Whoah.
We can borrow money (via selling government bonds) cheaper than I can ever remember, there are plenty of funds out there who would love to lend us their money.
The problem is supposed to be that it would increase the overall debt ... but a lot of that debt is underwritten the by bank shares that we own.
We may argue about how much they are worth and whether they are worth holding onto but the fact remains that those shares are still worth something even though it's less than we paid, so the debt-minus-assets isn't really as bad as it looks.

Bear in mind that Labour's "overspending" (as you put it) left them with a debt no higher than the debt they inherited.
Even after bailing out the banks, it was still way, way below that with Greece or the US and it makes us look pretty frugal.

Osborne's warnings about us being like Greece and on the brink of bankruptcy were absolute and total rubbish.

I loathe the man but I think he is not quite as thick as he appears.
He is a Tory and is simply pursuing Tory ideology, which is to ensure the rich stay rich and sod everyone else.
He and Cameron and their clique want to roll back as much of government spending as they can, regardless of what it would have been spent on and regardless of whether that would have been a good way to spend it.
In their book, the poor are their pawns and can (and should) only be motivated by hardship.
To them, ANY government spending is a source of regret, they see it as money that could be jingling in their mate's pockets instead of making everyone's lives better.
To them, decent schools and hospitals should be a source of cash profit, allowing it to be free at the point of supply makes them choke, I mean what's the point of being rich if everyone gets the benefit of education and health care?

Equality of opportunity is absolutely not what they are about.
Preserving their advantage .... that is what motivates them.

I'm constantly amazed that no Tory Government has ever suggested that anyone who spends their own money on education (via private schools) or on health (via private health providers) should have a corresponding discount on their NIS contributions.

Its just so blindingly obvious to follow the political dogma to its natural conclusion that I don't understand why its never been suggested - or has it ?

The problem with debt is the cost of servicing that debt, not just in the short term but also in the medium and long term. The source of the debt doesn't have a massive affect on that.



At a completely different point in the economic cycle. At the end of a long, sustained, boom period.

Here's a graph of budgets' surplus/deficit. The question is what happened in 2001 which [irequired[/i running a deficit for the next six years?


[url=http://lostalumni.wordpress.com/2011/03/21/looking-to-the-future/Source[/url

I'd hazard a gues that it was at least some attempt to reverse 18 years of underfunding by the tories in things like hospitals and schools. Wasn't there also a fooking great big war/wars to fund too?

And in more good news for Osborne: [url=http://www.independent.co.uk/news/business/news/treasury-borrowing-fails-to-contract-7878431.htmlBorrowing fails to contract[/url

Wrong bloke for the job it would seem

I'm not sure about a cut in VAT, especially if it was only in temporary, need to think that one through. It depends on what sort of investment you actually mean, but for many reasons I wouldn't want to get into at this hour, I seriously doubt whether a major new investment in social housing would actually stimulate growth (that's not to say there aren't arguments for this, just that growth probably isn't one of them). But when people start bringing phrases like "trickle down" into a thread it generally means they've run out of serious ideas and are just going for derailment.



The easy way would be that the Keynesians would be the ones who five to eight years ago would have been calling for the government to contract spending so to bring down aggregate demand, so in the case of New Labour it would have been contracting the public sector rather than growing it. I could be wrong but I don't remember that many voices calling out for that, and as I wrote in previous post it would have been a pretty hard sell for any government.

Tony Blair did, this was one of the splits at the heart of the party when they were in power. Blair thought public spending had grown too much in the 2001-05 parliament and wanted to contract after the election, Brown didn't, and Brown played hardball over a PM with diminishing power as it was known he wasn't going to fight another election.

Still though even if the UK had been running balanced budgets or small surplus going into the recession it wouldn't have made much difference to the fact the public finances ended up in a shocking state given the size of the recession and the bailout of the banking sector. The real problem was a failure to regulate the banking sector as it was the collapse of the banking sector that ruined the economy. Ireland got in a worse mess than us, and they were running budget surpluses going into 2008, same as Portugal.

Investment in social housing would certainly stimulate a building trade that is currently on its knees, a trade that employs many low skilled easily-unemployed people (as well as skilled labour of course) so in that respect it would make a difference and anything that gets people into work with money in their pockets will stimulate growth.

On the other hand the concept of a Conservative government encouraging an increase in the social housing stock is bizarre, particulalry with the news today that the latest kite to be flown is to remove housing benefit from the under 25s, the very people on the bottom rung of the ladder that social housing is designed for.

