The Good News Keeps On Coming

[IC1967]

You can drone on all you want about graphs and GDP etc but the plain fact of the matter is we are drowning in debt. As one of the richest countries in the world we should be lending money not borrowing it. Currently every man woman and child in the country has to pay around £775 per year just to pay the interest on our current debts. This figure is projected to rise quite considerably in the short term. You want to add to this burden. Crazy.

[BillyStubbsTears]

Mick.


Our current interest payments on Govt debt come to about 3% of our GDP (and the figure as a percentage of GDP is of course, all that really matters - that is an indication of our ability to service the debt). There are many millions of people out there who would love to have mortgage interest payments that were only 3% of their income.

Historically, our current interest payments as a percentage of GDP are lower than at any time since WWI. They are about on a par with where they were in the period 1850-1910. We didn't do so badly then as a nation.


So you point is? Win fact what is your point ever?

By the way, I assume you missed that post of mine a couple of weeks ago where I challenged you to double or quits our bet. You being an honorable chap who always sticks by what he says and always replies to posts, that surprised me.

So. We've already got a £100 bet on who is going to have the greatest number of MPs in 2015. Are you going to stick by your predictions and double up on Labour getting an opinion poll figure of 26% between now and May 2014? A simple yes or no will do.

[IC1967]

There you go banging on about GDP, WW1 etc. You can't see the woods for the trees. This is what matters. This year on average, every household in the country will pay £2000 in tax just to service the interest on our debt. You don't seem to mind this fact. Well I do. That money could be far better spent. The bad news is that this £2000 per year is going to keep rising thanks to all the debt we have previously accumulated. You want to add to this burden. Madness.

[BillyStubbsTears]

Mick.

Aye. Because the alternative is what I have explained before. Debt might come down but so will the wealth of the country, and by far, far more. THAT is the bit of logic that you have no comprehension of. That has been the effect of Austerity.

The world ain't as simple as your primary school ideas suggest. You CANNOT quickly reduce debt as an absolute value without causing economic catastrophe. What you should do is to manage the level of debt to ensure that economic growth is not throttled off.

Osborne has realised this the hard way. He's found that in attempting to rein in debt, he caused the economy to flatline for 3 years. Which actually meant that he failed in his attempt to rein in debt.

Very, very simple if you just sit down, shut up and think about it for a few minutes.

[IC1967]

Aye. Because the alternative is what I have explained before. Debt might come down but so will the wealth of the country, and by far, far more. THAT is the bit of logic that you have no comprehension of. That has been the effect of Austerity.

The world ain't as simple as your primary school ideas suggest. You CANNOT quickly reduce debt as an absolute value without causing economic catastrophe. What you should do is to manage the level of debt to ensure that economic growth is not throttled off.

Osborne has realised this the hard way. He's found that in attempting to rein in debt, he caused the economy to flatline for 3 years. Which actually meant that he failed in his attempt to rein in debt.

Very, very simple if you just sit down, shut up and think about it for a few minutes.

We need a period of deep recession to get the books balanced. We need swingeing cuts to public spending.  This period would also get rid of all the dead wood in the economy (zombie businesses). Also house prices would fall dramatically meaning youngsters would have half a chance of buying somewhere to live. This will be an uncomfortable period for a short while but once its over we can grow properly and strongly.

You seem quite happy with an ever increasing debt burden which will eventually lead to what you fear so much anyway. Best to follow my strategy and get the pain over and done with quickly instead of dragging it out like you want.

[BillyStubbsTears]

OK Mick. And your source is?

(Groundhog Day alert!)

[IC1967]

I am the source.

[IC1967]

Think about it like this. Government spends money on building a new house. The result is:

a) A new house exists, which is a benefit to the country as a whole
b) The house builders have to buy bricks. So the brick manufacturers can keep people in work, or take on new employees.
c) The new employees or people who have kept their job earn money that they wouldn't otherwise have earned.
d) That money may well be used by these people to pay off their debts. This would be a good thing as it reduces their indebtedness.
e) Some may also be used to pay for other things. Like improvements to their own house for example. Which would provide employment for other people. Which is a good thing as that would put money into their pockets too. Virtuous circle is established, economic performance improves for the country as a whole AND we have a better infrastructure than we had previously.

Alternative. Government DOESN'T spend that money on a new house.

