[Sloper]

Well it seems that about every economic indicator is moving strongly in the right direction.

http://www.theguardian.com/business/2014/apr/24/optimism-in-british-factories-at-four-decade-high
http://www.theguardian.com/business/2014/apr/24/uk-average-workers-pay-rise-inflation
http://www.theguardian.com/business/economics-blog/2014/apr/23/cbi-confidence-high-1973-bust
http://www.theguardian.com/business/2014/apr/23/uk-deficit-lowest-financial-crisis-osborne-budget
http://www.theguardian.com/business/2014/apr/21/cebr-raises-forecast-uk-growth

So a wad point for the person who can accurately forecast Ed Balls' or Miliband's response to the news.

For the employed home owner with a mortgage, you've never had it so good.  At this rate we can expect some tax cuts and a thumping Conservative majority at the next election

(yes I know, lies, damn lies, the 1%, zero hours contracts, food banks, towel folder etc etc)

[tomtom]

Simples....

'The real term cost of living has increased under the Tory government. People today have less money in their pockets than they did 5 years ago'

[lagerstarfish]

"this recovery was only made possible by the solid foundations laid by the last Labour Government - and it would have happened much quicker and with more joy if Labour had been managing it since then"

[tommytwotone]

For the...home owner with a mortgage, you've never had it so good. 


At this rate we can expect some tax cuts and a thumping Conservative majority at the next election, house prices and rent rates to rise, and an even larger gap between the haves and the have nots.

If I were Ed Balls that's where I would start.

[lagerstarfish]

For the...home owner with a mortgage, you've never had it so good. 


At this rate we can expect some tax cuts and a thumping Conservative majority at the next election, house prices and rent rates to rise, and an even larger gap between the haves and the have nots.

If I were Ed Balls that's where I would start.

getting a job and a mortgage?

[shark]

Simples....

'The real term cost of living has increased under the Tory government. People today have less money in their pockets than they did 5 years ago'

By which you mean inflation is ahead of average wages though there is evidence this trend is reverting and is likely to wrong foot Miliband.

Generally in each recession we are better off than the last, though no happier. Gains are taken for granted, loss is felt more keenly.

[Sasquatch]

but, but, but the rich are getting richer faster than the rest of us.  Tax 'em. Redistribute

[drdeath]

Well, one way to look at it would be  -

Our decrease in GDP was worse than nearly all of our competitors, our time spent in recession was longer and NOW, having still not returned to our pre-recession GDP, we are slightly ahead in terms of percentage GDP growth?

Hooray?

 

[Stubbs]

All these articles are just government written propaganda attempting to make people believe they are better off so they spend some money and think less :FoilHatSmiley:

[Jaspersharpe]

Why aren't the opposition pointing out that rather than reduce borrowing, this government has borrowed more in three years than Labour did in 13?

I don't think that running a deficit is that important but seeing as reducing it was what they based their entire election campaign on, shouldn't somebody mention that they've actually failed miserably? Borrowing is still enormous despite the cuts (which have been proven to be ideologically rather than financially driven - see the tuition fees mess - as predicted).

I thought that was the sort of thing the opposition was supposed to do? Miliband is fucking useless.

[Sloper]

Why aren't the opposition pointing out that rather than reduce borrowing, this government has borrowed more in three years than Labour did in 13?

I don't think that running a deficit is that important but seeing as reducing it was what they based their entire election campaign on, shouldn't somebody mention that they've actually failed miserably? Borrowing is still enormous despite the cuts (which have been proven to be ideologically rather than financially driven - see the tuition fees mess - as predicted).

I thought that was the sort of thing the opposition was supposed to do? Miliband is fucking useless.

I think it's because despite the Guardian reader's ignorance as to the distinction between debt and deficit Labour know that the reason debt has increased is that they left office with an eye watering deficit, and that debt necessarily will grow until the deficit has been turned into a surplus.

As such they don't want people with a basic knowledge of finances delving too deeply into why debt has increased over the parliament as it may raise a few akward questions about the deficit 2001/2to 2008.

Let me put it like this.

If the debt in 2009/10 was £nil and the defecit was £150Bn on the coalition taking office, then asuming the defecit was reduced by 20% per year the debt accumulated over the term of office todate would be £553Bn (including the debt for 2009/2010).

