Jeremy Clarkson should be sacked!

[vaya]

Unfortunately it doesn't, and regardless of this it doesn't explain why they're not enmployed anywhere else (we'd have probably noticed and followed suit by now) which is why I've asked the question of you.

If these policies guarantee health, wealth and prosperity for all, why are they not used in other economies outside of (and larger) than Hong Kong in the 1960s/70s?

I assume they can be applied elsewhere outside of this geographical and historical timeframe. I can't think of any off the top of my head though, even the US has a large welfare bill. Wny have they not followed the Hong Kong model and eliminated this?

Logic would dictate that such sucessful policies would be adopted at the drop of a hat even by politicians, to ensure electoral success.

Presumably real-world issues can't negate them, otherwise it's much an abstract ideological model as Marxism?

[madmick50]

Unfortunately it doesn't,

Yes it does. this documentary explains the problem and the solution. China is only now doing as well as it is due to learning from Hong Kong. Other countries don't follow suit as politicians will be out of work. Turkeys don't vote for Christmas.  

http://www.channel4.com/programmes/britains-trillion-pound-horror-story/4od

[vaya]

Unfortunately it doesn't,

Yes it does. this documentary explains the problem and the solution. China is only now doing as well as it is due to learning from Hong Kong. Other countries don't follow suit as politicians will be out of work. Turkeys don't vote for Christmas.  

http://www.channel4.com/programmes/britains-trillion-pound-horror-story/4od

Again, this doesn't answer the question. If these policies were the panacea you hold them to be, any politicians bringing them in would be guaranteed a job for life, surely?

Also, these policies work in China, which isn't exactly a democracy. If we ignore my previous point, follow yours and assume that politicians don't vote for Christmas, then we're back to the problem of this being a model that doesn't work elsewhere, it will by definition, never happen.
I'm afraid anyone can propose a hypothetical solution, it isn't going to cure real-world ills, which and the context we're all living in, which is a Western Democracy. You're proposing a solution that's only previously 'worked' (please see my final point) in non-Western non-Democracies. It's a pointless arguement.

Also, how does this explain the current Chinese slowdown? If this is due to internal issues, then the model's not infalible, if external issues then similarly any ecomony is liable to be effected by these?

[madmick50]

Again, this doesn't answer the question. If these policies were the panacea you hold them to be, any politicians bringing them in would be guaranteed a job for life, surely?

Also, these policies work in China, which isn't exactly a democracy. If we ignore my previous point, follow yours and assume that politicians don't vote for Christmas, then we're back to the problem of this being a model that doesn't work elsewhere, it will by definition, never happen.
I'm afraid anyone can propose a hypothetical solution, it isn't going to cure real-world ills, which and the context we're all living in, which is a Western Democracy. You're proposing a solution that's only previously 'worked' (please see my final point) in non-Western non-Democracies. It's a pointless arguement.

Also, how does this explain the current Chinese slowdown? If this is due to internal issues, then the model's not infalible, if external issues then similarly any ecomony is liable to be effected by these?

Politicians for the most part, are only bothered about lining their own pockets. If they did what I suggest there would be far fewer of them required. That's why they keep things as they are because they do very nicely out of the status quo thank you very much. That is why it is incumbent on people like me to educate the masses as to what is going on and get it changed.

This policy led to to the Asian economic miracle. Other countries in Asia followed suit and saw their economies grow rapidly. Some of them were also democracies. It doesn't matter what type of government you have. As long as the state is small and taxes are low you will generate rapid economic growth.

This policy has also been followed in Russia and Eastern Europe. Their growth rates have been a lot higher than ours as well. So saying it has not been tried elsewhere and only by non democracies is very wide of the mark and shows you've not digested the information I have been spoon feeding you.

