IMF gives Tories a glowing report

[mjdgreg]

Did I miss something? I thought the IMF called for an even looser monetary policy than we already have- lower interest rates (than 0.5%- FFS!) and more QE (i.e. printing money so the banks can hoard it and continue pay their staff big bonuses.) These are the policies that have failed to lift us out of recession and will continue to fail.

I agree there needs to be a growth strategy though- based on a combination of fiscal easing (a 12 month holiday on Employers' NI would be a start) and supply side reforms. Problem is, the Government can't agree on anything other than deficit reduction as cutting business taxes is anathema to most of the Lib Dems.

So, I expect we'll have a period of minimal growth (even if the Eurozone manages to avoid imploding) followed by a Labour Government who will increase public spending, leading to higher debt and high interest rates.

I agree with your comments on QE. It also leads to a devaluation of sterling and inflation. This increases the price of imports and reduces peoples standards of living. It's a big part of why petrol costs so much these days. There is a sly strategy going on of trying to inflate away the debt problem (or at least some of it). I feel sorry for savers who are having to watch their savings being devalued  by inflation just to keep the wolf from debtor's doors.

I fully expect the Eurozone to implode and the current flat-lining will seem like a picnic in the park compared to what's ahead of us. Rather than pay freezes there will be large pay cuts and much more unemployment. Take my advice and get rid of as much debt as possible before the worst happens because when it does there will be blood on the streets.

[BillyStubbsTears]

Mick

Having spent the whole day in A&E seeing my 5 year old going through agony, I'm not in a mood to suffer gobshite Internet warriors to be honest. I'll say my final piece on this. You will ignore it and to be honest, I don't give a f***.

The question that I posed was NOT "spending" vs "Austerity" it was about whether any country ever had managed to sort out a major debt problem through Austerity during a period of economic slump, which is what we are currently doing now. I challenged you to find ONE example. You didn't, because you can't. No examples exist. So, as usual, you change the theme of the discussion. I don't know who you are used to debating with, but in my professional milieu, you get eaten up and spat out if you try pulling shit like that.

We've kicked around the examples of Japan and Canada. They are absolutely crucial to the debate. Japan shows that when you try to drastically cut back Govt spending in a slump, the result is catastrophic. Negative growth, deflation and increased debt. Canada took a different path in the 90s. They kept up Govt spending when the economy was struggling. The economy got back on track, albeit at a cost of a higher deficit. By 96, the private sector was back on its feet and they could engage on a program of reining in Govt spending and debt reduction. Classic approach.

That is what the debate was about in 2010. Those on the Right wanted to cut hard and fast. The result has been Japan-like. My take was that it was essential to keep spending going until the private sector emerged strongly, THEN cut. Like Canada. I always believed that Govt cuts would have to come, but only when the private sector was strong enough. ( Read that again. That is what I ACTUALLY believe. Don't flatter yourself that you have the intellectual capacity to second guess what you THINK I believe, you arrogant t**t.)

I'll leave it to others to make up their own minds about the rights and wrongs of this debate. I'm more interested in looking after my kid now than dealing with your pointless witterings any more.

TRB: the headlines about the IMF report were all about monetary issues (interest rates and QE, both of which are vitally necessary as the temporary and entirely external inflationary pressures ease and the terrifying prospect of deflation emerges again). But they also made a strong case for fiscal easing to be considered, specifically a VAT cut or major infrastructure investment. THAT is how serious the situation is. I have never in 30 years heard the IMF ask for fiscal loosening.

[The L J Monk]

Once again it is fascinating that Mick has somehow reproduced a pre-existing article almost verbatim. Having denied copying and pasting previously it is amazing how this lexical coincidence just keeps on happening.

http://21stcenturysocialism.com/article/beware_the_canadian_austerity_model_01989.html

What's even more incredible is the article in question is headlined "Beware the Canadian Austerity Model".

[mjdgreg]

Once again it is fascinating that mjdgreg has somehow reproduced a pre-existing article almost verbatim. Having denied copying and pasting previously it is amazing how this lexical coincidence just keeps on happening.

http://21stcenturysocialism.com/article/beware_the_canadian_austerity_model_01989.html

What's even more incredible is the article in question is headlined "Beware the Canadian Austerity Model".

