Back in the day...

[BillyStubbsTears]

...the Tories were supposed to be the party who knew how to run the economy.

Whether that was true or not doesn't matter. But the fact of the matter is that from 1950-2010, our economy grew at a remarkably steady rate. About 2.3% per year after inflation.

It wasn't exactly 2.3% every year of course. Sometimes it was a bit higher. Sometimes it was a bit lower. But whenever it veered away, it always came back. If we had a recession and growth was depressed, we'd have a couple of years of 4-5% growth to make up for it.

That matters. Because that's how you get richer. If the economy is growing, then we tend to get richer. Grow at 2.3% per year and every generation will be about twice as well off as the one before.

Anyway. The Tories came to power in 2010 after a bad recession. We needed several years of above average growth to get back on line.

This is what we got:

2010 1.5%
2011 1.5%
2012 2.1%
2013  3.1%
2014 2.3%
2015 1.9%
2016 1.8%
2017 1.6%


In today's Budget, here are the OBR predictions going forward.

2018 1.3%
2019 1.6%
2020 1.4%
2021 1.4%
2022 1.5%
2023 1.6%

Our average GDP growth between 2010-2023, over FOURTEEN YEARS is projected to be about 1.8% compared to the previous long term average of 2.3%. That means that by 2023, we'll be about £1trn poorer than we would have been if the economy had been managed as well as it was from 1950-2010.

ONE TRILLION f**kING POUNDS!

What a f**king catastrophe. Two almighty f**k ups. Firstly Austerity that killed the recovery in 2010-12. Then Brexit-supporters, which is destroying our economic future to satisfy ignorant bigotry.

These incompetent bas**rds must never again be allowed to claim that they are the economically sensible ones. They had displayed mind-boggling incompetence for years. Never since the 1930s has any Govt mismanaged our economic performance like this. And as a result, we've all got a much poorer future to look forward to.

[ravenrover]

And the alternative is ..............?

[BillyStubbsTears]

The alternative in 2010 was not implementing the dementedly stupid Austerity programme.

The alternative now is not smacking ourselves in the face by choosing to leave the Customs Union and Single Market.

The general alternative is not ever again electing a party like this bunch who are so pig ignorant of basic capitalist economics.

[Bentley Bullet]

Billy. Would you vote for a party that was competent in capitalist economics?

[GazLaz]

It always makes me laugh that the day after the budget the independent economic commission or whatever they are called do a full review and report on their opinions. I’m presuming they are the real elite economics experts, why the f**k dont we get them to do the budget??

Politics has had its day, I’d just get a computer to make all the decision using algorithms.

[RoversAlias]

It always makes me laugh that the day after the budget the independent economic commission or whatever they are called do a full review and report on their opinions. I’m presuming they are the real elite economics experts, why the f**k dont we get them to do the budget??

Politics has had its day, I’d just get a computer to make all the decision using algorithms.

Computers taking over didn't pan out too well in Terminator.

That said, that apocalyptic future is looking pretty close to being reality now thanks to the imbeciles in charge of the UK, US etc.

[BillyStubbsTears]

Gaz.

Because the Budget is about politics.

If serious economists made the decisions, we'd not have had Austerity or Brexit and we'd all be much richer.

[GazLaz]

Gaz.

Because the Budget is about politics.

If serious economists made the decisions, we'd not have had Austerity or Brexit and we'd all be much richer.

Everyone wishes for a united society, but yet the people that run society are never united due to party politics so that wish is impossible before we even start.

[BillyStubbsTears]

Gaz. We've had two massive blows to the economy in the last 8 years and we'll suffer the consequences for the rest of our lives. Both are due to Tory leaders' ambitions.

Austerity was an insane economic policy in 2010 but Cameron went for it because it gave him a stick to beat Labour with and get to No10. The economic consensus is that it cost us something like £200bn between 2010 and 2012, and we've never made up that ground.

The Brexit referendum was called by Cameron to neutralise political threats to his position from the right. And the result was interpreted by May as meaning that we should leave the CU and SM in order to satisfy the Europhobes in her party and secure her position as PM. That decision has already cost us £100bn and the figures in the Budget suggest that the loss will be pushing £1trn by the middle of the next decade.

I hope the pair of them rot in Hell. They will certainly be eviscerated by the history books for what they have done to this country in order to further their self-interest.

[BillyStubbsTears]

Billy. Would you vote for a party that was competent in capitalist economics?

What an odd question.

Of course I would.

Do you seriously think I'd want to vote for a party that didn't know the fundamentals of how the economy works?

How stupid would that be?

[Bentley Bullet]

Nothing personal, BST. It's just that I thought socialists were against the principle of capitalism.

[Herbert Anchovy]

Gaz. We've had two massive blows to the economy in the last 8 years and we'll suffer the consequences for the rest of our lives. Both are due to Tory leaders' ambitions.

