Austerity?
How's that working for you Cameron? Like Spain, Italy? Didn't you say in 2010 we'd be out of the mess with your strategy by now?
Official: Britain staggers into double-dip recession doom
Britain has slipped back into recession, preliminary figures released by the Office of National Statistics showed this morning. The UK economy shrank by 0.2 per cent in the first quarter of 2012. That's the second consecutive GDP nosedive, which technically means fears of the country falling into a double-dip recession have …
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Wednesday 25th April 2012 14:39 GMT system11
Re: Austerity?
Please highlight which particular cuts caused this, and when they actually took effect. I don't mean the pile of discussed, planned or speculated ones - I want an example of an actual cut which has made any difference to the situation.
I see too many people bemoaning 'all the cuts' when actually almost nothing has changed.
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Wednesday 25th April 2012 18:19 GMT Anonymous Coward
Re: Austerity?
>>>Please highlight which particular cuts caused this,
So you never go into the public sector do you, you have a good income and no children, ahh! good for you. I am unfortunate enough to work for a school, no not as a teacher but as support staff, so not only am I poorly paid, but I'm not going to get any more money soon am I? My income is dropping in real terms, like a stone, petrol has gone up, gas, electicity, water rocketing up.
Child tax credits all but gone, as the family income is over £25 grand, yes that is two jobs. So guess what, I'm buying sweet FA, saving nothing and when the shit hit's the fan, running up debts on essential Items.
So enjoy your well paid life, and just hope that the cuts won't affect you when you or your loved ones(though I'm not sure you have any) have to go into Hospital or a care home, or pehaps when you trip up playing Sunday footy and rip your knee out, 'cos the cuts have only just started, bend over and brace 'cos Gideon and Dave are not going to let their fortunes wane.
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Thursday 26th April 2012 12:36 GMT system11
Re: Austerity?
Correct, I never go to the public sector. Oh - aside from the NHS telling me I can't have the medicine for my chronic sleep disorder, because it's too expensive - but they told me that before the "cuts" anyway.
I have a reasonable income, my partner earns a pittance though. We have no children, but if we did I don't think I'd be complaining that other people aren't funding my lifestyle choice. They *are* a lifestyle choice you know. Aside from that, my income is also dropping in real terms, bills are all up everywhere you look, and it's pretty grim. All of these things happened regardless of "cuts". My remaining grandparent went into a council provided care home just two months ago, no problem there either. It's much nicer and safer than the house the council used to pay for - it's been like watching someone wake up for another lease of life. The pavement outside our house was literally still warm to the touch yesterday because they're all being replaced.
Child tax credits are the one very good point made, but as I say - you chose to have children. I have not chosen to buy a horse or live in Chelsea, because I can't afford to. On a reality based note, we reduced the amount of time our heating runs over the winter because it was so expensive, that's just life I'm afraid.
No amount of moaning about cuts to front line services changes the fact that individually and as a country, we're mostly broke now. It doesn't matter how much money 'Gideon and Dave' have, or their chums in business, or the amount of tax dodged by people wealthy enough to dodge it, because it would probably fund a single beer for everyone in the country. I believe spending significantly less on things we can't afford, is a real part (but not all) of the solution.
I'm just tired of people talking the cuts up as if it's the worst spectre in the world, destroying the lives of the poor while funding the lives of the rich. Do you know who the 'rich' are in the context of tax funding? The poor sods working for a living with no children, who are not rich and also use very little services of the state, paying a fortune in rent while people live next door free of charge. The same poor sods who can't afford to go on holidays or buy new cars, just like people with less money can't. The media particularly sensationalise it like an unknowable boogeyman lurking under the bed just waiting to kill poor granny in the winter. The economy falling over even more would be worse.
In short: it sucks for everyone, get over it. I don't like it either. I like the probable alternative even less.
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Thursday 26th April 2012 12:48 GMT supermoore
Re: Austerity?
There's lots of people in the thread saying that having children is a choice, and they are of course correct.