How you can use the example of China having a slowdown as evidence the system doesn't work is beyond me. I don't know what their current growth rate is but I do know it was 9.5% in July. 9.5%!!! Of course internal and external factors can affect the system. However it is a much better system than the one we currently employ and would rapidly sort our problems out. If the whole world followed this system there would be no talk of impending financial doom.

As a side issue, I will be standing for the job of Mayor of Doncaster next time it is up for grabs. I've decided to dedicate myself to sorting out the ills of Doncaster then using the job to push forward my agenda nationally, then globally. I was wondering if I could count on your support?

[BillyStubbsTears]

See Mick, I'm struggling again.

On the one hand, your philosophy seems to be that we shrink the state and give more money back to people and companies to do as they see fit.

On the other hand, you want more regulation.

Am I being really dim here or is there some contradiction?

And your debating style. I like the forthright \"Here's an example of someone who has written something that I agree with - end of debate\" style. It's spunky. But, see, I was brought up a Catholic, so when someone says, \"Read this and believe!\" I tend to assume that they are dealing in blind faith rather than reasoned debate.


Finally, you keep chucking up pointless examples of the economic policy of tiny colonies or countries developing rapidly from Third World economic performance. Why do you keep shying away from the exams of Japan? Surely you must have an opinion on how Japan screwed their economy for 20 years by Austerity in the teeth of a recession in the early 90s?

[madmick50]

See Mick, I'm struggling again.

On the one hand, your philosophy seems to be that we shrink the state and give more money back to people and companies to do as they see fit.

On the other hand, you want more regulation.

Am I being really dim here or is there some contradiction?

And your debating style. I like the forthright \"Here's an example of someone who has written something that I agree with - end of debate\" style. It's spunky. But, see, I was brought up a Catholic, so when someone says, \"Read this and believe!\" I tend to assume that they are dealing in blind faith rather than reasoned debate.


Finally, you keep chucking up pointless examples of the economic policy of tiny colonies or countries developing rapidly from Third World economic performance. Why do you keep shying away from the exams of Japan? Surely you must have an opinion on how Japan screwed their economy for 20 years by Austerity in the teeth of a recession in the early 90s?

I want less regulation, much less. Where the banks are concerned, there needs to some regulation to stop them doing what they did before. So I think you are a bit dim and pedantic (however I make allowances as you are a leftie socialist).

I don't call China a tiny colony or country (I could give other examples but that one on it's own blows your argument out of the water). In the not too distant future it is likely to be the world's biggest economy.

Japan did well at first but fell into the trap of massive state intervention. That's why they are struggling. It is very simplistic to say all their problems are down to austerity.

Anyway I've given my assessment of the problem and a brilliant solution. What's your solution? On second thoughts I think I already know. Spend more money and when that doesn't work spend some more. Don't worry that we haven't got the money. Just get another credit card and max it out. Great solution.

[madmick50]

James Delingpole, another hero of the right sums up the Clarkson affair very well and exposes the left for what it is:

http://blogs.telegraph.co.uk/news/jamesdelingpole/100121163/how-the-bbc-ganged-up-with-the-militant-left-to-attack-jeremy-clarkson/

[vaya]

Fascinating.

With respect though, you still haven't answered my inital questions, just quoted other examples that have nothing to do with what I queried.

I'll simplify it if that'll help:

To resolve our current economic crisis, and to ensure future stability and prosperity you advocate adoption of a solution that:

Depsite offering a cure for all ills, has apparently only ever been seen in a limited number of other countries.

Has only ever been seen other countries with vastly different geographical, social, economic and hisstoric contexts to our current one.

By its very nature (and by your own argument) is unlikely ever to be adopted in a Western Democracy.

That you argue will do away with (and removes the need for) state intervention, despite the fact that your two primarly examples conversely had/have large state apparatus (colonial administration and the communist state respectively) and in China involves the state taking proactive steps to protect its currency.

That despite being a panacea, is currently experiencing an economic slowdown in its biggest proponent, and has failed to sustain the economic miracle in other Asian examples.

