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yellerkat

Torygraph: Private Sector 'will Be Smaller Than In 1998'

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It's going to take years to climb out of this situation.

I can't see any quick fix.

The most bearish story around today?

The economic output of the private sector next fiscal year will be around £706.1bn lower than the inflation-adjusted £708.9bn it amounted to in 1998/99, the first full fiscal year of the Blair government. The figures, calculated by the Policy Exchange think tank, show that in that same period the size of the public sector ballooned by some 63pc.

The figures are based on the assumption that the UK economy will shrink by 4.5pc this year, as predicted by experts such as the Ernst & Young Item Club, but does not contract any further next year.

ED: for LINK! Damn Sundays!

Double ED: Try to get pound signs working. Anyone else have a problem?

Edited by yellerkat

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It's going to take years to climb out of this situation.

I can't see any quick fix.

The most bearish story around today?

ED: for LINK! Damn Sundays!

The Policy Exchange have a habit of forging/making-up evidence if they can't find facts to meet their ideology - I'd take their viewpoint with a large pinch of salt.

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The Policy Exchange have a habit of forging/making-up evidence if they can't find facts to meet their ideology - I'd take their viewpoint with a large pinch of salt.

Quite, it is the Torygraph after all, but it does seem a little tricky to fudge such easily available figures.

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Quite, it is the Torygraph after all, but it does seem a little tricky to fudge such easily available figures.

I'm very skeptical about them - not least because of the strong evidence that they forged receipts for a publication on radicalism in Muslim communities. I'm all in favour of thinktanks and debate but this particular organisation has a large credibility gap - it has failed the most basic of tests regarding original source material and accordingly I'm suspicious. Given the connection between its leadership and the Telegraph group it's bound to get a sympathetic hearing there but elsewhere I suspect people will look at it with a jaundiced eye.

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So a smaller private sector has to support Browns spending.

Somehow I can't see this being sustainable something has to give.

Either the private sector expands or the public sector contracts.

Bets please.

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People forget that the manufacturing sector has itself been in recession for most of the past decade. With our FIRE economy now in decline we are totally screwed. Not that itself was anything other than a debt based illusion made possible by accounting quirks.

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People forget that the manufacturing sector has itself been in recession for most of the past decade. With our FIRE economy now in decline we are totally screwed. Not that itself was anything other than a debt based illusion made possible by accounting quirks.

Industrial output and the stock market both peaked in 2000.

Coincidence?

When Brown became Chancellor back in 1997 there were 4.178 million and rising manufacturing jobs now its down to 2.644 million and falling.

I wonder if there are more estate agents and mortgage brokers though?

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......When Brown became Chancellor back in 1997 there were 4.178 million and rising manufacturing jobs now its down to 2.644 million and falling.....

It would be helpful if that were put in an overall context - what has been the trend say for the last 30-40 years.

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Unfortunately much of the purchasing of the private sector products and services comes from the state too.

This element has expanded massively over the last 10 years but won't be picked up by simple figures like those.

yep, and its going to get even bigger soon.

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In modern Britain those 2.6 million who still make real things, are nearly classified as enemies of the people. Polluters, exploiters, global warming deniers etc..

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Time to expand the private sector:

Investment banking?

Mortgage lending?

Maybe not.....

Build vans? No

Blades for wind turbines? No

Other manufacturing? Too expensive (partly due to high wage demands to cover high housing costs).

Call centres? Oops, Colin in Mumbai got that job!

Any other thoughts???

Our arms manufacturers are pretty good.....time for a war?

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In modern Britain those 2.6 million who still make real things, are nearly classified as enemies of the people. Polluters, exploiters, global warming deniers etc..

Necessary if the planet is running out of resources to make things with?

As I've said before: Governments need to ensure the masses fiddle while Rome burns. The down side is that some decent scientists and mathematicians prefer to be paid six figures for spread betting rather than five figures for saving all of humanity. The kudos is higher, but who cares if you can't afford to retire at 40?

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Unfortunately much of the purchasing of the private sector products and services comes from the state too.

This element has expanded massively over the last 10 years but won't be picked up by simple figures like those.