Result.
a) Government borrows less. In itself in isolation, a good thing.
b) The country has one fewer house. Bad thing.
c) The construction workers stay on the dole, and are paid benefits by the Government (using borrowed money...)
d) The brick manufacturers have fewer customers, so they lay off workers or don't hire new ones. So their (potential) employees have less money and therefore spend less or don't pay down their own debts.

Result: Negative spiral AND the country doesn't get the extra house. The Government doesn't borrow as much, but the country as a whole is poorer.

This is what you should have written:

Think about it like this. Government borrows more money to build a new house. The result is:

a) A new house exists, which is of no benefit to the country as a whole
b) The house builders have to buy bricks. So the brick manufacturers put up their prices and cream off a tasty profit.
c) The new employees or people who have kept their job earn money that they wouldn't otherwise have earned but unfortunately our national debt has increased to keep these non-jobs on the go.
d) That money will be used by these people to go on a spending spree instead of paying off their debts. This would be a bad thing as it fuels another consumer debt fueled boom which will sadly end in bust again. This increases their indebtedness.
e) Some may also be used to pay for other things. Like improvements to their own house for example. Which would provide employment for other people. Which is a bad thing as that would put money into their pockets too and they can also help fuel a consumer led debt filled boom as well. Vicious circle is established, economic performance improves for the country as a whole for a short while AND we have a better infrastructure than we had previously but unfortunately another bust follows which is much worse than before.

Alternative. Government DOESN'T spend that money on a new house.

Result.
a) Government borrows less, a good thing.
b) The country has one fewer house that it couldn't afford. Good thing.
c) The construction workers change trades and start up their own businesses (not using government borrowed money...)
d) The brick manufacturers have fewer customers, so they lay off workers who find employment elsewhere as there are many new jobs being created. So their (potential) employees have more money and therefore can pay down their own debts.

Result: Country doesn't get the extra house. The Government doesn't borrow as much, and we start to live within our means. Eventually the country becomes much richer.

[BillyStubbsTears]

Mick

Latvia and Estonia followed exactly the path that you are describing. I await their wonderful re-birth with barely concealed anticipation.

As for your debt figures, you are certainly a something beginning with "s" but "source" isn't the word that immediately springs to mind.

[BillyStubbsTears]

By the way Mick.

You know the other day when I posted that our Debt interest payments were 3% of GDP? You recall that you posted that they were in fact double that? And you recall that I asked you to substantiate that claim?

Funny thing Mick. That post of yours has vanished.

Int that odd Mick?

See me? When I say things that are palpably and demonstrably wrong, I don;t delete the posts, I apologise and set the record straight.

So, just for the record, are you saying that you DON'T believe that our debt interest payments are more than 3% of GDP?

A simple yes or no will do Mick.

[IC1967]

There you go banging on about GDP debt ratios again. You must have been dreaming about this thread as I'm confused as to what point you are trying to make. If it makes you happy I agree with your figures.

[IC1967]

MP's are to get an 11% pay rise. Good. The job might attract a better calibre of politician if the wages go up. Pay peanuts and you get monkeys.

[River Don]

MP's are to get an 11% pay rise. Good. The job might attract a better calibre of politician if the wages go up. Pay peanuts and you get monkeys.

There is no evidence to support that assertion.

[Filo]

. Pay peanuts and you get monkeys.

I believe thats a betterware policy

[IC1967]

There is no evidence to support that assertion.

Matthew Paris (journalist and ex MP) sits on many Tory party candidate selection committees. The only people applying are youngsters that have done nothing but politics or others wanting a pay rise because they have reached a dead end in their current job (basically because they weren't good enough to climb the career ladder). All the top potential candidates earn considerably more than MP's so don't bother applying. So we end up with monkeys.

[River Don]

There is no evidence to support that assertion.

Matthew Paris (journalist and ex MP) sits on many Tory party candidate selection committees. The only people applying are youngsters that have done nothing but politics or others wanting a pay rise because they have reached a dead end in their current job (basically because they weren't good enough to climb the career ladder). All the top potential candidates earn considerably more than MP's so don't bother applying. So we end up with monkeys.

Is there any discernible difference in performance between our monkeys in Westminster and the considerably better renumerated monkeys in Brussels?

If you seriously want to attract the highest fliers in industry into politics, you would have to many multiples of £74k.

[IC1967]

If you seriously want to attract the highest fliers in industry into politics, you would have to many multiples of £74k.

Agreed. That said I'm sure there are many people like me that would be happy with the current salary and would be able to do a brilliant job. If only I could become Prime Minister, I'd soon get this country sorted out.

