conservatives are

[SirGalahad]

Me neither. I finish each month (slightly) better off than I started it. That's all I can do, really.

Paradox of thrift. Go o

I do wish you wouldn't keep using this spurious example of mortgages; it is not the same as actually borrowing money to buy goods.

If the country can't service its debt, will someone clear it by repossessing Britain and returning the surplus?

you really dont understand finance. its secured vs unsecured.

 

[SirGalahad]

And that's what I've tried to point out to you Kankerot, It's not being in debt that's the issue, it's being able to service it without causing other problems that's the real issue to considered. Every debt has to be serviced, and ideally paid back at some point, and the more you have to pay to service that debt, the less there is to go round for other services. If you persoanlly don't spend more than you earn, then why should a government. You keep failing to say what sort of society you want, and you fail to mention how you would fund that society, so it seesm that it's okay to have a nicely supported society, and don't worry about how it gets funded.

Dog. I perfectly understand gov finance and economics (no offence but you don't you just get it at the moment). I wanted to first work out what you meant by living within your means - such a subjective statement.

When you take on debt you are trading future consumption for today - like buying a car or a house.

So you say its ok to get into debt to buy a home. Then that is what gov do, they take on debt when they need to spend money on building hospitals, providing schools etc.

I asked you about society - answer it please - what services should gov provide and what it should not. As to funding - like any other economy through taxes both direct and indirect.

But no offence you need to read up on how government finances actually work and get out of this concept of living within your means as some sort of litmus test for governments.

 

[Doggit]

I think the problem we have, is that because we differ in our viewpoints, you think I don't understand finance, but I do, I just see a different immperative to you.

Now the odd thing about you, seems to be that you're a landlord, so are used to handling income and expenditure, but you feel that governments can act differently to people. You get a mortgage to buy a house, and the government takes on debt to finance infrastructure projects. Money get fed ito the economy, people spend, that raises revenue, and the cycle goes on. But if the national debt that the government owes money on keep rising, then somethings going wrong somewhere - hence my comment that we're living beyond our means.

And you can't turn round and say "fine, not problem as long as I'm alright jack", and that seems to be the impression you're giving.

You keep asking me what sort of society I want, yet you don't answer your own question. But I don't answer it, because it's not a relevant question, it's an aspiration that you work towards, not a lifestyle you decide to have, regardless of the consequences.

 

[SirGalahad]

Dog you seem like a nice chap but can you explain to me how money supply is affected by BOE open market operations and how that feeds into fiscal policy because on the surface you may think that government and personal finances are the same but not when you delve into it.

Your changing your stance. You first said that living within your means is being able to service your payments. Now you want to include debt when you didn't before.

So is your issue the rising amount of government debt? Your view seems to be very fluid.

Should the government lower debt - many western economies have high debt ratios and it depends how and when if they want to lower the debt.

By the way I don't know how I gave the impression that its about my own personal self interest and nothing else.

The reason I ask the question is relevant and shows you don't get macroeconomics - if we want a society that is based on neo liberal total free market and a small public sector then the states expenditures will be less but so will its take or you can have a more expansionist government which provides healthcare, transport, schools etc.

 

[Doggit]

The reason I ask the question is relevant and shows you don't get macroeconomics - if we want a society that is based on neo liberal total free market and a small public sector then the states expenditures will be less but so will its take or you can have a more expansionist government which provides healthcare, transport, schools etc

Now I haven't changed my stance at all, just expanded on it to try and show you where I'm coming from. But the above comment implies that you see thing either working one way or another, and it's nowhere near that simplistic; yet I doubt if you see so simplistcly either, because this site isn't easy to get complex ideas across. If you have a liberal free market, then the government income rises because companies employ people, that generates VAT and corporation tax on sales, and income tax and NI on wages. But if you have a large public sector, then money has to be sucked out of the free market to support the public sector, so small public sector is always best. Yet whilst it can be argued that some services like rail etc should be under public ownership, that tend to make it stagnate because the workers and the bosses have a job for life, so don't need to do more than the minimum.

