the economy.

[Len Rum]

Eitherway, the discussion on whether to cut tax, or stimulate will now emerge again, and probably about time.

Will the question of lets stimulate but raise taxes ever happen. Taxes need to be raised to cut deficits surely.

The poor can not pay off the deficit

Sod raising taxes!

Thank God the Tories are not planning to raise VAT in the next Parliament Ron.

 

[Prestwich_Blue]

National debt after last government 800 billion

Present debt after so called austerity drives and an upturn in the economy 1300 billion and growing at a rate of about 5 thousand pounds per second.

Soon enough the shite is going to hit the fan.

Shhhh......
A lot of people on here don't want to know this. George is doing a great job, don't you know.Tax cuts all round next few years. LOL!

You're confusing two things here - the fiscal deficit and the national debt.

If government spending is higher than government income (i.e. taxes and other revenues) then the government has to borrow to finance that gap. So debt will increase by the amount of the deficit (and should decrease if there's a surplus). We've only shown a surplus in 5 out of the last 40 years, including 1999-2001, so government debt will always be increasing. The real question is around the level of debt compared to the growth in the economy and how that impacts the servicing of that debt.

What's happened in the last 10 years or so is that Gordon Brown, as chancellor, did quite a good job of bringing down debt as a percentage of GDP, by ensuring that spending didn't run ahead of income. By 2002 it was down to around 37% of GDP, from a peak of 50% in 1996 as he'd been recording a surplus and paying debt down.

In 2002 he went on a bit of a splurge and started building up a deficit, when there was an argument that, with the strength of the economy, there should have been at least a balanced budget if not a surplus and debt should have been reduced further but debt as a % of GDP started to creep up to around 43% in 2007, when it really should have been not much more than 30%.

In 2008, government spending started to increase dramatically, as the liquidity crisis started to take effect and absolutely ballooned the following two years. By 2010, government debt had increased to nearly 80% of GDP as we were spending far, far, more than we earned as a country.

Since then, Osborne has been trying to reduce the gap between what we spend and what we earn. That's had some limited success and debt as a % of GDP is starting to level off at around 90%. The economic argument is that cuts have to be delicately managed so they don't constrain recovery, as it's recovery that drives up GDP and therefore public revenues. As demand grows, then consumption grows, production grows, income and profits grow and higher personal and business taxes increase government revenues. Some feel that the cuts have been too severe but they are certainly having an impact on the debt/deficit picture. That's at a cost to the ordinary person though.

But that's not happening this time, as I've explained before, due to growth in production not feeding into growth in personal, disposable incomes and this is limiting demand. That latter growth is needed to drive a sustainable recovery. Current projections are that the deficit should be cleared in the next 3 years and we should start recording a surplus by the end of 2018 and that government borrowing (which is not quite the same as the deficit) should cease by the end of 2019/2020. That's how they can talk about tax cuts by that time. The real test will be whether this is achieved or even achievable without a growth in incomes.

 

[Len Rum]

National debt after last government 800 billion

Present debt after so called austerity drives and an upturn in the economy 1300 billion and growing at a rate of about 5 thousand pounds per second.

Soon enough the shite is going to hit the fan.

Shhhh......
A lot of people on here don't want to know this. George is doing a great job, don't you know.Tax cuts all round next few years. LOL!

You're confusing two things here - the fiscal deficit and the national debt.

If government spending is higher than government income (i.e. taxes and other revenues) then the government has to borrow to finance that gap. So debt will increase by the amount of the deficit (and should decrease if there's a surplus). We've only shown a surplus in 5 out of the last 40 years, including 1999-2001, so government debt will always be increasing. The real question is around the level of debt compared to the growth in the economy and how that impacts the servicing of that debt.

What's happened in the last 10 years or so is that Gordon Brown, as chancellor, did quite a good job of bringing down debt as a percentage of GDP, by ensuring that spending didn't run ahead of income. By 2002 it was down to around 37% of GDP, from a peak of 50% in 1996 as he'd been recording a surplus and paying debt down.

