'years Of Pain Ahead' Says Dave

[timebandit]

The prime minister said there would be no “trampoline recovery” of the economy. He warned there was a “serious problem” with forecasts inherited from Labour of robust 3% growth next year.

Bear trampoline recovery

[quinnbear]

I'm actually quite glad that Cameron and Clegg are really talking up these cuts, because it will hopefully shell shock the nation into being a bit more sensible after the decade of lavish spending.

It still feels like people don't believe the cuts are coming, or worse, that the cuts will affect other people and not them. A bit like when house prices fall (like they used do in the distant past) people think their house will be different because it is their house, and they live in it, and they are different.

Cuts are what happen to other people (well I guess that is more true if you are a wealthy Conservative type!)

I don't think people are reflecting on their own lavish spending. There is too much news of bankers' bonuses, MP's expenses, massive bailouts and so on. By comparison, the "man/woman in the street" hasn't been that bad. It's the micro view than ignores the macro consequences of millions of people borrowing too much, buying unnecessary cr*p and trying to live a footballer's lifestyle on an office worker's salary.

QB

[Pytyr]

It still feels like people don't believe the cuts are coming, or worse, that the cuts will affect other people and not them. A bit like when house prices fall (like they used do in the distant past) people think their house will be different because it is their house, and they live in it, and they are different.

Cuts are what happen to other people (well I guess that is more true if you are a wealthy Conservative type!)

I don't think people are reflecting on their own lavish spending. There is too much news of bankers' bonuses, MP's expenses, massive bailouts and so on. By comparison, the "man/woman in the street" hasn't been that bad. It's the micro view than ignores the macro consequences of millions of people borrowing too much, buying unnecessary cr*p and trying to live a footballer's lifestyle on an office worker's salary.

QB

Agreed. People still don't get that the "toxic bank debt" everyone bangs on about is mainly mortgage debt. Stupid people paying stupid prices for houses with borrowed money. The banks know the houses aren't worth the amount owed and that's the problem.

[Harry Sacks]

Thatcher's government managed to budget surplus once, in 1989.

What would happen if the national debt was frozen and the budget deficit eliminated for any significant period - anyone?

[piece of paper]

No!! Just take those who got the UK into such huge amounts of debt on the "difficult journey".

Agree entirely.

p-o-p

[stormymonday_2011]

Agreed. People still don't get that the "toxic bank debt" everyone bangs on about is mainly mortgage debt. Stupid people paying stupid prices for houses with borrowed money. The banks know the houses aren't worth the amount owed and that's the problem.

It is the private debt mountain that is the killer and no amount of public sector austerity cuts and tax rises is going to make it go way.

In fact it is likely to make it grow bigger.

Those sitting on piles of cash, hoping to profit from any crash in the housing market had better hope they are going to be able to get their hands on their money when the walls cave in.

[hilltop]

It was the banks and the finance industry which lost the plot and caused the problem. The debt would be manageable but for the bail-outs.

The blame and the consequences should not be directed at ordinary people.

Camoron and Clegg have ripped up their Election promises. Efficiency savings were the answer then, now it is incomes and benefits which are to be cut, targetted at the poorest.

This is the same old Tory Party, luxuriating in power to the advantage of their clique and the disadvantage of the greater population.

On a happier note, we have to ask how long many LibDems will support these policies?

[stormymonday_2011]

Thatcher's government managed to budget surplus once, in 1989.

What would happen if the national debt was frozen and the budget deficit eliminated for any significant period - anyone?

Ask Bill Clinton.

He achieved it in 2000 which is more than any recent Republican President has done.

The only recent British government that came close was Thatchers in 1989 ironically just after Nigel Lawson lmplemented the reforms to tax Capital Gains like income.

Somehow I expect the current government is not going to get anywhere near these achievements particularly as the can not even manage to hop over the tiny mole hill of CGT rises.

[Bruce Banner]

It was the banks and the finance industry which lost the plot and caused the problem. The debt would be manageable but for the bail-outs.

The blame and the consequences should not be directed at ordinary people.