That provides no pathway between our current situation and adoption of this new model – the Hong Kong example being built on pre-existing growth, Russai, Eastern Europe, China and Vietnam gradual modifications of limited free-market policies in a Communist states, Korea benefiting from massive injectiosn of capital from the US

I don't think you've really any idea of what you're talking about beyond repeating rhetoric parrot-fashion, and I'm actually bored with taking your arguements apart now.

[madmick50]

Fascinating.

With respect though, you still haven't answered my inital questions, just quoted other examples that have nothing to do with what I queried.

I'll simplify it if that'll help:

To resolve our current economic crisis, and to ensure future stability and prosperity you advocate adoption of a solution that:

Depsite offering a cure for all ills, has apparently only ever been seen in a limited number of other countries.

Has only ever been seen other countries with vastly different geographical, social, economic and hisstoric contexts to our current one.

By its very nature (and by your own argument) is unlikely ever to be adopted in a Western Democracy.

That you argue will do away with (and removes the need for) state intervention, despite the fact that your two primarly examples conversely had/have large state apparatus (colonial administration and the communist state respectively) and in China involves the state taking proactive steps to protect its currency.

That despite being a panacea, is currently experiencing an economic slowdown in its biggest proponent, and has failed to sustain the economic miracle in other Asian examples.

That provides no pathway between our current situation and adoption of this new model – the Hong Kong example being built on pre-existing growth, Russai, Eastern Europe, China and Vietnam gradual modifications of limited free-market policies in a Communist states, Korea benefiting from massive injectiosn of capital from the US

I don't think you've really any idea of what you're talking about beyond repeating rhetoric parrot-fashion, and I'm actually bored with taking your arguements apart now.

Just because every country in the world hasn't done it doesn't make it wrong. You've got to start somewhere. It's not my fault that in Western democracies most of the population are apathetic to politics and let the self serving politicians do as they please.

What difference does it make that it has has only ever been seen other in countries with vastly different geographical, social, economic and historic contexts to our current one? All countries have differences. Just shows the system can work almost anywhere. That is a strength not a weakness.

I've not said by it's very nature it is unlikely ever to be adopted by a Western democracy. However I do think it will take something like the inevitable breakup of the Eurozone and the collapse of the Euro to bring people to their senses and insist the politicians implement the system.

I haven't said do away with state intervention. I've said it needs cutting back dramatically. The state isn't just the government. In our country it includes the public sector, a point you are obviously missing. I repeat, the fact that the system can work in many different countries with different styles of government is a strength not a weakness. All governments try to manipulate their currencies. What's wrong with China doing the same? It's just one of the tools at governments disposal (unless of course you are part of the ill fated Eurozone).

The fact that some economies are experiencing a slowdown given the state of the world economy shouldn't surprise you. I've never said the system will work no matter what else is going on in the world. Also once the system starts to work, governments can't then resist interfering. Do you seriously think that all the countries that have tried the system have stuck rigidly to the rules? They haven't. If they had done they'd be doing better. Even so, they've still done better than us in terms of growth.

The pathway is to cut taxes and reduce the size of the state. Simple.

I think you are so obviously a leftie socialist with a closed mind that you are a lost cause. You don't want to hear the voice of reason. All you try to do is pick apart my argument with spurious reasoning. No doubt your solution is also to spend our way out of trouble thereby exacerbating the problem and leaving our children and our children's children to pick up the bill. That's if we don't descend into total anarchy beforehand.

[BillyStubbsTears]

Mick.

Let me simplify things for you, given that you like simplistic arguments. To look at the effect of the policies that you espouse, you don't see what they have done in tiny colonies, or in emerging ex-Third World economies. You see what they have done when applied to large, mature, capitalist democracies like ours. You've steadfastly refused to take Japan as an example, so I'll do it for you.