Do you seriously believe I would go anywhere near a socialist website? If you believe that then you will also believe that greater debt is the solution to a debt problem. That said there is an incredible irony in the headline of the article lol.

[mjdgreg]

More evidence that cutting spending is the best way to achieve growth:

http://www.taxpayersalliance.com/economics/2012/05/spending-deliver-stronger-economic-growth.html

[bobjimwilly]

The lessons of history, and the empirical evidence, clearly support the claim that lower spending and lower taxes will tend to mean higher economic growth.

Who's taxes have been lowered? Mine bloody haven't! 

[mjdgreg]

Who's taxes have been lowered? Mine bloody haven't!

Maybe your boss has given you a secret pay cut based on performance. The coalition have raised the amount year on year since coming to power that people can earn before paying tax. So although not a tax cut it in effect does the same thing so there is more money in everyone's pay packet. A fine example of the coalition looking after the working man and the lower paid in particular.

Don't forget they've also stopped councils increasing the Council Tax which always used to go up by more than the rate of inflation under Labour. Remember 'we're all in it together'.

[The L J Monk]

Don't forget they've also stopped councils increasing the Council Tax which always used to go up by more than the rate of inflation under Labour. Remember 'we're all in it together'.

Have they?

http://www.telegraph.co.uk/news/politics/9114468/Four-in-10-households-to-see-council-tax-bills-rise.html

[mjdgreg]

Have they?

Yes they have. It's the police and fire authorities and parish councils that are responsible for the very slight increase some tax payers are facing. Thought you'd have been able to work that one out for yourself.

[The L J Monk]

Your words were "they've also stopped councils increasing Council Tax..."

This is untrue. They have incentivised Councils to refrain from increasing tax with a nationwide fund, however they have not "stopped" Council's raising tax. Councils are free to raise Council Tax by up to 3.5% before they trigger a local referendum,

This year has seen 35 Councils increase Council Tax.

Thought you'd have been able to work that one out for yourself.

[Filo]

Your words were "they've also stopped councils increasing Council Tax..."

This is untrue. They have incentivised Councils to refrain from increasing tax with a nationwide fund, however they have not "stopped" Council's raising tax. Councils are free to raise Council Tax by up to 3.5% before they trigger a local referendum,

This year has seen 35 Councils increase Council Tax.

Thought you'd have been able to work that one out for yourself.

Without Google, copy n paste he`s nothing!

[mjdgreg]

Your words were "they've also stopped councils increasing Council Tax..."

This is untrue. They have incentivised Councils to refrain from increasing tax with a nationwide fund, however they have not "stopped" Council's raising tax. Councils are free to raise Council Tax by up to 3.5% before they trigger a local referendum,

This year has seen 35 Councils increase Council Tax.

Thought you'd have been able to work that one out for yourself.

If all you can contribute to the debate is pedantry then I suggest you don't bother.

[mjdgreg]

Without Google, copy n paste he`s nothing!

That eloquent incisive post must have taken all of 5 seconds so down on your usual 20 seconds efforts. Thank you for your contribution to the debate. It has been most enlightening (not).

[The L J Monk]

Your words were "they've also stopped councils increasing Council Tax..."

This is untrue. They have incentivised Councils to refrain from increasing tax with a nationwide fund, however they have not "stopped" Council's raising tax. Councils are free to raise Council Tax by up to 3.5% before they trigger a local referendum,

This year has seen 35 Councils increase Council Tax.

Thought you'd have been able to work that one out for yourself.

If all you can contribute to the debate is pedantry then I suggest you don't bother.

You do know how to make me laugh. Talk about moving the goal posts.

[Filo]

Without Google, copy n paste he`s nothing!

That eloquent incisive post must have taken all of 5 seconds so down on your usual 20 seconds efforts. Thank you for your contribution to the debate. It has been most enlightening (not).

5 seconds to highlight what a knob you are, that`s all it takes!

another 5 second post that gets straight to the point and has no bullshit!

[mjdgreg]

You do know how to make me laugh. Talk about moving the goal posts.

That's a much better effort. Well done. You are finally starting to display signs of a sense of humour. I bet you didn't know you had it in you. The next stage is to try and make up some of your own jokes. I suggest you go and have a lie down in a darkened room for a while to recover from the shock.

[mjdgreg]

5 seconds to highlight what a masterful debater you are, that`s all it takes!

another 5 second post that gets straight to the point and has no bullshit!