Debt will keep on increasing until we're in surplus.

[Johnny Brown]

asuming the defecit was reduced by 20% per year (sic)

Never mind assumptions, what are the actual figures?

[lagerstarfish]

Debt will keep on increasing until we're in surplus.

perhaps someone could put this on a large sign in front of the speaker's chair

[Sloper]

This was an illustration of how deficits necessarily result in more debt (I'm not even sure that the defecit was £150bn, it was in that order though).

I think that the deficit has been cut by 1/3 over the course of the Parliament, so c.6% compund per year???

We can debate whether this was too fast and too deep or too shallow and too slow, we can debtate whether more borrowing and spending would have produced greater sustainable growth sooner, but what is beyond question is that the reason why the debt has increased during the course of the Parliament was that the government took office with the deficit that they did.

What we should be asking is how labour managed a structural deficit in the boom time when the cash was rolling in from stamp duty, IHT, IPT, 3G auction, various privatisations and so on . . . had we been in surplus over the 2001-2008 period we would have been able to have been able to have a significant Keynesian stimulus.

Ohh and before people say that the bank bail outs cost £150bn, £1tn or what ever, the actual costs last time I look ed at the Comptroller General's report was something like <£20bn.  Now that's real money but a category removed from the figures generally quoted. For absolute clarity, the cost is not the amount borrowed, but the cost of arranging the borrowing and servicing the debt.

Much of the bailout was guarantees which were not called on and therefore had little / no real cost.

[Sloper]

Debt will keep on increasing until we're in surplus.

perhaps someone could put this on a large sign in front of the speaker's chair

Stupid idea, it will make it look as if Mr Bercow is a very very long way away, which can't be good for his authority over the House.

[Stu Littlefair]

I think it's because despite the Guardian reader's ignorance as to the distinction between debt and deficit Labour know that the reason debt has increased is that they left office with an eye watering deficit, and that debt necessarily will grow until the deficit has been turned into a surplus.

Let's be clear that if the tories make this argument (blame Labour) they're moving the goalposts. In his first 'emergency budget' Osborne made this claim "The formal mandate we set is that the structural current deficit should be in balance in the final year of the five-year forecast period, which is 2015-16".

Now, as things stand there is no way the structural deficit will be in balance by 2016 - even Osborne admits it will be 2018 at the earliest.

If you want to blame Labour for this failure you have to assume that Osborne didn't know how big the deficit was when he made his budget statement, which is stretching things somewhat.

If I were the Labour chancellor I'd be saying that the Tories have given us years of painful austerity and still haven't met their own promises to balance the books.

Not that this makes any of what you are saying about Labour running a deficit in the boom years any less true, or any less unfortunate.

[Sloper]

In what way is the Government's failure to meet its target movign the goal posts?

The point I was making to Jasper was that the reason why debt has increased is due to the deficit they inheirited.  Debt would have incresed over the term of the government even if the budget was in surplus in the year 2014/15.

I'm not blaming Labour for the failure of the Government to meet the target they set themselves.

As for your suggestion as to what Labour might say, I recall Alisdair Darling's projections and proposing 'cuts deeper than Thatcher's, so that's one more shot fox, particularly against Ball's cricket umpire gestures and doom laden predictions of a bouble and trebble dip recession (we had neither).

[Stu Littlefair]

Jasper was making a general point about this government having to borrow more than expected. Your response was to blame the size of the inherited deficit. If the government had reduced the deficit as fast as they claimed they would, the debt would be smaller.

Changing the argument to "but debt will go up as long as there's a deficit" is

a) moving the goalposts,
b) pretty insulting, given that you're talking to an accountant.

You're right that Darling would have cut as much as Osborne but, again

a) Balls is not Darling
b) Perhaps not in the same places.

It's interesting - I think Labour have a good case to make that the Tories killed off a nascent recovery and prolonged the recession. I think Osborne silently acknowledged this when he made u-turns on everything in the 'omnishambles' budget and reversed cuts on capital spending - investing massively in road and rail projects amongst others. Krugman (ever the unbiassed commentator put it like this - ""So the UK government did a lot of austerity, then stopped doing more, and the economy began to grow thereafter". Even allowing for post hoc ergo propter hoc fallacies that's quite interesting.