In 1990, Japan (along with the rest of the world) went into a sharp recession. In Japan's case, the problem had been a speculative property bubble. As happens in recessions, their deficit increased. By 1991, their debt to GDP ratio was around 60%, which is worryingly high. They decided to address this by strongly cutting back on public sector costs.

Sound familiar so far? Well then, let's have a look at what happened.

The collapse of public sector funding deepened their recession. It drew demand out of their economy. In simple terms, there were fewer people with money in their pockets to pay for the wonderful technological goods that the Japanese private sector excels in making. So the private companies lost orders. They had to put people out of work. So there were still fewer people to buy goods.

Crucially for the Government, there were also fewer people paying taxes. And fewer companies making profits on which they could be taxed. So, despite having set out to reduce the deficit and pay back the debt in EXACTLY the way that you suggest we should do, the deficit remained stubbornly high and the debt to GDP ratio went up.

Are you sat down now because the resulting figures are terrifying.

Japan's unemployment rate, which was legendarily low, increased by 150% between 1993 and 2000, at a time that everywhere else in the world, it was falling. It has never got back down to the sort of levels that they had before.

Japan's GDP has flat-lined for two decades. Before 1990, Japan was a by-word for technology-based capitalist growth. Since 1990, their real GDP growth rate has fluctuated around zero per cent. They have dropped in and out of recession regularly - since 1992, they have had 17 periods of economic contraction. In Japan, they have long called the 1990s, \"The Lost Decade\".

And the effect on the debt? Well, in 1992, the debt was about 60% of GDP. Today it is around 220%. That's what happens when you obsess about Austerity and ignore the effect on confidence and growth. You produce exactly the scenario that you want to avoid.

I could move on to Italy if you're still listening. Italy's deficit has been under control for more than a decade. Their problem is not that the public sector is out of control - they bring in enough in taxes to pay for the public sector quite comfortably. Their problem is that they took the tax cutting and public sector cutting route out of debt 10 years ago. And as a result, their GDP has bombed. Over the last 10 years, only Haiti and Zimbabwe have had worse GDP growth. So Italy's debt to GDP ratio remains frighteningly high.

So there you go. Two examples of mature capitalist democracies that have tried the Austerity route out of debt and failed cataclysmically. You want that for our country?

[BillyStubbsTears]

Mick.

You also go to great lengths to support your argument by giving links to people who have a very particular right-wing agenda to peddle.

James Delingpole? A self-publicized gobshite who thinks that Cameron and Osbourne are lefties. He has his own coterie of followers, sure. But look what happens when he is faced by someone who can surgically take his arguments apart and point out their fallacies. This video is a clip of Delingpole discussing climate change with the President of the Royal Society.

Delingpole has made his name by tub thumping and arguing a political line. Paul Nurse has made his career by reasoned, scientific discourse, which is always open to attack if the facts are wrongly interpreted or if new evidence emerges. See who you think comes out the better of the two in this encounter...

http://www.youtube.com/watch?v=36Xu3SQcIE0

[madmick50]

So there you go. Two examples of mature capitalist democracies that have tried the Austerity route out of debt and failed cataclysmically. You want that for our country?

Where have I ever said that austerity is the solution? You have made this statement more than once and it is patently untrue. What I've said is that we need to cut taxes and reduce the size of the state. This is a completely different strategy than just relying on austerity.

Like I said I am a right winger. I would say I am am on the very right hand edge of the Tory right. Therefore it follows that I don't agree with the policies of Cameron and Osbourne. What I do agree with though is that I would much rather have them running the country than Labour.

Japan got it wrong because their government couldn't stop themselves meddling. They stopped using my strategy and have subsequently suffered the consequences.

I've never said my strategy should be implemented overnight. It should be introduced gradually. The economy would then start to recover and we could get our debt paid off and all have a rosy future. Simple.

Out of interest I'd like to know what your strategy is. I know you are going to say borrow some more money. Given this is your view what would we do if investors lose faith in us and start demanding high rates of interest? The current mess we are in would then seem like a walk in the park. What is your contingency plan?