You do know you can get help with your attention span problem but a lot of damage can't be undone. I  suspect your mother put you straight on the Cow and Gate and this has led to irreversible brain damage. You have my sympathy.

[Filo]

5 seconds to highlight what a masterful debater you are, that`s all it takes!

another 5 second post that gets straight to the point and has no bullshit!

You do know you can get help with your attention span problem but a lot of damage can't be undone. I  suspect your mother put you straight on the Cow and Gate and this has led to irreversible brain damage. You have my sympathy.

On the contrary Mr Bluenose, I like a good tit, but in your case the milks gone sour!

[Thinwhiteduke]

I  suspect your mother put you straight on the Cow and Gate and this has led to irreversible brain damage. You have my sympathy.

Fowarded this to http://www.cowandgate.co.uk/our-careline/ask-an-expert to ask them to comment on this idiots claim, seems to be pretty certain of his facts....or maybe he should be a little more careful than naming certain brands and then claiming they cause brain damage.

Ive took a screen print as well in case and cheeky editing goes on.

[mjdgreg]

On the contrary Mr Bluenose, I like a good tit, but in your case the milks gone sour!

That's better. You too seem to be getting a sense of humour. Now go and lie down with LJMonk for a rest to recover.

[mjdgreg]

Pmsl at skinnywhiteduke's post. He needs to take a leaf out of Fido and LJMonks book and lighten up a bit and work on his sense of humour. Unfortunately if you've had a charisma bypass operation this will prove very difficult to do.

[Mr1Croft]

Another thread that had potential for a serious debate descended into personal insults and small digs at one another...

 

[mjdgreg]

I don't think we're doing to badly at the moment given what the Governor of the Bank of England said recently:

"We have been through a big global financial crisis; the biggest downturn in world output since the 1930s; the biggest banking crisis in this country's history; the biggest fiscal deficit in our peacetime history – and our biggest trading partner, the euro area, is tearing itself apart.

"The idea that we could reasonably hope to sail serenely through this with growth close to the long-run average and inflation at 2 per cent strikes me as wholly unrealistic."

[BillyStubbsTears]

Well Mick, at least you are quoting your sources now, rather than just plagiarising them and passing them off as your own.

Mind, you still fail the first test of research, which is to look dispassionately for ALL relevant information, then make your informed conclusion. What YOU persist in doing is forming a conclusion then searching for data to back it up.

So, why stick to just gathering information from the TaxPayers's Alliance, or from Mervyn King (who doesn't say anything of substance in that quote anyway)? Why not consider the views of eminently respected, world-renown, Nobel Prize winning economists like Joseph Stiglitz? This is his view on Governments who implement Austerity as a means if reducing debt, without a plan for growth:
"The answer, even though they see over and over again that austerity leads to collapse of the economy, the answer over and over [from politicians] is more austerity.It reminds me of medieval medicine. It is like blood-letting, where you took blood out of a patient because the theory was that there were bad humours. And very often, when you took the blood out, the patient got sicker. The response then was more blood-letting until the patient very nearly died. What is happening in Europe is a mutual suicide pact. There will not be a restoration of confidence as long as economies keep falling, and that will continue until [politicians] change economic course."

[mjdgreg]

I'll have you know that I've got a degree in Marketing and know all about research. I've researched the subject extensively and now consider myself to be an expert. I've looked at both sides of the argument dispassionately and have concluded that spending more money will only make matters worse.

Your argument falls down on many levels this being just one of them:

Say we borrowed more money than we currently are doing and the markets lost confidence in the government's strategy because of this. What would happen to interest rates? There's a very good chance that they would go up meaning that the money we were borrowing would cost more therefore negating any benefit in borrowing it. Mortgage rates would go up and we would very quickly spiral out of control into a very deep recession and end up like Greece, Spain etc.

Your logic in borrowing more money may have some merit if we hadn't already maxed out that option under Gordon Brown. What was it that Mervyn King said, 'the biggest fiscal deficit in our peacetime history'. Thanks Gordon.

We are in unchartered territory and the old rules of economics no longer apply.

[mjdgreg]

This is his view on Governments who implement Austerity as a means if reducing debt, without a plan for growth:

But the government does have a plan for growth. They are cutting the public sector and reducing taxes to help the private sector grow (and implementing other measures). Austerity with a growth plan is happening as we speak.

