The TPA gets its advice from the same place the Tea Party does - FreedomWorks, I've no doubts that's where the idea of a "debt clock" has come from.
"British Tea Party" organises pro-cuts rally - May 14th
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The TPA gets its advice from the same place the Tea Party does - FreedomWorks, I've no doubts that's where the idea of a "debt clock" has come from.
Read the following sentence slowely: If I offered you £2000 within 1 week if you take out a £200 loan at 10% interest to give to me -- WOULD YOU GO £200 INTO DEBT FOR THAT WEEK OR NOT? If you answer not - sorry mate - you're the worst entrepreneur in the world!
Yep...you must be right!
Silly me....After all, anyone can own and pay for two houses by the time they are 22!
I must be a really a terrible entrepreneur and have no understanding of economics!
Good reason to ignore both...
Oh and I hope everyone remembers that the 'tea party' name at the moment is just a strange cover for white supremacists
And obligatory DOWN WITH THIS SORT OF THING!
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Indeed, your suggestion that a debt is always a bad idea regardless of the return on any investment made with the money proves it.
If you ever had a mortgage for either of your houses, I shout hippocrit!
You are accusing another poster of using too simple economics when yourself are using too simple scenarios as well. Unfortunately it's not as black and white as that the government could borrow, invest and make a bigger rate of retun than its debt interest. When talking about debt there are healthy levels of debt and unhealthy levels of debt, what you suggested is not an axiom to always follow.
To put your example in more realistic terms you need to imagine this:
1) You owe a lot of money to someone
2) Your business expenses are more than its receipts and your net working capital is negative (your liabilities are higher than your current assets)
3) You can borrow, but at an increasing interest rate because your business starts to look riskier every time you borrow more.
4) You can invest what you borrowed at a higher rate of return, BUT, it will take years to see this return, by which time you will need to repay your debt with the income you are generating NOW. By the time your payback period balances, your debt obligations will in all likelihood have spiralled out of control because your credit will be downgraded quickly.
Therefore the option that has the most immediate effect into getting back in the black is cutting your business expenses so that you are no longer bleeding financially. Then borrow at a stable rate (because you have displayed good credit characteristics) and invest so that you can start increasing your revenue. Borrowing when you are deep into debt is not always a good idea. Borrown when your business is making losses is never a cheap option.
When it comes to businesses, a high debt/income ratio (or equally an income loss as in the sense of a deficit) is only acceptable when a business is in its high growth phase, not when its future revenues are expected to be below average (and UKs GDP growth is projects to be below the world average I think, certainly low compared to other emerging economies). Therefore, investing in UK - as if it were a business - would be a bad idea until it debt/income ratio (or profit or income, choose what you will) gets better. As long as it stays high it's simply bad business and there are many good reasons why it's considered like that.
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All agreed. I just had to go very simple for the guy I was talking to - as he doesn't understand what an investment is!! Just trying to move him forward from his current
'All debt is always bad, anyone that thinks differently doesn't understand economics and has no brain' mind-set!
Loving how so many foolish people have fallen for the conservative/right wing media's HUGE exaggeration about how much debt/trouble we are actually in 
You do realize that we owed FAR more money after WW2 and that labour managed to repay huge amounts of this AS WELL as setup the NHS during this time?!!
Speculate to accumulate, but hey Conservatives seem hell bent on a double dipped recession it seems
You do realize that we owed FAR more money after WW2 and that labour managed to repay huge amounts of this AS WELL as setup the NHS during this time?!!
Speculate to accumulate, but hey Conservatives seem hell bent on a double dipped recession it seems
Broadly agree. I was disgusted by the anti-cuts rally, so I'd have no logical reason to attend.
More importantly, this would provide another opportunity for the 'anarchist' lunatics to come out of the woodwork, and there is no way in Hell I'd participate in something that would give them an opportunity.
Then why is there a deficit? Oh, that's right, because what you just posted is complete pish, is nothing more than an economist's wet dream and doesn't exist.
Yeah nothing to do with a GLOBAL recession
Everything to do with it, it's the idiots like Gordon Brown that followed a pipe dream and CAUSED IT.
Everything to do with it, it's the idiots like Gordon Brown that followed a pipe dream and CAUSED IT.
Gordon Brown caused a global recession? Methinks you overstate his importance.
There's always a deficit because what Britboy has posted is spot on - governments must borrow to invest in growth. This is why during the good times a deficit of 3% of GDP was agreed by the EU nations (though not always stuck to)
What I suspect you were really asking is why is the deficit so big? Well the largest cause would be the massive contraction of UK GDP during the global recession, coupled with the need to borrow billions to bailout the banks, cover liabilities and facilitate a fiscal stimulus.
The question you should have been asking is how do we reduce the size of the deficit? There are three factors that must be taken into account - growth, taxation and spending. Of these growth is the most important.
Loving how so many foolish people have fallen for the conservative/right wing media's HUGE exaggeration about how much debt/trouble we are actually in
You do realize that we owed FAR more money after WW2 and that labour managed to repay huge amounts of this AS WELL as setup the NHS during this time?!!
Welcome to 60 years ago
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I still remember the likes of Dolph and Hatter the Mad screaming from the rafters before the election that front line services would not be affected by the cuts.
They actually, really believed it ..
They actually, really believed it ..
What's wrong with taxing the rich? It's something David Cameron wholeheartedly agrees with: http://www.guardian.co.uk/politics/2011/apr/05/david-cameron-pakistan-raise-taxes-rich (unless perhaps "the rich" refers to rich people who aren't his chums).
David Cameron said:
Taxing the rich is fine, so long as you don't tax them so heavily that they leave, or use their tax revenues so inefficiently that they leave.