Osborne Warns Of 'great Contraction'

[MrFlibble]

Duplicate!

Edited September 7, 2011 by MrFlibble

[PopGun]

Is this Osbourne admitting they've got it terribly terribly worng then?

Of course government policy is failing, the previous lot put everything in place to insure it does.

Edited September 7, 2011 by PopGun

[Injin]

Is this Osbourne admitting they've got it terribly terribly worng then?

Of course government policy is failing, the previous lot put everything in place to insure it does.

The only way government can fix it is by buggering off.

But if they try that then most of the hapless will demand action to solve the problems!

To be fair to the current lot they really don't have a way out. But then they knew the chalice was poisoned when they picked it up so my sympathy isn't all that high.

[MrFlibble]

Is this Osbourne admitting they've got it terribly terribly worng then?

Of course government policy is failing, the previous lot put everything in place to insure it does.

It's always the last lot, I didn't see the Tories jumping up and down complaining about the housing bubble while they were sat in opposition.

The current situation we find ourselves in has been slow baking for decades under both colours of Government.

[Terribad]

+1

You cannot have infinite growth on a planet with finite resources, but you sure as hell can pretend to have it...

Quite simply wrong. You're in denial or ignorant of economics.

Yes there are some finite resources on earth, but plenty of infinite resources, mainly the sun.

Growth increases naturally through specialization and more efficient uses of a resource, finite or infinite.

Are you seriously suggesting that the only reason mankind progressed from foraging to the bronze age was through exploiting finite resources?

You're denying millions of years of economic growth based on increasingly efficient use of sustainable resources

[Georgia O'Keeffe]

It's always the last lot, I didn't see the Tories jumping up and down complaining about the housing bubble while they were sat in opposition.

The current situation we find ourselves in has been slow baking for decades under both colours of Government.

To be fair Osbourn he was complaining it wasnt more like / as big as Irelands

[eric pebble]

Almost no economist saw problems in the debt fuelled, economically self immolating binge of the last decade.

More like the Big Lie - big lies from the government(s), big lies from the central bank, big lies about inflation, growth, globalisation, jobs, immigration, education in fact almost every facet of the economy and the population.

That is where we are, and why we are here.

Yup....

BIG LIES

&

BIG LIAR LOANS.......

[Injin]

Quite simply wrong. You're in denial or ignorant of economics.

Yes there are some finite resources on earth, but plenty of infinite resources, mainly the sun.

Growth increases naturally through specialization and more efficient uses of a resource, finite or infinite.

Are you seriously suggesting that the only reason mankind progressed from foraging to the bronze age was through exploiting finite resources?

You're denying millions of years of economic growth based on increasingly efficient use of sustainable resources

You are basing your assumption of further exponential growth on continual exponential increases in effeciency, which is just as daft!

Even if you were right, which is doubtful, you'd have to be showing some pretty radical technology available right here and now to let the current GDP growth (activity) paradigm continue. As always I am open to evidence, so lets see some.

[Bloo Loo]

If the banker does not get interest, why would they lend money? Damned if they do, damned if they don't.

Wealth creation can cease. What do you want to destroy?

the bankers who lend on wealth creation that works WILL get interest.

Those that lend to lever up imaginary instruments of wealth will end up busted....as happened in 2007, except, the printing press was used to ensure they still got paid, still exist today, and still dealin imaginery bullcrap...and as you can see, things are getting worse.

The bottom line, we could have infinite money, infinite assets, as long as we have infinite wealth to cover.

If we dont, then we have to rely on velocity and a prayer that we will get paid....which strangely enough, is the exact situation we are in.

[Bloo Loo]

Quite simply wrong. You're in denial or ignorant of economics.

Yes there are some finite resources on earth, but plenty of infinite resources, mainly the sun.

Growth increases naturally through specialization and more efficient uses of a resource, finite or infinite.

Are you seriously suggesting that the only reason mankind progressed from foraging to the bronze age was through exploiting finite resources?

You're denying millions of years of economic growth based on increasingly efficient use of sustainable resources

you are confusing money with growth.

