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That's not strictly true. What the bank crisis did do was end the ability of consumers and governments to borrow recklessly at very low interest rates. Our debt to GDP levels remain dangerously high and unsustainable and can be viewed here http://www.usdebtclock.org/world-debt-clock.html
The bank crisis brought the level of debt for both consumers and governments into sharp focus but cannot really be blamed for the levels of debt that we (and many other countries) had prior to the bubble bursting. Ultimately the budget deficit has to be controlled. You can point to Labour for running deficits in the boom times when they should have been running surpluses. Of course many economists and famously Gordon Brown believed we were at the end of the boom bust cycle or as they called it "the great moderation"
Trom, Spot on and to add to that a unique problem the UK had was too many public sector jobs and final salary pension schemes that private sector workers can only dream of, we know which government increased the public sector spend don't we. I am just glad we have a government in place right now that recognises if you don't get spending under control borrowing becomes too expensive then it's all out of control. It's not about the have's and the have nots as some people seem to indicate but I would rather have intelligent business minded people running UK PLC than idiots that want to give everything away and spend money we don't have. Common sense. Gordon Brown totally screwed us over and watch, Ed Balls will do the same.
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Let them eat chips! on 14:23 - Nov 12 with 3491 views
Clive_Anderson: The necessity to cut spending in the aftermath of the crisis was unquestionable. But the severity of those cuts and the places where the scythe has fallen highlight the utter indifference and detachment of those in power. All epitomised by Cameron telling poor people they need to suck it up while he sits on a golden throne.
Nov77: Depending on the date of the picture of Brown, he may not have used that particular opportunity to castigate the poor and manoeuvre the levers of power to entrench the wealth of his cronies. Would Brown have known better than to deliver such a statement whilst surrounded by the trappings of the elite? Who knows.
Ultimately my main thought is that we need a debate on fairness. How do we rate and improve a society in which the inequality gap is exploding and millions of the younger generation have basically no future? Labour or Tories in power, will it make a difference? Not sure anymore.
I saw this the other day. Probably local enough to many of you, and at a time when we have a well acknowledged housing crisis. No doubt to be occupied for a few days a year by wealthy Middle Eastern, Russian and Asian émigrés. Prices starting at a cool £2.6m: http://londonsquare.co.uk/
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Let them eat chips! on 14:25 - Nov 12 with 3490 views
You say it was the Tories mates, yet it was labour who deregulated the banks, and who gave Fred Goodwin a knighthood?
From feb2009,
"Labour has given 23 bankers honours, brought three into the Government as ministers and involved 37 in commissions and advisory bodies Seven have got jobs on quangos and agencies, ten have been appointed to various councils, and four were given life peerages. Two banking chiefs have been appointed to senior posts inside Number Ten."
Well said Nov77.
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Let them eat chips! on 14:40 - Nov 12 with 3468 views
Let them eat chips! on 13:38 - Nov 12 by derbyhoop
On the basis of normal financial crisis management, which is to either spend less OR get more money coming in, Perhaps the answer is to take more in tax?
Or you could spend more and rely on borrowing as we are currently doing. The idea that we've got austerity is a myth.
My point was that if government spending stimulates the economy and increases tax take down the line, shouldn't a decade of high spending have mitigated the banking crisis and subsequent recession?
Sure it may be possible to tax more to eliminate the deficit (I personally don't believe it would work as France is demonstrating at the moment), but if the current huge level of spending isn't getting us out of the mess then perhaps it isn't the answer.
[Post edited 12 Nov 2013 14:43]
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Let them eat chips! on 14:41 - Nov 12 with 3467 views
Let them eat chips! on 14:24 - Nov 12 by gueRRilla
Couple of questions to be answered there.
Clive_Anderson: The necessity to cut spending in the aftermath of the crisis was unquestionable. But the severity of those cuts and the places where the scythe has fallen highlight the utter indifference and detachment of those in power. All epitomised by Cameron telling poor people they need to suck it up while he sits on a golden throne.
