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Dave Spart

Crash Gordon

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Andrew Rawnsley tells the inside story of how Gordon Brown, inheriting the problems he had himself created as Chancellor, found himself presiding over a massive recession.

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Andrew Rawnsley tells the inside story of how Gordon Brown, inheriting the problems he had himself created as Chancellor, found himself presiding over a massive recession.

Any problems that Gordon inherited he had 10 years to fix, instead he made a lot of things worse.

Gordon took the credit for the economy when things were on the up in the early years despite the foundations for this being laid by the conservatives and now he wants to blame them for the things he has screwed up trying to blame the conservatives, sorry this is hypocrisy of the worst order.

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What its saying is that - ironically - as PM he reaped the whirlwind he sowed as Chancellor.

Brown unwittingly set himself up to fail. Ouch!

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Any problems that Gordon inherited he had 10 years to fix, instead he made a lot of things worse.

Gordon took the credit for the economy when things were on the up in the early years despite the foundations for this being laid by the conservatives and now he wants to blame them for the things he has screwed up trying to blame the conservatives, sorry this is hypocrisy of the worst order.

He didn't benefit from the "foundations laid by the conservatives"... economies run in cycles, caused mostly by land price cycles. Labour happened to take over at the start of a scheduled upswing in land prices.

Now we are on the downswing.

Gordon Brown and Tony Blair could have sat in downing street playing cards for 10 years and we would be in exactly the same situation as we are now.

The only way to change anything is to interupt the land price cycle by moving taxation from production to land.

The "foundations laid by the conservatives" was the moving of taxation from land (rates) to production and the elimination of social housing. Put simply, the conservatives setup the current house price boom and bust and Labour were to busy profiteering from it to realise (or perhaps care about) the damage it was doing.

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He didn't benefit from the "foundations laid by the conservatives"... economies run in cycles, caused mostly by land price cycles. Labour happened to take over at the start of a scheduled upswing in land prices.

Now we are on the downswing.

Gordon Brown and Tony Blair could have sat in downing street playing cards for 10 years and we would be in exactly the same situation as we are now.

The only way to change anything is to interupt the land price cycle by moving taxation from production to land.

The "foundations laid by the conservatives" was the moving of taxation from land (rates) to production and the elimination of social housing. Put simply, the conservatives setup the current house price boom and bust and Labour were to busy profiteering from it to realise (or perhaps care about) the damage it was doing.

unfortunately you're wrong, this is a man made credit disaster, it has been deliberate gov policy to a) borrow lots of money and spend it and B) order low interest rates creating an artificial boom. This is what Blair/Brown did since 1999, look at the growth of the state it has more than doubled since 2000. Now it is crashing.

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unfortunately you're wrong, this is a man made credit disaster, it has been deliberate gov policy to a) borrow lots of money and spend it and B) order low interest rates creating an artificial boom. This is what Blair/Brown did since 1999, look at the growth of the state it has more than doubled since 2000. Now it is crashing.

Although pernicious, it wasn't the growth of the state(as you describe it) that broke the financial system, it was the real estate market.

Edited by Stars

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Although pernicious, it wasn't the growth of the state(as you describe it) that broke the financial system, it was the real estate market.

it is the growth of the state that leads to the bigger collapse we current experience. real estate market collapsing is just one part of it but massive gov spending was also a deliberate policy since 1999. remember they kept the tories spending plans for 2 years... then kicked off their massive spending, inflating and monetary expansion. now we're setup for a bigger collapse because of the inbalances in the economy and the ever increasing borrowing requirements which are unaffordable meaning we need DEEP cuts, i.e reversing what they've been doing for 8 years. this will make it even more painful and lead us into an extended recession or rather a depression.

what do you think is going to happen when GDP collapses and Brown and his cronies can't sell any more debt? there will be no funding for schools n hospitals or welfare, so they either cut or resort to hyper-inflation, either way it's painful because they've spent 10 years growing the state beyond what is necessarry and capable of sustaining

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it is the growth of the state that leads to the bigger collapse we current experience. real estate market collapsing is just one part of it but massive gov spending was also a deliberate policy since 1999.

That's debatable and I'll tell you why (this is going to seem paradoxical)

If the government had been more efficient (either taxing less or providing better services for less) then it is likely that the real estate boom would have been even more dramatic and profound. Consider two regions, one has a highly inefficient, wasteful government (like new labour) the other has a lean, mean cost effective government. The price of real estate in the efficiently run area will be higher and rise faster than the inefficient area; the government, because it is doing its tasks well, is adding to the inflation in real estate by making living in the area more attractive. The fact that labour taxed us heavily and flushed our tax money down the drain rather than providing decent services at a low price actually meant that real estate prices were more depressed during the boom, than they could have otherwise been (by the amount they wasted). If more efficient policies had been pursued, the real estate boom would have been more dramatic and the crash even more destructive. In either case our produced value ultimately goes down the tubes, either into higher real estate prices, or is taxed away and wasted by some socialist lunatic. This is the central problem with British politics and why we can't as a nation settle on one overall political philosophy or another; we are left with the hobson's choice between two groups of thieving b@stards, with two slightly different MOs and we keep switching between them.

remember they kept the tories spending plans for 2 years... then kicked off their massive spending, inflating and monetary expansion.

I don't recall the Torys complaining about loans being made available for people to purchase real estate, do you?

now we're setup for a bigger collapse because of the inbalances in the economy and the ever increasing borrowing requirements which are unaffordable meaning we need DEEP cuts, i.e reversing what they've been doing for 8 years. this will make it even more painful and lead us into an extended recession or rather a depression.

This i will give you. The response to the financial collapse might have been slightly different; but we would still have had a financial collapse. I could see the Torys, in a panic, supporting the financial system in much the same way new labour have - George Bush did.

what do you think is going to happen when GDP collapses and Brown and his cronies can't sell any more debt? there will be no funding for schools n hospitals or welfare, so they either cut or resort to hyper-inflation,

either way it's painful because they've spent 10 years growing the state beyond what is necessarry and capable of sustaining

I absolutely agree - welfare entitlements, hospitals etc etc are going to be slashed totally, but the reason these things are now unsupportable is not because of gov spending in the past, it is because the whole financial system has been screwed up by a tax policy that penalises producers so people can make money by holding real estate. America in comparison has and had quite conservative policies on spending on benefits, public services etc and it is facing the same problem now.

Edited by Stars

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