Labour finally get it..

[Spursex]

Ed Balls will pledge to 'balance the books' by 2020<br /><br />Ed Balls and George Osborne Both the Conservatives and Labour are aspiring to balance the books<br /><br />Labour has pledged to balance the UK's books and deliver a current budget surplus in the next Parliament if it wins the 2015 election.<br /><br />Shadow chancellor Ed Balls said Labour would pass a law to ensure it adheres to &quot;tough&quot; and binding fiscal rules.<br /><br />These would include eliminating the deficit and reducing debt as a share of GDP between 2015 and 2020.<br /><br />Chancellor George Osborne has already said a Tory government would aspire to an absolute budget surplus by 2020.<br /><br />Labour is under pressure to assert its economic credibility in the face of claims from its rivals that it would increase spending and borrowing.<br /><br />In a speech to the Fabian Society on Saturday, <em><strong>Mr Balls will say a future Labour government would legislate within the first year to introduce new rules on the deficit and debt levels while progress would be independently audited by the Office for Budget Responsibility.</strong></em><br /><br />But he will not set a specific date for achieving a surplus, saying it will depend on the state of the public finances and changing economic circumstances.<br /><br />&quot;The next Labour government will balance the books and deliver a surplus on the current budget and falling national debt in the next Parliament,&quot; he will say.<br /><br />&quot;We will get the current budget into surplus as soon as possible in the next Parliament. How fast we can go will depend on the state of the economy and public finances we inherit.&quot;<br />Spending freeze<br /><br />In his recent Autumn Statement Mr Osborne said he expected the UK to be running a budget surplus by financial year 2018-19.<br /><br />Economists have said this could lead to further substantial cuts to public spending - although Prime Minister David Cameron said spending could instead be frozen.<br /><br />He has said if the economy grows it could even be possible to spend more on some departments and run a surplus.<br /><br />Labour has already pledged to stick to the government's spending plans for the first year after the general election.<br /><br /><em><strong>&quot;No more borrowing for current spending under Labour,&quot; Mr Balls said in December. &quot;There'll be spending cuts, there'll be tough decisions.&quot;</strong></em><br /><br />The last time the government ran an absolute budget surplus - meaning that it generated more in revenues, including tax yields, than it spent - was in 2001.<br /><br />The UK has only balanced the books in seven out of the last 50 years.

 

[Spursex]

At last...it's only taken them decades to finally do it.

A law against racking up huge deficit and debt, now just how many times have I said that every gov should do this?!!

Mind you, knowing labour as quick as they pass it, they'd probably repeal it the moment the going got tough.

 

[Innispurs]

Basic Keynesian economics, Ex. In a recession you spend to stimulate growth, in times of high growth, you cut the deficit. This was a lesson learnt in the 1930s that this ideologically driven bunch of public school boy millionaires chose to ignore. The result was a double dip recession, untold misery, and a much delayed recovery. One day, you'll get it too.

The British electorate will neither forgive nor forget

 

[Spursex]

Innispurs - 25/1/2014 11:14

Basic Keynesian economics, Ex. In a recession you spend to stimulate growth, in times of high growth, you cut the deficit. This was a lesson learnt in the 1930s that this ideologically driven bunch of public school boy millionaires chose to ignore. The result was a double dip recession, untold misery, and a much delayed recovery. One day, you'll get it too.

The British electorate will neither forgive nor forget

So even though Labour have now finally had a eureka moment, you'll still clinge to the old spend spend spend and spend approach of labour?!!

Seriously, Enstein described stupidity, you should read it and think long and hard why your beliefs have been shown to be a disaster, not just lately, but for decades.

I'm relieved that at long last Labour have finally understood how governments should behave.

 

[Innispurs]

Another opinion from Tax reformer Paul Murphy. (And Ex, insulting me doesn't progress an argument. Deal with the argument. You're not good at that, are you?)

I find Murphy interesting, He's not a Marxist economist in that he believes that capitalism is the best economic system humanity has come up with. He just wants it to work more efficiently for everybody and he's no Labour party hack either (as this post shows).