Nov77: Depending on the date of the picture of Brown, he may not have used that particular opportunity to castigate the poor and manoeuvre the levers of power to entrench the wealth of his cronies. Would Brown have known better than to deliver such a statement whilst surrounded by the trappings of the elite? Who knows.
Ultimately my main thought is that we need a debate on fairness. How do we rate and improve a society in which the inequality gap is exploding and millions of the younger generation have basically no future? Labour or Tories in power, will it make a difference? Not sure anymore.
I saw this the other day. Probably local enough to many of you, and at a time when we have a well acknowledged housing crisis. No doubt to be occupied for a few days a year by wealthy Middle Eastern, Russian and Asian émigrés. Prices starting at a cool £2.6m: http://londonsquare.co.uk/
we've been bailing out our banks over here in Ireland for ages now. The problem is that they will always make their savings on the middle classes down.
The upper classes only account for 5% of the countries finances. So even if they taxed them heavier you still wouldn't generate anywhere near the money needed to pay off our debts.
If you did hit them heavier it would be a nice token gesture but it could run the risk of business owners to go elsewhere. Not good for an already struggling jobs market so what can you do. You hit the middle to lower classes and cut their welfare by a fiver/tenner etc
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Let them eat chips! on 14:47 - Nov 12 with 3457 views
You say it was the Tories mates, yet it was labour who deregulated the banks, and who gave Fred Goodwin a knighthood?
From feb2009,
"Labour has given 23 bankers honours, brought three into the Government as ministers and involved 37 in commissions and advisory bodies Seven have got jobs on quangos and agencies, ten have been appointed to various councils, and four were given life peerages. Two banking chiefs have been appointed to senior posts inside Number Ten."
Don't get me going on Brown. Letter I snail mailed to him 4 years ago. One word has had one letter changed for technical reasons.
Gordon Brown Prime Minister Downing Street London SW1A 2AA 10 May 2009
Dear Mr Brown,
I was brought up in a staunch labour home. My father was a fish filleter and I went to work when I was 15 years and 8 days old. My early politics were naturally labour. Over the years I slipped away and become a conservative. When new labour came in I thought I may return to the fold but it was not to be for many reasons, including Iraq.
As a chancellor you failed to keep a sensible government balance sheet in the ‘good’ years to enable you to soften the impact of bad years. Instead of putting money away you just created debt by milking the PFI system and saddling our children with long term debt which you carried off balance sheet as an illusion of prudence.
You declared prudence was your watchword. You declared boom and bust was finished.
You sold our gold at a market low of less than a third of its present price.
You were the architect of the FSA which succeeded as a box ticking bureaucracy but failed lamentably to address the larger issues which really mattered such as banks and hedge funds, a situation which still exists.
As prime minister you publicly congratulated the bankers of the city of London as the new world leader of creativity and ingenuity. You declared a golden age was upon us in the city of London.
Your lack of foresight is breathtaking as is your mendacity and obfuscation. It was the failure of your FSA to control banks ‘creativity and ingenuity’ which caused the British system to crash like the Yanks. It was not and is not a worldwide problem on the scale of our own. I know it and so do you and it is a simple lie for you to say, as you did, otherwise.
You personally are a disaster for this country followed closely by most of your out of their depth cabinet.
I loathe you personally and what you stand for politically with an intensity I have never come close to previously. I cannot express too clearly my utter contempt for you and the mostly odious crew you have gathered around you.
A word I never use because it expresses an extreme and is generally unacceptable is cxnt. However, I make an exception for you as it comes closest to expressing what I think of you. You really are a complete one.
Yours most sincerely,
Currently residing in Pinner, Centre of the Universe.
"The necessity to cut spending in the aftermath of the crisis was unquestionable. But the severity of those cuts and the places where the scythe has fallen highlight the utter indifference and detachment of those in power"
I'd say it's more of a case of Washington Monument syndrome.
