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"reality We Face Is Stark; Now Little Margin For Error," - Clegg

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http://uk.reuters.com/article/2011/09/14/uk-britain-economy-clegg-idUKTRE78C7UQ20110914

"The situation has changed dramatically, worse even than just six months ago," Clegg will say, according to extracts from his speech.

Even now, quite possibly the Daily Express are trying to get a "homeowner joy" headline out of this, somehow, just desperately any way they can

Clegg will say 40 infrastructure projects -- an area notorious for delays and budget over-runs in Britain -- will be given priority status to ensure they are delivered swiftly and on budget.

Homeowner joy for millions of infrastructures

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All to boost growth...

All to further indebt the tax payer.

If you compare the nations financies to your own personal financies...this would be akin to borrowing even more money to do up your house in the hope you might be able to sell it when everything gets back to normal

:blink:

Edited by TheCountOfNowhere

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All to further indebt the tax payer.

If you compare the nations financies to your own personal financies...this would be akin to borrowing even more money to do up your house in the hope you might be able to sell it when everything gets back to normal

:blink:

And we've got a country full of people who still think that's a good idea...

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All to further indebt the tax payer.

If you compare the nations financies to your own personal financies...this would be akin to borrowing even more money to do up your house in the hope you might be able to sell it when everything gets back to normal

:blink:

Sounds sensible to me.

Labor is a lot cheaper during a recession.

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Sounds sensible to me.

Labor is a lot cheaper during a recession.

+1

If you compare the nations financies to your own personal financies...

except they're really quite different

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+1

except they're really quite different

If you based you debt on continued growth it's very similar to basing your debt on continual house price growth/wage inflation.

One day you loose you job, house priced drop and then your bankrupt.

It's remarkably similar, one is just on a much bigger scale.

The only solutions:

1) Go bankrupt and write off the debt

2) Die and write off the debt.

3) Stop spending and work hard to pay back the debt.

4) Take someone else's wealth and use that to pay off the debt

5) Pretend there is not a problem and keep going.

It's definitely very very similar.

Edited by TheCountOfNowhere

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If you based you debt on continued growth it's very similar to basing your debt on continual house price growth/wage inflation.

One day you loose you job, house priced drop and then your bankrupt.

It's remarkably similar, one is just on a much bigger scale.

The only solutions:

1) Go bankrupt and write off the debt

2) Die and write off the debt.

3) Stop spending and work hard to pay back the debt.

4) Take someone else's wealth and use that to pay off the debt

5) Pretend there is not a problem and keep going.

It's definitely very very similar.

How about:

1) Go bankrupt and write off the debt

- Iceland did this one to good effect (for Icelanders). Greece may try the same trick!

2) Die and write off the debt.

- I guess the country called 'Eurozone' could do this

3) Stop spending and work hard to pay back the debt.

- Now that one's never going to sell to any but the German electorate (if then)

4) Take someone else's wealth and use that to pay off the debt

- couple of judicoiusly selected wars?

5) Pretend there is not a problem and keep going.

- The Labour parties preferred option

:rolleyes:

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Sounds sensible to me.

Labor is a lot cheaper during a recession.

Money could be too.

*printer whirs*

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How about:

1) Go bankrupt and write off the debt

- Iceland did this one to good effect (for Icelanders). Greece may try the same trick!

2) Die and write off the debt.

- I guess the country called 'Eurozone' could do this

3) Stop spending and work hard to pay back the debt.

- Now that one's never going to sell to any but the German electorate (if then)

4) Take someone else's wealth and use that to pay off the debt

- couple of judicoiusly selected wars?

5) Pretend there is not a problem and keep going.

- The Labour parties preferred option

:rolleyes:

Spot on. Everyone has a finite ways of dealing with debt. The best solution is not to get into debt in the first place.

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If you based you debt on continued growth

wrong on the first point

I could say nice try, but that would be untrue, sorry

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Sounds sensible to me.

Labor is a lot cheaper during a recession.

