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Government Presses the Spending Button


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Johnson pushes the button on spending :

https://www.bbc.com/news/uk-54988870

https://www.bbc.com/news/science-environment-54990030

The only question is, with the impact of covid, how much of this will be funded by government debt, and how much by taxes ?

The government will always waste money but i'd rather they spend it on stuff like this, that doesn't directly impact me, than on housing stimulus measures, which do directly and very negatively impact me.

I'm past hoping for any sincere action on housing from any government. All I want now is no further 'help' and their attention directed away from housing. The above seems a positive step in that regard. 

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Wind farms would be a good investment, especially given the power demands having electric cars will generate. 

Both would also generate plenty of jobs. 

We have been building a shedload of wind for a long time.

Today almost 50% of the UK's electricity was generated from wind (www.gridwatch.co.uk) and we have approx. 4GW more being installed in the next 2 years.

Edited by Gigantic Purple Slug
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Cyber warfare, AI, Automation?  How much is going to be creamed off by the big 'consultancies'.  Some middle aged 'managers' leading an assault unit...they'll start having 'accidents'.

All stuff people don’t understand that you can’t see, it’s perfect if you are wanting to enrich your buddies.  For 4billion we will probably get an app with an arrow controlled by the Army General, if we pay another 4billion we can upgrade so there is a pre recorded Voice saying forward chaps in a nice accent 

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It's a good job we didn't vote Corbyn in, as government spending would have rocketed :s

I think you can justify it on the grounds that it is "necessary" spending rather than spending for the sake of it.

I believe in Keynesian spending, that the government should pick up the slack when the economy falters. The problem is although most seem to shout loudly about this, what they don't seem to be so keen on is the flip side, which is that the government should contract its spending when the private sector is doing well.

FWIW I think the Tories have put the economy in a much better state than Labour would have done. They contracted spending from 2010 onwards, and although this meant the economy barely grew during this period, it did mean that when covid hit we were in a much better position re government finances than we would have been under a Labour government.

For me the issue over national finances is that the absolute level of debt is less important than the a level of debt relative to similar countries. If we had had a Labour government during the 10's we would now be facing the consequences of covid with much poorer government finances. As it is we are in reasonable shape compared with comparable countries like France and Italy and in a much better position to spend our way out of the covid crisis without making our financial position look stand out bad.

I do believe that a lot of what Corbyn was proposing we need to be looking at now in terms of spending. It's just that when he proposed it, we didn't need to be doing it.

 

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It's a good job we didn't vote Corbyn in, as government spending would have rocketed :s

Lesser of two evils isn't'. The tories spending over the last 10 years is obscene. But Labour want to spend even more. We're screwed.

 

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Lesser of two evils isn't'. The tories spending over the last 10 years is obscene. But Labour want to spend even more. We're screwed.

 

If they had contracted spending much more during the 10's then we would have spent longer/more periods in recession, which is a popularity no-no. They ran spending right on the edge.

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If they had contracted spending much more during the 10's then we would have spent longer/more periods in recession, which is a popularity no-no. They ran spending right on the edge.

Better to have a short/sharp recession than a long depression.  

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If they had contracted spending much more during the 10's then we would have spent longer/more periods in recession, which is a popularity no-no. They ran spending right on the edge.

Sooner or later they have to stop kicking the can down the road and admit "we're broke" and to cut spending drastically.

 

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Sooner or later they have to stop kicking the can down the road and admit "we're broke" and to cut spending drastically.

I dislike the word 'broke' in this context as it reminds us of an ordinary person who can't make ends meet.  A nation state (especially one with a soveriegn currency and central bank answerable to government) does not fit into such an analogy.

The question that matters, when it comes to government spending (over and above the tax take) relates to foreign exchange rates.  A government that borrows and spends massively in excess of how much tax it raises results in a currency devalued relative to other currencies (assuming, of course, the other currencies are not subject to similar policies).  For the UK, that could mean more expensive goods in shops (as we import most of them) but it could also make it viable for UK businesses to export.  Raising taxes to avoid borrowing to spend would result in a stronger currency - cheaper prices in shops but an even tougher environment for companies wishing to export.

A country with the structure of Britain (sovereign currency; central bank accountable to government) can only be "broke" if the government finds this state of affairs to be politically expedient.

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I dislike the word 'broke' in this context as it reminds us of an ordinary person who can't make ends meet.  A nation state (especially one with a soveriegn currency and central bank answerable to government) does not fit into such an analogy.

 

So Venezuela aren't broke? Cuba? Argentina? etc. Just because a government can borrow and print doesn't mean a county can be prosperous .There are limits and the UK government is reaching them. 

Edited by Warlord
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They've obviously ran out of hastily created, tory linked PPE suppliers to funnel billions of pounds to.... cue a flurry of hastily created, tory linked suppliers of space/war stuff suddenly appearing on Companies House.

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They've obviously ran out of hastily created, tory linked PPE suppliers to funnel billions of pounds to.... cue a flurry of hastily created, tory linked suppliers of space/war stuff suddenly appearing on Companies House.

It is unbelievable the amount of money being wasted. A SCANDAL !  

Cut spending NOW ! 

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Lesser of two evils isn't'. The tories spending over the last 10 years is obscene. But Labour want to spend even more. We're screwed.

 

I do not agree, you would have ministers looking at the data and if someone is on the right in the labour or the left in the conservative party, labour might have spent less, lets be honest it is about winning the next election who cares about debt.

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I dislike the word 'broke' in this context as it reminds us of an ordinary person who can't make ends meet.  A nation state (especially one with a soveriegn currency and central bank answerable to government) does not fit into such an analogy.

The question that matters, when it comes to government spending (over and above the tax take) relates to foreign exchange rates.  A government that borrows and spends massively in excess of how much tax it raises results in a currency devalued relative to other currencies (assuming, of course, the other currencies are not subject to similar policies).  For the UK, that could mean more expensive goods in shops (as we import most of them) but it could also make it viable for UK businesses to export.  Raising taxes to avoid borrowing to spend would result in a stronger currency - cheaper prices in shops but an even tougher environment for companies wishing to export.

A country with the structure of Britain (sovereign currency; central bank accountable to government) can only be "broke" if the government finds this state of affairs to be politically expedient.

Worth pointing out that countries only go broke when they borrow in a currency/commodity they have no control over.

Argentina goes bust because its debt is denominated in USD which it can't print.

Otherwise as you say going bust is equivalent to currency debasement. Which leads to inflation, and therefore reduction of debt.

I also think the idea that governments have any money to "go bust" is nonsense. We own the money, the currency, the debt. The government simply (mis)manages it on our behalf.

People on here have been saying that the UK is "going to go bust" for the past 10 years. I would never say never, but I'm not holding my breath either.

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The public sooner or later is going to realise that fueling HPI is not in the best interests of the majority of people surely.  I’d like to see house prices revert to affordable levels and people buying homes only to live in.

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Worth pointing out that countries only go broke when they borrow in a currency/commodity they have no control over.

Quite.

I'm reading about modern Russian history at the moment.  What stands out to me is that all the movers-and-shakers in Russia seem to have been mostly concerned with extracting anything valuable and selling it abroad for cash that is not Ruble denominated.  I thought it interesting as it is a curious dual to the idea that nation states can't run out of their own currency.

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  • 439 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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