This is a very important and interesting point... With large corporations able to either undertake most work in-house, or to outsource to low cost bases overseas, the government becomes one of the few parties engaging in capital-scale spending. I'm wondering, if government spending is reduced, will the private sector actually experience a sharper downturn? With the exception of one person I know who is a shop assistant - everyone else seems to be in direct or indirect government employ. Which is weird... I wonder if there are any useful statistics about the breakdown of the private sector... For example, are defence companies really private sector in spirit? What about firms that generate revenue primarily from government projects?

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Necessary if the planet is running out of resources to make things with?

I think most of the elites believe we are really running out of resources. The Club of Rome type predictions. I do not believe it, for example in electricity we have 1 billion years of uranium reserves if we use already built and operating breeder reactors. And for the other metals, we've literally only scratched the surface of the earth's crust.

But I can understand the line of thinking.

As I've said before: Governments need to ensure the masses fiddle while Rome burns. The down side is that some decent scientists and mathematicians prefer to be paid six figures for spread betting rather than five figures for saving all of humanity. The kudos is higher, but who cares if you can't afford to retire at 40?

Indeed, imagine if we had all that brain power and money going to productive research and engineering. My feeling is the 'problems' already mainly have solutions for, but the powers that be don't want to hear it. The powers that be, their power and wealth comes from trying to fight against these problems. So if they ever solved it, they would be out of a job and high position.

Its like the military constantly needs to find an enemy to fight, to justify increasing defense spending.

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This is a very important and interesting point... With large corporations able to either undertake most work in-house, or to outsource to low cost bases overseas, the government becomes one of the few parties engaging in capital-scale spending. I'm wondering, if government spending is reduced, will the private sector actually experience a sharper downturn? With the exception of one person I know who is a shop assistant - everyone else seems to be in direct or indirect government employ. Which is weird... I wonder if there are any useful statistics about the breakdown of the private sector... For example, are defence companies really private sector in spirit? What about firms that generate revenue primarily from government projects?

Very good point, and a key reason I have been arguing that such large scale QE and state spending is needed the way our economy is currently set up.

Currently with free trade it would seem most companies would just be doing production abroad.

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Very good point, and a key reason I have been arguing that such large scale QE and state spending is needed the way our economy is currently set up.

Currently with free trade it would seem most companies would just be doing production abroad.

the state spending bit i understand, but why is QE so important ? You do realsie the former can happen without the latter don't you ?

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That is my point.

Agreement, then. However, must we do this by anecdotal - isn't there hard evidence to which we can refer?

Incidentally, as another anecdotal, I perceive that today's government suppliers seem to be acting more like government departments than private enterprises... but, maybe, that's just my warped perspective.

Edited by A.steve

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I'm wondering, if government spending is reduced, will the private sector actually experience a sharper downturn?

in a word yes. govt. spending is acting as a stabiliser, making up for the lack of demand in the private sector. 101.

With the exception of one person I know who is a shop assistant - everyone else seems to be in direct or indirect government employ. Which is weird... I wonder if there are any useful statistics about the breakdown of the private sector... For example, are defence companies really private sector in spirit? What about firms that generate revenue primarily from government projects?

well that's not surprising seeing as the govt. sector needs to spend BEFORE the private sector can spend. Even the spend that private sector investors use to buy govt. debt comes from the govt. :blink:

As for employment in public sector, i linked to a torygraph article some time ago which indicated that a huge proportion of new jobs for women in the UK were in public sector or public sector related....this is one of the characteristics of the last 10 years of nulabour rule. And the role of the state only increases during the financial crisis becuase it's making up for the lack of growth in the private sector. In which case if this article is intimating that it's a cause for concern the increased role of the publci sector, then i'd ask what the f*** do they expect to happen in such circumstances. IT's a 101 that even a child can understand.

Edited by spivtastic

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My recent employment history is three years in a private architectural practice and two years in a large multi-disciplinary firm. I've worked on one private project in this time - which the client pulled the plug on before construction. Everything else has been government funded.

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Still such figures are hardly unbelievable.

Agreed

Take a look around you in the UK

Who is actually creating any real wealth?

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In calculations which underline the catastrophic collapse in Britain's non-public sector economy under Labour, experts have revealed that the private sector will by next year have suffered a "lost decade" of less-than-zero growth.

So that'll be two lost decades in a row then.

Edited by mikelivingstone

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