Why Do We Need Cuts Anyway?

[Sourman]

I really just don't get something. Why is everyone harping on and on about cutting this and cutting that, making a massive fuss about £6 Billion in savings? The mire we're in now wasn't caused by people claiming housing benefit or childrens funds or wanting pay rises. No the sh*t we're in now was caused by people with million pound pay packets and companies with multi billion pound turnovers, so why can't we just take the whole lot back from them?

If I stole all your lifes savings from you, and then said I'd lost it on a 3 legged horse at Epsom, you can bet the outcome would be very different wouldn't it? Why aren't we chasing every bank and financial institution who lost money or was helped by the BOE to repay that money? What the **** is going on in this country?

Barclay's Bank alone made £11Billion in profits this year. If they took an active part in the events that led up to the current state of affairs and If they benefitted from the past 12 years of lax deregulation, why can't we just grab £6 billion from them?

Surely the government cannot let the banks walk away from all this unrepremanded and without paying back something?

Am I missing some really important information that would explain this complete and utter madness?

[57percent]

I'd split this into 3 parts:

1) Profit the banks made pre 2007

There should have been an attempt to claw some of the bonuses back, but very difficult to do.

2) Profit the banks made post 2007

Should never have happened. As part of the bailout there should have been haircuts on bondholders

and counterparties and there should have been insurance/tax to make sure profits were not distributed

from the bailouts/QE. Totally irresponsible.

3) Government spending.

The government was taking massive tax income from 1), spending this and borrowing more. Could never

continue, so the cuts are needed anyway even without the bailout

[hilltop]

You are not subscribing to received wisdom, you have seen that the Emporor is naked.

These cuts are all about political power, the economic case is not proven.

Much of it is to do with hankering after Thatcher's household budget analogy. We could understand that.

Some good housekeeping is required, but shutting down the economy is not the right strategy.

And again the question must be: Why were those 6bn of cuts real cuts rather than trimming inefficiencies?

We are being lied to.

[Minos]

I really just don't get something. Why is everyone harping on and on about cutting this and cutting that, making a massive fuss about £6 Billion in savings? The mire we're in now wasn't caused by people claiming housing benefit or childrens funds or wanting pay rises. No the sh*t we're in now was caused by people with million pound pay packets and companies with multi billion pound turnovers, so why can't we just take the whole lot back from them?

If I stole all your lifes savings from you, and then said I'd lost it on a 3 legged horse at Epsom, you can bet the outcome would be very different wouldn't it? Why aren't we chasing every bank and financial institution who lost money or was helped by the BOE to repay that money? What the **** is going on in this country?

Barclay's Bank alone made £11Billion in profits this year. If they took an active part in the events that led up to the current state of affairs and If they benefitted from the past 12 years of lax deregulation, why can't we just grab £6 billion from them?

Surely the government cannot let the banks walk away from all this unrepremanded and without paying back something?

Am I missing some really important information that would explain this complete and utter madness?

I think the reasons why have been done to death on this site. Obviously you refuse to see.

[huw]

Am I missing some really important information that would explain this complete and utter madness?

Yes: if the bankers repaid all the wealth they've been given tomorrow, and promised not to do it again, we'd still be left living far beyond our means -- not least because the means that we thought we had, were actually based on bankers' lies; that portion of UK GDP is never going to return in any honest sense. And even when those lies were being booked as GDP, we were still over-spending.

New Labour's structural deficit was used to fund a range of perverse incentives that are economically, socially and democratically corrosive. It must be dealt with.

[Sourman]

I think the reasons why have been done to death on this site. Obviously you refuse to see.

I have seen more threads on the current level of HB and benefits in general than I have seen on topics discussing how and why we should be looking elsewhere to furnish the national coffers. I don;t live here though so maybe I have missed them all.

[Sourman]

I'd split this into 3 parts:

1) Profit the banks made pre 2007

There should have been an attempt to claw some of the bonuses back, but very difficult to do.