However, even if we accept the case that we could have recovered better, sooner, and it was only the quiet ditching of 'Plan A' that allowed the economy to return to growth I don't think Labour will make much headway with it as a political argument. Electorates have short attention spans and people are starting to feel more confident and better off.

I reckon you're right and Osborne will take the credit for the recovery and the Tories prospects will improve. I don't reckon you're right that they deserve it...

[tomtom]

I reckon you're right and Osborne will take the credit for the recovery and the Tories prospects will improve. I don't reckon you're right that they deserve it...

+1

[tomtom]

OK, so this chart explains all of the above more clearly... (I think)



Debt rising under both Labour and ConDems - but the rate of debt increase drops post 2012...
So the 'deficit' is really the 'deficit' of what we need to pay in order to stop our debts growing...

So instead of plugging the hole in the ship (thats up a creek without a paddle) we've managed to reduce the size of the hole slightly - but not managed to pump out any of the water yet

And one of Slopers points is why didnt Labour reduce this towards zero during the good times of the early/mid noughties...

[Sloper]

Jasper was making a general point about this government having to borrow more than expected. Your response was to blame the size of the inherited deficit. If the government had reduced the deficit as fast as they claimed they would, the debt would be smaller.

Changing the argument to "but debt will go up as long as there's a deficit" is

a) moving the goalposts,
b) pretty insulting, given that you're talking to an accountant.

You're right that Darling would have cut as much as Osborne but, again

a) Balls is not Darling
b) Perhaps not in the same places.

It's interesting - I think Labour have a good case to make that the Tories killed off a nascent recovery and prolonged the recession. I think Osborne silently acknowledged this when he made u-turns on everything in the 'omnishambles' budget and reversed cuts on capital spending - investing massively in road and rail projects amongst others. Krugman (ever the unbiassed commentator put it like this - ""So the UK government did a lot of austerity, then stopped doing more, and the economy began to grow thereafter". Even allowing for post hoc ergo propter hoc fallacies that's quite interesting.

However, even if we accept the case that we could have recovered better, sooner, and it was only the quiet ditching of 'Plan A' that allowed the economy to return to growth I don't think Labour will make much headway with it as a political argument. Electorates have short attention spans and people are starting to feel more confident and better off.

I reckon you're right and Osborne will take the credit for the recovery and the Tories prospects will improve. I don't reckon you're right that they deserve it...

I think we both deal in evidence, so let's look at the evidence.

What ever Jasper might have intended to say, you're misrepresenting what he actually did say. Which is 'Why aren't the opposition pointing out that rather than reduce borrowing, this government has borrowed more in three years than Labour did in 13?. . .  Borrowing is still enormous despite the cuts.

Although I do agree that 'Miliband is fucking useless.'

So Jasper's point was that the borrowing in the term of this government was > the borrowing in 13 years of Labour's administration and that that is the point Labour should be making, which in my view is not correct.

Had the defecit been reduced more quickly/in line with targets etc, the amount of debt would still have increased (providing a smoothish curve to a balanced position in 5 years) by some £300bn (and from rough memory been > the amount borrowed in the 13 years of the previous administrations) but it wouldn't have increased by quite as much as it has, the debt would not be 'smaller' i.e. below the level inherited.

As for Jasper's profession, I cast no aspersions on his professional competence, it's just on matters such as this his eyes glaze over and he loses his professional detachment.

As for prolonging the recession, you'll note that we haven't technically been in recession during this Parliament (the so called double dip was avoided on revision of figures) al be it from a -.01 to 0

http://www.ons.gov.uk/ons/dcp171766_348204.pdf

As for Labour's case that the recovery was killed off, the 'recovery' was a dead cat bounce on speed and could not have been sustained.

[Sloper]

OK, so this chart explains all of the above more clearly... (I think)



Debt rising under both Labour and ConDems - but the rate of debt increase drops post 2012...
So the 'deficit' is really the 'deficit' of what we need to pay in order to stop our debts growing...

So instead of plugging the hole in the ship (thats up a creek without a paddle) we've managed to reduce the size of the hole slightly - but not managed to pump out any of the water yet

And one of Slopers points is why didnt Labour reduce this towards zero during the good times of the early/mid noughties...

On hold to our glorious regulators, but I don't think that graph does explain things as it has no context.

