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CarbonBasedLifeform

83 Billion Cuts Over 4 Years To Fix 150Billion Year Defecit

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Basically as per thread title.

Govt defecit is currently arrount £150 billion a year or around £12.5 Billion a MONTH.

The proposed solution is to make cuts of £83 Billion over 4 years or around £21 billion per year.

So in four years we will have approx £520 Billion more debt than we have now, against around £600 Billion more debt than we have now without the spending review.

How does this solve anything?

How does this fool investors/buyers of govt debt?

What was the point?

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IIRC our debt is growing 20% faster than we are able to repay it. The government are hoping we are too big to fail. That, in a nutshell, is about the state of things.

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IIRC our debt is growing 20% faster than we are able to repay it. The government are hoping we are too big to fail. That, in a nutshell, is about the state of things.

It's like adding a new IO mortgage every month to your pile of debt.. whilst scrabbling round for change to pay the milkman...

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They don't seem to understand that cutting the deficit is not enough -- it needs to be eliminated.

Running a £50 billion deficit is still not on. Also, they are having a laugh with the increases in spending. The quicker this house of cards collapses the better.

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They don't seem to understand that cutting the deficit is not enough -- it needs to be eliminated.

Running a £50 billion deficit is still not on. Also, they are having a laugh with the increases in spending. The quicker this house of cards collapses the better.

Come on Errol, you must be secretly loving this? When the house of cards finally does collapse, and it will thanks to this cop out of a spending review, the likes of me and you will be laughing our socks off.

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Come on Errol, you must be secretly loving this? When the house of cards finally does collapse, and it will thanks to this cop out of a spending review, the likes of me and you will be laughing our socks off.

I keep reading you putting this Gold gloating stuff on, but how much do you have? If it's less than £500k frankly it's neither here nor there as far as putting you at a big advantage over others goes. I'm all for you making a point on gold as an investment, and well done, but to read this stuff you'd think you were Warren Buffett.

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The 88bn is to try and remove structural defecit (i.e. the deficit that exists regardless of recession). The other billions will be recouped with Economic growth (they hope).

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The 88bn is to try and remove structural defecit (i.e. the deficit that exists regardless of recession). The other billions will be recouped with Economic growth (they hope).

Thanks for saving me the time.

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Basically as per thread title.

Govt defecit is currently arrount £150 billion a year or around £12.5 Billion a MONTH.

The proposed solution is to make cuts of £83 Billion over 4 years or around £21 billion per year.

So in four years we will have approx £520 Billion more debt than we have now, against around £600 Billion more debt than we have now without the spending review.

How does this solve anything?

How does this fool investors/buyers of govt debt?

What was the point?

£83bn is what they think is the structural deficit. The rest of the deficit will sort itself out when the economy grows; less paid out in benefits and more tax receipts.

Cushty!

post-19783-024187700 1287600359_thumb.jpg

post-19783-024187700 1287600359_thumb.jpg

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Basically as per thread title.

Govt defecit is currently arrount £150 billion a year or around £12.5 Billion a MONTH.

The proposed solution is to make cuts of £83 Billion over 4 years or around £21 billion per year.

So in four years we will have approx £520 Billion more debt than we have now, against around £600 Billion more debt than we have now without the spending review.

How does this solve anything?

How does this fool investors/buyers of govt debt?

What was the point?

This was the Public Spending Review

You get the tax increases in next March's Budget.

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The 88bn is to try and remove structural defecit (i.e. the deficit that exists regardless of recession). The other billions will be recouped with Economic growth (they hope).

That's the important bit.

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The point of it is to cut the deficit enough so when we have our magic economic growth period in 6-24 months time, we will be solvent again.

Anyone spot a flaw in this plan?

The media has been reporting we are going to cut the deficit as though it is cutting debt, when it is actually rate of change of debt.

Actually what the politicians are trying to reduce is rate of change of the deficit, which is actually rate of change of rate of change of debt.

So providing rate of change of rate of change of debt stays constant we should have balanced books by 2018.

Ed Milliband described the review as an 'irresponsible gamble with our economy'. I just think it is a good line and very true, but not for the same reasons as him. The seemingly obvious thing to me ( and what a person would do if they were in this mess ) would be to cut the deficit in one year, for the government this probably means cutting 200 billion of spending ( because tax revenue will shrink ). So either macroeconomics is incredibly strange or nobody in government has a basic grasp of numeracy.

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The 88bn is to try and remove structural defecit (i.e. the deficit that exists regardless of recession). The other billions will be recouped with Economic growth (they hope).

Ok thanks for that , i didn,t know that.

However a defecit is a defecit i hardly think that labeling one part as structural is really going to help do you?

I mean if i,m £300 sort of paying my outgoings each month i hardly think my bank manager will give a toss if i call it "lost overtime defecit" or "cut in hours defecit" that i hope will be payed by future overtime etc.

Its just a label nothing more.The reality is that the debt is growing even after the spending review, and where is the growth in tax reciepts going to come from?

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I keep reading you putting this Gold gloating stuff on, but how much do you have? If it's less than £500k frankly it's neither here nor there as far as putting you at a big advantage over others goes. I'm all for you making a point on gold as an investment, and well done, but to read this stuff you'd think you were Warren Buffett.

Look, I don't mean to sound like I'm gloating. I see the current situation as very serious and want to alert other HPCers to one very good way to at least hedge themselves from losses, if not profit handsomely.

