw06

Vital 1st Team Regular
The debt wasn't run up by "silly spending", the debt and deficit were less in 2008 than in 1997 and public services improved, new hospitals, schools etc being built. The global crash created by greedy bankers created the deficit and debt, not the policies of the Labour Government. The biggest mistake the Labour Party made was in not refuting enough the lies spread by the Tories and their media allies about the debt. Bt drip, drip feeding the information over a number of years the general population have come to believe it as fact, when it is total nonsense.
Sorry you are falling for propaganda look at the numbers. We were in an economic boom period and Brown and Blair were still over spending massively and wracking up the debt and defecit in the good times financially when we should've been running a surplus - meaning when the banking crisis came we were so ill prepared to cope and it pushed us off the edge.

What you spend the money on doesnt make the borrow of such sums beyond what we can afford not bad practice. If the Torys go out tomorrow and decide they want to spend 100b on our police, army, NHS etc it's only a good thing if it can be afforded. If that 100b goes onto the defecit we are right back to the place we were in 2008 all over again and this time the interest in bigger, the debt is bigger and the austerity required to balance the books will be considerably worse. That decision may be nice for us today who benefit from it but that money we are borrowing has to be paid for by someone down the line. And i dont know about anyone else but i think it's irresponsible to leave that bill for future generations who will be so snowed under in debt they end up with so few options and so many problems as government spending becomes increasingly dominated by a debt spiral too big to climb out of. We have to be smart and careful with money.

As for greedy bankers that was allowed to happen on their watch and they bailed them out which they shouldn't have done. Also a big part of where the problem originated was the US government as part of a push to get poorer people with poor credit to become home owners signalled to the US banks they would secure them giving mortgages to people who previously wouldnt have been able to get them due to the hugh risk of defaulting on repayments. The US banks went with that knowing the government would cover their loses - so it's not actually greedy banks predatory lending like we are so often told it was govetnment interferance in the market in a very poor way that encouraged toxic debt to be stacked up like crazy. So it's not a failure of capitalism as many on the left like to say it was wreckless government policy trying to do good in the short term with nowhere near enough consideration for the actual financial consequences.

Just like you and me in our daily lives - the country cant every year spend drastically more than it earns indefinitely. The problem with Labour has always been they don't see the debt and defecit as a priority issues and no matter how much money we want to spend on nice things you have to balance the books. There is no way round that. If your a parent and you go out every month and buy your kids every toy under the sun, holidays to Disney land, front row tickets to shows etc all on your credit card. You spend so much over your monthly salary that after a while your bills are stacking up and struggling to pay the rent on the house you live in - despite the attempts to be a great parent you have undoubtedly derelicted your duty by putting them in the risk of not having a roof over their heads. It's the same concept with public finances - be as generous as you can but don't put everything at risk by being too generous.

If people say we need to spend more in key areas then thats fair, if they say the Torys couldve handled the debt management differently then ok but debt management had to happen due to the mess we were in. If they say they want to do more to help the poor then cool but Corbyns policies sound lovely on paper but when you play it through they aren't just throwing out the baby with the bathwater they are nuking the house with the bath and baby in it. The best way to help everyone is to keep the economy healthy if you tank it there is less money for public services if you borrow more the debt interest takes more money away from public seevices and still needs paying back by someone.

Thats not necesarrily an argument to say the Torys are grwat - they absolutely are not. And it's not an arguemnent suggesting nothing can change and things cant be better - they can and we should try to do things better. There are plenty of good things a Labour government could offer to improve things and help people but so far all we've seen is spending plans that will explode our finces and economic policies that will lead to more harm than good. If people want a change i get it, i do too but there's no point changing to something that will end up worse.
 
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TRUE BELIEVER

Vital Squad Member
Like the Tories have promised to eliminate the deficit and it has just got bigger despite all the austerity, which now apparently is at an end. Tell that to the low income families and the vulnerable who are deprived of public services, and the consequences are not at their worst yet
Sorry to rock your boat Kenny, but you are mixing up Deficit with National Debt. The Deficit has been reduced over the last ten years. The National Debt has increased.