Camoron and Clegg have ripped up their Election promises. Efficiency savings were the answer then, now it is incomes and benefits which are to be cut, targetted at the poorest.

This is the same old Tory Party, luxuriating in power to the advantage of their clique and the disadvantage of the greater population.

On a happier note, we have to ask how long many LibDems will support these policies?

The election promises were made in individual party manifestos.

What we have now is a coalition government, so the policies will be a compromise and as such may not comply, to the letter, with any of the earlier promises.

On a happier note, Labour promises will not be honoured as they, thankfully, lost the election.

.

Edited June 6, 2010 by Bruce Banner

[hilltop]

The election promises were made in individual party manifestos.

What we have now is a coalition government, so the policies will be a compromise and as such may not comply, to the letter, with any of the earlier promises.

On a happier note, Labour promises will not be honoured as they, thankfully, lost the election.

.

This is exactly why the Coalition is dishonest and its constitutional validity is compromised.

They are pursuing policies for which they have no mandate.

Particularly, Camoron is having to bow to the Redwoods of his Party to stay in power.

The Nasty Party is in control, for the moment.

[slacker]

It was the banks and the finance industry which lost the plot and caused the problem. The debt would be manageable but for the bail-outs.

Utter rubbish. This is the propaganda pushed by Brownites.

They are separate issues.

The debt and deficit are the result of borrowing money over the last 13 years to build new hospitals, hire millions of new civil servants, fight two wars and reward a vast number of people for not working.

The banking issue and subsequent bailouts have very little to do with it.

Brown/Balls have done a fantastic job of framing the problem as a global recession caused by greedy bankers and businessmen. If only they were as skilled at economics as they were at spinning.

[anon]

It was the Central banks and the monetary system which lost the plot and caused the problem. The debt would be manageable but for government spending commitments.

The blame should not be directed at ordinary people.

Camoron and Clegg have ripped up their Election promises. Efficiency savings were never the answer then. now it is incomes and benefits which are to be cut, targetted at the those whove benefitted most from the unsustainable debt binge.

where is The is the old Tory Party? luxuriating in power to the advantage of being in government which is always at the disadvantage of the greater population.

On a happier note, we have to ask how long the bond market will support these policies?

here you go, injected a bit of reality into your post.

[hilltop]

Lehman Brothers, toxic debt and irresponsible lending have nothing to do with our problems?

There should be a crime of City Responsibility Denial.

[Olebrum]

The banking issue and subsequent bailouts have very little to do with it.

Yeah that 850bn plus of bailout money has very little to do with it.

[anon]

Lehman Brothers, toxic debt and irresponsible lending have nothing to do with our problems?

There should be a crime of City Responsibility Denial.

ok, ask your self this. why did banks lend irresponsibly and take on silly amounts of leverage? any one who looked at it for even a few minutes could see it was all going to end in tears, bankers are not stupid people.

[hilltop]

ok, ask your self this. why did banks lend irresponsibly and take on silly amounts of leverage? any one who looked at it for even a few minutes could see it was all going to end in tears, bankers are not stupid people.

They were acting out of short term self-interest. Bonuses. Certainly not altruism or social responsibility.

But the bankers were the Golden Goose, too big to confront. Allowing them 'light touch' supervision was certainly a failure of the politicians.

Cameron and Clegg of course, stand proud for their calls for greater control over the sector three years ago - NOT.

[anon]

They were acting out of short term self-interest. Bonuses. Certainly not altruism or social responsibility.

of course they were, their human like the rest of us. but greed should always be tempered with fear. why werent they scared of failure, or bankrupcy?

[Timak]

My solution - all private household debt to be exchangeable for a national"debt obligations" scheme

It would work pretty much like debt consolidation loans do.

Anyone with any debt could apply and get it exchanged, the taxpayers would pay off the loans in full (no penalty clauses would be honoured) and in exchange the person would pay back the taxpayers at a rate far better than they were paying and far better than the taxpayers could get from other sources.

The rates would be set at something like the rate of inflation + the interest rate + 1%

Paying back these loans would be compulsory and they would be docked automatically from pay/benefits until fully paid off. You could not get rid of these loans through bankrptcy and they would be the preferred creditors in the event of death etc

Good for the indebted, good for the taxpayers, bad for those lenders practising ursuary.

