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richcrashman

Public Sector / Private Sector

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Question for you all.

We are told that the public sector is just over 50% of the economy. A figure of 53% springs to mind.

My Mrs just asked me if this figure included all the spending from the public sector purse that end up in private sector companies??

Her example was private care homes that are fully funded by local councils. These employ huge numbers of people, but are they public sector or private sector???? There are a huge range of private companies contracted to do work for public sector bodies.

Do the figures take this into account accurately??? Or is the public sector underestimated or the private sector overestimated?????

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http://en.wikipedia.org/wiki/Gdp

"The gross domestic product (GDP) or gross domestic income (GDI) is the market value of all final goods and services produced within a country in a given period of time. "

so council spending via private contractors does not contribute to GDP and is not counted directly, whereas overall council provision of a final service worth some money to the public IS counted as GDP so, since it is provided by a public sector body even if the physical provision is done by a private contracter, then this is public sector GDP, the total worth of the final service, so I would have thought it is ALREADY counted as such, not directly as you infer tho' (?)

Edited by Si1

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White Van Man gets a job delivering stuff for a builder doing work on an outpost office for a local authority. So White Van Man is, in effect, part of the public sector economy. That night WVM is out on another job, disposing of gassed badger corpses for local farmers by dropping them on a main road so they look like roadkill. Unfortunately he answers his mobile at the wrong moment and his Transit takes a trip off the road and hits a tree. WVM sustains a broken ankle. So is the NHS being part of the private sector economy in treating WVM's ankle?

Edited by Hyperduck Quack Quack

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...what about the guardian and others advertising Local Council high Profile Jobs and non Jobs ....are these papers part of the public sector and likely to be influenced in this way to retain the advertising revenue......?....... :rolleyes:

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Question for you all.

We are told that the public sector is just over 50% of the economy. A figure of 53% springs to mind.

On an expenditure basis, general government accounts for something like 26% of GDP, nothing like the 50%+ often quoted.

This is because transfer payments (social security payments, pensions etc.) are not direct consumption expenditure by the government and do not form part of GDP.

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53% sounds about right for the percentage of the British economy that is government spending. It is around 46% in the USA now.

I think the old East Germany was at 60%.

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It's hard to think of any firms that you can't trace back to benefitting from the public sector

even say Cadburys, if 53% of the population is employed in the public sector, is getting about half its uk income from biccy-munchers in the public sector. Others like BAE, big construction firms like Balfour Beatty, and big pharma use government contracts as bedrock money-spinning contracts.

Maybe the only purely private industry left in this country is a farmer selling some carrots to a coal miner. But I bet the farmer is getting some subsidies. And there's no coal miners left.

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It's hard to think of any firms that you can't trace back to benefitting from the public sector

even say Cadburys, if 53% of the population is employed in the public sector, is getting about half its uk income from biccy-munchers in the public sector. Others like BAE, big construction firms like Balfour Beatty, and big pharma use government contracts as bedrock money-spinning contracts.

Maybe the only purely private industry left in this country is a farmer selling some carrots to a coal miner. But I bet the farmer is getting some subsidies. And there's no coal miners left.

in the case of cadburys, definately the snake eating its own tail.

GDP measures money movement....not wealth creation...which is what pays for the continuing money movement.

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Its GDP.

The UK public sector spends ~ 53% of the UK GDP at the mo.

The 'accepted' (by Lab + COn + LDem) top limit of public sector spend is about 40%.

When Lab came it the public sector spend was 37%.

Its noiiable that the UK economy has grown by about 30% since 1997, so the amount being spent by the public sector is much much more.

As far as cuts go the pubclic sector spend has to go below 40% for a number of years to reduce the debt.

I'd guess the target should be about 35% - so spending has to be cut by about a 1/3 from its current levels and held their for about 10 years.

The Cons (79->97) only ever managed to hold the public sector spend at the same nominal rate i.e. never really managed real cuts.

Going back to the 40% upper limit of public spend. I think this is wrong because the UK has now got a shringing tax base - all those boomers retiring, all those unfunded public sector pensions being drawn upon.

Something will have to be default on.

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Keynes, darling of the left, said he couldnt imagine any scenario where govt made up more than 25% of the economy. :lol:

I guess he hadnt counted on the socialists and banks being in cahoots to suck the productive bits of economy dry back then and turn us into a nation of debt/welfare slaves

Edited by Sadman

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  • 312 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% +
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