[MrFlibble]

Quite simply wrong. You're in denial or ignorant of economics.

Yes there are some finite resources on earth, but plenty of infinite resources, mainly the sun.

Growth increases naturally through specialization and more efficient uses of a resource, finite or infinite.

Are you seriously suggesting that the only reason mankind progressed from foraging to the bronze age was through exploiting finite resources?

You're denying millions of years of economic growth based on increasingly efficient use of sustainable resources

7bn people are not somehow going to be magically living off the energy from the sun. How much energy do you believe it would take to restructure our current living arrangements to make such a thing possible? Mankind will return to working the land by hand, industry will been forced to localise, the energy to carry on with the current farce just isn't there I'm afraid.

There's an old Middle Eastern saying; "My father rode a camel, I drive a car, my son flies a jet plane, his son will ride a camel."

[eric pebble]

Great contraction for the little man, great big pile of money for his elite chums who keep creating digital money out of thin air and charging interest on it.

It's time we told these Muppets to F.O.

Agree 100%. They sit at their keyboards and simply type in their income - with the "RIP-OFF EVERYONE ELSE" key permanently set in the "on" position.....

It is time to make ALL banks simple public utilities, with all current bankers chained to their terminals on £15k per anum, porridge once a day..... :angry: :angry:

Edited September 7, 2011 by eric pebble

[Riedquat]

Are you seriously suggesting that the only reason mankind progressed from foraging to the bronze age was through exploiting finite resources?

They certainly did. If all technology and the knowledge of it was suddenly wiped out we'd have a much, much harder time progressing to even bronze age technology because it relied on the access to the easiest-to-exploit mineral resources, all of which have long since been exhausted. Can't get to even the bronze age if you've got to dig a deep mine for it. How much of the easily accessible coal is still available that was necessary for the Industrial Revolution to really take off? Oil? So even if we can continue where we are now it's because we're standing on centuries and millenia of finite exploited resources.

[thecrashingisles]

The Great Contraction?

'New Labour' pains.

[Georgia O'Keeffe]

'New Labour' pains.

We need a globl globl bargain, a future fair for all

Cometh the hour cometh the man

[R K]

The corporate balance sheets are stuffed to the gills with c. $2trillion.

The top earners have outstripped the bottom earners in real terms hand over fist for the last 30 years.

Yet Osborne wants to cut taxes for the rich and reduce corporate taxes.

The solution is blindingly obvious, unless you suffer from an insane dogmatic delusion.

Sort out the trade imbalances predominantly with China, force tariffs and our social practices onto those countries who want to continue trading with us, policies to encourage the corporates to spend their ill gotten gains (largely on the back of debt purchases) and shift the burden of taxation from the poorer onto the richer.

The complete opposite of Osborne's clearly failed policies of course.

Unless you're a millionaire Tory boy in which case carry on as you are.

[Bloo Loo]

The corporate balance sheets are stuffed to the gills with c. $2trillion.

The top earners have outstripped the bottom earners in real terms hand over fist for the last 30 years.

Yet Osborne wants to cut taxes for the rich and reduce corporate taxes.

The solution is blindingly obvious, unless you suffer from an insane dogmatic delusion.

Sort out the trade imbalances predominantly with China, force tariffs and our social practices onto those countries who want to continue trading with us, policies to encourage the corporates to spend their ill gotten gains (largely on the back of debt purchases) and shift the burden of taxation from the poorer onto the richer.

The complete opposite of Osborne's clearly failed policies of course.

Unless you're a millionaire Tory boy in which case carry on as you are.

balance sheets...ah, the things that show great solvency in our banks...yet assets currently declared as havign market value, dont....for example...a bank with 50bn of greek soveriegn debt on its books.

[Dorkins]

If the banker does not get interest, why would they lend money?

The major reason for saving is to transfer consumption from the present into the future, not reap a profit. If inflation was 0%, you could save by putting banknotes under the mattress, but it might be safer to put the money in a non-fractional-reserve 0% savings account.