The incredible Ed Balls
Posted on January 25 2014

Ed Balls looks like he’s going to do it again. For the third year running it looks like he is planning to deliver a disastrous speech on economic policy to the Fabian Society. Why does he do it? Why do they ask him back?

This time the Guardian says:

"The shadow chancellor, Ed Balls, is to give a binding commitment that a Labour government will be running a budget surplus by the end of the next parliament, putting himself under severe pressure to deliver big public spending cuts if the party wins the next election.

The significant move means that Labour will now face the dilemma of either raising taxes after the election or adopting a similar daunting level of cuts in day-to-day departmental spending already proposed by the chancellor, George Osborne".

Last December I wrote a blog on why the last thing this country needed was an economic surplus. It was aimed at George Osborne. Let me reprise the arguments.

What I argued then and what I rep[eat now is that there is no merit in a budget surplus, not least because such a surplus is part of an accounting equation. At the macro (national) level, which is what we’re talking about, there are some accounting equations that hold true in economics. One is that the economy does in fact balance, always. It may well balance at the wrong point with a result that we do not want, but it does balance. And what that means is that if someone is in surplus then someone else is in deficit.

There are not too many variables in this equation either: just the government, consumers (that’s you and me), business and trade. So, if the government runs a surplus someone else has to run a deficit. It’s pretty obvious really: the books will balance. So, a government surplus is matched by increasing consumer debt, business spending or money flows via trade.

We have remarkably little control over trade. First, we almost invariably run a deficit and secondly we have (unless we suddenly and ruinously begin using interest rates to alter exchange rates) almost no control over that rate so let’s treat that as fixed to the extent that it is beyond control. And let’s also be aware that such is the state of the Eurozone we should not be looking for much hope from that source – which is our biggest market.

In that case we’re looking for a government surplus to be matched by consumer borrowing and business spending on investment.

Now, again, let’s deal with the easy one – business spending. This would be on investment of course because we can’t imagine they’re going to start a free for all in pay rises for anyone but bosses right now. But as we know, whilst they’re laden high with cash (which right now they lend, in practice, to the government) they appear to have no intention of spending that and worse still appear clueless as to what they might spend it on. There is no hope of them creating a deficit on their budget, and so they will not create a surplus for the government.

In that case we’re down to consumers to start borrowing heavily to make the government surplus happen. I stress, this is the only way this can happen. This is exactly why George Osborne is creating a borrowing bubble right now – and why it seems to be delivering growth. In pure maths terms it has to do so. But what Ed Balls is saying is that he is guaranteeing that this will continue until there is no deficit.

You can’t achieve that by cutting. That takes money out of the economy and simply balances it at a lower level than before.

It’s hard to do it with tax increases unless – and it’s a big unless – they’re heavily redistributive, which can work.

So all that can create this balance is increased consumer spending from borrowing and growth – growth which will not be happening because government will be spending less.

What Ed Balls is suggesting is incredible – but I mean that in its literal sense. It is not credible. It just cannot happen. This is plain bad economics. And with it Labour’s economic credibility is in tatters.

Why, oh why, does Labour want to fail so badly?
-

 

[Spursex]

Innispurs - 25/1/2014 13:01

Another opinion from Tax reformer Paul Murphy. (And Ex, insulting me doesn't progress an argument. Deal with the argument. You're not good at that, are you?)

I find Murphy interesting, He's not a Marxist economist in that he believes that capitalism is the best economic system humanity has come up with. He just wants it to work more efficiently for everybody and he's no Labour party hack either (as this post shows).


The incredible Ed Balls
Posted on January 25 2014

Ed Balls looks like he’s going to do it again. For the third year running it looks like he is planning to deliver a disastrous speech on economic policy to the Fabian Society. Why does he do it? Why do they ask him back?

This time the Guardian says:

"The shadow chancellor, Ed Balls, is to give a binding commitment that a Labour government will be running a budget surplus by the end of the next parliament, putting himself under severe pressure to deliver big public spending cuts if the party wins the next election.