Brown's borrowing needs to be taken in context of a growing economy, with low and stable (in historic terms) interest and inflation rates with significantly above trend tax receipts and one off 'dividends', plus of course the crazed embrace of off balance sheet activities.

Of course Boy George hasn't sealed the hole in the canoe, pumped out the water and waved his cock in the air; but what he has done is steered a course away from the rocks / waterfall and given us a chance to repair the damage in slack water: indeed continuing the fluvial analogy we're now paddling upstream with the hole above the waterline with good prospects of sealing it without disaster.

[Stu Littlefair]

Sorry sloper - your reply to me reads like a 500 word essay to explain that you didn't understand that by 'smaller' I meant 'smaller than it currently is' and not 'smaller than it was when Osborne became chancellor'.

Since that was obvious in the context (no-one suggested the uk would run a surplus until 2016) I'll assume you're a bit tired and let you go have a lie down.

[Sloper]

Thanks, if there's anyone I need lessons in being patronising I'll be sure to give you a call.

If you're not available, I'll assume that the astrology has fatigued you somewhat.

[Stu Littlefair]

:-) good comeback.

[Moo]

Sloper there's no point in arguing with sheffields foremost Thom Yorke impersonator he's much to clever and strong ............... so strong.

[petejh]

He must be a Capricorn. They're supposed to be strong.

[Stu Littlefair]

Cancer. Underneath that strong exterior I'm soft and caring. No one sees my caring side.

[Jaspersharpe]

Well done Sloper you missed my point quite spectacularly.

Your original post was about politics and perception in terms of the economy (why so many Guardian links otherwise?) and that's what I was replying to.

Thanks for the explanation but unlike Dave and Gideot, I understand the concept of debt and deficit perfectly well. In fact, this is exactly my point.

The Tories used and continue to use the economy as their personal political football. Everything bad about it was the last lot's fault and everything good is down to them, if the facts get in the way they just lie (do I really need to post the links about Cameron being told off for "confusing" debt and deficit again?!).

What I was saying is, why do Labour seem incapable of similar politics when they have so many open goals to aim at? The average person doesn't understand the intricacies of economics (or even the basics) which is why politicians get away with such crap.

The amount of borrowing is just one example. There's the moving the goalposts on growth, there's plan A failing miserably, there's nicking Labour's policy on capital expenditure, there's the fact that the economy has recovered despite, not because of Osborne, etc etc.

Labour should have been wiping the floor with Osborne for the past few years rather than allowing him to get into a position where he can take credit for the current upturn. That was what I was saying.

[Oldmanmatt]

Surely, from this lay-mans perspective, the policies of the current Gov have little to nothing to do with any current recovery; much as the previous lot had little to do with the crisis and collapse? Both of these things are essentially global in scale, with regions trailing along behind the major economies, like carriages behind a Gulag Express?

I was an Expat at the time of the crisis and splitting my time between the Mid East and Europe (with several US customer too) and I would say Britain came off quite lightly.

I have never understood the blinkered attitudes here. In today's world individual Gov policies are like trying to steer the Titanic with a lifeboat oar.

[Johnny Brown]

What Matt said.

[Moo]

what jonny said about matt, but mainly what jasper said to sloper as well. My job mainly involves palming work off to other people so I'm loving the way this thread is developing.

[tommytwotone]

For the...home owner with a mortgage, you've never had it so good. 


At this rate we can expect some tax cuts and a thumping Conservative majority at the next election, house prices and rent rates to rise, and an even larger gap between the haves and the have nots.

If I were Ed Balls that's where I would start.

My point summed up a lot more eloquently here:


http://www.theguardian.com/commentisfree/2014/apr/29/rent-tenants-private-landlords-power-regulation

Those brilliant returns for landlords are not free; or in other words, they are not windfalls from a beneficent universe.

They are the direct result of a market in which people are being screwed for more and more of their income in rent. They cannot, therefore, amass the capital to buy, and so have to rent for longer, leaving them even more powerless in the face of price increases that bear no relation to their income. It's a racket, in other words: a game of Monopoly that won't end.

[petejh]

What Moo said, and also Jasper; but also some of what Sloper said in response to Stu.

[Stubbs]

A slightly less positive Graun piece

http://www.theguardian.com/environment/earth-insight/2014/may/01/treasury-economy-recovery-hype-growth-osborne-crash-risk