However, if everyone who can't really afford to do so stops having children for the next 5 years, what happens when the current 20-40s reach retirement with a life expectancy of 85+ and a small tax paying work force as a result of lower fertility rates? Ta-da the country either has to borrow heavily at that point, remove the welfare state altogether and enjoy watching large-scale deprivation and poverty amongst the eldery, or go bust. Japan is struggling with this right now, and China will not be far behind.
The situation is perilous enough in this regard already without further encouraging large portions of the population not to have children. If anything, looking at the long term we need more people to have children, not less.
This is typical of 4-year-term politics. Making decisions to appease people in the short to medium term that will have disasterous consequences for large numbers of people in the future.
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Tuesday 1st May 2012 08:18 GMT Mike Tyler
Re: Austerity?
Children may have been a past lifestyle choice, but not everyone knows how life will treat them. If we don't want children for the poor people, I can accept that, but make it clear that is what is wanted and what your are voting for.
It's a bit like the heath service, we don't really want older people to keep on going, it's a bit expensive. Cuts already apply, try and get some physio treatment over 70, "old dear won't neet to walk properly will she".
Nice to see your parents had a council provided home, just why should we pay for the old and infirm, if you object to paying for children to be properly fed and housed, people are people child, adult or older.
It's fine that education is now only for the wealthy, oh yes it is, covering up pockets of poor teaching in secondary schools by having tutors, paying for travel to colleges because the Sixth form is a bit poor, subsidising the young adults at university, we may as well give up on educating children at all
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Wednesday 25th April 2012 19:58 GMT mraak
Re: Austerity?
>>Please highlight which particular cuts caused this, and when they actually took effect.
Maybe 25% of housing and 25% of social expenditure? Was this money available to private sector and individuals buying stuff, things wouldn't be so catastrophic, money would be flowing - i.e. economy growing. Double dip recession, when they promised growth? You gotta be kidding me, are you their shitguard or what?
All this austerity BS is a way to make poor poorer so that "aristocracy" can reclaim their god given rights to riches.
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Wednesday 25th April 2012 22:31 GMT Anonymous Coward
Re: Austerity?
> You gotta be kidding me, are you their shitguard or what?
So what's the alternative? It's all very well the bitch and moan, but the honest answer is that we as a country are skint. Despite the cuts, which in percentage terms of total govt spending are actually quite small, we are still borrowing £80bn a year.
90% of the government cash goes on people - it's welfare, teachers, police, etc. Any cut the govt makes is going to hurt someone - it's impossible otherwise - but you can't just keep on borrowing $140bn a year ad infinitum. Eventually the merry go round stops and there is no more £££. At least this way we can all get off in more or less one piece rather than a tangle of arms, legs, and fibreglass horses ...
> Maybe 25% of housing and 25% of social expenditure?
Ah, but if you dial back to a sensible "pre Labour" budget, it's still up in real terms over the last 15 years. It's like middle England complaining about the collapse in house prices - "oh noes it's dropped by 10%" - the reality being it was all illusionary value anyway and the house prices had just dropped back a couple of years. - but most of them are still sitting on an insane profit.
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Thursday 26th April 2012 09:31 GMT supermoore
Re: Austerity?
As has been adequately pointed out several times in this thread, the actual affect of such measures is often less important that the threat of them, or perception of them.
Hundreds of thousands of public sector workers (far more than will be made redundant in the next 2 years) fear redundancy, and so do not spend what disposable income they have to hedge against this.
Families who may or may not lose tax credits and child benefit do likewise.
And importantly there is not just the real terms cuts that are made and threatened, but the absence of increase in investment, or reduction in value in the investment that remains due to high inflation. This clearly is resulting in less job creation and higher youth unemployment, again resulting in less money spent in the economy.
The mighty City is reassured that they will continue to be able to do what they like and interest rates stay low so we don't see mass repossesions (yet). Meanwhile anyone outside the home owning, self employed, share owning, Tory voting section of the population gets less well off by the day and the exonomy slowly starves as the wealth continues to accumulate in the investment funds and pensions of the wealthiest 10%.
Bonus.
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Wednesday 25th April 2012 13:56 GMT Vic
So What?
If today's figures are correct, the economy has contracted by 0.2%.
So, on average, for every £1000 you were making last quarter, you're now making £998.