The significant move means that Labour will now face the dilemma of either raising taxes after the election or adopting a similar daunting level of cuts in day-to-day departmental spending already proposed by the chancellor, George Osborne".

Last December I wrote a blog on why the last thing this country needed was an economic surplus. It was aimed at George Osborne. Let me reprise the arguments.

What I argued then and what I rep[eat now is that there is no merit in a budget surplus, not least because such a surplus is part of an accounting equation. At the macro (national) level, which is what we’re talking about, there are some accounting equations that hold true in economics. One is that the economy does in fact balance, always. It may well balance at the wrong point with a result that we do not want, but it does balance. And what that means is that if someone is in surplus then someone else is in deficit.

There are not too many variables in this equation either: just the government, consumers (that’s you and me), business and trade. So, if the government runs a surplus someone else has to run a deficit. It’s pretty obvious really: the books will balance. So, a government surplus is matched by increasing consumer debt, business spending or money flows via trade.

We have remarkably little control over trade. First, we almost invariably run a deficit and secondly we have (unless we suddenly and ruinously begin using interest rates to alter exchange rates) almost no control over that rate so let’s treat that as fixed to the extent that it is beyond control. And let’s also be aware that such is the state of the Eurozone we should not be looking for much hope from that source – which is our biggest market.

In that case we’re looking for a government surplus to be matched by consumer borrowing and business spending on investment.

Now, again, let’s deal with the easy one – business spending. This would be on investment of course because we can’t imagine they’re going to start a free for all in pay rises for anyone but bosses right now. But as we know, whilst they’re laden high with cash (which right now they lend, in practice, to the government) they appear to have no intention of spending that and worse still appear clueless as to what they might spend it on. There is no hope of them creating a deficit on their budget, and so they will not create a surplus for the government.

In that case we’re down to consumers to start borrowing heavily to make the government surplus happen. I stress, this is the only way this can happen. This is exactly why George Osborne is creating a borrowing bubble right now – and why it seems to be delivering growth. In pure maths terms it has to do so. But what Ed Balls is saying is that he is guaranteeing that this will continue until there is no deficit.

You can’t achieve that by cutting. That takes money out of the economy and simply balances it at a lower level than before.

It’s hard to do it with tax increases unless – and it’s a big unless – they’re heavily redistributive, which can work.

So all that can create this balance is increased consumer spending from borrowing and growth – growth which will not be happening because government will be spending less.

What Ed Balls is suggesting is incredible – but I mean that in its literal sense. It is not credible. It just cannot happen. This is plain bad economics. And with it Labour’s economic credibility is in tatters.

Why, oh why, does Labour want to fail so badly?
-

I'm not insulting you Innis, only your ability to cling on to your failed beliefs...after all the evidence around you, after labours final ephiphany, why do you persist with supporting such failure?

We've discussed our respective views many times, I admire your tenacity, just not your understanding or application - the real World is telling socialists all the time what works and what doesn't, so why do they constantly act as if they are in denial?!!

 

[Real Deal]

Just words, I doubt they would stick with that motto if they got in power again. Bunch of desperate jokers trying to get votes.

 

[Greavswasthegreatest]

And thre consequences of failure to meet their targets would be what?

Retire on a fat pension
Go work for a company that lobbied them and carroted a job for them
Resign
Blame the failure on the last govt

Absolutely meaningless twaddle... politicians are in the main scummy career chasers and have no real substance any more.

 

[spurdon]

Ed balls is a joke figure; that Miliband has not had the guts to dump him says deeply worrying things about his leadership.

 

[ST2]

Real Deal - 25/1/2014 17:51

Just words, I doubt they would stick with that motto if they got in power again. Bunch of desperate jokers trying to get votes.

That applies to every politician in every party RD

And wading into the 'failed political system' debate - I'd say capitalism doesn't look too clever either what with banking crises and rampant unstopped profiteering and tax evasion

I'd join a revolution but I have to work for a living :17: