The Uk Emperor Has No Clothes

[_w_]

Amid all the brouhaha and dramatisation over the formidable spending cuts being promised by the new fiscally responsible government one can't help but ask: what is all the fuss about?

I have the 2009/10 budget deficit at £156bn and public spending at £631bn.

This gives us an almighty 4% reduction in the UK's yearly deficit, and an astonishing 1% reduction in yearly public spending.

Based on these numbers this heroic effort will mean that the national debt will increase by a mere 24.31% in 10/10 instead of the guargantuan 25.28%! (that's on overly generous assumptions).

Are we being taken for a ride?

[winkie]

Amid all the brouhaha and dramatisation over the formidable spending cuts being promised by the new fiscally responsible government one can't help but ask: what is all the fuss about?

I have the 2009/10 budget deficit at £156bn and public spending at £631bn.

This gives us an almighty 4% reduction in the UK's yearly deficit, and an astonishing 1% reduction in yearly public spending.

Based on these numbers this heroic effort will mean that the national debt will increase by a mere 24.31% in 10/10 instead of the guargantuan 25.28%! (that's on overly generous assumptions).

Are we being taken for a ride?

Anything that is saved will sill be spent, plus more......forget macro....concentrate on what can be achieved in a micro way, only way things can change is by changing them yourself......never rely on others to pay your bills.

[Guest tbatst2000]

Amid all the brouhaha and dramatisation over the formidable spending cuts being promised by the new fiscally responsible government one can't help but ask: what is all the fuss about?

I have the 2009/10 budget deficit at £156bn and public spending at £631bn.

This gives us an almighty 4% reduction in the UK's yearly deficit, and an astonishing 1% reduction in yearly public spending.

Based on these numbers this heroic effort will mean that the national debt will increase by a mere 24.31% in 10/10 instead of the guargantuan 25.28%! (that's on overly generous assumptions).

Are we being taken for a ride?

You also need to factor in 4-5% inflation which, given flat numerical spending, is actually a far bigger cut than the explicit reductions. But, yes, we're being taken for a ride, the real cuts will have to come soon or the situation is likely to go all Greek.

[_w_]

You also need to factor in 4-5% inflation which, given flat numerical spending, is actually a far bigger cut than the explicit reductions. But, yes, we're being taken for a ride, the real cuts will have to come soon or the situation is likely to go all Greek.

If only.

I'm being too lazy to find the real numbers but IIUC next year's spending is meant to be bigger than what I used to make the calculations, to take inflation into account.

So the 1% reduction still stands I think.

So we are still on a path to wild public deficits backed up by CB printing.

Some austerity! Brrrrr.

[Georgia O'Keeffe]

If only.

I'm being too lazy to find the real numbers but IIUC next year's spending is meant to be bigger than what I used to make the calculations, to take inflation into account.

So the 1% reduction still stands I think.

So we are still on a path to wild public deficits backed up by CB printing.

Some austerity! Brrrrr.

lets hope global austerity measures dont mean company insolvencies start spiralling again causing tax receipts to fall off a cliff , that would be extremely unexpected

[_w_]

lets hope global austerity measures dont mean company insolvencies start spiralling again causing tax receipts to fall off a cliff , that would be extremely unexpected

That's another question to which I have no satisfactory answer.

The point I am making is that we are told the UK is entering a period of austerity and fiscal responsibility when in fact it is doing the opposite.

I bet the Greeks would like to swap their austerity for some of ours.

[Georgia O'Keeffe]

That's another question to which I have no satisfactory answer.

The point I am making is that we are told the UK is entering a period of austerity and fiscal responsibility when in fact it is doing the opposite.

I bet the Greeks would like to swap their austerity for some of ours.

yep, i dont think any country will carry out austerity to the extent needed unti they are really forced to, its not really politically acceptable to do so, i think thats why nearly everyone is heading to sov defaault, they simply wont cut to anywhere near the speed to stay ahead of deterioration

[plummet expert]

Amid all the brouhaha and dramatisation over the formidable spending cuts being promised by the new fiscally responsible government one can't help but ask: what is all the fuss about?

I have the 2009/10 budget deficit at £156bn and public spending at £631bn.

This gives us an almighty 4% reduction in the UK's yearly deficit, and an astonishing 1% reduction in yearly public spending.

Based on these numbers this heroic effort will mean that the national debt will increase by a mere 24.31% in 10/10 instead of the guargantuan 25.28%! (that's on overly generous assumptions).

Are we being taken for a ride?

THIS IS WHY YOU SHOULD HAVE A REASONABLE SUSPICION THAT THERE WILL BE SOVEREIGN DEFAULT IN THE Eurozone. The numbers are so big that you cannot see how they can be paid off, let alone serviced. Can you stop the national debt from rising? Not until you stop the structural deficit of £156bn pa. It's already £893Billion and going up every day. You have to pay the interest while trying to stop the debt getting bigger month after month, let alone actually reaching the point where you can reduce the national debt one penny.

[_w_]

THIS IS WHY YOU SHOULD HAVE A REASONABLE SUSPICION THAT THERE WILL BE SOVEREIGN DEFAULT IN THE Eurozone. The numbers are so big that you cannot see how they can be paid off, let alone serviced.

I think what is clearer is that in the UK for now, there is no intention to try. It's spend spend spend!

[Roman Roady]

Will the budget merely spell out where the £6Bn or so cuts will fall, or will it spell out more?

If it is due to anounce further cuts/tax rises, surely we should hold our fire until then?

[OnlyMe]

The UK Emperor has no means of making his own clothes.

Has to print up some money and import them despite an increasing trade deficit.

[Bloo Loo]

The UK Emperor has no means of making his own clothes.

Has to print up some money and import them despite an increasing trade deficit.

the trouble with cloths made from stitched together £50 notes is that they come off in the lightest of rains.

[BalancedBear]

Amid all the brouhaha and dramatisation over the formidable spending cuts being promised by the new fiscally responsible government one can't help but ask: what is all the fuss about?

I have the 2009/10 budget deficit at £156bn and public spending at £631bn.

This gives us an almighty 4% reduction in the UK's yearly deficit, and an astonishing 1% reduction in yearly public spending.

Based on these numbers this heroic effort will mean that the national debt will increase by a mere 24.31% in 10/10 instead of the guargantuan 25.28%! (that's on overly generous assumptions).

Are we being taken for a ride?

We are if these are the only cuts. However, I'm pretty sure the "nasty tories" are going to cut much further. George Osbourne already said that last week.

[JustYield]

Amid all the brouhaha and dramatisation over the formidable spending cuts being promised by the new fiscally responsible government one can't help but ask: what is all the fuss about?

I have the 2009/10 budget deficit at £156bn and public spending at £631bn.

This gives us an almighty 4% reduction in the UK's yearly deficit, and an astonishing 1% reduction in yearly public spending.

Based on these numbers this heroic effort will mean that the national debt will increase by a mere 24.31% in 10/10 instead of the guargantuan 25.28%! (that's on overly generous assumptions).

Are we being taken for a ride?

They're all marking time, hoping for "growth" to appear from somewhere.

The end game will be debt forgiveness in return for passive sovereignty.

Remember, the actual numbers don't matter; all that is relevant to those in power is that those who are currently in the elite remain ahead relatively. When the general public wakes up to the fact that the implied "deal" has been reneged on, it will be open season for asset accumulation by force.

[porca misèria]

Will the budget merely spell out where the £6Bn or so cuts will fall, or will it spell out more?

If it is due to anounce further cuts/tax rises, surely we should hold our fire until then?

The budget is about raising government money.

The one to watch is the spending review, to follow in the autumn. If the new govt can get a grip on the spending departments then we could perhaps divert from the Greek path to the Irish one. Could be interesting what Mr Drunken Smith comes up with, for instance.

[Soul Reaver]

THIS IS WHY YOU SHOULD HAVE A REASONABLE SUSPICION THAT THERE WILL BE SOVEREIGN DEFAULT IN THE Eurozone. The numbers are so big that you cannot see how they can be paid off, let alone serviced. Can you stop the national debt from rising? Not until you stop the structural deficit of £156bn pa. It's already £893Billion and going up every day. You have to pay the interest while trying to stop the debt getting bigger month after month, let alone actually reaching the point where you can reduce the national debt one penny.

Who is the person (or persons) that all this money is owed too? Who has so much money that they can lend to Nations like this?

[CHF]

pension funds

Sovereign wealth funds

Super rich private clients inc PE

Or even other bankrupts who can tell bigger more believable lies

[Soul Reaver]

pension funds

Sovereign wealth funds

Super rich private clients inc PE

Or even other bankrupts who can tell bigger more believable lies

So generally investors with large pots of cash.

[dissident junk]

Porca is right.

The ConDems will erradicate the deficit by slashing spending.

And the moves are already being played. For example, a total recruitment freeze was implemented throughout the entire Home Office last week; no one at any level can hire more staff. This is fascinating as it applies to all roles -- when agency staff and temp workers' contracts run out, they will not be renewed -- and one of the major employment issues in the public sector under the Labour government was a tendency to outsource key roles to agencies but then hire extraneous staff on permanent contracts.

In my view, the structure of entire departments from the top to the bottom is going to have to be rethought because they have been run in such a fiscally irresponsibly stupid way for a decade plus. When I sit back and think about it, I do feel that it is almost as though the plan was to create such huge schisms and fiscal problems in the public sector itself (ie. outside of government's actual spending on user services) that the structure would collapse in time in a dreadful way. There's simply no other reason for some of the decisions that have been made ... you just do not outsource the majority of your key front-facing roles, the bedrock of your service (like caseworkers, nurses, teachers etc) often paying double what you would if they were on permanent contracts with reasonable pension packages while employing sundries, such as admin managers, policy advisors etc on huge permanent contracts. There have been cases in the last ten years where departments have outsourced swathes of workers that provide the backbone of a service, only to import a new tier of management on permanent contracts.

It's been totally insane and will have to be sorted out.

[stormymonday_2011]

Porca is right.

The ConDems will erradicate the deficit by slashing spending.

And the moves are already being played. For example, a total recruitment freeze was implemented throughout the entire Home Office last week; no one at any level can hire more staff. This is fascinating as it applies to all roles -- when agency staff and temp workers' contracts run out, they will not be renewed -- and one of the major employment issues in the public sector under the Labour government was a tendency to outsource key roles to agencies but then hire extraneous staff on permanent contracts.

In my view, the structure of entire departments from the top to the bottom is going to have to be rethought because they have been run in such a fiscally irresponsibly stupid way for a decade plus. When I sit back and think about it, I do feel that it is almost as though the plan was to create such huge schisms and fiscal problems in the public sector itself (ie. outside of government's actual spending on user services) that the structure would collapse in time in a dreadful way. There's simply no other reason for some of the decisions that have been made ... you just do not outsource the majority of your key front-facing roles, the bedrock of your service (like caseworkers, nurses, teachers etc) often paying double what you would if they were on permanent contracts with reasonable pension packages while employing sundries, such as admin managers, policy advisors etc on huge permanent contracts. There have been cases in the last ten years where departments have outsourced swathes of workers that provide the backbone of a service, only to import a new tier of management on permanent contracts.

It's been totally insane and will have to be sorted out.

It is far too late for any of these measures to make much difference to what is going to happen.

Government deficits are only part of the UK debt mountain. There is a huge amount of private debt still sitting on the banks books that may well not get paid. How is abolishing all government spending going to remove those liabilities. This is the conundrum facing countries like Spain where the actual state deficit was not too bad until quite recently but the banks were loaded to the eyeballs with potentially lethal debts. In fact the recent Spanish austerity measure may actually precipitate the banking crisis that they want to avoid. The time for cutting and taxing the way to safety was 5-10 years ago. Now I think it is just going to hasten the path to default

[Guest The Relaxation Suite]

Amid all the brouhaha and dramatisation over the formidable spending cuts being promised by the new fiscally responsible government one can't help but ask: what is all the fuss about?

I have the 2009/10 budget deficit at £156bn and public spending at £631bn.

This gives us an almighty 4% reduction in the UK's yearly deficit, and an astonishing 1% reduction in yearly public spending.

Based on these numbers this heroic effort will mean that the national debt will increase by a mere 24.31% in 10/10 instead of the guargantuan 25.28%! (that's on overly generous assumptions).

Are we being taken for a ride?

Most states run like this. Even back in WWII the US debt to GDP ratio was something like 50%. Soon it will cross over the 100% threshold. So what? No one gives a shit any more.

[blankster]

I don't know about the emperor but the Queen was still done up in all the state finery for the state opening of parliament. I know the crown etc. isn't hers personally, like she couldn't sell it on Ebay even if she wanted to, but somehow it looks all the worse when 'her' speech is all about the coming austerity.

But what really makes the whole thing look such a sharade was the Duke of Edinburgh, who's in his late 80's, wearing full military dress uniform and medals, looking for all the world like a the dictator of some fictitious south American state in a 1970s James Bond film! All that was missing was a pair of dark glasses!

Edited May 31, 2010 by blankster

[_w_]

Porca is right.

The ConDems will erradicate the deficit by slashing spending.

That is the nice bedtime story we are being told.

But look at the numbers.

They tell the tale of an expansionary government, not the scary tale of austerity we are told. The UK strategy is to cut the Debt/GDP ratio via growth (cough inflation cough). And they are only making matters worse.

[_w_]

Most states run like this. Even back in WWII the US debt to GDP ratio was something like 50%. Soon it will cross over the 100% threshold. So what? No one gives a shit any more.

Post war austerity is not something we re prepared for.

There is a moment of reckoning that we can engineer ourselves or that can be forced on us. Both will be unpleasant but the latter will be more painful.

[sossij]

Who is the person (or persons) that all this money is owed too? Who has so much money that they can lend to Nations like this?

The future.