Local councils punish the government for making cuts to their budgets by cutting the most necessary and visible services in order to get them voted out so a friendlier government comes in a keeps the gravy train running.
In Nottingham the council lost £60m after keeping it in Icelandic banks after being advised not to. No problem they said as it won't affect services. Then the government cuts half a million from their budget and immeditately the council cut services to the most needy whilst keeping the salaries and pensions of the council elite intact. The cuts suddenly stopped after that funnily enough.
Our 'debt' was deliberately created in the illusionary world of the current financial system where a tiny percentage of money actually exists. The rest is just made up numbers on a computer screen created and then manipuluated via systems deliberately too complex for the average person to see through as the pure smoke and mirrors that they are.
Anyone genuinely interested in what this is all about and, more importantly, how it is an illusion that we don't have to buy into should definitely watch this.
We need to rise above all this 'it was labour's fault, it's the tories fault'. They are mere spokespeople/puppets/fronts for the real power. And whilst we continue to squabble on such an ineffectual level the problems will continue or rather they will be deliberately continued by those who they serve.
How can so many countries be in such crippling/unservicable debt? Who is it too? How can sovreign nations be in debt to organisations that exist within them!? It's a ludicrous farce and as soon as we all finish waking up to the big picture and stop getting tied up in the small print that we have been so constantly fed that we now think it's real, we'll make the changes we need to start serving all of us and not just the few.
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Let them eat chips! on 14:56 - Nov 12 with 3437 views
Don't get me going on Brown. Letter I snail mailed to him 4 years ago. One word has had one letter changed for technical reasons.
Gordon Brown Prime Minister Downing Street London SW1A 2AA 10 May 2009
Dear Mr Brown,
I was brought up in a staunch labour home. My father was a fish filleter and I went to work when I was 15 years and 8 days old. My early politics were naturally labour. Over the years I slipped away and become a conservative. When new labour came in I thought I may return to the fold but it was not to be for many reasons, including Iraq.
As a chancellor you failed to keep a sensible government balance sheet in the ‘good’ years to enable you to soften the impact of bad years. Instead of putting money away you just created debt by milking the PFI system and saddling our children with long term debt which you carried off balance sheet as an illusion of prudence.
You declared prudence was your watchword. You declared boom and bust was finished.
You sold our gold at a market low of less than a third of its present price.
You were the architect of the FSA which succeeded as a box ticking bureaucracy but failed lamentably to address the larger issues which really mattered such as banks and hedge funds, a situation which still exists.
As prime minister you publicly congratulated the bankers of the city of London as the new world leader of creativity and ingenuity. You declared a golden age was upon us in the city of London.
Your lack of foresight is breathtaking as is your mendacity and obfuscation. It was the failure of your FSA to control banks ‘creativity and ingenuity’ which caused the British system to crash like the Yanks. It was not and is not a worldwide problem on the scale of our own. I know it and so do you and it is a simple lie for you to say, as you did, otherwise.
You personally are a disaster for this country followed closely by most of your out of their depth cabinet.
I loathe you personally and what you stand for politically with an intensity I have never come close to previously. I cannot express too clearly my utter contempt for you and the mostly odious crew you have gathered around you.
A word I never use because it expresses an extreme and is generally unacceptable is cxnt. However, I make an exception for you as it comes closest to expressing what I think of you. You really are a complete one.
Yours most sincerely,
nice one Pom.
Get it off your chest.
I think my most hated English politician has to be your one who expensed a bathplug.
How tight can you get. You're getting good money and you have the cheek to expense a bath plug for your second residence.
Over here in Ireland they are all mostly self serving creatures.
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Let them eat chips! on 15:29 - Nov 12 with 3412 views
we've been bailing out our banks over here in Ireland for ages now. The problem is that they will always make their savings on the middle classes down.