[River Don]

Apart from that awarding them 11% while the public sector wage is locked down at 1%, and most of the country are receiving small wage rises below the inflation rate, isn't exactly leading by example is it?

And doing it while the various expenses scandals still smell like fresh manure too.

[IC1967]

Good points but we've got to look at the bigger picture. The top people (myself excluded) aren't going to do the job for less money than they can get elsewhere.

[River Don]

The top people aren't going to do it for £74k either. Except for the principled ones, who still have a sense of public service, and they'll do it for £68k.

We shouldn't go back to the days of unpaid politicians but it's worth remembering there was never a shortage of people who would do it for nothing. It is important anyone from any background should be able to afford to go into politics.

It's also worth remembering they've outsourced three quarters of their legislative responsibilities to the EU. They aren't as important as they were.

For me they should just lock their pay at double the average wage, while members of cabinet and those with much greater responsibility should probably be on higher pay grades than they are now.

[IC1967]

More good news. Rate of jobs growth at its highest for 15 years. Yes you read it right - 15 years. So much for the doom and gloom merchants.
http://www.bbc.co.uk/news/business-25294524

[River Don]

More good news. Rate of jobs growth at its highest for 15 years. Yes you read it right - 15 years. So much for the doom and gloom merchants.
http://www.bbc.co.uk/news/business-25294524

Lots of work for low paid East Europeans?

[IC1967]

I'm afraid so. The sooner we get out of Europe the better. It's not only that they are prepared to work for low wages but they've also brought down considerably what used to be the going rate for a job. Just ask anyone that works in the construction industry.

[Malc Morling]

I'm afraid so. The sooner we get out of Europe the better. It's not only that they are prepared to work for low wages but they've also brought down considerably what used to be the going rate for a job. Just ask anyone that works in the construction industry.   There okay claiming benefits while they work here our youngsters have to wait 2yrs  before they can claim glad i'm 60yr old other wise Aussey looks good to me

[Muttley]

I'm afraid so. The sooner we get out of Europe the better. It's not only that they are prepared to work for low wages but they've also brought down considerably what used to be the going rate for a job. Just ask anyone that works in the construction industry.

What are you suggesting? We weigh anchor and sail off into the Pacific?

There okay claiming benefits while they work here our youngsters have to wait 2yrs  before they can claim glad i'm 60yr old other wise Aussey looks good to me

I always love it when people whinge about immigration and then say that they want to emigrate to get away from immigrants! 

[IC1967]

What are you suggesting? We weigh anchor and sail off into the Pacific?

I like your wit. If only there were more around here like me and you.

[Muttley]

What are you suggesting? We weigh anchor and sail off into the Pacific?

I like your wit. If only there were more around here like me and you.

Well, there seems to be plenty more around here like me...but you seem to be on your own!

[jonrover]

MP's are to get an 11% pay rise. Good. The job might attract a better calibre of politician if the wages go up. Pay peanuts and you get monkeys.

Absolute b*llocks.

If you go in to politics for the financial reward then you are going in to it for the wrong reasons. If anything they should reduce it by 11% to bring in people who want to enter politics for the right reasons, to serve and represent their communities. And by their communities, I mean what it says, anyone wanting to stand as MP in their community should have lived in their constituency for at least 5 years in my opinion. Then we might actually get politicians who are prepared to represent the interests their constituents instead of that of themselves and those of corporations, lobbyists and bankers.

[IC1967]

Absolute b*llocks.

If you go in to politics for the financial reward then you are going in to it for the wrong reasons. If anything they should reduce it by 11% to bring in people who want to enter politics for the right reasons, to serve and represent their communities. And by their communities, I mean what it says, anyone wanting to stand as MP in their community should have lived in their constituency for at least 5 years in my opinion. Then we might actually get politicians who are prepared to represent the interests their constituents instead of that of themselves and those of corporations, lobbyists and bankers.

I beg to differ. There aren't many people around like me that could afford to do the job for such a pittance. Its a fact that in my experience the more you earn is a very accurate determinant of ability. No wonder we have such poor MP's when the wages are so low. If you had your way then it would only be the very rich that would be MP's. I agree with you that you should have lived in the constituency before becoming it's MP.

[IC1967]

Nice one George. He's planning to cut public spending on welfare again. Quite right too. Its time we got rid of the something for nothing culture that pervades our society.

http://www.bbc.co.uk/news/business-25349236