Austerity was an insane economic policy in 2010 but Cameron went for it because it gave him a stick to beat Labour with and get to No10. The economic consensus is that it cost us something like £200bn between 2010 and 2012, and we've never made up that ground.

The Brexit referendum was called by Cameron to neutralise political threats to his position from the right. And the result was interpreted by May as meaning that we should leave the CU and SM in order to satisfy the Europhobes in her party and secure her position as PM. That decision has already cost us £100bn and the figures in the Budget suggest that the loss will be pushing £1trn by the middle of the next decade.

I hope the pair of them rot in Hell. They will certainly be eviscerated by the history books for what they have done to this country in order to further their self-interest.

Cameron and May (along with Osborne) should be locked in the Tower of London. Osborne was interviewed on Newsnight recently and STILL does not appreciate the terrible affect of his austerity policies. A total and utter w*nker with no trace of human decency.

[BillyStubbsTears]

No problem BB.

Some socialist are. But they are mostly quasi-religious zealots. Me, I want capitalism to work and to work fairly. These useless t**ts in charge don't understand how it works, and what they do do, the do unfairly.

[ravenrover]

The alternative in 2010 was not implementing the dementedly stupid Austerity programme.

The alternative now is not smacking ourselves in the face by choosing to leave the Customs Union and Single Market.

The general alternative is not ever again electing a party like this bunch who are so pig ignorant of basic capitalist economics.

So I refer my honourable member to my original question, the alternative is..............?
You say who we should not vote in but who should we in your opinion?

[drfchound]

The alternative in 2010 was not implementing the dementedly stupid Austerity programme.

The alternative now is not smacking ourselves in the face by choosing to leave the Customs Union and Single Market.

The general alternative is not ever again electing a party like this bunch who are so pig ignorant of basic capitalist economics.

So I refer my honourable member to my original question, the alternative is..............?
You say who we should not vote in but who should we in your opinion?

Some things are so easy to see........with hindsight.

[RedJ]

The alternative in 2010 was not implementing the dementedly stupid Austerity programme.

The alternative now is not smacking ourselves in the face by choosing to leave the Customs Union and Single Market.

The general alternative is not ever again electing a party like this bunch who are so pig ignorant of basic capitalist economics.

So I refer my honourable member to my original question, the alternative is..............?
You say who we should not vote in but who should we in your opinion?

Some things are so easy to see........with hindsight.

In fairness it's common sense that slashing spending during a recovery is going to at least stunt said recovery.

[drfchound]

Better economists than anyone on here will have had good reason to do what they did back then.
Some of our posters have obviously missed their vocation.
They should have demanded that the government follow their suggestions and everything would now be fine and dandy.

[Not Now Kato]

Better economists than anyone on here will have had good reason to do what they did back then.

Yep, to line their own pockets and those of their friends
 

Some of our posters have obviously missed their vocation.

Yep, I should have become a chef
 

They should have demanded that the government follow their suggestions and everything would now be fine and dandy.

One thing is for sure, it currently isn't!

[drfchound]

Better economists than anyone on here will have had good reason to do what they did back then.

Yep, to line their own pockets and those of their friends
 

Some of our posters have obviously missed their vocation.

Yep, I should have become a chef
 

They should have demanded that the government follow their suggestions and everything would now be fine and dandy.

One thing is for sure, it currently isn't!

Fair enough, but really, who on here honestly would do a better job.
If they could, why aren’t they doing it?

[RedJ]

Better economists than anyone on here will have had good reason to do what they did back then.

Yep, to line their own pockets and those of their friends
 

Some of our posters have obviously missed their vocation.

Yep, I should have become a chef
 

They should have demanded that the government follow their suggestions and everything would now be fine and dandy.

One thing is for sure, it currently isn't!

Fair enough, but really, who on here honestly would do a better job.
If they could, why aren’t they doing it?

Because I'm a bas**rd and would never get elected to public office.

[drfchound]

Better economists than anyone on here will have had good reason to do what they did back then.

Yep, to line their own pockets and those of their friends
 

Some of our posters have obviously missed their vocation.

Yep, I should have become a chef
 

They should have demanded that the government follow their suggestions and everything would now be fine and dandy.

One thing is for sure, it currently isn't!

Fair enough, but really, who on here honestly would do a better job.
If they could, why aren’t they doing it?

Because I'm a bas**rd and would never get elected to public office.

Hey RedJ, apparently our government officers are all the same so you would probably be ok.

[RedJ]

Better economists than anyone on here will have had good reason to do what they did back then.

Yep, to line their own pockets and those of their friends
 

Some of our posters have obviously missed their vocation.

Yep, I should have become a chef
 

They should have demanded that the government follow their suggestions and everything would now be fine and dandy.

