Rishi Sunak

[Mr Fraser]

Tories know how to run the economy. Mad liz as PM cost £35 billion plus. Covid business loans written off £16 billion, covid related UC fraud £8billion, furlough fraud £5 billion. HS2 overspend £10 billion. I haven't even included the PPE fast lane scandal

 

[bluethrunthru]

don't they do any actual research before just spouting bollocks?

 

[bluethrunthru]

 

[BobKowalski]

I have to say, there are some absolute pearlers in your post, particularly the bit about Darling and Brown saving the world’s financial system from collapse. Bloody hell.

Actually, when I suggested you look at the government debt levels and what happened under Gordon Brown, I meant exactly that. Not the infamous note, but the actual data. Government debt as a share of GDP was already rising before the financial crisis, and then it went from 42% of GDP in 2007 to 141% in GDP in 2008, because the UK had to make by the largest intervention into the financial sector in the G7, due to the UK government’s disastrous failure to properly regulate the financial sector.

In fact the situation in the UK got that bad that at one point the government had to underwrite all interbank lending to stop the entire system folding, and the level of all guarantees extended surpassed a trillion pounds, again because the Labour government had a catastrophic failure in terms of financial sector regulation.

Of course, it’s just a coincidence that Fred Goodwin was at Chequers every other week, that Blair had been cosying up to the banks for years as part of his third way bollocks, that the Labour government enjoyed spending all the tax revenues generated by the banks or that Labour liked all the extra growth when consumer credit doubled under its watch. If you’re really interested, you might want to look at the difference between the UK banks’ loan and deposit growth in the lead up to the crisis, or the frankly ridiculous way UK banks were funding this gap, and ask why the government didn’t do something about it when a disaster was obviously brewing. But they didn’t and we ended up with a fiscal implosion that we’re still paying for now.

Of course, there’s a debate to be had about how to address austerity, but I’m afraid that the fiscal situation the coalition government inherited meant that years and years of austerity were always a given, and you shouldn’t try to kid yourself on that.

Austerity was a political choice not ‘a given’. In a decade of historically low interest rates and cheap money, the Govt could have borrowed to invest in infrastructure and growth. Instead they flatlined the economy and still missed their own financial targets.

The last decade has been an economic train wreck which is somewhat ironic given we are now incapable of building a high speed train line.

 

[Brewster's millions]

Austerity was a political choice not ‘a given’. In a decade of historically low interest rates and cheap money, the Govt could have borrowed to invest in infrastructure and growth. Instead they flatlined the economy and still missed their own financial targets.

The last decade has been an economic train wreck which is somewhat ironic given we are now incapable of building a high speed train line.

Why do you think interest rates were historically low?

Do you think rates would have stayed at such a low level if the government had faced a funding requirement equivalent to 13% of GDP every year, just as the coalition government did when it first came to office?

The idea that austerity could have been avoided because of low interest rates is an entirely false concept. Austerity was the dominant factor in maintaining rates at low levels.

 

[west didsblue]

Why do you think interest rates were historically low?

Do you think rates would have stayed at such a low level if the government had faced a funding requirement equivalent to 13% of GDP every year, just as the coalition government did when it first came to office?

The idea that austerity could have been avoided because of low interest rates is an entirely false concept. Austerity was the dominant factor in maintaining rates at low levels.

I wonder how the US and Eurozone managed to keep their interest rates low without years of austerity after 2010.

Truth is your grasp of economics is similar to your grasp of reality when it comes to you believing any old shite originating from Conservative central office.

 

[Brewster's millions]

I wonder how the US and Eurozone managed to keep their interest rates low without years of austerity after 2010.

Truth is your grasp of economics is similar to your grasp of reality when it comes to you believing any old shite originating from Conservative central office.

So you think that the ECB’s move to full blown QE and the eventual decline in borrowing costs had nothing to do with austerity, in particular the austerity programmes implemented across the periphery?

I think that most observers would suggest that the Eurozone provides an almost textbook example of how fiscal concerns, the shift to austerity, the rise in borrowing spreads across the bloc and the various bailout programmes ultimately shaped a paradigm shift in monetary policy and a sharp convergence of spreads, but clearly you would argue to the contrary.

I’d be fascinated to hear your views on the matter.

 

[BobKowalski]

Why do you think interest rates were historically low?

Do you think rates would have stayed at such a low level if the government had faced a funding requirement equivalent to 13% of GDP every year, just as the coalition government did when it first came to office?

The idea that austerity could have been avoided because of low interest rates is an entirely false concept. Austerity was the dominant factor in maintaining rates at low levels.

Interest rates were low because demand was low and the economy had flatlined. Low interest rates are designed to stimulate the economy by making credit and borrowing easier. What did the Govt do with an economy that needed money pumped into it? They did the opposite while hoping the private sector filled the gaps. It didn’t. Banks pulled up the drawbridge along with the Govt.

It was like applying a tourniquet to a rotting limb and then wondering why it fell off. The Govt put political ideology ahead of economic good sense.

 

[west didsblue]

So you think that the ECB’s move to full blown QE and the eventual decline in borrowing costs had nothing to do with austerity, in particular the austerity programmes implemented across the periphery?

I think that most observers would suggest that the Eurozone provides an almost textbook example of how fiscal concerns, the shift to austerity, the rise in borrowing spreads across the bloc and the various bailout programmes ultimately shaped a paradigm shift in monetary policy and a sharp convergence of spreads, but clearly you would argue to the contrary.

I’d be fascinated to hear your views on the matter.

As you say, the austerity programmes were on the periphery not in the core countries of the Eurozone in Northern Europe whose economies were more comparable to ours.

How do you think the US managed to combine low interest rates with healthy growth and high investment in the Obama years of the 2010s?
Spoiler: They proved that austerity doesn’t work and that applying a financial stimulus when an economy is under stress is a much better solution, because the growth generated keeps the increasing debt manageable thereby not causing interest rates to rise. The trick is to target the financial stimulus into areas where there will be a return rather than by the proposed Truss trickle down method of just borrowing more money to give it to the rich who wouldn’t spend it anyway.

 

[bluethrunthru]

conference bounce