Sorry if others have mentioned this, I have only just caught up with the thread.

Also apologies to Notts if I have failed to respond to any post. Unfortunately my missus wanted to watch some TV. Hen pecked, I know but I had to concede.
 
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Sorry you are falling for propaganda look at the numbers. We were in an economic boom period and Brown and Blair were still over spending massively and wracking up the debt and defecit in the good times financially when we should've been running a surplus - meaning when the banking crisis came we were so ill prepared to cope and it pushed us off the edge.

What you spend the money on doesnt make the borrow of such sums beyond what we can afford not bad practice. If the Torys go out tomorrow and decide they want to spend 100b on our police, army, NHS etc it's only a good thing if it can be afforded. If that 100b goes onto the defecit we are right back to the place we were in 2008 all over again and this time the interest in bigger, the debt is bigger and the austerity required to balance the books will be considerably worse. That decision may be nice for us today who benefit from it but that money we are borrowing has to be paid for by someone down the line. And i dont know about anyone else but i think it's irresponsible to leave that bill for future generations who will be so snowed under in debt they end up with so few options and so many problems as government spending becomes increasingly dominated by a debt spiral too big to climb out of. We have to be smart and careful with money.

As for greedy bankers that was allowed to happen on their watch and they bailed them out which they shouldn't have done. Also a big part of where the problem originated was the US government as part of a push to get poorer people with poor credit to become home owners signalled to the US banks they would secure them giving mortgages to people who previously wouldnt have been able to get them due to the hugh risk of defaulting on repayments. The US banks went with that knowing the government would cover their loses - so it's not actually greedy banks predatory lending like we are so often told it was govetnment interferance in the market in a very poor way that encouraged toxic debt to be stacked up like crazy. So it's not a failure of capitalism as many on the left like to say it was wreckless government policy trying to do good in the short term with nowhere near enough consideration for the actual financial consequences.

Just like you and me in our daily lives - the country cant every year spend drastically more than it earns indefinitely. The problem with Labour has always been they don't see the debt and defecit as a priority issues and no matter how much money we want to spend on nice things you have to balance the books. There is no way round that. If your a parent and you go out every month and buy your kids every toy under the sun, holidays to Disney land, front row tickets to shows etc all on your credit card. You spend so much over your monthly salary that after a while your bills are stacking up and struggling to pay the rent on the house you live in - despite the attempts to be a great parent you have undoubtedly derelicted your duty by putting them in the risk of not having a roof over their heads. It's the same concept with public finances - be as generous as you can but don't put everything at risk by being too generous.

If people say we need to spend more in key areas then thats fair, if they say the Torys couldve handled the debt management differently then ok but debt management had to happen due to the mess we were in. If they say they want to do more to help the poor then cool but Corbyns policies sound lovely on paper but when you play it through they aren't just throwing out the baby with the bathwater they are nuking the house with the bath and baby in it. The best way to help everyone is to keep the economy healthy if you tank it there is less money for public services if you borrow more the debt interest takes more money away from public seevices and still needs paying back by someone.

Don't forget the sell off Thatcher years of Tory rule when public investment was drastically reduced, yet the Tories had increasing amounts of oil revenues plus revenue from the sell off of State industries, council houses and the like. They were a wasteful government, managing to destroy many industries, such as coal, steel and motor vehicles. They were in power for 18 years, during which time there was a massive shortfall of spending on education, healthcare and public services. The Labour Party had to spend to make up for this shortfall. The same thing seems to happening today. Tories don't believe in public services.....end of.
 

Made in Wigan

Vital Squad Member
Again, in your opinion, which doesn't make it fact. Just as my opinion doesn't. However I believe my opinion is more realistic than yours and has basis in fact rather than rhetoric you have read in the biased media , who are run by people who have made fortunes out of the current system and are scared of losing out on the gravy train
Actually half of that was actually fact and the opinion part based on an assessment of facts. Unfortunately you have been hoodwinked by the propaganda pumped out by Momentum.

His desired economic policies have been proven to fail and will fail again. It would cause so much damage to our economy and country it wouldnt recover for the remainder of our lifetimes.

