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Hip to be bear

A Beautiful Summary Of The Uks Parlous Finances

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Part of an article in the Prospect magazine. Link provided by Gruffydd in the thread mentioned above.

THis bit of a great article was too good not to copy. I will let you find the link yourself.

Gordon had gang raped his ex girlfrieng Prudence and ripped up and trampled on his book of golden rules before this recession even got started, and yet they think that we will give them 5 more years. They are sadly deluded...I hope :ph34r:

The cause of all this recent borrowing is not the banking crisis itself. The bonds required to fund the banks taken into state administration, a mere £37bn, were issued last autumn. No, Stheeman’s headache comes from spending by government departments (without accompanying tax rises) over the last nine years and is to be traced in the policies and misfortune of a single man, Prime Minister Gordon Brown.

The approved practice of modern public finance is to accumulate modest surpluses in good times, which turn into modest deficits in bad times as tax receipts fall and more money is spent to pay for higher unemployment. So it was in the first two “good†years of the 1997 Labour government. Then in 1999, Brown, as chancellor of the exchequer, launched a programme of public spending unparalleled in British peacetime. Public spending rose from 36 per cent of GDP in 1999-2000, to 41 per cent in 2007-2008. Then, in early 2008, business began to contract all over the world. The banks and investors of the City turned from lucrative sources of tax into demoralised petitioners for state funds. In the year to next April, the treasury expects tax revenue to drop 10 per cent (and public spending will rise to 48 per cent of GDP).

Determined to keep money in people’s pockets, the treasury says expenditure in 2009-2010 of £671bn will exceed income of £496bn by £175bn. That difference is over 12 per cent of GDP. Brown thought that the profits of the City would finance a new welfare state that would be a monument to him more lasting than bronze. He was mistaken.

Buried in the budget report of last April are passages of statistical terror. According to the treasury the economy will not merely contract by 5 per cent this year. The slump has impaired Britain’s productive capacity by a further 5 per cent. If the treasury is correct (which it may not be, Britain often bounces out of recessions more energetically than expected), it means that even if confidence returns to business, companies and households Britain will still not pay as much in taxes relative to national income as in early 2008. So the government will have to raise taxes, cut its spending or inflate the currency to make its interest payments worth less or worthless. Even then, the budget is not expected to come close to balance until 2017-2018.

Edited by Hip to be bear

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Guest UK Debt Slave
Part of an article in the Prospect magazine. Link provided by Gruffydd in the thread mentioned above.

THis bit of a great article was too good not to copy. I will let you find the link yourself.

Gordon had gang raped his ex girlfrieng Prudence and ripped up and trampled on his book of golden rules before this recession even got started, and yet they think that we will give them 5 more years. They are sadly deluded...I hope :ph34r:

The cause of all this recent borrowing is not the banking crisis itself. The bonds required to fund the banks taken into state administration, a mere £37bn, were issued last autumn. No, Stheeman’s headache comes from spending by government departments (without accompanying tax rises) over the last nine years and is to be traced in the policies and misfortune of a single man, Prime Minister Gordon Brown.

The approved practice of modern public finance is to accumulate modest surpluses in good times, which turn into modest deficits in bad times as tax receipts fall and more money is spent to pay for higher unemployment. So it was in the first two “good†years of the 1997 Labour government. Then in 1999, Brown, as chancellor of the exchequer, launched a programme of public spending unparalleled in British peacetime. Public spending rose from 36 per cent of GDP in 1999-2000, to 41 per cent in 2007-2008. Then, in early 2008, business began to contract all over the world. The banks and investors of the City turned from lucrative sources of tax into demoralised petitioners for state funds. In the year to next April, the treasury expects tax revenue to drop 10 per cent (and public spending will rise to 48 per cent of GDP).

Determined to keep money in people’s pockets, the treasury says expenditure in 2009-2010 of £671bn will exceed income of £496bn by £175bn. That difference is over 12 per cent of GDP. Brown thought that the profits of the City would finance a new welfare state that would be a monument to him more lasting than bronze. He was mistaken.

Buried in the budget report of last April are passages of statistical terror. According to the treasury the economy will not merely contract by 5 per cent this year. The slump has impaired Britain’s productive capacity by a further 5 per cent. If the treasury is correct (which it may not be, Britain often bounces out of recessions more energetically than expected), it means that even if confidence returns to business, companies and households Britain will still not pay as much in taxes relative to national income as in early 2008. So the government will have to raise taxes, cut its spending or inflate the currency to make its interest payments worth less or worthless. Even then, the budget is not expected to come close to balance until 2017-2018.

Labour governments are pretty predictable but the sociopath Broon has just taken it all to new levels of insanity.

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Edited for you. (Changed the title of the thread from summation to summary.) Thanks. You learn something new every day on HPC Wish I was as clever as you and had just bought a house too!?!?!? ;)

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