I'm reminded of an episode of South Park where the boys uncover a "conspiracy". Turns out that it's "W" creating a fake conspiracy to make it seem that his government is all powerful and controls everything - when really they haven't a f******g clue .
This is how I see this lot.
They don't even have the brains to follow a simple Tory ideology. Look at the latest clumsy outpourings, stop housing benefit for under 25's, bring back O Levels. Next they'll be blaming miners.
The great skill of the upper class is to look stupid, act stupid and talk stupid and yet still the plebs think they must actually be really clever. They hand each other prizes at their expensive schools and universities to show how clever they must be and we all buy it. Take away Cameron and Osbournes money and they wouldn't have been able to scrape a GCSE grade C between them.

Cunning plan my arrrssseee.

I seem to remember the Tories suggesting that private health treatment should have been subsidised by 50% by the NHS a few years ago when they were in opposition, I can't remember if it was the Quiet Man, the 14-pint-er, or the one who won't answer the question though.

Quote ="McLaren_Field"I'm constantly amazed that no Tory Government has ever suggested that anyone who spends their own money on education (via private schools) or on health (via private health providers) should have a corresponding discount on their NIS contributions. Its just so blindingly obvious to follow the political dogma to its natural conclusion that I don't understand why its never been suggested - or has it ?'" By the way, if any of you are feeling in any way sorry for Cameron's alma mater, you can help them out ... www.etoncollege.com/waysofgiving.aspx

Quote ="McLaren_Field"I'm constantly amazed that no Tory Government has ever suggested that anyone who spends their own money on education (via private schools) or on health (via private health providers) should have a corresponding discount on their NIS contributions. Its just so blindingly obvious to follow the political dogma to its natural conclusion that I don't understand why its never been suggested - or has it ?'" By the way, if any of you are feeling in any way sorry for Cameron's alma mater, you can help them out ... www.etoncollege.com/waysofgiving.aspx

There may be some short term benefit to construction sector, but special pleading for construction sector aside, for a long list of reasons I don't think it would deliver the sustained economic growth the country really needs. If Government is going to take risk and expand deficit spending to pursue economic growth it needs to be something more structural that only Government can do and there's no reason why that wouldn't be a boost to construction sector in short term too.



I don't think this will happen, it's just hot air, although I do wonder if it is a smokescreen for something else, that's how these things usually work.

Quote ="El Barbudo"By the way, if any of you are feeling in any way sorry for Cameron's alma mater, you can help them out ... www.etoncollege.com/waysofgiving.aspx'" What a bunch of t0ssers. How that is allowed charitable status I'll never know. On a slightly related note, it made me laugh on the outside and cry a little on the inside when I was watching coverage of Trooping the Colour and they did interviews with some of the officers of the Coldstream Guards. Every single one was a Julian or a Rory and usually with a double barrelled surname (& not in the Jones-Buchanan sense of the double barrelled name!) and every single one had gone to very expensive private school. They also did a short bit at Sandhurst and again, every officer cadet interviewed was from private school. A friend of mine is in the Grenadiers, and he'd mentioned before the poshness of the officers but it was still very depressing to see that in reality sod all has changed in the Army.

Quote ="El Barbudo"By the way, if any of you are feeling in any way sorry for Cameron's alma mater, you can help them out ... www.etoncollege.com/waysofgiving.aspx'" What a bunch of t0ssers. How that is allowed charitable status I'll never know. On a slightly related note, it made me laugh on the outside and cry a little on the inside when I was watching coverage of Trooping the Colour and they did interviews with some of the officers of the Coldstream Guards. Every single one was a Julian or a Rory and usually with a double barrelled surname (& not in the Jones-Buchanan sense of the double barrelled name!) and every single one had gone to very expensive private school. They also did a short bit at Sandhurst and again, every officer cadet interviewed was from private school. A friend of mine is in the Grenadiers, and he'd mentioned before the poshness of the officers but it was still very depressing to see that in reality sod all has changed in the Army.

Because they end up as the people who decide who gets charitable status. If it was you or me then things might be different, but it 'aint.

You are completely wrong here. The only reason the boom period ended was due to the banking crisis. Darling was already setting out plans to cut public spending while the economy was still going to be booming and so would have done what you wanted. There were no economic indicators the economy was going to contract in some sort of traditional cyclic manner either. The banking crisis came right out of left field. It is only with hindsight that you can level the charge you do and without the banking crises there would not have been a problem with the level of spending as was or what was planned.

Before the banking crisis the Tories were also saying they would match the level of spending Labour were predicting anyway where they to win the election which some people seem to conveniently forget.

