Triple A? But for how much longer?

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I've been saying for the past few years that Britain will one day default on its debts - and with Standard and Poor saying the rating is at risk - I'm being proven right (as usual). The cost of borrowing will rise - and our ability to repay will fall. Then the rating will fall again until London is twinned with Athens. It's a mathematical certainty - just a matter of time.
 
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If we can't stop borrowing - then it is.
 
We are at no risk of defaulting, unlike Greece we have our own currency, and by and large the public understand we need to cut.

Greece cannot devalue as it is in the Euro (which screws it's economy), and it can't print money, further it's population strikes against spending cuts (whilst dodging taxes as a national past time).


The issue for the UK is the longer we leave the cuts, the harder the cuts will be (government spending has risen year on year, the deficit has only been slightly reduced by raising taxes, all cut's to council funding are not yet enacted.)

Councils are STILL hiring at inflated wages for non jobs, pick up any job paper and you will find something, the quangos that where "axed" still exist (their functions were kept, the staff were kept, but they now work in government instead of quangos), councils have whole departments that can be cut and they still waste resources (In my area they have had about 20 consultations on building a new stadium, sod knows how many millions they have wasted TALKING about it).

Then councils cut library and child care services as a deliberate ploy to protest the cuts (one council paid for advertising to advertise against "the brutal cuts", oh the ironing is delicious).



We will probably lose our credit rating, and some we will see some more public strikes, but as long as we don't vote in labour again (who keep saying the "cuts are to fast to deep" despite a RISE in spending), we won't default.
 
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The CUT CUT CUT strategy of millionaire Cameron and his millionaire chums doesn't work.

It isn't working in Greece, it isn't working ANYWHERE in the world. It never has, it never will. It's a paradox but we need to invest (spend money), in the country in order to stimulate it into making money. It's the simple economics of Demand Management. In order for ANY economy to be successful, Demand (for products/services), needs to be there.

Demand comes from people having money to spend. In order to have money to spend you have to have employment/self-employment. When people have money to spend it creates 'Demand', those people want products and services. Because the 'Demand' is there, more products and services need to be created... how do you create them? By employing people and/or self-employment. Those employed/self-employed people then have money to spend which creates.... YES you guessed it... DEMAND! And that demand creates more jobs, more jobs create... demand... demand creates more jobs.... you get the picture.

Germany (the strongest economy in Europe), had Billions upon Billions loaned/spent on it after the war to rebuild it. It invested heavily in it's industry. They have literally just finished paying back the loans made to it after the war! And yet even though they've JUST finished paying off their debts... they're the strongest economy in Europe! How can that be? How can a country that was annihilated during the war, that's been in debt to the tune of multiple Billions of pounds for over 50 years be THE strongest economy in Europe? Because they invested in their country. They continued innovating and developing and manufacturing. We didn't, we've stopped spending money on our country multiple times over the past 50 years.

So the millionaire Tory mentality of simply cutting and cutting until it hurts ends up creating a position where you need to start spending (like the bank of England have had to with their quantitative easing), in order to get out of the hole you created by cutting!

The 'Cut Cut Cut' Strategy isn't working and it won't work. The economy is going further and further down the pan. It is going down the pan because of the cuts of jobs and spending on the economy. More and more people are becoming unemployed and/or at risk of unemployment and/or worrying about unemployment... so less and less people have or are willing to spend money.

The Bank of England has just had to do yet ANOTHER round of quantitative easing (SPENDING MONEY ON THE ECONOMY IN ORDER TO STIMULATE IT!!!!!!), and that 'SPENDING' runs into the tens of BILLIONS! This is all having to be done for two reasons:

1. The Banking Sector (that we rely on too heavily), became a bunch of gamblers. The old style bankers where a cautious lot who had to be convinced to spend money. Now they're a bunch of fly-by-ya-pants chancers. They have an attitude of, it's not my money, why should I care? It is the Bankers that drove the world economy into recession. It had very little to do with over spending. I'm not saying spending was done in the right way, but it was NOT the reason for the collapse of world economies.
And yet where is the 'Quantitative Easing' money being spent...? Yes that's right, it's being spent in the very industry that drove the economy into the ground in the first place! I'm not saying that Quantitative Easing isn't required, it is in order to stimulate the banks to lend money to businesses/the self-employed but one hopes there has been an agreement put in place for this to happen.

2. The government decided we were in a hole so the best course of action was to chop off the arms and legs of the economy in order to stop it running away! As I've outlined above, that hasn't worked so now they're having to SPEND money in order to stimulate the regrowth of those arms and legs they chopped off in the first place!

By the way, I'm no fan of the way the Germans are handling the Greeks debt crisis. The Germans seem to have developed some form of amnesia when it comes to their own record on paying back debt so I think it somewhat duplicitous of them to be treating the Greeks the way they are.
 
People need to spend, that includes the government.
I dont know the maths, but it seems the government are happy to pay unemployment & other benefits, yet if it were to invest in building works etc, & create jobs then people will be employed & earning.
I have been looking to move for over a year there are so few properties on the market, its not about getting morgages etc, its people are worried about not having a job.
I havent got a job (dont need one), but I wont spend my money except on a property, and I think a lot of people wont spend there savings & then we get to those that borrow/borrow & borrow & isnt thats why we are in the economic mess.