The upper classes only account for 5% of the countries finances. So even if they taxed them heavier you still wouldn't generate anywhere near the money needed to pay off our debts.
If you did hit them heavier it would be a nice token gesture but it could run the risk of business owners to go elsewhere. Not good for an already struggling jobs market so what can you do. You hit the middle to lower classes and cut their welfare by a fiver/tenner etc
Ah the Irish banks. Scum to the last one. As far as I see it, the Newbridge credit union scandal is nothing but an attempt by banks to squeeze out the competition.
Just for interest, in Ireland the top 1% of the population hold 20% of the wealth, the top 2% control 30% and the top 5% disposes of 40% of private assets. http://www.eapn.ie/eapn/training/income-inequality
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Let them eat chips! on 16:27 - Nov 12 with 3367 views
Trom, Spot on and to add to that a unique problem the UK had was too many public sector jobs and final salary pension schemes that private sector workers can only dream of, we know which government increased the public sector spend don't we. I am just glad we have a government in place right now that recognises if you don't get spending under control borrowing becomes too expensive then it's all out of control. It's not about the have's and the have nots as some people seem to indicate but I would rather have intelligent business minded people running UK PLC than idiots that want to give everything away and spend money we don't have. Common sense. Gordon Brown totally screwed us over and watch, Ed Balls will do the same.
" Give everything away " mmm, who did that then. A certain M.T. ?
It's being so happy that keeps me going.
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Let them eat chips! on 17:02 - Nov 12 with 3349 views
Ireland is an interesting if painful example. By going in to the euro (something a lot of our politicians told us was a good idea) they lost the ability to print money. As a result they had real austerity with public sector workers seeing 40% cut in salary - imagine what would happen here if the old bill or teachers were told we were getting a 40% pay cut! This was imposed on them by 'the troika' effectively German central bankers. Most of the nations young people have left and gone overseas many down under. Irish people have shouldered this very bravely whilst the Greeks have practically strung up politicians who suggested 'less' austere measures. Welfare has been decimated.
We have been able to use QE to keep our bankers going keeping things ticking over and have managed to keep borrowing from international markets. There was a risk at one point that would not happen. We are all poorer because of QE and it has caused an asset bubble meaning a studio flat in Shithouse EC3 will cost your kids about a squillion quid but to a certain extend we have kept the show on the road. The margins between the coalition austerity and labours plans were in the big picture about a fag paper apart.
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Let them eat chips! on 17:45 - Nov 12 with 3249 views
Let them eat chips! on 16:27 - Nov 12 by Stanisgod
" Give everything away " mmm, who did that then. A certain M.T. ?
Are you referring to the council houses she let people buy at "give away" prices to offer prosperity to the generally less fortunate. Don't get me started how the unions were ruining this Country at that time and a certain M.T. had the courage to tackle and save the entire Country going down the pan.
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Let them eat chips! on 17:56 - Nov 12 with 3240 views
Trom, Spot on and to add to that a unique problem the UK had was too many public sector jobs and final salary pension schemes that private sector workers can only dream of, we know which government increased the public sector spend don't we. I am just glad we have a government in place right now that recognises if you don't get spending under control borrowing becomes too expensive then it's all out of control. It's not about the have's and the have nots as some people seem to indicate but I would rather have intelligent business minded people running UK PLC than idiots that want to give everything away and spend money we don't have. Common sense. Gordon Brown totally screwed us over and watch, Ed Balls will do the same.
Woah there! A lot of the people, probably the majority, that have "final salary pension schemes that private sector workers can only dream of" are also on very poor wages e.g. dinner ladies, binmen etc.
Their pensions are part of their overall remuneration. In the same way that I would be upset if someone suddenly cut my wages, they are very unhappy.
