The Budget

[The Red Baron]

Grant Shapps is supposed to be the Tory Party's contact with the common man. He was born and brought up on a council estate apparently, although he's changed details of his biography more often than Mad Mick, so who really knows?

Grant Shapps IS Mad Mick and I claim my £5!

[BillyStubbsTears]

Boomstick
We've been through this a dozen times but clearly you've bought into the bullshit story that Osborne has spun.

The VAT cut was part of what you do when the bottom falls out of the economy due to a horrific recession. In 2008, business activity worldwide fell off a cliff after the credit crunch. Cutting taxes and increasing Govt spending is the standard response to this situation to stop the economy totally collapsing. NOT doing that in 1930 was what turned a bad recession into the 10 year Great Depression. I assume you didn't want that to happen this time?

Pretty much every advanced economy in the world was in debt and running a defecit in 2008. Pretty much every advanced economy in the world cut taxes and raised Govt spending in 2008.

http://en.m.wikipedia.org/wiki/National_fiscal_policy_response_to_the_Great_Recession

But I'm sure you'll continue believing that it was all down to Labour.

[BillyStubbsTears]

TRB

He's a good un Shapps, isn't he.

When he was trying to stand for Mayor of London, he printed leaflets saying he was London born and bred. When he stood for Parliament in Herts, he said he was Hertfordshire born and bred.

He's run businesses in self-help quackery (read this book and you'll make $20k, or your money back) under two different assumed names.

Sounding more like MadMick all the time.

[Filo]

Not for a long time Nudge. That's part of the spirit of the era, that's shifted the burden of taxation from higher paid towards lower paid over the past 30 years. It ain't going to change any time soon.

u
No, we're still paying for darlings vat cut. When he thought throwing more money at spiralling debt was a good idea. It was one hell of a mess created by labour, and hopefully those idiots won't be running the country again in my lifetime.
The Tories are just getting to grips with the shit storm that happened on labours watch.

Sucked in by the Tory spin!

[Boomstick]

TRB

He's a good un Shapps, isn't he.

When he was trying to stand for Mayor of London, he printed leaflets saying he was London born and bred. When he stood for Parliament in Herts, he said he was Hertfordshire born and bred.

He's run businesses in self-help quackery (read this book and you'll make $20k, or your money back) under two different assumed names.

Sounding more like MadMick all the time.

You gret bell end, he was born in Watford (Hertfordshire). Watford is also part of the greater London urban area, and within the m25.
Some more billy bullshit

[Boomstick]

Not for a long time Nudge. That's part of the spirit of the era, that's shifted the burden of taxation from higher paid towards lower paid over the past 30 years. It ain't going to change any time soon.

u
No, we're still paying for darlings vat cut. When he thought throwing more money at spiralling debt was a good idea. It was one hell of a mess created by labour, and hopefully those idiots won't be running the country again in my lifetime.
The Tories are just getting to grips with the shit storm that happened on labours watch.

Sucked in by the Tory spin!

It's not spin, it's just how it is, and more people are waking up to it every day.

[BillyStubbsTears]

Boomstick

Watford is NOT in Greater London. That is a simple fact. Check it anywhere you want. A spokesman for Shapps said the leaflets claiming he was born in London were "a mistake" and were later withdrawn.

It's a tiny matter. But it shows that this is a politician prepared to lie over the most trivial issue. Most politicians don't by the way. They evade, they dissemble, they use weasel words. But they rarely lie outright.

Shapps is making a career out of it. Last year he was publicly slapped down by the head of the Office of National Statistics. Shapps claimed that Tory policies had led to nearly a million false benefit claims being withdrawn. Sounds impressive. Sounds like the system was broken and the Tories fixed it. Except it was a bare faced lie. The head of the ONS told him that the actual figure was 19,000.

[big fat yorkshire pudding]

BFYP

If we really want to compete properly, it would mean dragging living standards and conditions for a great many to the level of Chinese and Bangladeshi factory workers.

I'm not sure we really want to see that.

Innovation, we need to be better than them and offer better quality.

Of course there's an irony in that comment.  The left want more jobs for the perceived working class, but then want higher wages which makes them less competitive.  How the hell can you have both?  That's something I don't think anyone has gotten to grips with have they?  We're in a position we'll find it very hard to get out of and really we need to move with the times.

I expect Labour to win the next election, let's see how well things go when they don't reverse George Osbourne's moves (I expect they won't, they can't) and will have to go further, that penny still hasn't dropped.  Be intriguing to see how they do it if they do win, given the union power there.....