Anti Semitism. His own actions and words speak for themselves on this. I maintain it is utterly disgraceful a party leaders holds such discriminatory views, utterly shameful in 2018.

Salisbury. Again factual, go look up his comments. It would be laughable if it wasn't so serious. Appeasement doesn't work, it certainly won't work in today's world when dealing with external threats. Naivety in the extreme for people to think otherwise.

As I said previously my voting fluctuates between the two main parties, cheques and balances i believe are a good thing. I'm not pro or anti either labour or Tory and vote blind for one regardless of their policies. However despite the appalling way we are governed at present and a hopeless PM there is no way on Gods green earth I could ever vote for the Labour Party again run by people with some extremist views that would without question destroy this country.
 

king_dezeeuw06

Vital 1st Team Regular
Don't forget the sell off Thatcher years of Tory rule when public investment was drastically reduced, yet the Tories had increasing amounts of oil revenues plus revenue from the sell off of State industries, council houses and the like. They were a wasteful government, managing to destroy many industries, such as coal, steel and motor vehicles. They were in power for 18 years, during which time there was a massive shortfall of spending on education, healthcare and public services. The Labour Party had to spend to make up for this shortfall. The same thing seems to happening today. Tories don't believe in public services.....end of.
Saying that the Torys got stuff wrong is fair enough, they certainly did and spending was needed but again it needed to be balanced against what you bring in.

What you also have to factor in that John Major sent us into a recession by caving into the EU inspred scare mongering that we had to join the European Exchange Rate Mechanism in the early 90's (how ironic he now takes part in the same scare tactics that fooled him into ruining his economy for the sake of the EU). We withdrew from the ERM a few years later and the economy started to slowy recover and by the time Labour came into power in 1997 and they enjoyed the boom years of the recovery. Despite signigicant increases in public spending they still turned a surplus in the first 4 years in office. They were able to make the most of the boom period, investing more and also kept the enconomy in good shape being responsible with the finances - that is exactly what you can do if you are smart and sensible in those good periods. But in the subsequent years they became very reckles pushed the borrowing up like crazy and using further PFI's to mask further spending and running up 7 years of large defecit that averaged nearly 40b a year - during a boom period - before the crash ploughed even more on top. If you have been in power four years with a surplus, then while still in that boom period you run up about 40b a year for 7 years of over spending - you are absolutely doing it wrong. We were already in trouble before the crash happened with that approach, the crash just smashed an economy we foolishly left so vunerable by so much over crazy over spending.

No matter what reason you want to come up with to justify dangerously excessive levels of borrowing we can't afford - spending yourselves into oblivion, living beyond your means and putting your defecit to a level that completely screws you if an unexpected crash happens are unforgivably irrisponsible and makes the country much worse off in the long run '...end of'.
 
Every economy on the planet has budget deficits and national debt, even the U.S. From a macroeconomic perspective, there must be spending in the economy. Our economy, since Thatcher, has relied on consumer spending to drive GDP growth. Once consumers stop spending as much i.e. since 2008, if economic growth is to be accelerated, spending from elsewhere in the economy needs to happen. This could be from exports, which hasn't been happening or business spending, which has been slower than desired. If these three components of spending are sluggish then Government needs to increase its spending ( not decrease it) if it wants faster real GDP growth. Austerity is not good for economic growth. So, tax revenues are lower than necessary to reduce the deficit on a long term basis. Government should not be reducing public spending at this point.
 

king_dezeeuw06

Vital 1st Team Regular
Of course economic growth can be stimulated by government spending but it depends how much is spent, what it uses the money on and if it's a good return on investment. It's not a one size fits all approach to spend unconditonally as you can easily end up worse off and in a debt spiral. Look at Blair for example in those boom years the first 4 or so he did what your speaking about - invested more and grew proporitionally to keep the economy healthy - no one is against that. But then they pushed the spending much further and the gowth couldn't keep up meaning we were starting to make a NET loss with the defecit and the debt shooting up. We went way too far in the wrong direction and lead us into a crisis where we couldn't risk spending anymore to stimulate growth due to how desperate the situation had become.