"Gordon Brown totally screwed us over" you say. Should he have let the banks fail? Are you fond of anarchy? This "Labour caused all the debt" argument does not bear any scrutiny, let alone close scrutiny. The banks turned out to be poor at sums and more than willing to take huge risks, then needed to be bailed out to avoidance the meltdown of our entire financial system.
Meanwhile, we have 5m people and rising on less than the living wage. Well done David, that's progress.
RFA
"Things had started becoming increasingly desperate at Loftus Road but QPR have been handed a massive lifeline and the place has absolutely erupted. it's carnage. It's bedlam. It's 1-1."
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Let them eat chips! on 19:46 - Nov 12 with 3201 views
Ireland is an interesting if painful example. By going in to the euro (something a lot of our politicians told us was a good idea) they lost the ability to print money. As a result they had real austerity with public sector workers seeing 40% cut in salary - imagine what would happen here if the old bill or teachers were told we were getting a 40% pay cut! This was imposed on them by 'the troika' effectively German central bankers. Most of the nations young people have left and gone overseas many down under. Irish people have shouldered this very bravely whilst the Greeks have practically strung up politicians who suggested 'less' austere measures. Welfare has been decimated.
We have been able to use QE to keep our bankers going keeping things ticking over and have managed to keep borrowing from international markets. There was a risk at one point that would not happen. We are all poorer because of QE and it has caused an asset bubble meaning a studio flat in Shithouse EC3 will cost your kids about a squillion quid but to a certain extend we have kept the show on the road. The margins between the coalition austerity and labours plans were in the big picture about a fag paper apart.
Have you got any evidence for those Irish numbers? This Irish Examiner report suggests pubic sector wages have fallen about 5% in three years, but may have left off an earlier adjustment. Public sector jobs have been cut by about 10%. Despite this, public sector wages are 50% (!) higher on average than private sector wages. Private sector wages are lower here too, but not to anything like that extent.
As for emigration, this report suggest 200,000 since the beginning of the crisis, or 4% of the total. No doubt it has fallen heavily on young people, but not to the extent that "most of the nations young people have left".
spemnd to save means invest in stuff (e.g. infrastructure), and take advantage of the cheaper costs.
Double galzing is a very good example... yes it costs money to buy (spend) but your fuel costs go down (save), so in the long term you end up better off. But even better buy the double galzing during a sale.
This is a false and deliberately misleading analogy for public infrastructure spending. It's one thing if I know the costs and the savings, I make the decision, I pay and I benefit. How about HS2? No-one knows the costs, and the dichotomy between austerity and "spend to save" means that the payment is deferred, we don't even know who is going to spend and when, it will all be put on the public borrowing tab. And there aren't even any "savings", except as expressed in "Benefits", which are highly contentious. Will future generations footing the bill when the bonds come due feel it was a good decision to save their parents 15 minutes in their occasional rail journey from London to Birmingham?
So what you get are uncertain costs, no idea of who is to pay them, uncertain benefits beyond those directly involved in construction, and even a core of people who will be negatively affected by the deal.
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Let them eat chips! on 20:06 - Nov 12 with 3183 views
Or you could spend more and rely on borrowing as we are currently doing. The idea that we've got austerity is a myth.
My point was that if government spending stimulates the economy and increases tax take down the line, shouldn't a decade of high spending have mitigated the banking crisis and subsequent recession?
Sure it may be possible to tax more to eliminate the deficit (I personally don't believe it would work as France is demonstrating at the moment), but if the current huge level of spending isn't getting us out of the mess then perhaps it isn't the answer.
[Post edited 12 Nov 2013 14:43]
Government spending can help stimulate an economy but it depends what the spending is on. The most productive type of spending is generally seem as infrastructure and the least transfer payments (benefits).
You could make a strong argument for the point that under labour regime spending was out of control due to the expanding public sector. Another point that monetarist might make is that public sector spending can crowd out the private sector. Essentially both are competing for loa able funds, which means public borrowing makes it more difficult to raise private finance.
