Government borrowing

[rov1200]

Does anyone still believe it is wrong to tackle the huge deficit or should we carry on spending like before?

More than £16bn debt interest for one month alone. And that is with a low interest rate. Imagine the consequences if inflation shot up.

http://www.bbc.co.uk/news/business-11380600

[R1Geezer]

Well the unions do and most of the lib dems. Dunno where they think the dosh is going to come from.

[youngmafbog]

Simple R1, they will just print some more and tax those over 100K a year.

Hang on thought thats all the union leaders D'oh !

[jake-the-peg]

Most of that is interest that we borrowed to bail out the banks - that is an extra-ordinary borrowing charge - to represent that as a ongoing borrowing is mischievious.

This is a straw man argument because nobody is suggesting that the defecit can be ignored and we should just carry on as it there is no issue.

It is a matter of timing and degree.

The best time to start making the big cuts are when the private sector is strong enough to stand on its own two feet without Government contracts.

That's not now - current government spending cuts will have a lot of companies go under - that will put more people out of work chasing too few jobs.

Connaught is a case in point - 1,400 job losses blamed directly on the cuts
http://www.bbc.co.uk/news/business-11289734

Of course for the Tories that is not the real issue and they are using this as an excuse to shrink Government because small government is an article of faith for them.

See the decision to close the National Audit Office with a ridiculous set of trumped up pretences

Quoting big numbers without putting them into context is a rather cheap tabloid trick

Take a look at this chart of UK debt as a percentage of GDP

http://www.ukpublicsp...ional_debt_chart.html

Not quite so scary now is it?

[rov1200]

Good point Jake about the failure of Connaught. I believe those 700 workers are to be taken on by another company to fulfill the contracts. I have a relative who works in the building industry and as you can imagine contracts go out to tender with usually the lowest tender being accepted. The problem is just to get the job a company may tender much lower than advisable so ends up with a loss. This is what's happened here. Also in the building game Polish workers have been getting contracts because their overheads are much lower putting British workers out of jobs.


We could have ploughed on with the Labour policies but our untreated debt would have lowered our Moody's AAA status and the debt would have cost us more to repay. This is now happening to Ireland.

One way of helping our economy would be for us all to buy British. This would help to keep us all in work and so provide more tax receipts and less benefits. Unfortunately the patriotism that once existed does not happen.

[rov1200]

Youngmafbog you are probably right. Only this morning I read that they are adding to the £200bn QE program. To my mind this is not the real answer to our problems. The real economy has not improved because of this. Its the stimulus packages that has got us out of recession in the first place and now they have been removed.