Economic growth can also be stimulated by dropping tax using the Laffer curve like the Torys have done over the past 9 years or so resulting in a record low tax rate and record high tax take - also done by Trump reccently to boost the economy. It's all a big balancing act, there are times to pull back, times to invest and times to save - it's very hard to get the right counter balance with the Torys often overly cautious and Labour being reckless.

Speculate to accumilate is fine when calcuated properly, it's prudent to make wise investments now that are likely to pay off later but you can't indefinetely spend yourself out of debt and borrow your way into surplus - and that is what was happening and it's a recipe for disaster. If you keep spending when the debt is dangerously high already you risk entering a debt spiral that gives you very little room to manouver rather than future austerity and the chances of generating enough growth when the accumilated defecit, debt and interst reach such levels is unlikely and again leaves you vunerable to another financial down turn. You've got to live within your means, that doesn't mean we should be adverse to occasionally borrowing small amounts when the situation merits it for cap ex investment, but if you are planning on borrowing more and more every year it will never balance out.
 

Kenny Morris

Vital Squad Member
Sorry you are falling for propaganda look at the numbers. We were in an economic boom period and Brown and Blair were still over spending massively and wracking up the debt and defecit in the good times financially when we should've been running a surplus - meaning when the banking crisis came we were so ill prepared to cope and it pushed us off the edge.
Sorry, but look at the figures and you will find it is you who are falling for the propaganda. National debt was over 42% GDP when Labour came into government, by 2008 it was down to less than 34% and falling, then the banking crisis hit from the US, not Britain.
Much that I don't like it the bank bailout was necessary as it was the lesser of two evils.
 

Kenny Morris

Vital Squad Member
Anti Semitism. His own actions and words speak for themselves on this. I maintain it is utterly disgraceful a party leaders holds such discriminatory views, utterly shameful in 2018.

Salisbury. Again factual, go look up his comments. It would be laughable if it wasn't so serious. Appeasement doesn't work, it certainly won't work in today's world when dealing with external threats. Naivety in the extreme for people to think otherwise.
Tell me anything Corbyn has ever said that is anti-semitic, he is pro-Palestinian and advocates a 2 state solution. Israel and their friends don't want this and have orchestrated a smear campaign that has worked.
Salisbury, all he said is where is the evidence? You ca't go accusing people without evidence, when this was shared he agreed it was Russian citizens who carried out the attack
 

king_dezeeuw06

Vital 1st Team Regular
Sorry, but look at the figures and you will find it is you who are falling for the propaganda. National debt was over 42% GDP when Labour came into government, by 2008 it was down to less than 34% and falling, then the banking crisis hit from the US, not Britain.
Much that I don't like it the bank bailout was necessary as it was the lesser of two evils.
No, it's not propaganda, national debt as a percentage of GDP going down doesn't mean that debt has fallen or everything is rosey. Debt to GDP ratio can be misleading as it suggests you have a strong economy but it doesn't suggest how much you are overspending per year. Look at the specific example you used the percentage of debt to GDP dropping by 8% for the boom years before the crash - sounds great - until you realise that the actual figures of national debt increased by nearly half from 347b billion to nearly 600b and the defecit was more thandoubled in size from 15b to 34b in that period. The economy being bigger is great but if despite the government having more money to spend from that gorwth if they have drastically increased borrowing and are piling up debt at such a fast rate that is a big issue and the GDP to debt ratios don't reflect the dangers of that. The growth is not paying for the borrowing and that is going to be have to paid for by someone down the line.

The banking crisis often masks the negligent approach to national finances that occured in the previous 7 years. While other countries like Canada used the good years to run a surplus we were borrowing more and more. The result was when the financial crash hit the Canadians were able to cope with it much quicker and easier - they their total defecit spending before they returned to surplus was less than our first year alone - they largely avoided the pain of the crash due to being sensible while we headed in to the crash with the credit cards effectively already maxed out and are still chipping away at our defecit 10 years later and about a trillion extra in debt because of it.