Whilst this is hardly grounds to break out the champagne, is it really going to have a significant effect on a business' profitability? Are margins that thin? Of course not.
But what *will* happen is that businesses will panic themselves into thinking that Something Needs To Be Done. And that means some other poor sap gets laid off. And that is where the problem arises: if employees are uncertain about their future, they stop spending in case they get laid off as well. Businesses then take a huge drop in revenue - and the cycle repeats.
In an effort to avoid losing a little bit of income, businesses cost themselves (and others) a load of income. Spreadsheet management at its very best... :-(
I'd like to propose a Redundancy Tax. Any business laying off employees will be taxed heavily. Yes, I'm aware that this will lead to an increase in the number of Constructive Dismissal suits...
Vic.
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Wednesday 25th April 2012 15:01 GMT James 36
the problem with economics is
it isn't easy
micro seems to work but macro involves people therefore is difficult to predict. People taking credit for running economies well are just lucky
look at its history , up until the early 70's in the UK it was widely espoused that inflation and unemployment were inversely proportional until we had high unemployment and high inflation
At the moment we have rising unemployment but interest rates are low, if they rise the situation will get really bad, remember the recession in the 80's with mortgages at 14% ?
no...
thought not
it is always different and I am sure the economy will recovery , just don't know when or what can be done to make it happen other than try to mitigate the worst of its effects (affects?! pedant services please )
whilst Capitalism may have its faults I like the alternates I am aware of even less
Paris , cos whatever happens she will carry on due to being rich enough to be insulated from a bad economy. lucky cow
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Wednesday 25th April 2012 17:30 GMT Keep Refrigerated
Re: the problem with economics is
At the moment we have rising unemployment but interest rates are low, if they rise the situation will get really bad, remember the recession in the 80's with mortgages at 14% ?
But those mortgages were capped at 3.5 times income and house prices at healthy sane affordable levels. The spectacular bust in house prices we saw recently can be squarely blamed on lowering interest rates (look you can now afford to borrow MORE!); increased mortgage cap (6x income); lax regulations (self-cert anyone?); my-house-should-be-worth-double-now sellers; shared-ownership schemes (all the cons of ownership + all the cons of renting)... I could go on.
Which would you prefer? A huge loan and tiny interest paid off over 30 years, or a small loan, high interest paid off over 15 years - because I can tell you which is the cheapest one and I'll give you a hint: It's not the one that stays with for 3 decades.
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Wednesday 25th April 2012 19:41 GMT Vic
Re: the problem with economics is
> The spectacular bust in house prices we saw recently can be
> squarely blamed on lowering interest rates
I disagree.
The house price problem is down to demand exceeding supply. The lack of supply is because all the councils sold off their housing stock (under Right To Buy) and couldn't replace it.
Rising rents meant that buy-to-rent made sense. So private landlords bought up stock, leaving the supply of housing further depleted. And we're straight into a positive feedback loop. To make matters worse, rising house prices meant that investors could ride the price bubble - yet more houses being taken out of the housing supply.
The only solution I can see is for councils to regain their housing stock. This won't be cheap...
Vic.
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Wednesday 25th April 2012 15:30 GMT Anonymous Coward
Over on this side of the pond, the Republicans blame such a thing on Obama. I'll be waiting to see who in this crowd will try and pin another countries woes on him also.
Myself personally, I'm doing great, nobody to blame and nobody to thank. It's called "taking responsibility for yourself and not letting others dictate your life".
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Wednesday 25th April 2012 16:18 GMT Anonymous Coward
Who to thank?
Maybe your parents for instilling a modicum of common sense? It doesn't always work that way, but it's most likely that that occurred.
I'm in a similar situation myself, BTW: just keeping my head down & doing the sensible thing, like I normally do. It's not for everyone, but it's what I'm comfortable with. I definitely don't rely on government: too many forms, too much hassle.