I got quotes for extending two stories to the side by about 4 meters. So adding 30sq meters

80k....+vat

labour certainly isn't cheap at the moment at least in the construction industry

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Sounds sensible to me.

Labor is a lot cheaper during a recession.

Except this time it isnt because of our stratospheric base cost of living underpinned by cheap money (ZRIP and QE) and massive subsidies to people on zero and low incomes. A recession normally brings cost reduction and effeciency which paves the way for the recovery, but no chance of that now.

Edited by goldbug9999

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One of the biggest issues imo is Govt's around the world have seriously underestimated the rate of advancement for automation in robotic or software form.

The simple fact is the workforce & education cant keep up with the innovation.

That's not an issue its a good thing if people understood it

So few people understand production, Productivity & profit.

If tomorrow we layed off everyone over 60 it would largely result in the rest of us working more productively. There is no need for them to work

Likewise the benifits system largely pays for itself.

The government takes money off my business & gives it to Mr unemployed. Mr unemployed comes to my store and buys my product. 90% is gross profit.

So the government took 10quid off me. Mr unemployed gave me 10quid back. Of which 9 quid goes into my pocket again so the cost to me was only 1quid. If you keep following the money you would see it all comes back

So few of you will understand this but the unemployed are paid for by the spare productivity in business there is little real cost

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I bet if you looked back at press releases from the USSR, they would have similar claims that their central planning was going to 'boost growth' or 'boost productivity' or some such.

The government shouldn't be 'creating jobs' or 'boosting growth' or any other such nonsense. They should be getting out of the way and letting individuals and companies help themselves.

Then again, after decades of deficit spending, fuelling short term growth at the expense of long term prospects, it's little wonder that they think this. Their politics is obsolete. Their economic models are broken. How long will it be before people ignore this talking shop and kindly request that they feck off, stop indebting the future generations and let the country sort itself out?

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If that is true, can we all go on benefits?

Only to the point where there is no spare productive capacity but I believe that is enough to probably support half the population

I'll give you an example of my own business.

We have the machines to produce about £40k worth of goods but in a typical week produce about 10k worth

costs are only 10%

My suppliers are similar

As is their suppliers

Etc

Overall we in the.chain.could produce 30k worth of goods for free & donate it to charity (benifits). This would cost us NOTHING. Well it would mean we employed in this.chain would work more hours rather than sitting here at work not working and chatting to you

This already happens to a degree. without benifits our chain instead of producing 10k might be producing 8k. so the 2k extra is free production

the state takes and the people give back. the cost to us is just working more productively

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Only to the point where there is no spare productive capacity but I believe that is enough to probably support half the population

I'll give you an example of my own business.

We have the machines to produce about £40k worth of goods but in a typical week produce about 10k worth

costs are only 10%

My suppliers are similar

As is their suppliers

Etc

Overall we in the.chain.could produce 30k worth of goods for free & donate it to charity (benifits). This would cost us NOTHING. Well it would mean we employed in this.chain would work more hours rather than sitting here at work not working and chatting to you

This already happens to a degree. without benifits our chain instead of producing 10k might be producing 8k. so the 2k extra is free production

the state takes and the people give back. the cost to us is just working more productively

So you could be put out of business by someone who didnt have a huge tax take then? They could charge a lot less than you.

Isnt this a big disincentive to produce, having 3/4 of your production taken, and getting nothing in return?

Why is it that huge numbers of our working people, dont have enough money for things like entertainment, cars and decent housing? If you are going to divide up a large portion of what is produced to those not producing, shouldnt you ensure that those doing the producing get first dibs on what they produce?

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So you could be put out of business by someone who didnt have a huge tax take then? They could charge a lot less than you.

Isnt this a big disincentive to produce, having 3/4 of your production taken, and getting nothing in return?

Why is it that huge numbers of our working people, dont have enough money for things like entertainment, cars and decent housing? If you are going to divide up a large portion of what is produced to those not producing, shouldnt you ensure that those doing the producing get first dibs on what they produce?

I can't see the state backing off voluntarily, can you?

I can't see the banks suddenly switching sides and lobbying to remove the legal tender law, can you?