Which is precicely the problem the debt is growing to frightening levels, when you get to 12 digit debt numbers they compound so fast - by the time it takes anyone to read through this messages the interst accrued on the debt will have gone up quite literally by hundreds of thousands of pounds. While ever getting the national debt down to zero is at this point near impossible it can't be allowed to continue to grow at this rate - and the only way the debt can be stabalised is by getting the defecit into a surplus and then continuing to live within our means.

If you live beyond what you can afford it will always come back to get you eventually and with the state of our debt levels we better get a grip on it sooner rather than later.
 

Made in Wigan

Vital Squad Member
Tell me anything Corbyn has ever said that is anti-semitic, he is pro-Palestinian and advocates a 2 state solution. Israel and their friends don't want this and have orchestrated a smear campaign that has worked.
Salisbury, all he said is where is the evidence? You ca't go accusing people without evidence, when this was shared he agreed it was Russian citizens who carried out the attack
There has been plenty said about his anti Semitic views. I suggest you look them up for yourself, but be careful they may upset you as they won't be contextualised by Momentum spin.

For starters look at his inaction in failing to endorse the definition of anti semitism as defined by the IHRA. His associations with Hamas, hezbollah and some other group whose name I've forgot run by a holocaust denier. His support or lack of condemnation for Livingstone and another member of his shadow cabinet suggestioning the Jewish community should be moved abroad. His and his party treatment of Margaret Hodge when she called him out on his views. Or about overall his lack of leadership in tackling anti semitism which is running rife in the Labour Party. And that's not including all the other stuff I've forgot that became prominent this summer.

In regards the Salisbury attack, there was plenty of evidence to indicate who was responsible and there has been plenty more since. The Russian Ambassador is now likened to Comical Ali for his ludicrous bullshit and denials. For Corbyn to disbelieve this evidence and suggest we give them the samples back so they can test the thenselves is beyond ludicrous and suggests he is either naive, gullible, or just a first plain thick. He is all three in my opinion, yet this idiot could conceivably be running the country, which in my view means he is a very real national security risk.
 

Kenny Morris

Vital Squad Member
No, it's not propaganda, national debt as a percentage of GDP going down doesn't mean that debt has fallen or everything is rosey. Debt to GDP ratio can be misleading as it suggests you have a strong economy but it doesn't suggest how much you are overspending per year. Look at the specific example you used the percentage of debt to GDP dropping by 8% for the boom years before the crash - sounds great - until you realise that the actual figures of national debt increased by nearly half from 347b billion to nearly 600b and the defecit was more thandoubled in size from 15b to 34b in that period. The economy being bigger is great but if despite the government having more money to spend from that gorwth if they have drastically increased borrowing and are piling up debt at such a fast rate that is a big issue and the GDP to debt ratios don't reflect the dangers of that. The growth is not paying for the borrowing and that is going to be have to paid for by someone down the line.

The banking crisis often masks the negligent approach to national finances that occured in the previous 7 years. While other countries like Canada used the good years to run a surplus we were borrowing more and more. The result was when the financial crash hit the Canadians were able to cope with it much quicker and easier - they their total defecit spending before they returned to surplus was less than our first year alone - they largely avoided the pain of the crash due to being sensible while we headed in to the crash with the credit cards effectively already maxed out and are still chipping away at our defecit 10 years later and about a trillion extra in debt because of it.

Which is precicely the problem the debt is growing to frightening levels, when you get to 12 digit debt numbers they compound so fast - by the time it takes anyone to read through this messages the interst accrued on the debt will have gone up quite literally by hundreds of thousands of pounds. While ever getting the national debt down to zero is at this point near impossible it can't be allowed to continue to grow at this rate - and the only way the debt can be stabalised is by getting the defecit into a surplus and then continuing to live within our means.