It'd be interesting to hear something more from Milliband than the same old sound bites.  Great, it might win him over part of the electorate who love the soundbites, but still no policy, no substance and no thought from him.  Let's hope he comes out with something soon as there are some valid points from Labour, but what they don't seem to have is any idea how  they can deliver anything as yet.  Their problem is that they're bulling up cuts, cuts, benefit cuts blah blah.  They have a tough job on delivering on all the things they've grumbled about without looking like hypocrits - a bit like Nick Clegg has found himself to be!

[BillyStubbsTears]

BFYP

It's the spirit of the age. No one really wants to engage with the detail of macroeconomic policy. So we prefer to go for politicians who get the mood music right.

Back in 2010, Osborne effectively won the economic argument, not by arguing about the economics. He did it by coining a genius term. He called anyone who disagreed with Austerity a Deficit Denier.

That destroyed Labour. Never mind that first year University economics tells you that what Labour were doing in response to the recession was the classically correct policy. Never mind that the same basic textbook stuff told you that cutting Govt spending in a deep recession would hugely delay the recovery, with a permanent loss of wealth to the country.

No one wanted to get into that detail. And labelling people like Balls who wanted to have that level of debate a Deficit Denier was genius. It resonated with the public and it still does. Even though we actually DID have the severely delayed recovery and consequent permanent loss of wealth. AND never mind the fact that Osborne is now borrowing more than Darling had planned to do. None of that matters because people don't want the detail.

I won't blame Osborne for that. He's a superficial politician in an era when we deserve superficial politicians because we abdicate our responsibility to think. If Miliband uses the same superficial tactics (Cost of Living Crisis) do you blame him?

[RedJ]

TRB

He's a good un Shapps, isn't he.

When he was trying to stand for Mayor of London, he printed leaflets saying he was London born and bred. When he stood for Parliament in Herts, he said he was Hertfordshire born and bred.

He's run businesses in self-help quackery (read this book and you'll make $20k, or your money back) under two different assumed names.

Sounding more like MadMick all the time.

You gret bell end, he was born in Watford (Hertfordshire). Watford is also part of the greater London urban area, and within the m25.
Some more billy bullshit

I like how you've elected to ignore his rebuttals and just attack him on a post directed at someone else over what you think is facts (and unsurprisingly get it wrong).

[big fat yorkshire pudding]

BFYP

It's the spirit of the age. No one really wants to engage with the detail of macroeconomic policy. So we prefer to go for politicians who get the mood music right.

Back in 2010, Osborne effectively won the economic argument, not by arguing about the economics. He did it by coining a genius term. He called anyone who disagreed with Austerity a Deficit Denier.

That destroyed Labour. Never mind that first year University economics tells you that what Labour were doing in response to the recession was the classically correct policy. Never mind that the same basic textbook stuff told you that cutting Govt spending in a deep recession would hugely delay the recovery, with a permanent loss of wealth to the country.

No one wanted to get into that detail. And labelling people like Balls who wanted to have that level of debate a Deficit Denier was genius. It resonated with the public and it still does. Even though we actually DID have the severely delayed recovery and consequent permanent loss of wealth. AND never mind the fact that Osborne is now borrowing more than Darling had planned to do. None of that matters because people don't want the detail.

I won't blame Osborne for that. He's a superficial politician in an era when we deserve superficial politicians because we abdicate our responsibility to think. If Miliband uses the same superficial tactics (Cost of Living Crisis) do you blame him?

It doesn't actually these days, university lecturers commonly tell one thing, that the economics of the past offer some guide but that the changing world has rendered alot of it actually not as relevant as it once was.

Therein lies the problem that you yourself seem to be in aswell, harking back to previous theories etc.  Is it not indeed the problem that the theories that fit 40 years + ago just don't hold true anymore?  I would argue that is the case - if indeed you agree about the outcomes of some of these so called theories.

Indeed the key thing of all of it is that whilst some theory is a guide, reacting to the true market is the true driver we should use to make business and economic decisions.

Afterall, it would be all well and good pumping 20 billion in to some projects and then selling it all to China for the best value - where's the economic benefit there?  What the often forgotten thing in it is perhaps the politics of it.  The Tory government would be derided by you for offering a contract to a UK company at twice the price but which actually offers the most economic benefit to the country a project at 10 BN to a Chinese company or a project at 20BN the same to a UK company?

I give you one example of the wastage that occurred on a big project - Trinity Leeds.  Just how much of that came through the UK and UK workers - not a significant sum of it remained in the economy - did that benefit us?

[Keith Myath]

Taking a penny off a pint, could have been jazzed up a bit more.