I can't see the legions of people who are basically on a form of very expensive dole with diversity knobs on suddenly clapping their hands to their foreheads and exclaiming "you know I should stop doing this well paid rubbish and go and provide services on a voluntary basis for a much lower wage!" either.

Many people know the answer, they know the problems but they are also in effect trapped by their lifestyles and previous choices.

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That's not an issue its a good thing if people understood it

So few people understand production, Productivity & profit.

If tomorrow we layed off everyone over 60 it would largely result in the rest of us working more productively. There is no need for them to work

Likewise the benifits system largely pays for itself.

The government takes money off my business & gives it to Mr unemployed. Mr unemployed comes to my store and buys my product. 90% is gross profit.

So the government took 10quid off me. Mr unemployed gave me 10quid back. Of which 9 quid goes into my pocket again so the cost to me was only 1quid. If you keep following the money you would see it all comes back

So few of you will understand this but the unemployed are paid for by the spare productivity in business there is little real cost

I think that is a little unclear. You appear to be using costs of 10%.

You are giving 10 quid to Mr unemployed. You eat that cost yourself in terms of living standards, you charge it to other customers, or a combination of the two. If the unemployed, as a group, spend all that money back into the enterprises they drew it from, then the loss would only be the cost of production (1 quid in your example). Ignoring all the insufficiencies in that system, we are still losing 1 quid in costs that is basically eaten (lets say you produce food) and does not contribute to further production. This cost doesn't disappear with repetition of the cycle as you suggest - the cost just repeats too.

That only seems like a low figure because you cited enormous profit margins. If you can produce 10k worth for 1k, then why aren't you maxed out?

Guessed answer: excess production (ie marginal increases from here) is worth less than cost, hence you don't produce it.

Of course, the unemployed are supported with excess production. And you can argue that this payment represents very good value (it keeps consciences eased and it keeps the level of rioting down). But it is still a cost on production, only self funding in the sense of saving on jails, or perhaps investing in skills.

Unemployed people are unlikely to be spending their meagre benefits on productive capital expenditure - they are consumers. This is often given as a reason why stimulus fiscal spending should be directed their way - because they spend all of it immediately. However, they don't necessarily do so in a way that stimulates the economy long term, precisely because it is mostly short term consumption.

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I understand your point but I think you missed mine. How much does it cost to run a computer? A lot less than a human, likewise the energy requirements to replicate a computer and software is a lot less than the costs to replicate and educate a human.

Likewise when a computer can think for itself to work within the existing system (rules) we have created do you think it could amass its own it wealth in a short space of time? Afterall there a number of sources of revenue that can be garnered like work from the internet, like rent a coder, or work instructions that can be given over the telephone, for example when you talk to BT, you talk to a computer for the first part of the call, how long until all of the call is handled exclusively by a computer? Some call centres are virtually fully automated.

Becuase a computer program can be copied so quickly and put to work almost instantly after its been developed a computer will very soon be able to outperform a human in intelligent activity. The development of an AI is no more than developing the DNA we are made of.

We would certainly have to make sure they remained slaves!

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So you could be put out of business by someone who didnt have a huge tax take then? They could charge a lot less than you.

yes but taxes are applied to all business in the nation. This does however bring into question the taxation portion of international trade

Isnt this a big disincentive to produce, having 3/4 of your production taken, and getting nothing in return?

no I don't think it is. Personally everyone employed by the company would work the same hours. Just our machines would work harder

Why is it that huge numbers of our working people, dont have enough money for things like entertainment, cars and decent housing? If you are going to divide up a large portion of what is produced to those not producing, shouldnt you ensure that those doing the producing get first dibs on what they produce?

this is a question I don't have the answer to but I haven't met anyone who has either. We have so much spare productivity with companies just sitting there surely it would be wise to use it. My own business can produce about 30k worth of stuff for effectively free. With a v.small investment I could double this. Likewise we have an idle plant up in teesside not producing steel. An idle plant there not rolling the steel and anothhrr not putting that together into cars

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this is a question I don't have the answer to but I haven't met anyone who has either. We have so much spare productivity with companies just sitting there surely it would be wise to use it. My own business can produce about 30k worth of stuff for effectively free. With a v.small investment I could double this. Likewise we have an idle plant up in teesside not producing steel. An idle plant there not rolling the steel and anothhrr not putting that together into cars

It's because no one can afford to buy the stuff.