[madmick50]

You also go to great lengths to support your argument by giving links to people who have a very particular right-wing agenda to peddle.

I'm a right winger. I've reached that position by evaluating the agendas from left, centre and right. Why do you seem surprised that I would use links to people who have similar views to my own?

I don't know enough about climate change, so don't know if Delingpole is right or wrong. Even if I decided he was wrong on that subject, it doesn't mean I then dismiss his political views.

[BillyStubbsTears]

I don't know enough about climate change, so don't know if Delingpole is right or wrong. Even if I decided he was wrong on that subject, it doesn't mean I then dismiss his political views.

That's not the issue. The issue is that Delingpole set himself up as an authority on the validity of the scientific method. He has preached about this for years, mostly through his own websites. When confronted on  his opinions by someone who understands the subject deeply, he was made to look an ignorant an opinionated fool.

Delingpole starts with a political angle, then finds information to support that. His opinions are utterly worthless as a result.

[BillyStubbsTears]

So there you go. Two examples of mature capitalist democracies that have tried the Austerity route out of debt and failed cataclysmically. You want that for our country?

Where have I ever said that austerity is the solution? You have made this statement more than once and it is patently untrue. What I've said is that we need to cut taxes and reduce the size of the state. This is a completely different strategy than just relying on austerity.

Like I said I am a right winger. I would say I am am on the very right hand edge of the Tory right. Therefore it follows that I don't agree with the policies of Cameron and Osbourne. What I do agree with though is that I would much rather have them running the country than Labour.

Japan got it wrong because their government couldn't stop themselves meddling. They stopped using my strategy and have subsequently suffered the consequences.

I've never said my strategy should be implemented overnight. It should be introduced gradually. The economy would then start to recover and we could get our debt paid off and all have a rosy future. Simple.

Out of interest I'd like to know what your strategy is. I know you are going to say borrow some more money. Given this is your view what would we do if investors lose faith in us and start demanding high rates of interest? The current mess we are in would then seem like a walk in the park. What is your contingency plan?

So what is cutting taxes and massively reducing the size of the state if it's not \"Austerity\". That is the absolute definition of \"Austerity\" - cut back public costs to balance the books as quickly as possible.

OK. You say that if we simply cut taxes and let the state wither, we'd be in a better situation.

A nice simple economic philosophy. Trouble is, the facts don't support it.

In Europe, the highest taxed people of all are the Danes, followed by the Swedes. Not far behind are the Austrians and the Finns. Those are four of the very strongest economies in Europe.

At the other extreme, among the least taxed people are the Irish, the Greek, the Spanish, the Romanians and the Bulgarians. Go check the numbers for yourself. I have done. There is also very strong evidence that the US economy enjoyed more stable, long term growth in the era 1945-1980, when tax levels were high, than it has done in 1980-2010 when tax levels have been significantly lower.

There is simply no correlation between tax (or size of state) and economic performance. It is a myth peddled by the Right to justify a policy that they believe in for ideological reasons.

My approach?

You start off by accepting the fact that in 2007-08, the world narrowly avoided an utter economic catastrophe. The results of the banking crisis on public finances across the world have been devastating. The state of public finances is unsustainable, no question. But you look at the reasons for that. Which are categorically NOT that state spending was out of control before 2007. It wasn't. It was relatively low by historical standards. The cause of the current Govt debt problem is the breakdown in tax receipts as the economies of the world teetered on the edge.

If you are of a particular right-wing mindset, you see an opportunity here. You are ideologically against the idea of the state as having a useful role. So you blame the state for having run up the debts by being out of control. And you shout fro the state to be drastically cut back to balance the books. Except that, as Japan shows clearly, that is a phenomenally dangerous path to take.