The real problem is that there wasn't sufficient regulation of the banks to prevent the banking crises but it would be rank hypocrisy for anyone with a right wing bent to their politics to blame Labour for that as they would have been opposed to any such regulation in the first place. This is another charge that can only be levied with hindsight but given the Tories deregulated the banking industry in the first place and Cameron was even calling for LESS regulation literally a matter of weeks before the whole thing kicked off its just right wing propaganda to try and pin the blame elsewhere as if they had been forewarning everyone of impending doom. They weren't. They wanted even more of the same.

And it's a myth that Labour's public spending was at massive, record levels. It was, as Prof Colin Talbot of Manchester University points out, a convenient myth for Labour – and one they did nothing to contradict – but it was a myth.

That they couldn't see the bust coming is not an excuse for their overspending. Without the banking crisis the bust still would have happened. Maybe later, possibly sooner - people seem to ignore the contribution the banking sector made to sustaining the boom we all enjoyed. Of course part of what the banks were doing was just as unsustainable as part of what the government was doing.

Out of interest is anyone, other than you, propagating this myth? It just I've not heard it anywhere else.

Rubbish. Both spending and debt were easily sustainable prior to the banking crisis and would have remained sustainable without the banking crisis as evidenced by the HM Treasury statistics that show the public spending and public sector debt as a % of GDP were generally no higher under Labour than they were under the Tories.
Labour should have regulated the banks, so should every other nation, something which is conveniently forgotten by the "it's all Labours fault" brigade. If its all Labours fault, why has the same thing happened across the world?

As has already been said on here, before the crisis, the Tories were proposing to match Labour's spending. Cameron was saying that whilst the economy may be ok, "society was broken." Gus O'Donnell the head of the civil service under Major, Blair and Brown has said that the civil service didn't see the crisis coming.
I think some blame can be attached to a Labour government not regulating the banks, but the zeigeist was "the market is always right" As with many of this country's ills, the banking crisis can be traced back to Thatcher.
The British economy shrank 7% in 2008/9, the deficit was a product of that reduction. TBH I reckon Darling did well to pull the economy through that and nurture some growth. Osbourne killed that growth stone dead. He and Dave the Kipper should pay the price at the next election. I sincerely hope they do.
As an added vindictive bonus I'd like to see Clegg kicked out of Sheffield too. That'd larn 'im!

They were comfortably affordable in the short term, whilst the going was good, sure. The problem is the good times were never going to last forever and Labour should have, after such a long boom period, have left the public finances in a better state.



You'll have to ask some claiming it's all Labour's fault that one. You seem to be the one blaming Labour for the banking crisis - something I haven't done.

Labour could have spent less. That would have left us in a better position now. I doubt whether they could have put effective regulations in place to prevent the banking crisis - even after the crisis no-one has actually managed to come up with any effective regulation. That's with the knowledge of what went wrong. Expecting regulation against problems which have never happened is asking a lot in my opinion. That's why I blame Labour for what they did have control of (overspending) not for what they had no realistic control over (the banking crisis).

The only one is ignoring it is you because without the banking crisis there wouldn't have been crisis.

You seem to also be confusing the spending levels with the crisis that came after the banking crash. The spending levels were nothing out of the ordinary. As the figures show.

Without the banking crisis there would not have been a problem. As the figures show.

As to Labour could have spent less. How much less? Go on put a figure on it.

They could have kept the public service budgets in line with what they were when they took over the reins in 1997.

Then things would have been REALLY crap, a bit like where we're heading now.

Aye, they should have emulated the Tories who after 18 years, during which they engineered two dreadful slumps through their magnificent fiscal management, left us with a debt at a level that is now considered by the same Tory party to be unsustainable.
And that even omits all the massive North Sea oil revenues that they, the Tories, managed to spend as well as the debt.
Plus all the huge amounts of cash from selling-off gas, telephones, electricity generation, electricity distribution, water ... etc etc.

So, it seems that when the Tories spend money, that's careful management but when Labour spend the same without privatising or getting the same monies from the North Sea, that's shockingly wasteful profligacy.

I'll say it again (and this is going to be very boring because I'll keep saying it) ... the Tory Jackanory Story about debt and spending, whilst it has a grain of necessity in it, is a handy cover for rolling back the state in a big way.

The Thatcher/Major era was all about the rolling back of state-owned enterprise, de-regulation of the markets and smashing Union power regardless of who got hurt, this one is about the shrinking of the welfare state and filling the pockets of their sponsors regardless of who gets hurt.