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The New Condem Government


bickster

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David Cameron chokes back the tears as he describes how his father struggled against disability to rise to the position of senior partner with Panmure Gordon stockbrokers; a position coincidentally also held by Cameron senior's father, and his grandfather.

Meanwhile, disabled people more generally are facing severe cuts in their benefits, ludicrous fit-for-work assessments by the serially incompetent ATOS, and as a backdrop, are coping with a rising tide of disability hate crime from people who have been taught by repeated planted stories in the press to see disabled people as feckless scroungers who should get off their arse and go to work.

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Those 'Britain Unchained' chaps are frightening. If they are the future of the Tories then it won't be long until we find ourselves back in the Victorian era.

The danger of career politicians is they haven't a **** clue about how 99% of the population live and make presumptions (and decisions) based on out-dated ideology.

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I should have been clearer - it was one of the "Golden Rules" that people like Gordon Brown were on about, and stuck to (for a while) - my understanding was that as the economic cycle changes, at times you want to be running a surplus - this allows paying off of national debt, giving currency "weight" and "reliability" and re-inforcing the ability to print money in bad times. In other wors if people thing that their money is safe in the UK, then they'll lend and invest. If they think it's not safe then they'll not invest and will charge ever higher interest rates and so on. Worst case, currency devaluation, rocketing import costs, crash. (see Zimbabwe, Argentina etc).

if the defecit is an ever increasing one it's a problem.

The US economy is broken, as is ours.

Why, in discussions about deficits, are the 'worst case' things always referred to?

Why don't we have a bit of balance and accept that most governments run deficits most of the time and don't end up like Zimbabwe, Germany between the wars and so on? Perhaps we might then look at those economies and think that something may well have added to their woes to lead them to this worst case scenario.

The purpose of my question in that previous post was to inquire where you thought the problem was - the permanence or the deficit.

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with a rising tide of disability hate crime from people who have been taught by repeated planted stories in the press to see disabled people as feckless scroungers who should get off their arse and go to work.

Did you watch the paralympics at all ? I'd say the vast majority of people in this country got behind the disabled people so I can't subscribe to your POV there

I think people do object to someone earning money falsely through fraud or faking a disability ... sadly it seems ATOS are hounding genuine cases in their efforts to find these fraudsters

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my understanding was that as the economic cycle changes, at times you want to be running a surplus - this allows paying off of national debt, giving currency "weight" and "reliability" and re-inforcing the ability to print money in bad times. In other wors if people thing that their money is safe in the UK, then they'll lend and invest. If they think it's not safe then they'll not invest and will charge ever higher interest rates and so on.

Cameron and Osborne keep saying that we must pay off debt if we want to be able to borrow, that our AAA rating depends on this, that the rating is a sign of confidence by "the markets" in austerity policies, etc.

It's not true.

Higher deficits lead to higher interest rates? Not exactly. If anything, the opposite, certainly over the last year - because, of course, both higher deficits and lower interest rates are driven by economic weakness, precisely as theory predicts

Full article here.

The US economy is broken, as is ours.

I agree. But by the standards of the prevailing orthodoxy, the wish for continuous growth, and the "aspirations" (today's must-have word) of policy-makers, it is a success. I quote it because people who see that as success also state that deficits and debt are dangerous and destructive, and seem blind to the wholly contradictory line they are putting out.

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Did you watch the paralympics at all ? I'd say the vast majority of people in this country got behind the disabled people so I can't subscribe to your POV there

I think people do object to someone earning money falsely through fraud or faking a disability ... sadly it seems ATOS are hounding genuine cases in their efforts to find these fraudsters

Hate crime overall fell last year. Within that overall total, hate crime against disabled people rose by a third.

This is the consequence of government spin doctors planting stories in rags like the Sun about "benefit cheats", with the aim of creating a a climate of opinion hostile to people on benefits including disabled people and which reduces opposition to the changes in the Welfare Reform Bill.

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Hate crime overall fell last year. Within that overall total, hate crime against disabled people rose by a third.

This is the consequence of government spin doctors planting stories in rags like the Sun about "benefit cheats", with the aim of creating a a climate of opinion hostile to people on benefits including disabled people and which reduces opposition to the changes in the Welfare Reform Bill.

the data is 2011 isn't it , and also states "we know that disability hate crimes have been significantly under-reported in the past."

now I guess one way to look at the data is to blame it on the Tories .. but that may not strictly be the true story

A new poll following the games found that eight out of 10 British adults thought that Paralympics 2012 had had a positive impact on the way disabled people were viewed by the public.

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the data is 2011 isn't it , and also states "we know that disability hate crimes have been significantly under-reported in the past."

now I guess one way to look at the data is to blame it on the Tories .. but that may not strictly be the true story

A new poll following the games found that eight out of 10 British adults thought that Paralympics 2012 had had a positive impact on the way disabled people were viewed by the public.