My approach would be to accept that, yes, of course Govt spending has to be reined in, and the deficit has to be brought under control. But that has to be done over a decade or more. It is lunacy to pull the rug out from the state sector while the private sector is on its knees. We know that because we did that in the 30s. And Japan did it in the 90s. It is the road to total economic collapse.

So, you reduce the deficit at a slower rate, giving the private sector the opportunity to grow and pick up the slack. Which is EXACTLY what we did after 1945, in an era that saw us get our debt to GDP ratio down from 200% to 40% over 30 years. Not by cutting the state, but by expanding it and having the state help private industry get back on its feet.

[madmick50]

His opinions are utterly worthless as a result.

Just because you think he is wrong on climate change you then say any of his opinions on any other subject are worthless. Very simplistic and a poor attempt to discredit one of my heroes.

[BillyStubbsTears]

His opinions are utterly worthless as a result.

Just because you think he is wrong on climate change you then say any of his opinions on any other subject are worthless. Very simplistic and a poor attempt to discredit one of my heroes.

No, no no. Read what I said. It has nothing to do with his opinions on climate change.

It is to do with the fact that his approach to the entire scientific method is flawed. In the scientific method, you gather facts, discuss them, consider arguments about what they might mean, then come to a conclusion. What Delingpole does, is to come to a conclusion, then scour the world for facts that support it.

Watch that video.

He was utterly kebabbed by the president of the Royal Society. He was shown up for the fool that he is. A  would-be demagogue who's approach is, \"Don't bother me with facts and logic. THIS is what I believe in and I'll stick to that.\"

That makes him a tub thumper and a rabble-rouser for sure. he's very good at that because he tells certain people exactly what they want to hear. But his fundamental approach to marshalling facts for an argument is deeply flawed and mendacious. As that interaction with Paul Nurse shows. Delingpole's reaction when he realised what a dick he'd been made to look was, \"Errr, errr, err, I don't want to discuss that any more. Let's change the subject to something where I can spin a particular political and philosophical opinion.\" He's a fool and a worthless fool at that.

[RobTheRover]

Billy, Vaya.

I love yous.

[Glyn_Wigley]

His opinions are utterly worthless as a result.

Just because you think he is wrong on climate change you then say any of his opinions on any other subject are worthless. Very simplistic and a poor attempt to discredit one of my heroes.

If you want to hang on the word of someone who has been shown to be a pillock, that's entirely up to you. But don't expect anyone else to take you seriously.

[big fat yorkshire pudding]

You all make this assumption that increased goverment spending would dramatically improve growth.  Would it do this?  Theory suggests yes (afterall it is part of the growth equation).  But look at other aspects.  Eventually the cut has to come and this economic situation won't be solved in the short term.  Surely we're better off alligning ourselves in a position where we sort ourselves out quickly rather than dragging it out?  Low growth and stagnation, perhaps even recession in  my opinion is impossible to avoid in this economy there's just too many external factors at play that we cannot control.  That's one way of looking at it.  All well and good stating theory but theory has never been in this situation.  That was the first thing I was ever taught studying finance, theory does not know your situation.  That doesn't mean we should ignore the things of the past, but fact is really that neither the Tories or Labour could do things that much drastically different.  Labour would spend more that is clear, but I'm not sure it would be significantly more than the Tories.  

Ed Balls is a bit of a clown IMO I'm not a fan, but if you read some of his articles he's quite clear that the room for manouvre is rather small.  They probably wouldn't have had much different an outcome I really don't feel we've that much scope to have an effect, the market forces are in charge.  I find it quite tedious some of the arguments if I'm honest.

Look at today with the European treaty.  I ask myself what would Labour do?  They haven't said a word.  All well and good stoking up the tension within the other party, but voters like me who could be swayed towards them want to know what they would do.  That message has not got out at all.  I think the Tory backbenchers need to wise up.  There's a much bigger picture than getting a few powers back, but what is key is that we don't give in to the EU demands for these banking taxes etc.  We must not let any of these powers go, because we have a strong services sector, if we lose that we're in trouble as other sectors clearly aren't that strong.