Feel free to pick holes!

[tomwatkins]

Ask Bill Clinton.

He achieved it in 2000 which is more than any recent Republican President has done.

The only recent British government that came close was Thatchers in 1989 ironically just after Nigel Lawson lmplemented the reforms to tax Capital Gains like income.

Somehow I expect the current government is not going to get anywhere near these achievements particularly as the can not even manage to hop over the tiny mole hill of CGT rises.

Pure fluke by Slick Willy. 2000 had the Dow/Nasdaq at record levels, people paying huge amounts in CGT and companies (in the IT section through IPO's etc) joining in. You couldn't go wrong until it went wrong.

[tomwatkins]

My solution - all private household debt to be exchangeable for a national"debt obligations" scheme

It would work pretty much like debt consolidation loans do.

Anyone with any debt could apply and get it exchanged, the taxpayers would pay off the loans in full (no penalty clauses would be honoured) and in exchange the person would pay back the taxpayers at a rate far better than they were paying and far better than the taxpayers could get from other sources.

The rates would be set at something like the rate of inflation + the interest rate + 1%

Paying back these loans would be compulsory and they would be docked automatically from pay/benefits until fully paid off. You could not get rid of these loans through bankrptcy and they would be the preferred creditors in the event of death etc

Good for the indebted, good for the taxpayers, bad for those lenders practising ursuary.

Feel free to pick holes!

"W" where are you mate? Post the 1791 France paper again so that you can answer this!!

[Timak]

of course they were, their human like the rest of us. but greed should always be tempered with fear. why werent they scared of failure, or bankrupcy?

I object to this "Well we'd all do it in their position" stuff.

I don't consider myself motivated by pure greed or naked self interest and couldn't and wouldn't knowling cause pain and suffering to someone for my own financial benefit.

[LJAR]

I object to this "Well we'd all do it in their position" stuff.

I don't consider myself motivated by pure greed or naked self interest and couldn't and wouldn't knowing cause pain and suffering to someone for my own financial benefit.

No, but they were doing their job. Their job involved lending as much money to people as they could. They could get it for next to nothing and lend it out for more.

This required them to ignore the fact that people would not be able to pay back the loans, and those getting the loans had to lie on their applications. Which they did very happily. Anyone who took out a "sub prime" loan is also to blame for the mess we are in.

They also knew that they could ask the governments for taxes to bail them out when it went wrong. They are not especially evil, or at least no more so than ordinary people. I don't think they all sat there rubbing their hands in glee at all the suckers who were going to fall. Some of them did, but the idea that there was a huge conspiracy is ********.

Edit - we should have let them go bankrupt. There would still be banks around.

Edited June 6, 2010 by LJAR

[anon]

I object to this "Well we'd all do it in their position" stuff.

I don't consider myself motivated by pure greed or naked self interest and couldn't and wouldn't knowling cause pain and suffering to someone for my own financial benefit.

i dont think anyone does. id be interested to find out how much money was given to charities by bankers over the last few decades, anyone know? but my point is that greed is perfectly natural as long as its balanced with fear. unfortunatly over the last 90 or so years governments and central banks have been systematically removing any fears of failure that should have counterbalanced the greed.

[anon]

Edit - we should have let them go bankrupt. There would still be banks around.

absolutely.

[Alan B'Stard MP]

i dont think anyone does. id be interested to find out how much money was given to charities by bankers over the last few decades, anyone know? but my point is that greed is perfectly natural as long as its balanced with fear. unfortunatly over the last 90 or so years governments and central banks have been systematically removing any fears of failure that should have counterbalanced the greed.

Exactly - central banks or taxpayers should not be the lender of last resort. Banks should self-insure by actually having the larger proportion of money that is actually deposited with them as cash or bonds. Debt-based money only works if institutions can fail. None of these banks should be systemically important either - and if they're properly self-insured they won't be.

Of course that horse has already bolted.

Edited June 6, 2010 by Alan B'Stard MP