Yes, 2011. Yes, previously underreported (or reports brushed aside, like reports of domestic violence and racism were in years gone by).

Yes, paralympics created a more positive perception among many people. But not everyone.

Alongside that more positive perception of (successful) disabled people, there is a feeling, deliberately and cynically encouraged by the government, that many people in receipt of disability benefits are scroungers. There has been a campaign on these lines for two years, with Ministers making media appearances to quote figures, case studies of people who were cheating the system and so on, designed to create a climate of opinion that there was widespread abuse and that benefits must be cut.

You must have noticed it.

One effect of that has been an increase in unprovoked verbal and physical assaults on disabled people in the street, and even in their own homes.

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Why, in discussions about deficits, are the 'worst case' things always referred to?

Why don't we have a bit of balance and accept that most governments run deficits most of the time and don't end up like Zimbabwe, Germany between the wars and so on? Perhaps we might then look at those economies and think that something may well have added to their woes to lead them to this worst case scenario.

The purpose of my question in that previous post was to inquire where you thought the problem was - the permanence or the deficit.

I don't think worst cases are always referred to, though there's a lot of "we don't want to be like the worst case" certainly. I think that the permanence of defects (overdrafts) is not ideal, but don't think a deficit is a problem at all, per se. The causes of it can be - for example if a defect (or debt) is incurred because of investment in something - infrastructure, energy, jobs etc. then great. If it's incurred as a result of permanent (long term) income structural issues, then that is a problem.

The ideal is that when the economy is growing, Gov't takings from taxes etc. rise and there's a surplus, and when it's falling, and people are struggling, the Gov't uses money (and runs a defecit) to fund people back into work, to support those who can't work...etc. But it should be cyclical, not permanent.

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I don't think worst cases are always referred to, though there's a lot of "we don't want to be like the worst case" certainly. I think that the permanence of defects (overdrafts) is not ideal, but don't think a deficit is a problem at all, per se. The causes of it can be - for example if a defect (or debt) is incurred because of investment in something - infrastructure, energy, jobs etc. then great. If it's incurred as a result of permanent (long term) income structural issues, then that is a problem.

The ideal is that when the economy is growing, Gov't takings from taxes etc. rise and there's a surplus, and when it's falling, and people are struggling, the Gov't uses money (and runs a defecit) to fund people back into work, to support those who can't work...etc. But it should be cyclical, not permanent.

But the problem there is to have a surplus, you have to have one or more of the other sectors in deficit.

Which of those is it going to be for the UK? It won't be the worldwide part of our economy, there's simply no way we're going to export more than we import.

The private sector hates being in deficit, it exists to make money. If they don't make money, they make cuts so they do make money.

Households, well, we're constantly told households being in debt are a bad thing, and banks aren't really willing to allow the household side to rack up much of a deficit these days.

So that really only leaves the Government to be the ones taking on a deficit.

It's always going to be the same unless something drastic changes in our economy.

The surplus can never come from the economy growing, it can ONLY come from the net of the other 3 areas of the economy being in deficit, growth has nothing to do with the ability to run at a surplus, and when the private sector is as profit hungry as it is these days, it's going to be hard for any country to have a public sector that runs at a surplus unless it's blessed with an extremely strong export market, where it's surplus will then be at the expense of other countries deficits.

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The surplus can never come from the economy growing, it can ONLY come from the net of the other 3 areas of the economy being in deficit, growth has nothing to do with the ability to run at a surplus, and when the private sector is as profit hungry as it is these days, it's going to be hard for any country to have a public sector that runs at a surplus unless it's blessed with an extremely strong export market, where it's surplus will then be at the expense of other countries deficits.

Yes. Whether the economy is x, or x+10% or x-10%, in any year the public deficit will be matched by a private surplus and vice versa. Unless, in extremely rare cases like Norway, foreign trade is in massive surplus - we needn't trouble ourselves with that scenario.

The whole idea of making a surplus in good times in order to "put something aside for a rainy day" makes sense for households, and no sense for governments.

Because governments are not like households.

What the government needs to do is make sure that the rate at which it stimulates the economy does not outstrip the productive capacity of the economy. We are very far from that point, and Osborne is busy creating more slack unused capacity every day, by his mad policies. We should be ramping up public spending, adding to the national debt, and getting the country back to work. Instead of which, we have someone in the Treasury whose only work experience is folding towels in Selfridges, and who seems to think the economy works like a personal bank account or a corner shop.

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But the problem there is to have a surplus, you have to have one or more of the other sectors in deficit.

Which of those is it going to be for the UK? It won't be the worldwide part of our economy, there's simply no way we're going to export more than we import.

.....It's always going to be the same unless something drastic changes in our economy.

The surplus can never come from the economy growing,...... it's going to be hard for any country to have a public sector that runs at a surplus unless it's blessed with an extremely strong export market, where it's surplus will then be at the expense of other countries deficits.