[mjdgreg]

It reminds me of medieval medicine. It is like blood-letting, where you took blood out of a patient because the theory was that there were bad humours. And very often, when you took the blood out, the patient got sicker. The response then was more blood-letting until the patient very nearly died.

That is a very bad analogy. Here is my own much better one.

Spending more and more money is like taking in more and more calories than the body can handle. First you become a bit overweight then eventually you become morbidly obese. You reach the point where you are so overweight that drastic action has to be taken.

You go to doctor Stiglitz and he says it's OK to keep on consuming far too many calories (more spending) as everything will be all right if you just do a bit of jogging (growth plan). You think great I didn't realise it would be so easy to sort my problem out and on the way home you go to Mcdonalds and have a triple burger with fries and lashings of Coca Cola. Of course your your son pays the bill having been unable to afford a burger himself (mortgaging the future to future generations).

Then you remember his advice about jogging so you get your oversized sports gear on and step outside to do your workout. Unfortunately you go no more than a few yards when your knees give out and you fall into a crumpled heap and suffer a major heart attack that nearly kills you (depression). So much for Doctor Stiglitz's advice.

You are rushed into hospital where you are met by the charming Doctor mjdgreg. He gives it to you straight and tells you that you need to lose some weight and need to stop consuming so many calories. He gives you a diet (austerity plan) that needs to be strictly adhered to and when you've lost some weight (debt reduction) then you can start doing some jogging (growth plan) to get fit. If you don't follow this plan you're going to end up dead pretty soon (Greece, Spain etc).

You follow his advice and gradually you get back to full fitness (budget surplus). Eventually you are that fit you can take on more calories to increase your fitness (limited borrowing to improve infrastructure) and end up winning a gold medal at the Olympics (world's most successful economy). You rue the day that you followed Doctor Stiglitz's (crank) advice but thank your lucky stars that the charming Doctor mjdgreg (world's foremost economic expert) sorted you out before it was too late.

[mjdgreg]

Eeh mjdgreg, that's a very verbose way of saying "no I can't".

No wiggling here. I was simply requiring that the reduction in debt be reasonably significant, not just a transient blip, and that it be achieved within a socio-politico-economic system more or less like ours, given that the whole debate is about what WE should do.

But I'll indulge you. Give me ANY example.

More ammunition to destroy your argument. New Zealand are a current example. They've been implementing an austerity plan with great success. They're even projecting a budget surplus in 2014-2015. It relies on economic growth, picking up from the current 1.4% annual rate to 2% later this year. Time for you to finally admit you have totally and  comprehensively lost the debate.

http://tvnz.co.nz/business-news/budget-2012-john-key-confident-over-economic-plan-4898777

[Filo]

Eeh mjdgreg, that's a very verbose way of saying "no I can't".

No wiggling here. I was simply requiring that the reduction in debt be reasonably significant, not just a transient blip, and that it be achieved within a socio-politico-economic system more or less like ours, given that the whole debate is about what WE should do.

But I'll indulge you. Give me ANY example.

More ammunition to destroy your argument. New Zealand are a current example. They've been implementing an austerity plan with great success. They're even projecting a budget surplus in 2014-2015. It relies on economic growth, picking up from the current 1.4% annual rate to 2% later this year. Time for you to finally admit you have totally and  comprehensively lost the debate.

http://tvnz.co.nz/business-news/budget-2012-john-key-confident-over-economic-plan-4898777

I don`t know what you`re reading into that Mick, it`s just the finance Minister championing his own budget, just like Gideon does over here, but a couple of months down the line he realises he`s dropped a bollock and does a u turn on certain aspects of his budget

[mjdgreg]

I don`t know what you`re reading into that mjdgreg, it`s just the finance Minister championing his own budget, just like Gideon does over here, but a couple of months down the line he realises he`s dropped a bollock and does a u turn on certain aspects of his budget

John Key is the Prime Minister not Finance Minister. This policy has been implemented for years and is proving to be successful. The voters have endorsed the policy by re-electing the government. This budget is just the latest stage of the plan. Read the link properly and you will see that it mirrors what's happening in the UK.

Here's more evidence.

http://blogs.telegraph.co.uk/news/author/danielhannan/