We have a P**s poor HMRC that doesn't enforce the tax rules on big companies, and we have incoherent lawsa that allow companies like Google and Amazon to hide their income overseas, so our tax receipts are nowhere near as high as they should be.

You happily act condecendingly towards me, and suggest that I don't understand macroeconomics, but I suspect that I just have a much bigger picture in mind. Your comments suggest a socialist outlook that justifies the way you want things to be I'm afraid, but we need a major shift in politics, and the civil service before we can achive a society that is fair for all, and works for all as well.

 

[EFLImpudence]

But if you have a large public sector, then money has to be sucked out of the free market to support the public sector, so small public sector is always best. Yet whilst it can be argued that some services like rail etc should be under public ownership, that tend to make it stagnate because the workers and the bosses have a job for life, so don't need to do more than the minimum.

I would say that was the case with the nationalised industries in the past.
That they were not run as efficiently as the private sector was solely the fault of poor management or government sabotage - as is now happening with the health service.

The privatised railways now make a so-called "profit", much of which goes to foreign owners. Some, European Railways, one of which is Deutsche Bahn, use them to run their own system. It would obviously be better if the profit remained in Britain.

This so-called "profit" is, of course, merely the result of far higher subsidies - of one form or another - than was the cost to run them when nationalised.

So, you are contributing to Deutsche Bahn and others.
Would it not be better to contribute once again to British Railways?

Perhaps renationalise them on the condition that only foreign management be employed.

 

[Doggit]

Too right EFL, our energy companies subsidise France and all sorts of places. Market forces are one thing, but selling off our industies just shift profits overseas, and doesn nothing to contribute to our own economy.

The subsidies are supposedly paid to the privatised rail companies so that they keep open the non profitable lines, but I doubt if the nationsilsed railway would have improve themselves in the same way, so any suggestions to achieve both goals would be well appreciated.

 

[SirGalahad]

I think the problem we have, is that because we differ in our viewpoints, you think I don't understand finance, but I do, I just see a different immperative to you.

Now the odd thing about you, seems to be that you're a landlord, so are used to handling income and expenditure, but you feel that governments can act differently to people. You get a mortgage to buy a house, and the government takes on debt to finance infrastructure projects. Money get fed ito the economy, people spend, that raises revenue, and the cycle goes on. But if the national debt that the government owes money on keep rising, then somethings going wrong somewhere - hence my comment that we're living beyond our means.

And you can't turn round and say "fine, not problem as long as I'm alright jack", and that seems to be the impression you're giving.

You keep asking me what sort of society I want, yet you don't answer your own question. But I don't answer it, because it's not a relevant question, it's an aspiration that you work towards, not a lifestyle you decide to have, regardless of the consequences.

I have asked you basic questions about how economy works and you have not replied - I will take that as you can't answer.

Why is it odd that I am a landlord? How you think my views are in conflict?

So living beyond our means (not a term in any economic text) - we onto our third iteration now? Is growing government debt?

https://tradingeconomics.com/country-list/government-debt-to-gdp?continent=europe

That list is self explanatory. Look at the list of the countries with the lowest Gov debt and look at the issues in their economies.

Again for the last time. The question is relevant - what services should the government provide? What do you determine as public goods / services. As this then feeds into the question of government debt.

 

[SirGalahad]

If you have a liberal free market, then the government income rises because companies employ people, that generates VAT and corporation tax on sales, and income tax and NI on wages. But if you have a large public sector, then money has to be sucked out of the free market to support the public sector, so small public sector is always best. Yet whilst it can be argued that some services like rail etc should be under public ownership, that tend to make it stagnate because the workers and the bosses have a job for life, so don't need to do more than the minimum.

What is a liberal free market. So no regulations? Laissez faire? I just want to know how you understand that term.

