Does austerity work

stewski said:
If you feel quoting your belief about Portugal, the USA and the UK re spending, austerity and the relative merits of Keynsian approaches, backed up with graphs of absolute values and then typifying the problem with spending as a % of gdp as an economic measure, relating to Gordon Brown is an "Analysis", bully for you!

I suspect it's more complicated than absolute positions will admit!

I will say the absolute value of government spending in this banana republic has put a lot of people out of work, including police, nhs, fireservices and a range of other public sector workers, whilst freezing those who survived the axe pay! At this point I'm not sure your absolutist graphs will convince many we haven't actually had Austerity, perhaps you could trot out a household analogy for them!
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This is the fundamental problem, people have to believe what is being done is right. At the moment a large section of society that is doing essential work is taking a hit. This is the typical Tory way of simplistic spread sheet accounting. The trouble is it's a race to the bottom.

Unfortunately I don't think any of the current political options or even the BOE are capable of running the economy in the correct manner.

The current economic progression is unsustainable so it either all crashes or slowly gets worse and more people get poorer.
I don't see anything that is going to generate sustainable wealth for the majority.
 
Irish_Tom said:
Depends whether you trust the figures — many would argue that they've been inflated by people in part-time work or on zero-hours contracts.
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There is that and it probably explains why despite that levels of taxation are higher now than they've been since the 70s I think, now that the deficit has been substantially cut.

Edit: Should probably note that it's as a % of GDP as regards tax receipts.
 
Dolph said:
My analysis, though far from complete, is certainly better than rants like this one.

You do know maths is axiomatic? And that's what this is at this point.
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I presented data and so did you, mine is the more traditional measure, you appear to have gotten a little confrontational since this freely available oecd data was posted?

What has maths got to do with your opinion presented as "analysis" thus far, you've yet to consider a number of points raised with your "analysis" so far and are now just calling anything that doesn't confirm your bias a rant.
 
Actually national debt wasn't over 1trn at the start of 2010, it was higher than 450 BN , though,

By some estimates it is now 1.8 trn , is that austerity?
 
The Tories have managed to decimate public services slashed public sector pay in real terms but still massively increase the debt.

Meanwhile sundry pet projects plough on.
 
stewski said:
I presented data and so did you, mine is the more traditional measure, you appear to have gotten a little confrontational since this freely available oecd data was posted?

What has maths got to do with your opinion presented as "analysis" thus far, you've yet to consider a number of points raised with your "analysis" so far and are now just calling anything that doesn't confirm your bias a rant.
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I have responded due to the change in tone of your posts. You have been getting stedily more aggressive as the thread has gone on, with more attacks towards me in lieu of actual argument, and emotion in response to numbers.

The numbers are crystal clear. We continued to increase spending, albeit at a slower rate than was originally planned. Portugal and the USA reduced their spending. We grew, the USA grew, Portugal shrank. All these things are statements of fact, but they are incompatible with your presented narrative.
 
Just to add, the GDP calculation whilst apparently internationally recognised is not actually a very good way of judging how the economy is doing. It is more a bankers/ economists way at looking at things rather than an engineer/entrepreneurial way at looking at things.
GDP is a measure of mostly unproductive things like buying a Chinese made TV on a credit card. It's all about the velocity of money and asset values. So to contradict myself it measures economic activity but not necessarily useful economic activity.

For instance imputed rents are I believe 10% of GDP.
 
Slam62 said:
Just to add, the GDP calculation whilst apparently internationally recognised is not actually a very good way of judging how the economy is doing. It is more a bankers/ economists way at looking at things rather than an engineer/entrepreneurial way at looking at things.
GDP is a measure of mostly unproductive things like buying a Chinese made TV on a credit card. It's all about the velocity of money and asset values. So to contradict myself it measures economic activity but not necessarily useful economic activity.

For instance imputed rents are I believe 10% of GDP.
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It's also prone to recalculation, I believe the UKs GDP was revised up a fair bit when they decided to add in the likes of prostitution a year or two ago.
 
Dolph said:
I have responded due to the change in tone of your posts. You have been getting stedily more aggressive as the thread has gone on, with more attacks towards me in lieu of actual argument, and emotion in response to numbers.

The numbers are crystal clear. We continued to increase spending, albeit at a slower rate than was originally planned. Portugal and the USA reduced their spending. We grew, the USA grew, Portugal shrank. All these things are statements of fact, but they are incompatible with your presented narrative.
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Actually I see it that I posted a graph of a more commonly valued economic measure spending as a % of GDP and you responded:

https://data.oecd.org/chart/4V05
One of the reasons for our problems was politicians doing just this. Gordon Brown vowed to keep the deficit below 3% of GDP, increasing spending throughout the boom. This was the key reason we didn't have the flexibility as when the recession hit, that 3% of GDP overspend was suddenly much higher despite the same amount of money being spent. The same effect was seen with debt. Brown increased the national debt by 50% prior to the recession hitting, hiding it behind the temporary gdp increase of the boom.

Debts and deficits don't exist as a percentage of gdp, they are actual numbers, irrespective of GDP.
Our debt against gdp went down because of gdp growth, not spending cuts.
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First you seem to attack spending at a %of gdp as a measure, then you "analyse" the difference between us and the USA and Portugal in about 2 mins. You could be spot on for all I know, you've yet to address absolute government spending during a period of printing more money, what factors changed gdp in 3 large nations over the 10 year period and as we both agree is important, where and how the money was spent!

I'm sure more opinion will now follow.
 
Dolph said:
I have responded due to the change in tone of your posts. You have been getting stedily more aggressive as the thread has gone on, with more attacks towards me in lieu of actual argument, and emotion in response to numbers.

The numbers are crystal clear. We continued to increase spending, albeit at a slower rate than was originally planned. Portugal and the USA reduced their spending. We grew, the USA grew, Portugal shrank. All these things are statements of fact, but they are incompatible with your presented narrative.
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The USA versus Portugal is an interesting one, some people say the USA is just loading up on private debt, (student loans, sub prime auto loans , cheap company finance). I personally take the view that the industrially the USA really knows what it's doing and has plenty of natural resources. So it's only a matter of time before they get going properly again.

Portugal I don't know about, a couple of years ago I had a chat with a young Portuguese trainee and things seemed to be pretty grim, the culture was a bit of an old boys network when it came to getting ahead.
Sounds like things are probably worse now.

I don't know what the answer is, I would be interested to hear theories.
 
I think that recalculation also resulted in our EU contribution increasing too, which seemed to anger the Daily Mail at the time.
 
I will say if we are after national examples of economies performing better than the U.K. over the last 10 years under George Gideon Osborne (your preference to Cable) and Phil Spreadsheet Hammond, at this point it's the whole G7 with a bunch of other interesting cases.
Something's not working for sure!
 
Slam62 said:
https://www.theguardian.com/busines...ng-drugs-prostitution-uk-economy-gdp-eu-rules
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From that source.
"In isolation, if the economy is 4.6% bigger and nothing else changed, the public finances would look much better – since we tend to look at borrowing relative to GDP or debt relative to GDP. That would be the equivalent of public finances alchemy but we know that the ONS is going to adjust the way it accounts for debt as well – and this is going to be revised higher – so there is no free lunch here."
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