I dont know if Im lucky or was 'cute' when younger, all I want to do is spend my money & move, I cant keep having holidays.
Im ready for the flack. :p
 
The CUT CUT CUT strategy

UK Government spending

2008 - 575 billion
2009 - 621 billion
2010 - 660 billion
2011 - 683 billion
2012 - 703 billion projected
2013 - 722 billion projected

CUT CUT CUT!

of millionaire Cameron and his millionaire chums

I wasn't aware millionaire Cameron was friends with millionaire Milliband?
 
Blas, you say that the Cut,cut, cut strategy isn't working and we need to invest in the country. Fine, but what do we use to invest in the country? Borrow more money?
I perhaps look as things a bit more simplistic than these government bods, but when my credit card is maxed out, I don't get another credit card to keep on spending, or get a loan, to pay off the first one, which is exactly what the government is doing, (and what the previous government did)
When the pot's empty, we have to cut our cloth according to our income or face the consequences.
I personally think the Euro will be lucky to survive. Problem is, if it all goes t**s up and the Euro does collapse, it will plunge the whole of Europe into a recession unheard of in modern times. We in the UK won't escape.
 
The CUT CUT CUT strategy

UK Government spending

2008 - 575 billion
2009 - 621 billion
2010 - 660 billion
2011 - 683 billion
2012 - 703 billion projected
2013 - 722 billion projected

Now tell me again that the UK can't go bust.

Let's take that figure of approx 700 billion. The Olympics - cost 9 billion. So we will spend the equivalent of holding the Olympics 73 times in one year - and you can't see a problem? :confused: :confused:
 
Blas, you say that the cut,cut, cut strategy isn't working

The reason the strategy isn't working, is as above it isn't happening.

Instead spending is rising (albeit very slightly, almost a freeze), taxes have risen (reducing spending, slowing economic growth), no government sectors have been passed to the private industry (like they tried to do with the forestry palava).

The government are essentially freezing spending, not cutting, not rising.

On it's own, this helps because it keeps some money going around the system, but when you couple this with rise in taxes, it doesn't work.

The problem is that we have had debt fuelled growth, so some loss in trade is inevitable, the idea is to keep spending money on the proverbial credit card, until real growth returns, then that debt can be paid off.

This is rather sound, but doesn't work when coupled with government spending that is already bloated (remember how many councils had annual rises of 6-8% or even 10% before the recession), and with red tape and extra costs that stifle new business.

We need to cut taxes, cut red tape, as well as cut or spend.

Fine, but what do we use to invest in the country? Borrow more money?

If you buy the stimulus option, then yes, borrow money.

And spend it on large scale infrastructure projects, roads, power (not effin wind farms), things that make business more convenient and practical and cheaper (our high energy prices drive away manufacturing).

Instead we spend it on wind farms (foreign manufacture and labour), aid, money to the EU (stupid amounts of money), rail (but buying foreign made trains).

Now I am not a protectionist, and do not think we should be protectionist. But if the government needs to stimulate the economy, spending it on a whole lot of foreign stuff isn't really going to help is it?
 
Yes. I adjusted the post but you'd already copied it.
 
Yes. I adjusted the post but you'd already copied it.

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The government are essentially freezing spending, not cutting, not rising.

On it's own, this helps because it keeps some money going around the system, but when you couple this with rise in taxes, it doesn't work.

The problem is that we have had debt fuelled growth, so some loss in trade is inevitable, the idea is to keep spending money on the proverbial credit card, until real growth returns, then that debt can be paid off.

This is rather sound, but doesn't work when coupled with government spending that is already bloated (remember how many councils had annual rises of 6-8% or even 10% before the recession), and with red tape and extra costs that stifle new business.

We need to cut taxes, cut red tape, as well as cut or spend.

Fine, but what do we use to invest in the country? Borrow more money?

If you buy the stimulus option, then yes, borrow money.

And spend it on large scale infrastructure projects, roads, power (not effin wind farms), things that make business more convenient and practical and cheaper (our high energy prices drive away manufacturing).

Instead we spend it on wind farms (foreign manufacture and labour), aid, money to the EU (stupid amounts of money), rail (but buying foreign made trains).

Now I am not a protectionist, and do not think we should be protectionist. But if the government needs to stimulate the economy, spending it on a whole lot of foreign stuff isn't really going to help is it?
I agree to an extent. There is spending (I mentioned the need for the Quantitative Easing), but there IS cutting and there is, as you've said, tax rises. As a result, spending is, I would argue, not frozen but CUT in real terms. I am not for ONE MINUTE stating that money is and has been spent by ANY of the millionaire chums now or in the past in the right ways. I'm not a huge fan of Quantitative Easing as you may have guessed, but spending IS required in order to create the stimulus we need.

It's a very simplistic view of an economy but you cannot start a business selling ANYTHING without investing. Suppose we all started a business selling Ice Creams or providing a Cleaning Service. We cannot produce Ice Creams without buying the ingredients. We cannot clean premises etc without materials and a means of getting to and from those premises. And we need people wanting to buy Ice Creams and/or wanting their premises cleaned in order for us to be able to sell those products/services... none of that can happen without investment (spending).
 
Blas. The stuff we sell to ourselves doesn't help. It's the stuff we export that matters - and all those countries are going bust too. Try selling something to a customer with no money and see how far you get.

And my understanding of quantitive easing is that we (the people) buy bad debt off the banks in return for good money.
 
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