In 2002 he went on a bit of a splurge and started building up a deficit, when there was an argument that, with the strength of the economy, there should have been at least a balanced budget if not a surplus and debt should have been reduced further but debt as a % of GDP started to creep up to around 43% in 2007, when it really should have been not much more than 30%.

In 2008, government spending started to increase dramatically, as the liquidity crisis started to take effect and absolutely ballooned the following two years. By 2010, government debt had increased to nearly 80% of GDP as we were spending far, far, more than we earned as a country.

Since then, Osborne has been trying to reduce the gap between what we spend and what we earn. That's had some limited success and debt as a % of GDP is starting to level off at around 90%. The economic argument is that cuts have to be delicately managed so they don't constrain recovery, as it's recovery that drives up GDP and therefore public revenues. As demand grows, then consumption grows, production grows, income and profits grow and higher personal and business taxes increase government revenues. Some feel that the cuts have been too severe but they are certainly having an impact on the debt/deficit picture. That's at a cost to the ordinary person though.

But that's not happening this time, as I've explained before, due to growth in production not feeding into growth in personal, disposable incomes and this is limiting demand. That latter growth is needed to drive a sustainable recovery. Current projections are that the deficit should be cleared in the next 3 years and we should start recording a surplus by the end of 2018 and that government borrowing (which is not quite the same as the deficit) should cease by the end of 2019/2020. That's how they can talk about tax cuts by that time. The real test will be whether this is achieved or even achievable without a growth in incomes.

Good post.
I do understand it -'Geoffrey' has run a cumulative fiscal deficit of half a trillion over the past five years, hence the increase in the national debt. His aim was to reduce the national debt to 650 billion at the end of this parliament and to start running a fiscal surplus in 2015-16 (LOL). He has failed spectacularly in both respects. However by allowing the deficit to rip each year he has engineered a growth in the economy to coincide with the next election (fuelled also by a temporary property boom).

 

[Prestwich_Blue]

Shhhh......
A lot of people on here don't want to know this. George is doing a great job, don't you know.Tax cuts all round next few years. LOL!

You're confusing two things here - the fiscal deficit and the national debt.

If government spending is higher than government income (i.e. taxes and other revenues) then the government has to borrow to finance that gap. So debt will increase by the amount of the deficit (and should decrease if there's a surplus). We've only shown a surplus in 5 out of the last 40 years, including 1999-2001, so government debt will always be increasing. The real question is around the level of debt compared to the growth in the economy and how that impacts the servicing of that debt.

What's happened in the last 10 years or so is that Gordon Brown, as chancellor, did quite a good job of bringing down debt as a percentage of GDP, by ensuring that spending didn't run ahead of income. By 2002 it was down to around 37% of GDP, from a peak of 50% in 1996 as he'd been recording a surplus and paying debt down.

In 2002 he went on a bit of a splurge and started building up a deficit, when there was an argument that, with the strength of the economy, there should have been at least a balanced budget if not a surplus and debt should have been reduced further but debt as a % of GDP started to creep up to around 43% in 2007, when it really should have been not much more than 30%.

In 2008, government spending started to increase dramatically, as the liquidity crisis started to take effect and absolutely ballooned the following two years. By 2010, government debt had increased to nearly 80% of GDP as we were spending far, far, more than we earned as a country.

Since then, Osborne has been trying to reduce the gap between what we spend and what we earn. That's had some limited success and debt as a % of GDP is starting to level off at around 90%. The economic argument is that cuts have to be delicately managed so they don't constrain recovery, as it's recovery that drives up GDP and therefore public revenues. As demand grows, then consumption grows, production grows, income and profits grow and higher personal and business taxes increase government revenues. Some feel that the cuts have been too severe but they are certainly having an impact on the debt/deficit picture. That's at a cost to the ordinary person though.