We've had a huge credit boom, which has created masses of malinvestment. We have too many shops, money tied up in houses, future money already ear marked.

You can't undo malinvestment. Once it's done, it's done. There are many ways you can return the malinvested money back to people, but there will be winners and losers. One way is to inflate the money supply to pay (soft default) and the other is to not repay what is owed (hard default). You can have one, the other or a combination of both, but all lead to pain for some... that is unavoidable.

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I think that is a little unclear. You appear to be using costs of 10%.

You are giving 10 quid to Mr unemployed. You eat that cost yourself in terms of living standards, you charge it to other customers, or a combination of the two. If the unemployed, as a group, spend all that money back into the enterprises they drew it from, then the loss would only be the cost of production (1 quid in your example). Ignoring all the insufficiencies in that system, we are still losing 1 quid in costs that is basically eaten (lets say you produce food) and does not contribute to further production. This cost doesn't disappear with repetition of the cycle as you suggest - the cost just repeats too. yes you are correct the cost to me is the cost .of my production or about 1quid in the example I gave. However that 1quid only has a 10p cost to my supplier...who has a 1p cost who has a nil cost. Everything is human labour in one form or another. So if you keep going it costs nothing (if you want to think about it.

That only seems like a low figure because you cited enormous profit margins. If you can produce 10k worth for 1k, then why aren't you maxed out?

many reasons. But simplest there isn't the demand to max out my production. Of course you could look at it the other way around and say I baught too 'big a machine' or I employ too many people. However I can't further sub divide my labour (can't hire half a man) and a smaller machine was near enough the same price as our current setup. The important thing to take away is that most businesses are the same. Very high GP & lots of spare capacity

Guessed answer: excess production (ie marginal increases from here) is worth less than cost, hence you don't produce it.

it would I imagine reduce the price. There is an equilibrium point where producing more makes no sense. Here you have one of business biggest unanswered troubles. How to produce more and charge.less without decreasing the current price for your current customers. I would be willing to give away my production for free to the poor were there no benefits. However I can't do that because my current customers wouldn't buy if I was giving away to the poor for free.

Of course, the unemployed are supported with excess production. And you can argue that this payment represents very good value (it keeps consciences eased and it keeps the level of rioting down). But it is still a cost on production, only self funding in the sense of saving on jails, or perhaps investing in skills.

yes excess production but importantly from excess productivity. For instance if you are a doctor in an uber capitalistic system what is your or anyone loss in you treating for free the poor in between paying customers. Ie while you would otherwise have been idle

Unemployed people are unlikely to be spending their meagre benefits on productive capital expenditure - they are consumers. This is often given as a reason why stimulus fiscal spending should be directed their way - because they spend all of it immediately. However, they don't necessarily do so in a way that stimulates the economy long term, precisely because it is mostly short term consumption.

we as a species are producers and consumers. We shouldn't abstract don't just incest to produce for the sake of it someone needs to consume. Importantly many many most business can produce their goods for free. See doctor example

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It's because no one can afford to buy the stuff.

We've had a huge credit boom, which has created masses of malinvestment. We have too many shops, money tied up in houses, future money already ear marked.

You can't undo malinvestment. Once it's done, it's done. There are many ways you can return the malinvested money back to people, but there will be winners and losers. One way is to inflate the money supply to pay (soft default) and the other is to not repay what is owed (hard default). You can have one, the other or a combination of both, but all lead to pain for some... that is unavoidable.

No one can afford to buy the stuff that is free?

I don't think that's the answer.

Forget money. Simply the machines sit there doing nothing.

I guess the only answer I can come up with is that there simply isn't the desire for more of those products. Cars. Holidays. Going to the cinema. Maybe we have reached saturation

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  • 276 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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