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UK slides back towards recession

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Britain’s economy shrank 0.3 per cent in the final quarter of last year, bringing it closer to a possible “triple-dip” recession and piling pressure on the coalition government.

Chancellor George Osborne, whose austerity programme has come under increasing criticism as the economy has faltered, said he would “confront” the UK’s problems and not “run away” in response to the data, which was worse than economists had predicted.

http://www.ft.com/intl/cms/s/0/d0795284-66d0-11e2-a805-00144feab49a.html

This was to be expected after the previous quarter.

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http://www.ft.com/in...144feab49a.html

This was to be expected after the previous quarter.

As a Tory I'm saddened to say that even I think Osborne doesnt have a clue what he's doing.

People dont like Hitler (genocide+war) but one thing that is often overlooked about him is that he was great at economics. Why? Because he applied macroeconomic synthesis how its supposed to be applied as determined by economic experts. To kick start growth the chancellor is supposed to -

1. Increase the money supply (This lowers interest rates and has been done correctly with quantitive easing).

2. Reduce Taxes (The Torys have only done this for the rich so this has only half been done. Labour have stated they would raise taxes on high earners indicating they would violate this aspect of macroeconomic synthesis too).

3. Increase Spending (Austerity is completey at odds with this measure. Austerity reduces demand, removes the mulitplier effect and shrinks the economy).

I personally think we should have had no austerity, tax cuts and balanced the books by increasing the birth rate (breed our way out of recession as it increases demand). Osborne is a joke (labour are too) and even the world bank is telling osborne he needs to increase demand which he's ignoring. This Tory supporter is voting UKIP at the next elections.

Edited by Mr Right Wing

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As a Tory I'm saddened to say that even I think Osborne doesnt have a clue what he's doing.

People dont like Hitler (genocide+war) but one thing that is often overlooked about him is that he was great at economics. Why? Because he applied macroeconomic synthesis how its supposed to be applied as determined by economic experts. To kick start growth the chancellor is supposed to -

1. Increase the money supply (This lowers interest rates and has been done correctly with quantitive easing).

2. Reduce Taxes (The Torys have only done this for the rich so this has only half been done. Labour have stated they would raise taxes on high earners indicating they would violate this aspect of macroeconomic synthesis too).

3. Increase Spending (Austerity is completey at odds with this measure. Austerity reduces demand, removes the mulitplier effect and shrinks the economy).

I personally think we should have had no austerity, tax cuts and balanced the books by increasing the birth rate (breed our way out of recession as it increases demand). Osborne is a joke (labour are too) and even the world bank is telling osborne he needs to increase demand which he's ignoring. This Tory supporter is voting UKIP at the next elections.

Boolcrappy, most Hitler did was to implement the recipes of the former Social-Democrat government and when that ran out of steam he started the war.

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Boolcrappy, most Hitler did was to implement the recipes of the former Social-Democrat government and when that ran out of steam he started the war.

In the UK the hysteria towards Hitler clouds peoples judgements. An example was economics experts stating that the Government needed to look at what Hitler did to resolve Germanys economic problems 6 months back. The result was the media had a go at them for daring to mention that Hitler may have done good at something. Unfortunately the media dont run the economy and dont have a clue how too either. The vast majority of the worlds economic experts see Hilter as an economics genius including the grandfather of modern macroeconomics John Keynes. Heres a website - http://www.ihr.org/o...hitler2011.html

It took Hitler just 3 years to take Germany from the harsh economic problems of the Weimar Republic to being one of the worlds most richest nations. How did he do it? He applied John Keynes marcoeconomic synthesis as its supposed to be applied. Something the Conservatives and Labour are completey incapable of doing because the synthesis contains parts at odds with left-wing ideology and parts at odds with right-wing ideology.

Unfortunately most people dont go to uni to study something with economics in, they have no interest in learning about it and as such they are easily played by politicians who realise the public dont have a clue about how economies work.

Finally what Hitler did was he is expanded the public sector. His reasons may have been for the coming war but it works as it kick-starts demand. The tax cuts and quantitive easing were also applied correctly.

Edited by Mr Right Wing

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Not knowing that much about Britain I can't say if this would work there, but I have a strong bias, when stimulus is needed, in favor of borrowing for public works.

This stimulates the economy.

It provides direct employment and various forms of indirect employment.

It makes the nation more efficient (shorter trips, fewer potholes, etc.)

Future generations pay for it but they also get the benefit of the works.

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Not knowing that much about Britain I can't say if this would work there, but I have a strong bias, when stimulus is needed, in favor of borrowing for public works.

This stimulates the economy.

It provides direct employment and various forms of indirect employment.

It makes the nation more efficient (shorter trips, fewer potholes, etc.)

Future generations pay for it but they also get the benefit of the works.

Problem is: been done before, went nowhere.

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well it looks likely we'll have a triple dip recession, and lose our triple A credit rating, if the two things are to happen its best to happen sooner rather than later. because the impact will be less when we join the likes of France etc... who have had their credit rating downgraded. we'd be lost in the crowd. - lets see what happens first.

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Problem is: been done before, went nowhere.