2) Profit the banks made post 2007

Should never have happened. As part of the bailout there should have been haircuts on bondholders

and counterparties and there should have been insurance/tax to make sure profits were not distributed

from the bailouts/QE. Totally irresponsible.

3) Government spending.

The government was taking massive tax income from 1), spending this and borrowing more. Could never

continue, so the cuts are needed anyway even without the bailout

Without the bailout of the banks where would we be now? Can anyone provide figures that cancel out the massive amounts used to ease the banks problems?

[OnlyMe]

The bankers are not responsible for any of this mess - they told us so. None of the losses, none of the handouts, none of the gamblng they did with other people's money, none of the lies.

As such in any other industry this level of responsibility would furnish you with a min wage job, except being untrustworthy you would be effectively unemployable, that is why they have to stay in banking.

Edited June 8, 2010 by OnlyMe

[swissy_fit]

I'd split this into 3 parts:

1) Profit the banks made pre 2007

There should have been an attempt to claw some of the bonuses back, but very difficult to do.

2) Profit the banks made post 2007

Should never have happened. As part of the bailout there should have been haircuts on bondholders

and counterparties and there should have been insurance/tax to make sure profits were not distributed

from the bailouts/QE. Totally irresponsible.

3) Government spending.

The government was taking massive tax income from 1), spending this and borrowing more. Could never

continue, so the cuts are needed anyway even without the bailout

Good post.

The OP is right in one sense though, the banksters have got away with the biggest robbery in history, aided by their politician friends.

They SHOULD be made to pay as well as the rest of us..

[dancer7]

It is gratifying to see that someone has started a thread which questions the received 'wisdom' of this forum, namely how wonderful it will be when many thousands of poorly paid public sector workers lose their livelihoods. Be careful what you wish for you slashers and burners!

This is a golden opportunity for David Cameron and his Tories to farm out loads of public sector work to his City friends. What we will have as a result are much reduced services provided by low paid workers. We are all in this together...but not David Cameron and friends. Wake up everyone!

[Georgia O'Keeffe]

Good post.

The OP is right in one sense though, the banksters have got away with the biggest robbery in history, aided by their politician friends.

They SHOULD be made to pay as well as the rest of us..

they havent got away with it yet, the game is still afoot, we wont know what the result is until the real poverty is hitting and how the govt react to massive social unrest

[Liquid Goldfish]

Public spending has definitely got a bit out of hand and needs to be reined in, but the case for drastic cuts is being overstated.

I remember in the mid 90s there was a deficit almost as big as the the current one along with dire predictions about the future of the public finances. Then, within a couple of years everything was rosy again.

Also, the attack on benefits has got a bit hysterical e.g. the numbers on incapacity benefit are no higher than they were in the mid 90s and unemployment is about the same.

[gimble]

I really just don't get something. Why is everyone harping on and on about cutting this and cutting that, making a massive fuss about £6 Billion in savings? The mire we're in now wasn't caused by people claiming housing benefit or childrens funds or wanting pay rises. No the sh*t we're in now was caused by people with million pound pay packets and companies with multi billion pound turnovers, so why can't we just take the whole lot back from them?

If I stole all your lifes savings from you, and then said I'd lost it on a 3 legged horse at Epsom, you can bet the outcome would be very different wouldn't it? Why aren't we chasing every bank and financial institution who lost money or was helped by the BOE to repay that money? What the **** is going on in this country?

Barclay's Bank alone made £11Billion in profits this year. If they took an active part in the events that led up to the current state of affairs and If they benefitted from the past 12 years of lax deregulation, why can't we just grab £6 billion from them?

Surely the government cannot let the banks walk away from all this unrepremanded and without paying back something?

Am I missing some really important information that would explain this complete and utter madness?

Yes you're missing something. You cannot nationalize a profitable company like Barclays and seize its profits without trashing the credibility of the UK as a place to invest in. If the government went around seizing the assets of rich people and the profits of big financial companies, as much as that would feel like justice being done to us normal folk, it would destroy our economy as investors' money would flee the country practically overnight.

