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okaycuckoo

Uk Draws Wrong Lessons From Canada

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Not an authoritative article, but food for thought. Comments are interesting.

For once, Canada is making the news for the wrong reasons: The government of the United Kingdom has braced the country for cuts in government spending of up to 20 per cent as the new Conservative-Liberal Democrat coalition lays the groundwork for an austerity program to last the whole parliament. Their inspiration? According to the Telegraph, the administration of Prime Minister David Cameron hopes to draw lessons from the experiences of the Canadian Government of the 1990s. Before too much damage is done, we suggest they'd better re-read the history books a bit more closely.

I go with the idea of big cuts + weak £ to allow gradual recovery.

http://www.nakedcapi...a.html#comments

Edited by okaycuckoo

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Not an authoritative article, but food for thought. Comments are interesting.

For once, Canada is making the news for the wrong reasons: The government of the United Kingdom has braced the country for cuts in government spending of up to 20 per cent as the new Conservative-Liberal Democrat coalition lays the groundwork for an austerity program to last the whole parliament. Their inspiration? According to the Telegraph, the administration of Prime Minister David Cameron hopes to draw lessons from the experiences of the Canadian Government of the 1990s. Before too much damage is done, we suggest they'd better re-read the history books a bit more closely.

I go with the idea of big cuts + weak £ to allow gradual recovery.

http://www.nakedcapi...a.html#comments

Being fckwits they havent seemed to have noticed that Canada implemented it going into one of the biggest global growth periods in History (the tech boom), I imagine the taxes generated from Nortel alone was enough to offset most of the shortfall. It will be totally unexpected though when its a disaster as we are going into the biggest global cutbacks/austerity for decades.

I really despair the stupidity of these people, not to even recognise something so fundamentally basic

Edited by Tamara De Lempicka

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That is the fundamental objection to the cuts policy. No-one can justify waste and the issue there is where you define marginal benefit.

But to justify cuts which lose jobs there has to be a counterbalancing strategy for growth.

I have yet to hear of one for the UK and unlike Canada, whose neighbour and main training partner was growing like Topsy, we can only see Europe contracting.

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Guest DissipatedYouthIsValuable

Being fckwits they havent seemed to have noticed that Canada implemented it going into one of the biggest global growth periods in History (the tech boom), I imagine the taxes generated from Nortel alone was enough to offset most of the shortfall. It will be totally unexpected though when its a disaster as we are going into the biggest global cutbacks/austerity for decades.

I really despair the stupidity of these people, not to even recognise something so fundamentally basic

"Let the peasantry decide amongst themselves who to cull."

"Should keep them off our back for a while, eh boss?"

"Precisely."

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That is the fundamental objection to the cuts policy. No-one can justify waste and the issue there is where you define marginal benefit.

But to justify cuts which lose jobs there has to be a counterbalancing strategy for growth.

I have yet to hear of one for the UK and unlike Canada, whose neighbour and main training partner was growing like Topsy, we can only see Europe contracting.

There is no counter balance for growth, you had the growth in the 90s and when it ended decided to carry and mask the lack of growth by getting up to the eyeballs in debt with fraudulent banking the politicians were happy to accept fraudulent taxes from, which could never actually of existed in a sound economy.

The core reason for cuts is because they at least have some sort of choice rather than the IMF implementing them. If you wanted to avoid this depression you need to go back in a time machine a couple of decades and save some money, as you havent you are fcked whether you cut or dont cut it is immaterial to the end game of running out of taxes generated.

My only objection to the article is to not realise such a basic difference when extrapolating the same result as the Canadians. It is fckwittery of immense proportions which is par for the course for UK politicians

Edited by Tamara De Lempicka

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I suspect a lot of the economic plans our coalition may have are predicated on a boom in eco-loonery requiring the production of windmills galore, low power stuff and lagging lofts at breakneck speed. Hit the growth at the right time and we could be exporting green tech to the nations that don't have the capability. But it is betting the economy on a global regime of punitive and arbitrary emissions targets and trading schemes that would funnel other nations' tax revenues into our booming green industry.

The other thing to consider is that the comments about aping Canada are likely political rather than practical - making the case that it can be done as opposed to setting out how it will be done. The detail will come later.

Regarding the naked capitalism piece the shift from public to private debt is a sign that Canada didn't really do austerity as a nation but the Government did. People were made to pay for more of their own lifestyles rather than socialising the cost until it all goes pop. In the UK we don't have that luxury. Return responsibility for the cost of lifestyle choices onto private individuals and many will have to tighten their belts because they are already up to their eyeballs in debt. Going by this piece, in Canada the belt tightening happened in the public sector but not in the private sector. Here it has to happen in both.