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Wednesday 25th April 2012 16:25 GMT The Grump
Look overseas...
and you'll find your missing jobs. Look to Hong Kong, Singapore, China, Malaysia, India, Mexico - anywhere human life is cheap and expendable, and you will find the missing jobs. Company A outsources IT jobs to India. Company B doesn't. Now, Company B is loosing market share and profitsbecause their costs are higher. Solution? Company B outsources, too. To bring our jobs back, your have to... bring our jobs back. By legislative force if necessary. Tariff the hell out of overseas labor costs, to make them equal to the labor costs at home. Yes, it will increase prices, but I imagine the cost of stuff will be very cheap when the last job at home is lost overseas. But no one will have any money to buy anything. Ironic, isn't it ?
Id love to see a BOFH where the company outsources (or tries to outsource) the hero's jobs to Tibet. Lift accident anyone ?
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Wednesday 25th April 2012 16:26 GMT Sir Runcible Spoon
Sir
People on the bread-line are having a really tough time of it, that's understood. What is happening now though is that the middle classes are starting to feel it like never before, and a lot of that can be laid at the banks' doorsteps.
They were given billions to bail them out and start lending again, but they haven't. Even if you manage to convince a bank to lend you money, it comes with a lot of strings and a massively inflated interest rate compared to the inter-bank lending rates.
I make my living selling services to the banks and I'm retraining in another field right now because it makes me feel too dirty to be supporting them to be honest.
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Wednesday 25th April 2012 16:42 GMT Anonymous Coward
yeah well
in the future we wont have banks, they'll find a more efficient form of slavery like maybe an injection that turns you into a drone that does work all day and sleeps in a phone box and eats your own shit for food. then banks will be obsolete because their job of fucking everything up can be done easily in one injection that is good for you because it makes you a slave.
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Wednesday 25th April 2012 16:42 GMT Anonymous Coward
If I borrowed £0000's from banks and credit card companies, spent if all and couldn't pay it back, they would call in the loans, but a court would say that they'd recklessly loaned me the money and had not checked that I could pay back the debts. I would have to pay a small portion and the banks and card companies would be forced to right off the rest.
The banks & bond markets loaned to Greece, Italy, the UK and others without a care of how they were going to pay it back, the best they planned for was the countries could always borrow more to pay the interest. Well guess what, YOUR mistake, so you, the banks and bond holders, should loose your stake, you bet on the wrong outcome.
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Friday 27th April 2012 08:39 GMT Anonymous Coward
Re: Degrees of magnitude
Actually, that's not quite right, but there's no opportunity to edit a post so, to requote the old saying and then extend it to include events of recent years...
If the bank lends you £20k, that's your problem.
If the bank lends you £20m, that's their problem.
If the bank lends you £20b, that's our problem.
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Wednesday 25th April 2012 22:38 GMT Anonymous Coward
> Well guess what, YOUR mistake, so you, the banks and bond holders, should loose your stake, you bet on the wrong outcome.
Which of course means we end up paying for it anyway - because who owns the banks? Either (a) tax payers or (b) your pension fund. All this "tax them evil banks" rage is quite funny, because we really are all just taxing our own pension funds.
Oh, yeah, Gordon did that first. Thanks ...
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Wednesday 25th April 2012 16:43 GMT Anonymous Coward
I don't really know what to think anymore. With a rocketing welfare bill I can only hope that the people of our country come to their senses and vote for something completely different like UKIP. I read on the BBC this week that people are furious they're only getting £400/week to pay for their four bedroom council house? WTF and facepalm.
Sunday Trading is one law that confuses me. Why on earth are we still doing this in 2012? It should be dropped completely and would give people who work during the week extra time to spend money.
Whoever came up with the idea that shops should be open between 9-5.30 during the week when everyone else works I've no idea.
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Wednesday 25th April 2012 17:03 GMT Anonymous Coward
People aren't getting £400 for a council house, it's mostly private rented sector, Councils aren't allowed to build cheap housing, it's the landlord that's getting the £400.
Sunday trading is to help shop workers have a few hours with their families when the family members are not a school or working, you don't believe shop workers can set their own hours do you?? The 9 to 5:30 historic hours came about when everybody body worked standard hours, there haven't been fixed shop opening hours in years, apart from Sunday trading limit for shops over a certain size.
If you don't really know what to think, maybe you shouldn't be commenting, just doing more thinking, I'm sure the "news of the sun" available on Sunday will help you out.