[Guest BetterOffOnBenefits]

I'd like to know that whenever 'pain' is being dished out, it's on the ordinary workers.

The rich escape and the "poor" (benefits faternity) do as well.

man in the middle gets his knackers crushed

[Guest BetterOffOnBenefits]

Public spending has definitely got a bit out of hand and needs to be reined in, but the case for drastic cuts is being overstated.

I remember in the mid 90s there was a deficit almost as big as the the current one along with dire predictions about the future of the public finances. Then, within a couple of years everything was rosy again.

Also, the attack on benefits has got a bit hysterical e.g. the numbers on incapacity benefit are no higher than they were in the mid 90s and unemployment is about the same.

Really? Housing benefit, alone, is nudging £20Bn

The welfar state is the biggest slice of the pie......but let's cut everything else instead

Why should I have a 5% pay cut when I'm ALREADY priced out of the f***ing housing market!!!

Edited June 8, 2010 by BetterOffOnBenefits

[swissy_fit]

they havent got away with it yet, the game is still afoot, we wont know what the result is until the real poverty is hitting and how the govt react to massive social unrest

How have they not got away with it yet?

The banksters are already installed in their mansions, the worst that might happen to them is needing to pay a few security guards.

[Liquid Goldfish]

Really? Housing benefit, alone, is nudging £20Bn

The welfar state is the biggest slice of the pie......but let's cut everything else instead

Housing benefit was also huge back in the mid 90s and we dealt with the deficit then fine.

The benefits that have really increased under Labour are the "middle class benefits" such as Tax Credits

[Georgia O'Keeffe]

How have they not got away with it yet?

The banksters are already installed in their mansions, the worst that might happen to them is needing to pay a few security guards.

its quite easy for govts to confiscate retrospectively on a whim if they want, Russia were excellent at this

[SEW247]

We need cuts because the state sector has grown far too large and now relies too heavily on the private sector for its existence. The state should support private enterprise and not the other way round.

There are too many non-jobs in the state sector which increase bureaucracy and don’t add value (Refuse Consultants, Street Football Coordinator, Equality and Diversity Manager etc. some on ridiculous salaries)

Sorry, but the public sector have it far too easy (gold plated index-linked pensions, limited job accountability, early retirement) and need to share the pain.

Public sector workers need to take a good look at the private sector and swallow the medicine. Not everyone in the private sector works in banking and is responsible for this mess!

[swissy_fit]

its quite easy for govts to confiscate retrospectively on a whim if they want, Russia were excellent at this

Ah OK.

This is fantasy (a pleasant fantasy, admittedly).

The UK is not the medieval kingdom of Putin.

[Guest BetterOffOnBenefits]

Housing benefit was also huge back in the mid 90s and we dealt with the deficit then fine.

The benefits that have really increased under Labour are the "middle class benefits" such as Tax Credits

yes that as well

we also weren't housing somalian tribes in London apartments back then

[Riedquat]

The state should support private enterprise and not the other way round.

Why?

[Liquid Goldfish]

yes that as well

we also weren't housing somalian tribes in London apartments back then

I've been trying to look at some DWP stats, but am finding it quite difficult so far

one thing I found that has shocked me is that DLA claimants have gone from 2.5 million to 3.2 million in the last 6 years

[Liquid Goldfish]

delete; wrong info

Edited June 8, 2010 by newdman

[Hector]

the sh*t we're in now was caused by people with million pound pay packets and companies with multi billion pound turnovers, so why can't we just take the whole lot back from them?

No it wasn't. It was caused by borrowers (individuals, companies, and the government) choosing to over-extend themselves. Banks facilitated this, and profited from this, but they did not cause it. When the problems of excess debt became obvious, the government chose to borrow even more money to smooth things over for a while. This "worked" until it became obvious that even the government had excess debt. The solution to excess debt is repayment. Tax and/or cut.