If you live beyond what you can afford it will always come back to get you eventually and with the state of our debt levels we better get a grip on sooner rather than later.
But if the economy is bigger and therefore more income then you are not living beyond your means.
By your logic we would have little or no public services because we would never increase the money that goes into them.
Remember also that after 18 years of Tory misrule the infrastructure was crumbling with dilapidated hospitals and long waiting lists etc so more money had to be spent to improve these. It is the same every time Labour is in government, they spend years just catching up to where we should be and have to invest money in infrastructure outside of the South east to improve things.
I dispute your figures on debt too, the economy was in a very healthy state back in 2007-8 before the global crisis
 

king_dezeeuw06

Vital 1st Team Regular
You are misundersranding and conflating different concepts and facts.

If you are running a defecit the government is quite simply borrowing money to cover its over spending. The economy being bigger means there is more money going around the country but not all of that money ends up in government hands although it inevitably will have more than it did. But it is possible to increase borrowing at a rate faster than your growth in revenue and that is why the economy size and debt management can be seperate things. Americas economy is doing very well right now but they have also added 1 trillion to their debt in less than 2 years in omnibus spending pledges. So as you can see great GDP growth with frightening borrowing is simulatiously possible.

To use an example; if you earn 500 quid a week but by the time you pay for your rent, bills, a day at the football and a night out, etc your outgoings are 600 quid a week with the extra 100 put on your credit card - your living beyond your means. We all may overspend a little now and again and make it up later but if you are spending more than your salary every single month that becomes a problem as it means you are adding to the debt on your credit card rather than ever paying any of it off. The credit card should be used to give you wiggle room when required not act as an extra weekly spending allowance. That is pretty much running a defecit every year.

Now imagine you get a better job and your new wage is 750 quid - enough to cover your existing lifestyle, start to pay off some of your credit card debt that has piled up and even allow you to increase your outgoings a little more. But rather than do that you raise your weekly expenses significantly and your outgoings become 900 quid a week and 150 quid a week is gping on your credit card, even more than before. You have a better income than before, having a better lifestyle but you are also spending further beyond your means at the same time and your debts are stacking up faster. That is GDP rising while running a larger defecit and that is what we were doing.

If you are increasing the defecit borrowing significantly despite GDP growth it means the government is spending is way too excessive. Look at Blairs first 4 years in office good GDP growth, lots of extra spending but still running a small surplus - with zero borrowing. That is how you do it - being responsible with government finances so spending increases on public services are in line with the extra growth revenue and everything can improve without us wracking up huge debts. Slow and steady. After that spell i think most would agree we had the right balance - there was more public spending, more investment but at sustainable levels and those levels were increasing as we could afford them and the debt management was completely under control.

The problem was after the first 4 sensible years the economy continued to improve but Blair started over spending more and that's where it goes wrong. I dont know what you are desputing regarding the pre crash figures as i actilually said the economy was in a boom band that was the point during a boom we had 7 years where the debt and defecit were spiralling up. The propoganda is that the only issue was the financial crash when the reality was there was considerable debt mismanagement before it happened at a time we didn't need to so excessively borrow. And the fact the financial crisis was so devestating is further evidence exactly why you have to be on top of your debt management in the good years so when the inevitable next crash comes we are in the strongest possible posotion to weather the storm and it doesn't put you into a debt spiral that you cant reciver from.

There is ofcourse speculate to accumulate and times you borrow to invest knowing it will pay off but we weren't doing that - we were spending faster than we brought money in and spending more than the growth could cover. It was living for today without a thought of how we cope with the debts tomorrow. It was selfishly sleepwalking the next generation into levels of debt that they would be stuck paying for to give us a better quality of life today.

No one is saying you dont increase public spending or investment but the argument is do it in a controlled manner balanced against your GDP growth rather than just continually borrowing so excessivly and unrealistically hope that it will pay for itself and the debts wont cause problems down the road. It's very irrisponsible if we hand over levels of debt that our kids and grandkids will have to make sacrifices to even keep up with the interest alone and will be forced into austerity measures 10 times worse than what we have seen. We need to pay for what we use and try and give them a set of finances that wont have a note saying 'there is no money left' so they can have choices and a fair crack at life rather than just have to be in a permanent state of crisis management.
 

Kenny Morris

Vital Squad Member
The big misconception is that Government finances are run just like our domestic ones, they are not and whilst income v expenditure does play a part it is not the same as a domestic scenario