[madmick50]

So what is cutting taxes and massively reducing the size of the state if it's not \"Austerity\". That is the absolute definition of \"Austerity\" - cut back public costs to balance the books as quickly as possible.

Cutting taxes and massively reducing the size of the state is not austerity it's common sense. Where have I said the books need to be balanced as quickly as possible? You are making inaccurate assumptions about what I am saying. The strategy has to be implemented gradually.

If taxes are cut it will stimulate growth because people will start to feel like it's worth starting a business and employing people. The higher the tax take the less likely this will happen. Lower taxes mean lower tax avoidance and more tax revenue. I firmly believe individuals will spend money far more wisely than politicians who just try to spend (and waste) money to try to get votes.

More businesses setting up will then mop up the 'redundant' public sector workers. So both elements of the strategy go hand in hand. The big mistake at the moment is raising taxes.

Eventually overall tax should be down to around 15% and I'm including 'hidden' taxes like VAT. Below a certain level of wages no tax at all should be paid. This strategy is simple and brilliant and would do the job. Sorted.

[madmick50]

A nice simple economic philosophy. Trouble is, the facts don't support it.

In Europe, the highest taxed people of all are the Danes, followed by the Swedes. Not far behind are the Austrians and the Finns. Those are four of the very strongest economies in Europe.

At the other extreme, among the least taxed people are the Irish, the Greek, the Spanish, the Romanians and the Bulgarians. Go check the numbers for yourself. I have done. There is also very strong evidence that the US economy enjoyed more stable, long term growth in the era 1945-1980, when tax levels were high, than it has done in 1980-2010 when tax levels have been significantly lower.

There is simply no correlation between tax (or size of state) and economic performance. It is a myth peddled by the Right to justify a policy that they believe in for ideological reasons.

So the Asian economic miracle didn't happen? China didn't grow to the point it is likely to become the worlds largest economy in the not too distant future?

You make the mistake of looking at countries that are successful who have high tax rates and then assume this must be the way to go. A bit simplistic again I'm afraid. There are other factors at work helping them succeed to the point that they can cope with high tax.

The countries you list as low tax ones e.g. Ireland do not have low tax rates at all. They are very high compared to where I'm wanting to go. My target is 15% all in, including VAT, income tax, N.I. contributions, inheritance tax etc.

I'm not saying my strategy is the only one that will work. What I am saying though is that it is the only viable way forward for us given the mess we are in.

I believe in this strategy to sort out the mess we are in. I'm not ideologically driven. I've weighed up the options and don't care if it was a left winger or a right winger that came up with it. I've used my common sense and put all my prejudices to one side and have come down on the side of logic and reason. Too many people are ideologically driven to believe all things Tory are bad and all things Labour are good so they don't bother to engage their brains. They may as well not have one.

[madmick50]

You start off by accepting the fact that in 2007-08, the world narrowly avoided an utter economic catastrophe. The results of the banking crisis on public finances across the world have been devastating. The state of public finances is unsustainable, no question. But you look at the reasons for that. Which are categorically NOT that state spending was out of control before 2007. It wasn't. It was relatively low by historical standards. The cause of the current Govt debt problem is the breakdown in tax receipts as the economies of the world teetered on the edge.

Totally disagree. Gordon Brown spent and wasted money on an unbelievable scale. He spent it like a drunken sailor. He didn't put anything aside when the going was good instead he just kept on recklessly spending and borrowing. State spending was way out of control.

 Part of the reason tax receipts are down is because he made the unproductive part of the economy (the public sector) bigger than the productive part (the private sector). He did this to buy votes on borrowed money and to mask real unemployment.

He should be shot and I would quite happily pull the trigger.