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I really despair the stupidity of these people, not to even recognise something so fundamentally basic

+1, we should keep spending like there's no tomorrow. Someone else will pick up the tab further down the line.

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There is no counter balance for growth, you had the growth in the 90s and when it ended decided to carry and mask the lack of growth by getting up to the eyeballs in debt with fraudulent banking the politicians were happy to accept fraudulent taxes from, which could never actually of existed in a sound economy.

The core reason for cuts is because they at least have some sort of choice rather than the IMF implementing them. If you wanted to avoid this depression you need to go back in a time machine a couple of decades and save some money, as you havent you are fcked whether you cut or dont cut it is immaterial to the end game of running out of taxes generated.

My only objection to the article is to not realise such a basic difference when extrapolating the same result as the Canadians. It is fckwittery of immense proportions which is par for the course for UK politicians

I read your first post and thought, what does he want us to do, not cut?

But the above post sums it up nicely, shouldn't have got ourselves into this position in the first place.

There has been a few posters on here saying cutting now is the wrong thing to do. I can't see it myself. If we didn't, in a years time, we'll have had insipid growth, end up with a bigger debt pile and cutting then will cause a contraction in the economy.

If labour had won the election, held off a year, and then started making their cuts, that would have caused the economy to contract.

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I suspect a lot of the economic plans our coalition may have are predicated on a boom in eco-loonery requiring the production of windmills galore, low power stuff and lagging lofts at breakneck speed. Hit the growth at the right time and we could be exporting green tech to the nations that don't have the capability. But it is betting the economy on a global regime of punitive and arbitrary emissions targets and trading schemes that would funnel other nations' tax revenues into our booming green industry.

Countries like Germany who are light years ahead of the UK on this? :lol:

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Regarding the naked capitalism piece the shift from public to private debt is a sign that Canada didn't really do austerity as a nation but the Government did.

Bingo, you win.

A public sector in surplus ALWAYS results in an increasingly indebted private sector. Its a little known fact that the labout government actually ran a surplus for a couple of years as did clintons government. THis is a major factor (not the only factor) in UK and US private sectors being partcularly indebted.

The canadian austerity was actually a ponzi kind of austerity, and one reason why they have HPI worse than ours. Likewise the aussies.

I do hope the canadian economy implodes (which it will do sonner or later), just when the star chamber is getting up a head of steam, which will serve to expose the schoolboy economics of boy george, which Tamara has succiectly highlighted above.

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A public sector in surplus ALWAYS results in an increasingly indebted private sector

Does that also mean that an indebted public sector ALWAYS results in a private sector in surplus?

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Does that also mean that an indebted public sector ALWAYS results in a private sector in surplus?

yes. that is an accounting identity.

it should be obvious when you think about it.

the only curve ball is when the government debt is majority foreign owned and the domestic private sector is more indebted to foreigners than itself.

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yes. that is an accounting identity.

it should be obvious when you think about it.

the only curve ball is when the government debt is majority foreign owned and the domestic private sector is more indebted to foreigners than itself.

Then your original claim isn't as watertight as you first made out. Does a government surplus ALWAYS mean an indebted private sector? No, not according to your latest theory. A surplus may be an indication of the deficit run up by another gov't; nothing to do the private sector.

Although I do agree with the accounting identity bit, the system always balances.

Edited by Chef

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Although I do agree with the accounting identity bit, the system always balances.

that is the point.

people, particularly right wingers and little islanders, like to ignore the reality by focussing on this nation or that nation.

globally, the public debt situation means the private sector is in surplus like never before.

and that fundamentally, over and above flow imblances between individual nations is the root of the problem. this situation is already reversing, with many private sector entities having the public sector as their major creditor and shareholder.

that is what credit easing is.

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that is the point.

people, particularly right wingers and little islanders, like to ignore the reality by focussing on this nation or that nation.

globally, the public debt situation means the private sector is in surplus like never before.

and that fundamentally, over and above flow imblances between individual nations is the root of the problem. this situation is already reversing, with many private sector entities having the public sector as their major creditor and shareholder.

that is what credit easing is.

You jump to conclusions that I would personally avoid, because I'm a bit thick.

All I would say is that huge debt on one side of the balance sheet indicates a huge surpluse on another. Where the surpluses reside is matter mostly for ideologists (although there's clearly an objectively correct answer),but what should be done about them though is entirely political.

If an individual wants to get him/herself into massive amounts of debt then that's a personal decision imo, it's different when the indebtedness becomes systematically unavoidable however.

Edited by Chef

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As much as I want to believe this article, I'm struggling a bit with it.

Because In the UK we seem to have increased out private debt even more than Canada whilst still increasing our public debt.

So it doesn't seem as simple as one sort of debt just replacing the other?

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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