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What are the views on austerity here at gd? Has it worked or would we have been better investing like they have in Portugal or the USA?
Does austerity work
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No.
Long answer: no, if we go off of productivity as you know that's kinda the point, we've grown 0% since the omnishambles a decade ago.
Investment via the state is a sound plan that has worked time and again, but apparently we should just be happy that our services are **** and the people providing it are horrible or mentally unstable from all the stress.
QE's risk is minimal and the reward is a better country, it's too ******* late to save the lost decade, but we can stop it becoming worse... But nah that ain't British, we need to suffer and that's that.
Long answer: no, if we go off of productivity as you know that's kinda the point, we've grown 0% since the omnishambles a decade ago.
Investment via the state is a sound plan that has worked time and again, but apparently we should just be happy that our services are **** and the people providing it are horrible or mentally unstable from all the stress.
QE's risk is minimal and the reward is a better country, it's too ******* late to save the lost decade, but we can stop it becoming worse... But nah that ain't British, we need to suffer and that's that.
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Perhaps our Government prefers it? Each new Government hasn't tried a new course.
I have mixed views - I think austerity as a shrewdly utilised tool in can have its merits and I believe that there was a time period awhile back where I actually agree with its usage as while it might not have paid off the best it gave us a better resilience at the time to the potential for catastrophic failure.
However it is not something that should be employed as a long term strategy forever and I believe the current government is employing it out of fear of failing and lack of a proper strategy.
However it is not something that should be employed as a long term strategy forever and I believe the current government is employing it out of fear of failing and lack of a proper strategy.
Nearly 10 years of making the same mistakes expecting a different outcome?
It's hard to tell, because we haven't really had austerity in the UK. Slowing the growth of state spending is not really austerity.
On balance, I would have preferred a more stimulus response to the financial crisis, but I would also have preferred the government at the time not to have been running a deficit during the boom, which damaged our ability to respond in a stimulus fashion. Likewise, I would prefer a different approach to what is cut and what is not to the one that was taken, but the nature of politics means that politics, not economics, dictated the approach.
To ask about just austerity is to miss the key of context.
On balance, I would have preferred a more stimulus response to the financial crisis, but I would also have preferred the government at the time not to have been running a deficit during the boom, which damaged our ability to respond in a stimulus fashion. Likewise, I would prefer a different approach to what is cut and what is not to the one that was taken, but the nature of politics means that politics, not economics, dictated the approach.
To ask about just austerity is to miss the key of context.
I remember Question Time nearly exploded when one individual said that. Close to lynching him.
I believe the approach has been very badly handled, when I draw on the keynsian approach after wwii the country invested wisely and whilst not extravagant managed to develop a national health service, comprehensive education and the welfare state. Growth in all of those things and the economy occurred under successive government of different parties who treated neither capitalism or socialism as the final solution!
Recent governments have been entirely ideological in their implementation of austerity at a cost to all of us. The banking crisis shows the clear limit of pure capitalism (ask Alan Greenspan) and a new approach is needed, especially re the trite household income analogy to the National interest of 70+ mil in a golbe of 7+ bil!
Recent governments have been entirely ideological in their implementation of austerity at a cost to all of us. The banking crisis shows the clear limit of pure capitalism (ask Alan Greenspan) and a new approach is needed, especially re the trite household income analogy to the National interest of 70+ mil in a golbe of 7+ bil!
The last year the debt went down, rather than up, was 2001.
http://www.ukpublicspending.co.uk/spending_chart_1990_2020UKb_17c1li111mcn_G0t
UK's debt has been rising steadily for a long time. The question isn't whether Austerity has reduced it so much as whether it's slowed the rate of increase. The UK owed around £1.5trn in 2015 (in more useful terms for comparison with other countries, that's 82% of our GDP). Around 3-5% of our tax revenue goes on the interest on this debt. That means every household is paying around £2,500p/a just on servicing the debt. ALL of the main UK political parties agree the debt is too high and we need to bring it down. The chief difference is that the Conservatives think we need to cut government spending to achieve that and Labour believes that if we put enough money on Red, we'll get back enough to pay it down.