How would you define a large public sector? What do you define as a small public sector?

So you get round to finally talking about what I have been asking you. What services should the gov provide which then feeds into the size of the public sector.

Are you arguing a secure job is a disincentive to work hard?

You happily act condecendingly towards me, and suggest that I don't understand macroeconomics, but I suspect that I just have a much bigger picture in mind. Your comments suggest a socialist outlook that justifies the way you want things to be I'm afraid, but we need a major shift in politics, and the civil service before we can achive a society that is fair for all, and works for all as well.

Lol. Doggit you have your opinion - what is this bigger picture?

What is a socialist outlook? That you think I have.

Again describe a society that is fair for all?

You use non economic terminology to argue issues regarding economics -that's why I keep asking for clarification.

 

[SirGalahad]

I would say that was the case with the nationalised industries in the past.
That they were not run as efficiently as the private sector was solely the fault of poor management or government sabotage - as is now happening with the health service.

In the past nationalised industries were run inefficiently part due to government meddling and poor management. Contrast that to the way the BOE is run now.

The NHS is being sabotaged by the government with the unnecessary internal market and market led reforms and contracting out.

Perhaps renationalise them on the condition that only foreign management be employed.

How dare the East Coast Mainline makes a profit when it was nationalised.

The privatisation of the Railways was a total and utter shambles. The tracks is owned and operated by Railtrack. The franchises are owned and operated by a multitude of private companies some foreign. The rolling stock by three main providers.

There are three main providers or rolling stock
https://en.wikipedia.org/wiki/Rail_transport_in_Great_Britain#Train_leasing_services

Which are owned by PE companies, banks , finance houses. Also when the stock was sold in the privatisation it was sold way under market value - report from National Audi office.

So not are we only subsidising foreign train operators, we sold the trains cheap and then the profits are offshored.

 

[SirGalahad]

Too right EFL, our energy companies subsidise France and all sorts of places. Market forces are one thing, but selling off our industies just shift profits overseas, and doesn nothing to contribute to our own economy.

The subsidies are supposedly paid to the privatised rail companies so that they keep open the non profitable lines, but I doubt if the nationsilsed railway would have improve themselves in the same way, so any suggestions to achieve both goals would be well appreciated.

Rail provision is not cheap and neither is it profitable if it wasn't for the huge subsidies. The problem with privatisation is that it is done for ideological reason and not economic reasons.

What happens is a public monopoly becomes a private monopoly. The most important aspect of privatisation is entry and exit of competitors and substitute and complimentary products.

 

[Brigadier]

https://tradingeconomics.com/country-list/government-debt-to-gdp?continent=europe

That list is self explanatory. Look at the list of the countries with the lowest Gov debt and look at the issues in their economies.

What am I missing?
I see no correlation between the health of the economies, and their place in the table. There are "nice" places and not-so-nice places distributed throughout the list.

 

[Roger928]

"We have to live within our means and more borrowing... is not the solution."
Philip Hammond.

Borrowed money only once. Which was £5k to set up a business account.
When I read the statement at the end of the month and seen how much the bank was profiting from my venture I paid a visit to the bank.
Paid them what I owed and closed the account.

 

[SirGalahad]

What am I missing?
I see no correlation between the health of the economies, and their place in the table. There are "nice" places and not-so-nice places distributed throughout the list.

You got the point. Focusing solely on debt and deficit misses the larger issues within an economy - there is no hard or fast rule - those with lower debt perform better or with higher debt perform worse. There is more to the ecomomy than just debt.

 

[IWalkLikeHimaMartian]

You got the point. Focusing solely on debt and deficit misses the larger issues within an economy - there is no hard or fast rule - those with lower debt perform better or with higher debt perform worse. There is more to the ecomomy than just debt.

There is more to society than just debt.
Is it possible that austerity cuts can be self-defeating, eventually?