One thing is for sure, it currently isn't!

Fair enough, but really, who on here honestly would do a better job.
If they could, why aren’t they doing it?

Because I'm a bas**rd and would never get elected to public office.

Hey RedJ, apparently our government officers are all the same so you would probably be ok.

Aye but I don't think I'd get away with calling people Kitsons in the Commons which would probably be my undoing.

[BillyStubbsTears]

Hound

There's a story there. Make yourself comfortable. It's a good one.

Since the 1930s, we've known how to get out of recessions like the 2008-10 one. Recessions hammer economic confidence. People and companies stop buying because they are scared about the future and they want to save. But if we all spend less, that means we all buy less, so the producers sell less. So they make less money and get more scared about the future. So the recovery from recession doesn't happen.

It's logical. Its a frightening weakness in Capitalism. And that's been understood since the 1930s.

It's called The Paradox of Thrift. It's a sensible reaction for every individual one of us to tighten our belt. But if we ALL do it, it's catastrophic for the economy as a whole. In a nutshell, that's why the Great Depression was such a horrific economic mess.

We know the solution now. The way out is for Govt to keep borrowing and spending to keep oiling the wheels of the economy, until confidence comes back and private business starts functioning again.

But Govt was already in debt you say. Yes. And it doesn't matter. You can sort that out by cutting Govt spending once the economy is healthy again. The key thing is to get the economy roaring again.

Thing was. 10 years ago, the right wing of politics saw this issue as a chance to boot out the Left by using a line that said: you're having to tighten your belt. Why shouldn't the Govt also have to. Isn't that fair?

It's economic lunacy as we've just seen, but they weren't bothered about the economics. They were bothered about the politics. They wanted the Tories in power.

As it happens, there WERE a couple of influential American economists who supported that idea. The overwhelming (and I mean overwhelming) number of economists knew about the Paradox of Thrift and knew what we should do. But these renegade economists were latched onto by right wing politicians, because they appeared to be giving them an intellectual rationale for their economic stupidity. Osborne regularly quoted Allesina and Rogoff in 2009/10.

So, what did Allesina and Rogoff say?

Allesina studied economic performances of countries that had high debt. He concluded that countries with high debt end up with poor economic performance. So he said, if you want a better future, cut Govt spending.

Ken Rogoff did a similar study. He concluded that countries with Govt debt greater than 90% of GDP had bad economic performance afterwards. And yes, we were in target to come perilously close to that value. So we should cut Govt spending or face a poorer future.

So, Osborne had some intellectual cover. These were serious professors at leading US universities. And the BBC, being obsessed with 'balance' presented the academic economists debate as a finely balance one. Not the truth, which was, the vast majority think one way and acouple of high profile renegades think the other.

So, we had Austerity. And whaddya know? We had the worst recovery from a recession since the 1700s. (NB: Eventually, in 2013, Osborne started increasing Govt spending again. Whaddya know? Economic growth came back. But we have permanently lost the growth that we should have had in 2010-13 and that is a shocking, expensive waste.)

What about Allesina and Rogoff?

Well, lots of other economists studied Allesina's data. The conclusion is that he got cause and effect the wrong way round. High debt doesn't cause poor economic performance. Poor economic performance leads to high debt. D'oh! No f**king shit Sherlock.

Rogoff? You won't believe this, given the disaster that his work underpinned. Rogoff used an Excel spreadsheet to do his calculations. In 2013, way after his work had underpinned Austerity and f**ked up our economy, a young PhD student asked if she could have a copy of his spreadsheet to do some research. The great Prof sent her a copy. And she found a massive great f**king mistake in it. He'd added up the wrong data in one of his calculations. When you did it right, there was no 90% debt panic point. If anything, countries high debt tended to do a little better in the future than countries with low debt.

So there you go. That's the story. We had Austerity and put our country into a permanently poorer future because of bas**rd Tory politicians who put ambition ahead of country, and an American professor who literally couldn't f**king add up. We ignored 80 years of understanding of how to deal with great recessions. And every one of you who bought into the Austerity argument ten years back were played for fools.

[drfchound]

Billy, After one read throug of your post I won’t evenpretend to have taken it all on board.
However, your obvious gripe is with the fact that we have a Tory government and take any opportunity to have another pop at them.
Your depth of political knowledge appears to be considerable but do you know that if we had been blessed with a Labour one in 2010 whether they would have gone down a similar route or whether things would have been better or worse than they have been.
My guess is that you will say things would have been better but in truth we will never know because it didn’t happen and we don’t have the benefit of hindsight, as we do currently based on what has actually happened.
Having been in business for too many years to mention I know the Paradox of Thrift scenario that you mention and certainly I know that not everyone has tightened their belt over the last ten years.
I also know that many people fear a worse financial situation for the country should Labour come to power under their current leadership.
Maybe the economists of ten years ago thought the same?