[madmick50]

If you are of a particular right-wing mindset, you see an opportunity here. You are ideologically against the idea of the state as having a useful role. So you blame the state for having run up the debts by being out of control. And you shout fro the state to be drastically cut back to balance the books. Except that, as Japan shows clearly, that is a phenomenally dangerous path to take.

I'm not against the state having a useful role. What I am against is having a state that is so big and unwieldy that it stifles the private sector. I'm against politicians thinking they have a divine right to spend and waste our money just so we will vote for them.

I want the state to be cut back to allow the private sector to grow not to balance the books. This will happen as the private sector thrives.

Japan has had problems because of massive state intervention amongst other things.

[madmick50]

My approach would be to accept that, yes, of course Govt spending has to be reined in, and the deficit has to be brought under control. But that has to be done over a decade or more. It is lunacy to pull the rug out from the state sector while the private sector is on its knees. We know that because we did that in the 30s. And Japan did it in the 90s. It is the road to total economic collapse.

So, you reduce the deficit at a slower rate, giving the private sector the opportunity to grow and pick up the slack. Which is EXACTLY what we did after 1945, in an era that saw us get our debt to GDP ratio down from 200% to 40% over 30 years. Not by cutting the state, but by expanding it and having the state help private industry get back on its feet.

So do you think the current government is pulling the rug out from under the private sector? I've got news for you after 5 years of this government we will end up with a bigger national debt. We are still having to borrow like crazy thanks to Gordon. We can't go much slower than we already are.

Are you really saying we should expand the state? I can't get my breath. Expanding the state even more will kill off the private sector not help it.

Anyway, you've conveniently forgotten to mention your contingency plan in case our borrowing costs rise. What would you do if this happened?

[madmick50]

You all make this assumption that increased goverment spending would dramatically improve growth.

I don't. It would have the opposite effect.

[BillyStubbsTears]

Mick

A strong state sector did not kill off the private sector between 1945 and 1970. With hindsight, that era was one if wonderfully serene and stable private sector growth. That was the era of Keynesian intervention.

By contrast, since the monetarist/free market revolution of the mid 70s, we've been on a terrifying roller coaster culminating in the current f**k up. Your response is more free market and less Government. Interesting take.

As for borrowing costs, I suggest that they are secondary. Japan had nigh on zero interest rates throughout the 90s. Didn't stop their economy tanking. Their problem, like ours now, is collapsed confidence leading to collapsed demand, leading to depressed evonomic activity, leading to higher debts, leading to call for more cuts.

Clever people learn from their mistakes. REALLY clever peoe learn from other prople's mistakes. Japan made the mistakes for us. Failing to learn those lessons is what really stupid people do.

[Glyn_Wigley]

If taxes are cut it will stimulate growth because people will start to feel like it's worth starting a business and employing people.

What, when consumer demand has nosed-dived?? You can only sell stuff when people can afford to buy. Where's the demand going to come from in a flat-lined economy with unemployment made even higher by your sacking the public sector workers in your dash for a smaller state - the demand fairy?

[BillyStubbsTears]

By the way Mick, that glib comment that \"Japan has had problems because of massive state intervention amongst other things\" really won't stand without some back-up.

So give us the back-up. How did state intervention cause the problems of Japan. And did Japan's phenomenal success before 1990 come about with no state activity?

Detail lad, detail. You're not James Delingpole. You can't get away with just stating an opinion then running away from justifying it.

[madmick50]

What, when consumer demand has nosed-dived?? You can only sell stuff when people can afford to buy. Where's the demand going to come from in a flat-lined economy with unemployment made even higher by your sacking the public sector workers in your dash for a smaller state - the demand fairy?

If taxes are cut people will have more money to spend so consumer demand will increase. Simple. More jobs will be created which will take up the slack from the massively bloated public sector. Simple. Guess what we could also increase our exports with this strategy.

Borrowing even more money to keep people in unproductive work in the public sector is the economics of the madhouse.