I believe my overtly biased likening of Labour's investment plans to a casino roulette wheel shows my views on that. And I believe the burning casino that Brexit has created supports my bias. But opinions may vary.
Did the Labour/Tory Government's after WWII following Keynes approach also bet in a casino because history shows they both invested and grew better than many nations who just trimmed back across the board, but do replace household analogies with casino analogies, perhaps you are the new economic visionary?
I think a lot of people at least subconsciously are making the comparison of what we've had in the way of austerity and for instance the way Germany grew its economy over the same time - but take a deeper look at Germany and things aren't so rosy with a very real chance of it unravelling FAST while our economy is much more resilient to spectacularly falling apart though also it has become a bit resilient to any real growth with the continual strategy employed by the Conservatives which especially isn't good at a time like now with Brexit looming where we need to be using incentives and stimuli to get it moving and working for us.
I think the key is what you mentioned before about investing wisely, etc. more lately both Labour and Tory approaches seem far more blindly ideology lead and lacking some of the shrewdness in application of that bygone era.
Soldato
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I don't agree with outright austerity. I think the coalition government had a better balance in the beginning when there was higher taxation and stimulus especially if you look at the first year in government. There was a little bit of a silver lining starting to emerge from that, but they went further and further in trying to hit 'targets' of getting the deficit down by x amount of time. I think they should have taken a longer than they did, as it became too aggressive and stunted some of the economic growth.
The worst part about all this, is after 7yrs we don't have much to show for it. The deficit is down yes, but debt is up. The aggressive deficit reduction has been quite counter productive at times, as we have had to borrow again when the government cut too aggressively, look at the NHS and social care for example. The trusts in the red are spending more to cope with the top down reorganisation which essentially moves money out of one pot into another cutting treatment and care.
I don't believe in complete socialist type spending, but I don't agree with the way the government has dealt with this issue either. I think a mixture is probably the best balance. The situation will also only be harder when Brexit comes. Further austerity during Brexit really is not going to go down well with large parts of the UK.
The worst part about all this, is after 7yrs we don't have much to show for it. The deficit is down yes, but debt is up. The aggressive deficit reduction has been quite counter productive at times, as we have had to borrow again when the government cut too aggressively, look at the NHS and social care for example. The trusts in the red are spending more to cope with the top down reorganisation which essentially moves money out of one pot into another cutting treatment and care.
I don't believe in complete socialist type spending, but I don't agree with the way the government has dealt with this issue either. I think a mixture is probably the best balance. The situation will also only be harder when Brexit comes. Further austerity during Brexit really is not going to go down well with large parts of the UK.
We're simply closer to spending what we earn. Anyone who thinks lending money and paying endless interest is a good idea should probably not be incharge of finances, there's no such thing as infinite growth. Eventually you can't just outgrow the debt, you have to actually pay it off.
No, and mainly because there is so much waste, unethical practice and inefficiency in the government and many councils that I honestly don't believe cutting services has led to the 'saved' money going anywhere but into pockets. Take Wokingham Borough Council - this year they have cut half of the lollipop ladies around the schools, citing austerity measures and in spite of a public outcry. At the same time they have been employing 'temporary' staff at the Council and paying them RIDICULOUS wages...
http://www.readingchronicle.co.uk/n..._and_reveals_heavy_spending_on_interim_staff/
...and doing things like spending £50,000 on the relatively new library only to decide to demolish it and move it a few hundred yards for no actual reason that anyone can fathom.
http://www.readingchronicle.co.uk/n..._and_reveals_heavy_spending_on_interim_staff/
...and doing things like spending £50,000 on the relatively new library only to decide to demolish it and move it a few hundred yards for no actual reason that anyone can fathom.