Anyway, I won’t enter into a long drawn out series of posts with you about this subject.
I notice that no one has come back and suggested that they honestly feel they could do a better job themselves than the government, despite a few posters giving opinions on why the government is doing so poorly.

[Herbert Anchovy]

Billy, After one read throug of your post I won’t evenpretend to have taken it all on board.
However, your obvious gripe is with the fact that we have a Tory government and take any opportunity to have another pop at them.
Your depth of political knowledge appears to be considerable but do you know that if we had been blessed with a Labour one in 2010 whether they would have gone down a similar route or whether things would have been better or worse than they have been.
My guess is that you will say things would have been better but in truth we will never know because it didn’t happen and we don’t have the benefit of hindsight, as we do currently based on what has actually happened.
Having been in business for too many years to mention I know the Paradox of Thrift scenario that you mention and certainly I know that not everyone has tightened their belt over the last ten years.
I also know that many people fear a worse financial situation for the country should Labour come to power under their current leadership.
Maybe the economists of ten years ago thought the same?

Anyway, I won’t enter into a long drawn out series of posts with you about this subject.
I notice that no one has come back and suggested that they honestly feel they could do a better job themselves than the government, despite a few posters giving opinions on why the government is doing so poorly.

Hound

I do see your point, I really do.

However, in my opinion it boils down to the fact that the Goverments austerity policy is having such a terrible affect on many, many people in the country. Yet, they really don’t seem to care.

Here’s an example.

My sister volunteers at a food bank in Lancashire and some of the stories she shares are heartbreaking. These are working people who’s salaries have barely increased in a decade, yet the cost of living continues to rise. They have to choose between food and heating in some cases. In 21st century Britain its a disgrace that thousands of people live this way.

Would things be different under Labour? Who knows for sure. However, if I had to trust the Tories or Labour to take care of those members of society, I know where my money would be.

[Donnywolf]

Mine too - BUT - I think (without the benefit of foresight) that we would be far far better off (not in an economical sense of the word) if we had Proportional Representation and we would (or at least should) avoid extremism either way.

It wont come in my lifetime although the Libs I seem to remember had a chance to "force" the issue when getting into the Coalition with the Tories. Cant remember the exact circumstances but a "golden chance" lost / spurned

It will come

[BillyStubbsTears]

Hound
That is a profoundly depressing response.

My main gripe is NOT that we have a Tory Govt. It's that we have a Govt which has, from choice, disregarded the most fundamental and we'll established aspects of economic theory, and in doing so, have left us all poorer to an astonishing amount. Yes, the Govt happens to be a Tory one. But I would criticise any party and any politician who did that. They are aided and abetted by the LDs in doing this. I have regularly castigated the LDs for that, despite having voted for them in the past.

This is not about wanting to be right in an argument. It's about holding politicians to account when they make decisions that are in THEIR interests, but not in the country's interest.

That's kind of how democracy works.

[BillyStubbsTears]

Hound

Regarding the Paradox of Thrift, of course not all companies tightened their belts. And thank God they didn't.  If EVERYONE had drastically cut spending,  we really would have been in the Mother of all Catastrophes.

The point was that enough companies and enough consumers cut their spending, that we had a viciously sharp recession. And the classic textbook way out of that is for Govt spending to increase to bridge the gap.

That is EXACTLY what Brown's Govt did in 08-09. Textbook capitalist economic response.

And Cameron and Osborne castigated them for it and coined the phrase Deficit Denier.

That was very good for them politically. But it was disastrous economically. And worse, it treated the electorate like idiots who could be mislead and misdirected. I find that intolerable. Not least because it normalises lying. And that paves the way for far worse people to lie openly. I'm genuinely bemused by anyone who isn't horrified by that.

[Glyn_Wigley]

What it boils down to is a party with a record of ideologically wanting as small a government as possible using the 2008 crash as the perfect excuse to get away with decimating it without the general public cottoning that what they're doing is nothing to do with the economy.

[Campsall rover]

What got us into this mess in the first place.
Gordon Brown with an Unlimited overdraft facility which he decided to use without any thought to the Consequences.
Also greedy Bankers who were seemingly out of control and nobody did anything about it until it was too late.
Yes austerity has not been a success because far too many of those on lower income levels have suffered the worst.
Minimum wage should be £10 an hour imo and zero hour contracts should be outlawed.  45% tax rate on £70,000 income band & 50% on
£100.000 & over.  That would raise considerable revenue
The alternative of a Labour Government is unknown of course but based on Corbyn’s rhetoric we will probably be bankrupt within 3/4 years.
The uk is like any PLC if you continually spend more than you produce then the eventual consequence is disastrous.
Just look at Greece as an example.