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Let them eat chips! on 20:18 - Nov 12 with 3172 views
This country has not had an industrial policy for 30 years and that is the real problem, private capital sucks money to the top companies are cash rich but risk averse because the financial markets demand ever increasing profits but we won't grow unless we develop, we need to build housing, develop technologies, invest in R & D and infrastructure. We need energy security. That will create jobs and those at the lower end of the scale will spend what they earn, the only problem is at the moment that goes to supermarkets, housing costs, childcare, and money lenders.
On top of that this governments treatment of the most vulnerable especially the mentally ill is nothing short of disgusting
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Let them eat chips! on 22:56 - Nov 12 with 3135 views
Let them eat chips! on 18:03 - Nov 12 by R_from_afar
Woah there! A lot of the people, probably the majority, that have "final salary pension schemes that private sector workers can only dream of" are also on very poor wages e.g. dinner ladies, binmen etc.
Their pensions are part of their overall remuneration. In the same way that I would be upset if someone suddenly cut my wages, they are very unhappy.
"Gordon Brown totally screwed us over" you say. Should he have let the banks fail? Are you fond of anarchy? This "Labour caused all the debt" argument does not bear any scrutiny, let alone close scrutiny. The banks turned out to be poor at sums and more than willing to take huge risks, then needed to be bailed out to avoidance the meltdown of our entire financial system.
Meanwhile, we have 5m people and rising on less than the living wage. Well done David, that's progress.
RFA
I don't know how far away from the UK you are but in the UK the average public sector pay has now overtaken the private sector, most private sectors workers don't even have a pension even though the law has just changed so dont give me the part of their remuneration thing, it doesn't stack up anymore. I am a private sectors employer and my wife is a public sector worked so my view is balanced I can assure you. Teachers are retiring at 55 on very healthy pensions, private sectors can't even think about retiring for an additional fifteen years.
If you look at an earlier post, I comment on the unique problem the UK had and that is the amount paid for by the public purse, higher than anywhere else in Europe with an estimated 1 million extra jobs that the Country couldn't afford, this coupled with the banking crisis made it difficult for the UK to overcome.
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Let them eat chips! on 13:03 - Nov 13 with 3075 views
I don't know how far away from the UK you are but in the UK the average public sector pay has now overtaken the private sector, most private sectors workers don't even have a pension even though the law has just changed so dont give me the part of their remuneration thing, it doesn't stack up anymore. I am a private sectors employer and my wife is a public sector worked so my view is balanced I can assure you. Teachers are retiring at 55 on very healthy pensions, private sectors can't even think about retiring for an additional fifteen years.
If you look at an earlier post, I comment on the unique problem the UK had and that is the amount paid for by the public purse, higher than anywhere else in Europe with an estimated 1 million extra jobs that the Country couldn't afford, this coupled with the banking crisis made it difficult for the UK to overcome.
I am in Berkshire, as it happens. I work in the private sector, my wife in the public sector, and she has done over 25 years.
"In the UK the average public sector pay has now overtaken the private sector" - Agreed, but I think you will find there is not a vast difference and what difference there is will not compensate public sector workers for the major impact on their pensions. To get the same pension she signed up for, my wife is having to make vastly increased contributions (so, to pay more), plus she will need to work several (I can't remember how many) years more.
You talk about "1 million extra jobs that the Country couldn't afford" - Let's see if they end up being the pointless jobs that you are implying. After all, who needs A&E departments? I well remember how the public railed against Labour's spending on health and education when they were in power.
Replacing Trident, £250m on extra bin collections, and HS2 are, on the other hand, an excellent use of money which we can afford. While we are talking about disproportionate spending, we spend a ridiculous amount on defence for a country of our size (fifth most in the world, from memory).
RFA
"Things had started becoming increasingly desperate at Loftus Road but QPR have been handed a massive lifeline and the place has absolutely erupted. it's carnage. It's bedlam. It's 1-1."
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