Well, then it was badly executed or done half-heartedly.

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Well, then it was badly executed or done half-heartedly.

It does not matter how much you invest in infrastructure if you have been systematically been neglecting, and sometimes even destroying, your production capacities. Then there is nothing to gain by having better roads, or water lines or whatever.

Britain's problem is that they went down the cul-de-sac of a services economy.

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It does not matter how much you invest in infrastructure if you have been systematically been neglecting, and sometimes even destroying, your production capacities. Then there is nothing to gain by having better roads, or water lines or whatever.

Britain's problem is that they went down the cul-de-sac of a services economy.

Not quite - they went down the path of been the tail that the city wags. A disaster for almost all of the rest of the country.

They are so badly tied to the interests of the banking sector that they systematically block any reforms which might help prevent future bubbles. They have become a cancer on the productive capacity of the world.

Br Cornelius

Br Cornelius

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It does not matter how much you invest in infrastructure if you have been systematically been neglecting, and sometimes even destroying, your production capacities. Then there is nothing to gain by having better roads, or water lines or whatever.

Well I can think of one thing you gain -- you have better roads and water lines.
Britain's problem is that they went down the cul-de-sac of a services economy.

As automation spreads everybody will have to do that. And what is such a dead-end about it?

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It looks like it's even more important that the Government continues with the austerity programme. Painful it may be but necessary to get the economy back on track.

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Well I can think of one thing you gain -- you have better roads and water lines.

As automation spreads everybody will have to do that. And what is such a dead-end about it?

That the services economy is to be compared to a hamburger stand employing a worker to clean its windows who in turn buys his food there. That economy ends as soon as the stand runs out of hamburgers.

Any healthy economy has to produce at least the equivalent in goods of what it consumes. That is the cul-de-sac.

And automation will ultimately lead to a society with a 2 hour work week, because not having people earn money to buy the products those automatons produce the process is self defeating.

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Not knowing that much about Britain I can't say if this would work there, but I have a strong bias, when stimulus is needed, in favor of borrowing for public works.

This stimulates the economy.

It provides direct employment and various forms of indirect employment.

It makes the nation more efficient (shorter trips, fewer potholes, etc.)

Future generations pay for it but they also get the benefit of the works.

I agree.

While to some doing the opposite of austerity and increasing public spending seems like madness you sound like someone else who knows it increases demand which is whats needed. A country is supposed to increase spending during recessions (it increases demand) and reduce it which is practising austerity during booms (it decreases demand).

We are being kept in recession/depression by a government doing the wrong thing and before people say lets vote Labour they have made it clear they will do the wrong thing too. Increasing taxes is just as bad as that also reduces demand.

As I was saying the problem in the UK is political parties being ideological when it comes to our economic problems not giving us what we need. The running of the economy should be taken off them and given over to the economic experts.

Problem is: been done before, went nowhere.

It hasnt been done.

'Econmic stimulas' means quantitive easing not increasing public spending in real terms.

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I agree.

While to some doing the opposite of austerity and increasing public spending seems like madness you sound like someone else who knows it increases demand which is whats needed. A country is supposed to increase spending during recessions (it increases demand) and reduce it which is practising austerity during booms (it decreases demand).

We are being kept in recession/depression by a government doing the wrong thing and before people say lets vote Labour they have made it clear they will do the wrong thing too. Increasing taxes is just as bad as that also reduces demand.

As I was saying the problem in the UK is political parties being ideological when it comes to our economic problems not giving us what we need. The running of the economy should be taken off them and given over to the economic experts.

It hasnt been done.

'Econmic stimulas' means quantitive easing not increasing public spending in real terms.

Has not?

http://news.yahoo.com/uk-programme-finds-jobs-only-3-5-percent-095208684--finance.html

http://www.thetimes.co.uk/tto/news/politics/article3430284.ece

http://www.newstatesman.com/politics/2012/11/dwp-preparing-bury-bad-news-work-programme

The only thing that will get Britain ever out of the hole again is to rebuild its manufacturing... if they can find markets open to Britain.

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Don`t panic! Don`t panic!

We still have tax payers money to send around the world as aid.

Why do they call it a dip? to dip something in you need to take it out, we never came out of the last recession, so basically, its "just getting worse". ........sorry, in a picky mood today.

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Don`t panic! Don`t panic!

We still have tax payers money to send around the world as aid.

Why do they call it a dip? to dip something in you need to take it out, we never came out of the last recession, so basically, its "just getting worse". ........sorry, in a picky mood today.

Not sure it's even really getting worse tbh, seems to me like we're just flat lining and will be for a little while longer. Apparently, more people are in work now then have been for the past 40yrs or so, but as the population is larger now the overall percentage is down, from something like 73% to 70% (roughly). The way some people talk you'd think the world will end for the UK soon, i'd put a wager on things just flat lining for a few more years then gradually picking up again..

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Has not?

http://news.yahoo.co...4--finance.html

http://www.thetimes....icle3430284.ece

http://www.newstates...-work-programme

The only thing that will get Britain ever out of the hole again is to rebuild its manufacturing... if they can find markets open to Britain.