[bendy]

says deflation yadda yadda, does pull plug on ns&i

the old say do.

[billybong]

‘That’s why economists… have called the period we are living through the “Great Contraction”,’ the Chancellor said.

Sounds like something he's just made up himself in another of the Coalition's Homer Simpson moments. "Doh, it's the Great Contraction". It'll just be an excuse for more daft policies being announced and likely supported by Labour on the quiet. Like the opposition did when Labour were in power.

Until recently economists have generally been calling it recovery perhaps even the "Great Recovery".

Edited September 7, 2011 by billybong

[interestrateripoff]

Sounds like something he's just made up himself in another of the Coalition's Homer Simpson moments. "Doh, it's the Great Contraction". It'll just be an excuse for more daft policies being announced.

Until recently economists have generally been calling it recovery perhaps even the "Great Recovery".

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

http://www.project-syndicate.org/commentary/rogoff83/English

A more accurate, if less reassuring, term for the ongoing crisis is the “Second Great Contraction.” Carmen Reinhart and I proposed this moniker in our 2009 book This Time is Different, based on our diagnosis of the crisis as a typical deep financial crisis, not a typical deep recession. The first “Great Contraction” of course, was the Great Depression, as emphasized by Anna Schwarz and the late Milton Friedman. The contraction applies not only to output and employment, as in a normal recession, but to debt and credit, and the deleveraging that typically takes many years to complete.

......

Many commentators have argued that fiscal stimulus has largely failed not because it was misguided, but because it was not large enough to fight a “Great Recession.” But, in a “Great Contraction,” problem number one is too much debt. If governments that retain strong credit ratings are to spend scarce resources effectively, the most effective approach is to catalyze debt workouts and reductions.

It looks like Osborne has heard something and decided to run with it.

[mfp123]

at the end of the day what really is going to happen is the economy, house prices, will fall back to a more equilibrium level.

everything is inflated at the moment, and unsustainable. even if we saw growth no one and i mean no one would have a great deal of confidence it would last because everyone knows due to QE, everything is out of kilter, price signals dont mean the same anymore because its been artificially created..

we just have to face the truth that our natural level of economic activity isnt where we are now.

worst still, had we not used QE to save the banks, there would have been a short shock to the system and 3-4 years down the line - pretty much where we are now, we would start to recover.

but instead 3-4 years down the line, were starring down the same barrel because all we did was kick the can down the road.

Edited September 7, 2011 by mfp123

[Bloo Loo]

at the end of the day what really is going to happen is the economy, house prices, will fall back to a more equilibrium level.

everything is inflated at the moment, and unsustainable. even if we saw growth no one and i mean no one would have a great deal of confidence it would last because everyone knows due to QE, everything is out of kilter, price signals dont mean the same anymore because its been artificially created..

we just have to face the truth that our natural level of economic activity isnt where we are now.

worst still, had we not used QE to save the banks, there would have been a short shock to the system and 3-4 years down the line - pretty much where we are now, we would start to recover.

but instead 3-4 years down the line, were starring down the same barrel because all we did was kick the can down the road.

growth ISNT coming from QE...its coming from £160bn in annual deficit spending.

[A.steve]

What I would like to know is WHY we have to continuously grow?...standing still is fine as long as we don't go backwards.

While an economy (or company) grows, there's no demand to pay down debt. This allows expenses to be accounted as capital expenses - and for a profit to be declared even if gross income is smaller than gross expenditure. This is why companies (and national product) must continually grow... it's simple pragmatism.

You cannot have infinite growth on a planet with finite resources, but you sure as hell can pretend to have it...

That's not technically true: see Zeno's dichotomy paradox.

The problem with 'growth' is that you need to say what you think is growing, and how you intend to measure it. Once this is clarified, most arguments on the topic evaporate.

[MrFlibble]

That's not technically true: see Zeno's dichotomy paradox.

The problem with 'growth' is that you need to say what you think is growing, and how you intend to measure it. Once this is clarified, most arguments on the topic evaporate.

Interesting read, trouble is I am now picturing Osborne as a Tortoise