But that's not happening this time, as I've explained before, due to growth in production not feeding into growth in personal, disposable incomes and this is limiting demand. That latter growth is needed to drive a sustainable recovery. Current projections are that the deficit should be cleared in the next 3 years and we should start recording a surplus by the end of 2018 and that government borrowing (which is not quite the same as the deficit) should cease by the end of 2019/2020. That's how they can talk about tax cuts by that time. The real test will be whether this is achieved or even achievable without a growth in incomes.

Good post.
I do understand it -'Geoffrey' has run a cumulative fiscal deficit of half a trillion over the past five years, hence the increase in the national debt. His aim was to reduce the national debt to 650 billion at the end of this parliament and to start running a fiscal surplus in 2015-16 (LOL). He has failed spectacularly in both respects. However by allowing the deficit to rip each year he has engineered a growth in the economy to coincide with the next election (fuelled also by a temporary property boom).

It's probably just as well he got it wrong as, more by accident than design I suspect, he has engineered a growth of some sort in the economy. Had he hit his original target by cutting even more, we'd be facing another recession just like the eurozone appears to be, thanks to the German failure to invest sufficiently. Their problem is a more severe version of ours, where increased output is not fueled by productivity gains and there are many people (like in the UK) who are supposedly economically active but not really able to stimulate demand. We will probably face the same situation if we don't kickstart domestic demand.

To use the carpet analogy, Bill's suppliers (the carpet manufacturers) can increase output all they like, which will increase GDP. But if not enough people are buying those carpets then any benefit is purely temporary.

 

[Mike D]

Eitherway, the discussion on whether to cut tax, or stimulate will now emerge again, and probably about time.

Will the question of lets stimulate but raise taxes ever happen. Taxes need to be raised to cut deficits surely.

The poor can not pay off the deficit

The underlying factors that no right winger can get into there head and where there philosophy falls on its arse is that.

1. Poor people aren't upwardly mobile and spend practically all of their money in the economy
2. The trickle down effect is an urban myth
3. There are lots of poor people more than rich people

Punishing the poor is self defeating an in essence takes money out of the economy.

 

[Bill]

Taxes have to rise. We will not pay off our debt unless it happens



Tax in the UK is ridiculously low the effects of that are now being seen

They are only too low to those that Dont and never will pay any.

Everybody pays tax everyday.

Dont be so naive

no they dont.
you could say the cadgers pay tax on fags and cider but as the money was handed to them for doing fuck all in the first place i beg to differ.

 

[Bigg Bigg Blue]

They are only too low to those that Dont and never will pay any.

Everybody pays tax everyday.

Dont be so naive

no they dont.
you could say the cadgers pay tax on fags and cider but as the money was handed to them for doing fuck all in the first place i beg to differ.

Don't hold back Bill, say what you think. :)

 

[Bill]

Everybody pays tax everyday.

Dont be so naive

no they dont.
you could say the cadgers pay tax on fags and cider but as the money was handed to them for doing fuck all in the first place i beg to differ.

Don't hold back Bill, say what you think. :)

its not what i think mate, its the way it is.

 

[Rascal]

They are only too low to those that Dont and never will pay any.

Everybody pays tax everyday.

Dont be so naive

no they dont.
you could say the cadgers pay tax on fags and cider but as the money was handed to them for doing fuck all in the first place i beg to differ.

You are just wumming now mate.

I never once mentioned income tax should rise but you appear to have turned it against me because "i no longer pay income tax" But i can proudly proclaim that the amount of tax i have paid into the system far outweighs what i have taken out. Which you said and i agreed should always be the case.

 

[Bill]

Everybody pays tax everyday.

Dont be so naive

no they dont.
you could say the cadgers pay tax on fags and cider but as the money was handed to them for doing fuck all in the first place i beg to differ.

You are just wumming now mate.

I never once mentioned income tax should rise but you appear to have turned it against me because "i no longer pay income tax" But i can proudly proclaim that the amount of tax i have paid into the system far outweighs what i have taken out. Which you said and i agreed should always be the case.

you might have done but the country is riddled with lard arse layabouts whove never lifted a finger other than to sign on, and they dont even have to do that now. fucking shameful.