Ah now I see why you think spending has increased and I suppose technically it has but only in certain areas.

Overall there has been a vast reduction in it which is at odds with macroeconomic synthesis. There should have been no austerity whatsoever and the government should have done some of the following -

1. Caused a baby boom to raise demand.

2. Increased spending by taking the unemployed and giving the lot of them a £12000 per annum job.

3. Increased immigration to raise demand (I dont agree with this one).

4. Increased the number of police, nurses, doctors, soliders, teachers and civil servants. This gives them money to spend in the economy raising demand further.

Conservatism is about shrinking public spending but theres a time and a place which isnt during economic problems.

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We need to have our own bank, simple. Same with the US an other countries. The way it should be.

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And the Telegraph's take:

2701-MATT-ST-PORTA_2463243a.jpg

If we vote to leave the EU, can we still ask them to bail us out?

Source

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And the Telegraph's take:

2701-MATT-ST-PORTA_2463243a.jpg

If we vote to leave the EU, can we still ask them to bail us out?

Source

nice joke. :tu: - but i feel i have to add - because some might think it true, The EU havent even got the money to bailout Spain. let alone anyone else. and keep your eye on the EU situation. its gone quiet in the news but if you keep your finger on the pulse things are set to get a hell of a lot worse in the EU/Euro zone. its going to be a hot' hot summer in more ways than one.

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nice joke. :tu: - but i feel i have to add - because some might think it true, The EU havent even got the money to bailout Spain. let alone anyone else. and keep your eye on the EU situation. its gone quiet in the news but if you keep your finger on the pulse things are set to get a hell of a lot worse in the EU/Euro zone. its going to be a hot' hot summer in more ways than one.

It is always good to adivise caution, but there are some indicators that suggests that there are real structural improvements throughout the EU (particularly in the Banking Sector:

The ECB provided 530bn euros of low-interest loans in February 2012 to 800 banks across the whole of the European Union - including 37.4bn euros to UK banks.

Some of the banks in Europe that received billions in cheap loans to keep them afloat during the eurozone debt crisis are to repay them early.

The European Central Bank (ECB) said that 278 eurozone banks will repay 137.16bn euros ($185bn; £117bn) of three-year loans they borrowed.

The money, lent in December 2011 and February 2012, will be paid on 30 January, it added.

Source (BBC): http://www.bbc.co.uk...siness-21197594

See also: http://www.unexplained-mysteries.com/forum/index.php?showtopic=241775

Edited by keithisco

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I suppose in a perfect world the government restricts its spending to its revenue. For many reasons countries often don't succeed. First, emergencies happen that necessitate extra spending. Then of course there is always a war somewhere to spend money on. Revenues are unpredictable, and a government can commit itself to a certain expenditure and then find that revenues are not coming in as expected. Finally, politicians like to get re-elected, and spending money is a good way to do that (far more effective than cutting spending or raising taxes).

For good economic reasons some deficit is also a good idea. One should read Alexander Hamilton on that topic. Keynes later also pointed out that when times are hard deficits are the prescription, and it is generally hard times that causes government revenues to decline.

Now the problem is what to do if the deficit gets so bad you don't have the revenue to cover it. Sovereign debt lenders and international agencies will want to see austerity before they renegotiate, let alone give you more money, so you end up devaluing your currency, ruining economic activity for awhile and generating a nice batch of inflation -- hard on people, especially the poor and elderly.

Ronald Regan understood that there is another way out -- grow the country. Don't impose austerity. Cut taxes in ways that are stimulative -- i.e., don't tax wealth and income production -- and spend money on public works. This route scares the bejesus out of "conservatives," who think of money as a rigid inflexible (and holy) object -- how can you control a deficit by spending money and lowering taxes? Then print the money and shove it out helicopters if the politicians can't find good public works for you (believe me, they will).

Well in comes the revenue. It comes because the public works projects stimulate the economy while making it more productive and the lower taxes on the rich generates investment and all sorts of that nasty thing called "trickle down." Spirits fly and people invest and people spend and in comes the revenue. Even inflation behaves itself because of the public improvements and the tax structure and the strong currency.

Basically the idea is to make your country rich by making its people rich.

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Money is lent into existence by central banks. Governments are always in debt to their central banks which are private banks.

In low growth economies the debt to the central bank grows because the interest to pay on the loan grows faster than the economy can expand to pay it. This is why most of the most indebted countries were running surpluses until the rest of the economy tanked. The debt was always there but the ability to repay it disappeared with the economic growth.

The solution is to move to a debt free currency.

Br Cornelius

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Countries have a variety of ways of creating money, and even if they don't people create and destroy the stuff all the time by bidding up or bidding down what they will pay for assets (the assets in the end are money*). For that reason I don't see what a "debt-free currency" would look like. When people borrow to buy an asset and hence bid it up, the bank or other lender is creating money.

To an extent then it becomes a matter of fear and greed, and governments try to manipulate these by either stimulating when fear predominates or forcing austerity (generally by raising interest rates) when greed predominates.

*If one insists on a definition of money that it is only a token for assets, then this statement becomes more complicated, so just live with it.

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