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Turning the poor on the poor

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Comments

  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    An interesting fact on the debt:

    government debt is not like the debt we would get at the bank, where you have an account in arrears you are charged say, 2% interest on that debt. Rather the government issues gilts which give you a certain payment, so essentially its fixed debt. So we might have issued debt at 7% in 2005 or something (numbers pulled out my ass for demonstrations sake). You can't wipe out this debt, it will expire when it expires. I think gilts are 15 years from date of issue? I'm happy to be corrected.

    So government interest is an average of:

    £s of gilts issued in 2005 @ 2005 rate +
    £s of gilts issued in 2006 @ 2006 rate +
    £s of gilts issued in 2007 @ 2007 rate +
    £s of gilts issued in 2008 @ 2008 rate +
    £s of gilts issued in 2009 @ 2009 rate + etc.

    So recently because financing costs are so low new gilts have a lower value. As old gilts are fully redeemed, new gilts at lower rates will 'lower' the total liabilities even though we've not made a change to anything. We could carry on borrowing and the rate would come down because borrowing is cheaper now.

    This doesn't change the fact that I agree, there is too much debt. But, crucially, we can't 'pay back' this debt overnight - its all fixed term like mortgages. We could inflate the economy if we want, they're all issued in £ sterling and we can print the money tomorrow and suddenly the government has a bank account covering the next 50 years of debt. 'Crisis' over. But that kind of inflation is bad for our competitiveness.

    What the current government is trying to do is cut the structural deficit e.g. the amount of new gilts we are required to issue each year. That's a noble aim, but many would argue that being so aggressive that the economy contracts has defeated the entire point. This against the backdrop that the conservative government doesn't philosophically agree with the welfare state leads me to be skeptical of the argument they are 'doing it for the country', when it seems they don't have a thorough theoretical/analytical justification for the specific cuts they are making, and indeed even the cuts they have previously made have massively missed what objectives they said they would fulfil.

    You talk of no debt and no deficit, but these would never and indeed should never happen. A small deficit each year means the government has fully employed its resources (think in the same way a shop should not sell out of something but have one left on the shelf - it means they've efficiently bought the right amount of stock and not missed sales). Having debt like gilts is fine as long as the economy keeps growing, and whilst some argue there will be a limit eventually, we are not at that limit until we have fusion power and unlimited energy production and unlimited healthcare provision (two things of which there is virtually unlimited demand).

    It's all about a balance. I just don't think the government are balanced. But more concerning is the silly rhetoric which we all agree is detrimental to this country. Just look at the No to AV campaign - both positions were valid but ask the guy on the street and he or she had been fed such misinformation that the arguments were ludicrous. We are living in an information age and despite the advent on the internet and seemingly a better ability to get better information that at any point in human history, the information people believe is increasingly being skewed.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    One issue I have found is that some people will complain about being constantly mislead, but never go out and look for information themselves and/or believe anything they hear. Just look at the number of people who keep telling me Neil from art attack has died......
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    G-Raffe wrote: »
    One issue I have found is that some people will complain about being constantly mislead, but never go out and look for information themselves and/or believe anything they hear. Just look at the number of people who keep telling me Neil from art attack has died......

    Something I believe more these days is that democracy only works under an assumption of an informed electorate. On aggregate, money can buy people's opinions and ideas. It raises some serious questions about our system of governance (and who holds the political elite types / media to account?) but again thats another debate. What concerns me is why is there such a limited counter-weight to the fairly wide-reaching changes that are happening in the UK? There are a few writers who talk about it, and a few left leaning communities on the web that will echo my sentiments - but in general public that I've spoken to in the last 6 months? Everyone believes all the cuts are necessary, that labour destroyed the economy, that we need to 'fix' broken britain and the people leeching off the state.

    Similarly with how everyone feels about the EU on the street (47% are against EU membership at this point) yet check out this blog: http://blogs.ec.europa.eu/ECintheUK/ Our democracy at this point is being run on propaganda and misinformation.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    I don't care how it was portrayed, if the Government have the money to give money to business they have the money to give it to the most vulnerable people. The fact they don't speaks volumes.

    Here's something interesting: if people in places like Hull (where unemployed to job vacancies is 40:1 I believe) actually received more benefits, they would have more cash to spend at the local pub, meaning the pub owner could have a new conservatory, meaning two-three people could build that conservatory and buy a new van for their small outfit. It becomes a great feedback loop for people to take themselves out of poverty/joblessness. I cant imagine those two-three people wouldn't work because of the cushy benefits, and I've never seen evidence to support that*

    *except in the case of working mothers and working teenagers who opt instead to care for family/stay in school if they receive welfare. (source: http://www.dominionpaper.ca/articles/4100)
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Some of the extreme views I have witnessed against europe have been founded on nothing more than racism.
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