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Clown Osbourne To Allow Govt Borrowing Only In Exceptional Circumstances!

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http://www.theguardian.com/politics/2015/jun/10/george-osborne-public-finances-victorian-values

George Osborne is to announce a return to the public finances of the Victorian age, with plans for permanent budget surpluses designed to cut the national debt and to make life uncomfortable for the Labour party.

The chancellor will use his annual Mansion House speech on Wednesday to exploit the political advantage of the Conservative victory in the general election with a “new settlement” that would allow the government to borrow only in exceptional circumstances.

Labour, still shaken by the scale of its defeat last month, will be forced to decide whether it wants to back the proposal that tax revenues should cover spending on both infrastructure and the day-to-day running of government when parliament votes on Osborne’s tougher approach to the public finances later this year.

Labour fought the election on a policy of running a surplus on day-to-day spending but with borrowing allowed to fund public investment projects. This would be ruled out under the new proposals, which are far more stringent than have been the postwar norm.

Osborne will say: “The result of this recent British election – and the comprehensive rejection of those who argued for more borrowing and more spending – gives our nation the chance to entrench a new settlement.”

..

Osborne will say that he wants “a settlement where it is accepted across the political spectrum that without sound public finances, there is no economic security for working people; that the people who suffer when governments run unsustainable deficits are not the richest but the poorest; and that therefore, in normal times, governments of the left as well as the right should run a budget surplus to bear down on debt and prepare for an uncertain future.”

He will add: “In the budget we will bring forward this strong new fiscal framework to entrench this permanent commitment to that surplus, and the budget responsibility it represents. This fiscal framework will be voted on by the House of Commons later this year, and assessed by the Office for Budget Responsibility we created.”

Treasury figures show that in only seven of the past 50 years have governments run a budget surplus – the last of them a run of three years at the end of the 1990s and the start of the 2000s when Gordon Brown was chancellor...Osborne will drive home his desire to bring back the days of sound finance by announcing he will convene the first meeting in more than 150 years of the committee of the commissioners for the reduction of the national debt...A chancellor would be allowed to override the budget surplus rule if the economy again ran into severe problems, but the details of what would constitute abnormal circumstances will not be revealed until Osborne delivers his summer budget on 8 July.

Hilarious is this Osbourne's golden rule moment?

I wonder what the plan is for when you have GDP growth but no job growth, the US economy since the late 1990's has required around 2.4% growth just to avoid job losses. As many sectors depend on govt spending for profits and the UK consumer is already maxed out on debt just how does he propose to get the books balanced?

Edited by interestrateripoff

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http://www.theguardian.com/politics/2015/jun/10/george-osborne-public-finances-victorian-values

Hilarious is this Osbourne's golden rule moment?

I wonder what the plan is for when you have GDP growth but no job growth, the US economy since the late 1990's has required around 2.4% growth just to avoid job losses. As many sectors depend on govt spending for profits and the UK consumer is already maxed out on debt just how does he propose to get the books balanced?

Well those are pretty exceptional circumstances therefore the government can borrow to fix the problem.

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Osbourne knows that this is a non-starter because one parliament can not bind it's successor, but even if it was a real proposal, how would the labour party define 'exceptional circumstances'? Probably along on the lines of: "Look at all these poor single mothers who have never worked a day in their lives living in five bedroom houses with only three spare rooms! Won't someone think of the children! We need to run a billion and something deficit spending for the next 20 years".

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Today's needs will always be deemed to be exceptional. Tomorrow will have to look after itself.

This is it. Today is all that matters. Bail out the banks. Exceptional circumstances. Tories borrowed more in their first 3 years than Labour did in 13 years. Exceptional circumstances. 0.5% Boe rate for 76 months and counting. Exceptional circumstances. H2B. Exceptional circumstances. Everything is ultra-short-term so the Tories can skew the stats and say "robust and sustained recovery".

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Tbf we have all been spouting doom about the growing national debt. If you can't start reducing debt as a percentage of GDP when you are shading full employment, the economy is growing at 2.5% and it is six years since you escaped the recession, when indeed can you reduce the debt. No doubt the next recession will hit within the next decade, but at present we are probably mid-way through the up cycle.

Obviously, there is now a school of thought that you can run a permanent deficit, one the IMF have suddenly signed up to.

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Back to the Victorian Age! How inspiring. Tenements and rookeries, child pornography and cholera, workhouses and rickets.

Another slice of unicorn meat, Mr Osborne? It's so very tender.