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Thursday 26th April 2012 10:55 GMT Intractable Potsherd
I do pay my own mortgage ...
... and I still don't see any justification for your attitude towards people that are unfortunate enough not to have a job. It reeks of the old "outdoor relief" plan - next you'll be calling for modern poor-houses.
Oh, and it will be a cold day in hell before I vote for UKIP or any of their ilk. Trying something new can sometimes be obviously a stupid idea - "I'll do something I haven't done before - snake-kissing sounds fun!"
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Wednesday 25th April 2012 17:24 GMT Flabbergarstedbastard
Hows about a tax break for the little guys?
Maybe Mr Cameron should consider helping small business out a bit to boost the economy rather than smothering the little guys to death with heavy taxing. Where is all that money going? It certainly is not helping me out when it leaves my pocket and gets turned into a depleted uranium tipped bunker buster.
Help small businesses stay afloat and they will lube up the wheels of commerce.
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Wednesday 25th April 2012 21:56 GMT Mike Brown
this is simple to fix
tax breaks. for £25000 per year and under.
This would stimulate the economy by giving everyone (that needs it) extra money in their pocket.
how do the govt pay or it? easy: QE.
instead of giving the extra "money" to the banks, give it to us. then we will spend it, and the companies will higher more staff, and then everyone pays more tax (vat and PAYE), which then pays for the tax breaks. and so on and so forth.
and bosh! Country fixed.
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Thursday 26th April 2012 04:06 GMT P. Lee
Re: this is simple to fix
tax breaks won't do it.
The solution is not to spend more, but to get out of debt. Mortgage rates of 14% are irrelevant when you don't have a mortgage.
Sadly, it appears few people can resist living beyond their means and when everyone else is outbidding you on housing by taking on more debt, it is hard not to follow.
A solution is to bring back the mortgage caps and perhaps raise the cash portion of house purchases. It is hard, long-term medicine. House prices will collapse. However, lower debt means more cash-in-pocket without borrowing. There may be requirements to limit foreign investment if you restrict your market like this.
Alas, this requires a political spine of steel. I fear we would need a local war to get this sort of measure through.
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Thursday 26th April 2012 13:05 GMT Mike Brown
Re: this is simple to fix
well yes. but which politicion is ever going to burn there Party and carear to try and save the country?
Our economy is a consumer based one. Without consumers spending the economy cant recover, id go so far as without consumers spending we have "no" economy. Companies then cant hire people, and have to cut jobs, which dents the buying power even more. Its a vicous circle.
But giving the consumer more money fixes this cycle. Giving this money to the banks is pointless, as they hold on to it, and the compnaies dont see it, and neither do the consumers. But giving it to the consumer, even if they just pay off thier credit card, will eventually trickle into the banks.
So i stand by my comment. I realise its only papering over the cracks, but at this point in time, its all we can do. And it fixes the problem we currantly have.
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Thursday 26th April 2012 07:40 GMT Jtom
I'm rather amazed at the number of people saying continued GP growth is impossible.
Is the population not growing? More people means more houses, more furniture, more cars, more TVs....Great Britain is on target to grow 3 million people by 2020. A zero GDP growth translates to zero job growth. More are graduating schools and entering the workforce than are retiring. The surplus will find no jobs. For every immigrant getting a job, a citizen will lose one. People will need more housing, but can't afford them - there are no jobs.
If you have a growing population and no GDP growth, your standard of living will start falling and your taxes - to pay for more welfare and other aid - will go up.
GB and most of the rest of the world are in a heap of trouble because of the debts governments have created. Good luck to all in the coming depression.
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Thursday 26th April 2012 09:10 GMT David Black
Cameron is just doing a Ratner
Now I know the Tories want to keep the political machine running and ensure that no one forgets that "We are in an economic mess" unusally followed by "left by the last Labour government". Now without taking on the factual substance of the statement, can nobody see that if you have an entire government just constantly restating what a mess we're in, we'll never get out. Just stop saying it. We've heard it now. Well done, you're not Labour, they were bad, thanks. Just say something positive and provide a direction for moving our country forward and stop talking it down.
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Biting the hand that feeds IT