Maybe you're right, I have considerably less than 500k, by a large factor, due to the limits of my own finances. But if we see 5000 dollar gold (and the corresponding increase in sterling value) I'll still be sitting on a tidy pile of booty, rather than having been kicked in the nuts by devaluing sterling and inflation.

And if the lid gets blown off the paper gold market during this crisis, I really could clean up even with the few dozen ounces I own. Please bear in mind the amount of gold per citizen in the UK gold reserves equates to 0.16 ounces per person. The few dozen ounces I own would make me a relatively rich man, if we get outright currency collapse and are forced back onto a defacto gold standard.

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The 88bn is to try and remove structural defecit (i.e. the deficit that exists regardless of recession). The other billions will be recouped with Economic growth inflation (they hope know).

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Osborne's numbers:

In the next 4 years Government's total current spending will be:

2011-12: £651 bn ........ Projected tax receipts: £551.0bn as % of GDP - 35.8

2012-13: £665 bn ........ Projected tax receipts: £583.0bn as % of GDP - 36.0

2013-14: £679 bn ........ Projected tax receipts: £621.0bn as % of GDP - 36.3

2014-15: £693 bn ........ Projected tax receipts: £657bn as % of GDP - 36.4

2015-16 Tax receipts £691bn as % of GDP - 36.3

Tax receipts since 1963 for UK govt

To make sense of what's being claimed you need to see what they are projecting in tax receipts, I've added in the projected tax receipts into the original post. Clearly the recovery is well under way.

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"The 88bn is to try and remove structural defecit (i.e. the deficit that exists regardless of recession). The other billions will be recouped with Economic growth inflation (they hope know)."

Thanks _w_ :)

Me : Doctor doctor, my left testicle is inflated!

Doctor: That's not inflated it's a growth....

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Ok thanks for that , i didn,t know that.

However a defecit is a defecit i hardly think that labeling one part as structural is really going to help do you?

I mean if i,m £300 sort of paying my outgoings each month i hardly think my bank manager will give a toss if i call it "lost overtime defecit" or "cut in hours defecit" that i hope will be payed by future overtime etc.

Its just a label nothing more.The reality is that the debt is growing even after the spending review, and where is the growth in tax reciepts going to come from?

But borrowing a bit to scrape by when times are at their toughest probably isn't unreasonable. The problem is that it's not going anywhere near that far - if everything is hunky dory again at some point in the future then the defecit needs to be negative, not zero, at that point.

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if everything is hunky dory again at some point in the future then the defecit needs to be negative, not zero, at that point.

You don't think we're actually going to start paying this debt back, do you?

:unsure:

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The 83bn cut is per year, well for the first year as I understand it. That's why the nominal figure is a bit irrelevant.

We will still be overspending massively, but far less than before.

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The 88bn is to try and remove structural defecit (i.e. the deficit that exists regardless of recession). The other billions will be recouped with Economic growth (they hope).

The 3 planks are:

1. cuts

2. increased taxes

3. growth

The killer move is to allocate all the proceeds of growth to paying down the deficit in the run up to the next election, and beyond, and finally force the UK to live within its means.

The people must be made to understand that they are not getting any of the money removed from them in 2010-15 back, ever - it was a repayment.

They will get a share in growth eventually, maybe 2018 or so, but the first call on funds must become and remain, keeping public borrowing under control.

Hopefully the people will 'get it' in the end, but I fear it will take many years. The rewards for a culture change along these lines for future generations would be immense.

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Thanks for saving me the time.

Oh you mean if we cut £80bn over FOUR years the rest of the deficit £600bn (£150bn * 4 years) will disapeer once the economy RECOVERS

Recovery - oh yes, we'll be able to go back to an economy that generates respectable tax revenues from HPI and ponzi city speculation.

Dream on.

The fiscal deficit is £150bn a year. That's the amount we need to cut to stop the national debt from growing.

And you're supposed to be a Thatcherite?

Confused: Just like your views on competition

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And if the lid gets blown off the paper gold market during this crisis, I really could clean up even with the few dozen ounces I own. Please bear in mind the amount of gold per citizen in the UK gold reserves equates to 0.16 ounces per person. The few dozen ounces I own would make me a relatively rich man, if we get outright currency collapse and are forced back onto a defacto gold standard.

I wish you the best with it, though I don't see how Gold gets to have more buying power over other limited availability assets (land).

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Oh you mean if we cut £80bn over FOUR years the rest of the deficit £600bn (£150bn * 4 years) will disapeer once the economy RECOVERS

Recovery - oh yes, we'll be able to go back to an economy that generates respectable tax revenues from HPI and ponzi city speculation.

Dream on.

The fiscal deficit is £150bn a year. That's the amount we need to cut to stop the national debt from growing.

And you're supposed to be a Thatcherite?

Confused: Just like your views on competition

Where's the slaphead icon when you need one?

The objective is to have no deficit in 4 years; that means removing the structural and getting the rest in increased tax revenues from growth. Whether it works or not is one thing but your inability to grasp it is amusing.

The idea they have is to get growth by getting people out of pointless, wealth destroying public sector non-jobs and into creating loads of wealth, like I do.

PS The DEBT will be bigger (doh!) but the DEBT is f*cking vast already and that ain't going away this side of 30 years of inflation.

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  • 142 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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