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Tbf we have all been spouting doom about the growing national debt. If you can't start reducing debt as a percentage of GDP when you are shading full employment, the economy is growing at 2.5% and it is six years since you escaped the recession, when indeed can you reduce the debt.

Personally for me, my "doom and gloom" about the UK is about what's coming up, not how it is today. Nothing about our economy is in any way sustainable. The established generations are stealing from the up-and-coming ones. It's like seeing a functioning alcoholic - people look at the person, see he's smartly dressed and well-spoken, and earning good money, so he's fine. All the while I know the underlying problem is killing him swiftly, and his situation is dire without radical change.

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I bet those Commissioners must be pretty old and crumbly if they last met 150 years ago.

I see that this is already hurting the usual lefties.

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Quite apart from the obvious fact that the same policy for the last 5 years didnt work and only served to reduce output and increase the debt by far more than not cutting spending.

got to hand it to Osborne, he doesnt let economics get in the way of a good narrative, especially when hes sucking up to the very people who caused the rise in debt at their little Mansion house mutual c0ck-sucking soiree.

Must feel like a Bullingdon Club re-union.

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Personally for me, my "doom and gloom" about the UK is about what's coming up, not how it is today. Nothing about our economy is in any way sustainable. The established generations are stealing from the up-and-coming ones. It's like seeing a functioning alcoholic - people look at the person, see he's smartly dressed and well-spoken, and earning good money, so he's fine. All the while I know the underlying problem is killing him swiftly, and his situation is dire without radical change.

The trouble is the doctors (politicians) are complicit with the patient.....us.

We are made to believe that 8 pints a day is being on the wagon...the equivalent of saying that the current 6% deficit is austerity. That you can spend forty years in work and then spend the next forty years in retirement and it's all funded and after all it's not much to expect for a ''lifetime'' of work.

Indeed the best doctors to see are those that are really complicit with the system say Sturgeon, Bennett or Woods. There really is no limit to the intake, anything else would be a mockery of social justice.......16 pints a day should be fine.

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Not what is said....but what is done.....confidence is key and talk of control and direction helps others, the important others/investors to believe there is a plan, a way out a future. ;)

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We are made to believe that 8 pints a day is being on the wagon...the equivalent of saying that the current 6% deficit is austerity.

Not much more needs to be said. Black is white, white is black. We live in austere times, out-borrowing Labour in their most reckless years. The patient is sober after 8 pints of strong lager.

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Meanwhile, the private banks can emit as much debt...sorry, 'credit', as they want...which will ultimately be assumed by the taxpayer and saver when it goes bad (which, of course, like any other pyramid scheme, it will)

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Quite apart from the obvious fact that the same policy for the last 5 years didnt work and only served to reduce output and increase the debt by far more than not cutting spending.

got to hand it to Osborne, he doesnt let economics get in the way of a good narrative, especially when hes sucking up to the very people who caused the rise in debt at their little Mansion house mutual c0ck-sucking soiree.

Must feel like a Bullingdon Club re-union.

Not saying the last five years havent been a shower of shite...but are you Ed Balls?

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There's a strong argument that, for inter-generational fairness, governments hsould not run large, persistent deficits.

Of course, does not matter when the gov is 'investing' where things likes road tend to getget muddled with spending like community-outreach worker.

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Osbourne knows that this is a non-starter because one parliament can not bind it's successor,

no but it can possibly make it look economically reckless in the eyes of the average voter

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The excessive borrowing of the private sector is what caused 2008. Now Osbourne wants to restrict public spending even more and encourage the private sector to pick up the slack? :blink:
We all shouldn't be surprised as he took the sub prime disaster and repackaged it as a nice sounding policy called Help To Sell Buy.

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They'll just create more things like PPP or PFI to hide investment off the balance sheet when they want to spend more money than they have.

This is, above all, just a political gesture to embarass Labour - do they vote for something their constituents will hate, or not and get labelled as 'irresponsible'?

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It's meaningless economically. There's not point in commenting on it in that context because that is not its purpose.

This announcement should be looked at in the light of someone trying to control the narrative.

Repeat after me: The Conservative party is the party of fiscal responsibility, they have a long-term economic plan.

There's a good pleb.

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A colleague at work said that austerity has all been all for nothing and has been a con. Another bloke of the same mindset said that the right to buy on HA's is completely wrong. Both are of Conservative mindsets. I've given the second bloke the facts for a while now and he's finally waking up.

Seems like the narrative might be starting to crack?

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The Telegraph coverage has a debt clock. It's still going up at super speed and that is only the public sector net debt which excludes alot!

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