I.e Buy 290 pints get one free as advertised in my local after i pointed it out

[BillyStubbsTears]

BFYP

It's nothing to do with the age of a theory. Some things are timeless. Bridge engineers use totally different materials and construction methods to those used in the 16 and 1700s. But there analyses are still based on the theories developed by Isaac Newton and Leonard Euler back then.

If you had an economics lecturer who told you that there was no sound theoretical basis for the argument that reducing Govt spending in an aggregate demand slump recession leads to a prolonging of the slump, you should go and ask for your money back because he's a charlatan.

[BillyStubbsTears]

BFYP

Your wrong in your assumption of what I would think in your hypothetical Govt contract. It's a bit of a silly hypothesis, as tree wouldn't be such a big difference in the bids. But I'll accept your premise. In the depth of a demand slump, they would do better for UK plc giving a contract to an inefficient UK company, that giving it to an uber efficient Chinese one. The purpose of Govt spending in an aggregate demand slump is to generate demand by getting money into people's and companies' pockets. So they spend it and generate more demand and confidence comes back into the economy.

It sounds counterintuitive, but it's no less correct for that. That well known raving lefty Milton Friedman talked about taking pallet-loads of dollar bills up in a helicopter and sprinkling it down on the population as a way of getting demand going.

What Osborne has relied on is that he could tap into common sense by spinning the line that you don't get out of debt by spending. For individuals, that is undoubtedly correct and that's why the argument gains traction. For economies as a whole, it's ignorant bullshit.

[IC1967]

The purpose of Govt spending in an aggregate demand slump is to generate demand by getting money into people's and companies' pockets. So they spend it and generate more demand and confidence comes back into the economy.

What a load of rubbish. That is not the only way to get confidence back into the economy. From where we were, it would probably have had the opposite effect. If spending was the solution then we would never have had a recession. Brown spent like a drunken sailor. If your outdated theory was right we'd never have had a problem. Where does the government get the money to spend? They get it off the man in the street. They borrow it and pass the bill on to the man in the street.

Given that the British consumer was already heavily in debt what makes you think he would have been happy to get into even more debt? More debt is not the solution to debt. Throwing money at the problem would have just papered over the cracks and allowed us to carry on living beyond our means. Postponing the day of reckoning would have made things a lot worse than they currently are.

The way to get proper confidence back into the economy is to embark on a strategy that gets us living within our means. Thankfully George has started us off on this path and confidence is returning (despite not doing as you wanted). I just wish he'd go at it a lot harder and get the job done a lot quicker.

Those of you that think it was all a product of a world wide recession need to get a grip. Those of you that think a Keynesian approach should have been adopted need to also get a grip. You conveniently state that Keynes would have wanted more spending to sort the problem out. What you never state is that Keynes advocated that this money should come from the money put aside in the good times. Labour never put any money away and left us totally exposed to a worldwide recession with our trousers down. They also caused the banking crisis with their complete lack of proper regulation of the banks.

How anyone could ever dream of voting for that bunch of incompetents is incredible. It just goes to show how economically illiterate the British public are. And that's just how Labour like it.

[BillyStubbsTears]

Just in case anybody still thinks that the fiscal stimulus in 08-10 was a bizarre idea that only cranks like Labour could come up with, here's what the right wing economist and commentator David Smith had to say on the subject.

"Do only Keynesians support an emergency fiscal stimulus in a crisis and deep recession? No...support for the stimulus was pretty universal among the economic mainstream."

Smith himself also agreed with the fiscal stimulus.

To be fair to him, he was one of the few right wingers who was openly prepared to accept that Austerity would slow down the recovery too. He said he was still in favour of Austerity, but at least he didn't spout the mumbo-jumbo about expansionary austerity that was in vogue at the time, and which is now never mentioned by anyone with a brain cell because it's been shown to be the claptrap that it always was.

I have no problem with someone like this who has a different opinion but is prepared to follow the logic of his case.

[BillyStubbsTears]

And just as I comment that only anyone with half a brain cell still believes in expansionary austerity, up pops Mad Mick to make the point for me.

[IC1967]

Thank you for your excellent detailed rebuttal.

I've noticed you use the strategy of abuse  when you find yourself at a total loss to refute the marvelous points I make.

[BillyStubbsTears]

Mick. The rebuttal is there. Page after page after page for month after month. It never penetrated your cranium previously. I have no expectation of it ever doing so again. But thank you for illustrating my point for me.

[IC1967]

I don't believe austerity is expansionary. I don't know where you get that from. We need austerity to get back to living within our means. Initially this was always going to mean we'd have a period of contraction. Obvious economics I'd have thought.