We should actively endeavour to import less and produce more - manufacturing, construction, engineering, technology - "stuff". We should actively make drastic changes to our econonomy. It's utterly bioased towards parasitic activities that create nothing and add no value

Yes. Whether the economy is x, or x+10% or x-10%, in any year the public deficit will be matched by a private surplus and vice versa. Unless, in extremely rare cases like Norway, foreign trade is in massive surplus - we needn't trouble ourselves with that scenario.

The whole idea of making a surplus in good times in order to "put something aside for a rainy day" makes sense for households, and no sense for governments.

Because governments are not like households.

Expressed like that it doesn't. But for example paying down debt as bill Clinton did and Gordon brown did (for a while) does make sense. The Gov't pays interest on the trillion pounds of debt it has. less debt is less interest and more for "good" things. At times when the economy is growing, Gov't revenues go up and the opportunity is there to pay down long term debt, particualry if interest rates on that debt start rising.

All the talk about just create more and more money - if it was that simple then no one (with their own currency) would ever borrow money. They'd just keep creating it at Gov't level (not private banking level) and....oh, the currency would become devalued, the price of imports would go up, and for an import dependent country that would lead to higher inflation, higher lending rates, lower private investment in R&D and jobs - leading to unemployment and depression.

The way the world is, borrowing and paying back is an intrinsic part of the system. That involves Gov't surplus.

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The government is currently printing money (QE) and it's not exactly causing run away inflation, theoretically, if the economy is running below capacity (actual GDP is lower than potential GDP) then printing money should not be inflationary. You can find support for this in Milton Friedman who's advice to Japan in the early 1990s was precisely expansionary monetary policy, to provide more 'high-powered' money to expand the economy. Others would point out that when interest rates are at the zero lower bound (as we have in the UK right now), monetary policy doesn't have much efficacy and thus fiscal policy should be used, this is exactly the conclusion the IMF have reached in their latest world econ outlook.

I'm not sure looking to run a surplus during a recession is a good idea, where Labour failed was not tightening their belts during the good times (this is pretty basic Keynesian economics here).

Looking to become a bigger exporter will require huge structure changes and essentially an unwinding of economic policy over the last few decades. This is a fine idea but will take decades to get serious pay-offs, what we ought to be concerned about is the here and now. Although how desirable this is is unclear because sophisticated manufacturing industries already exist (e.g. in medical technologies, software/hardware engineering) abroad in countries with much lower labour unit costs. And although these costs will rise over time they'll always be lower than that of the UK.

The 'developed' countries are really facing some very, very tough dilemmas.

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We should actively endeavour to import less and produce more - manufacturing, construction, engineering, technology - "stuff". We should actively make drastic changes to our econonomy. It's utterly bioased towards parasitic activities that create nothing and add no value

Couldn't agree more.

Expressed like that it doesn't. But for example paying down debt as bill Clinton did and Gordon brown did (for a while) does make sense. The Gov't pays interest on the trillion pounds of debt it has. less debt is less interest and more for "good" things. At times when the economy is growing, Gov't revenues go up and the opportunity is there to pay down long term debt, particualry if interest rates on that debt start rising.

All the talk about just create more and more money - if it was that simple then no one (with their own currency) would ever borrow money. They'd just keep creating it at Gov't level (not private banking level) and....oh, the currency would become devalued, the price of imports would go up, and for an import dependent country that would lead to higher inflation, higher lending rates, lower private investment in R&D and jobs - leading to unemployment and depression.

The way the world is, borrowing and paying back is an intrinsic part of the system. That involves Gov't surplus.

We pay back debt all the time, as it falls due, and issue new debt to match spending requirements. We pay back debt each and every year, whether there is a government deficit or (rarely) a surplus.

It makes sense to issue more debt, when its cost is historically low, as it is now, if there is something to spend it on which will repay the investment - which there certainly is.

It could also make sense, especially when the cost of debt rises, to print money instead of borrowing. That would be a problem for those who want to be able to invest in government debt, of course, because they would be deprived of new opportunities to make steady interest on a totally risk-free investment.

It wouldn't make sense to issue more money continuously, and beyond the capacity of the economy. I don't think anyone would advocate such a thing.

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Aren't the Government doing exactly that, borrowing more now at the lower rates?

Well they're certainly borrowing more than they planned, in fact setting new records.

You wouldn't think so to listen to them, of course.

But it's a reaction to falling tax revenues and increased spending, not a strategy. At the same time, they are trying to cut the deficit by cutting back on capital schemes, which is exactly what they should be spending on.

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The 'developed' countries are really facing some very, very tough dilemmas.

I very much agree.

I don't think these countries are facing up to them (probably because those at the very top don't really care where they have to move their capital) and I'm not sure how much it would matter even if they were.

I'd say the shift in economic power is inexorable and accelerating; I think that the only real question to be answered is whether the developed countries' economies fall off a cliff or not.

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