[gibbsy]

Latest figures for borrowing shows a big increase. Benefit payments up 12%. Tax receipts down 7%. The feckless cannot account for the rise in benefit payments, these are people thrown on the dole and needing the safety net of our welfare state.

Where or where are the policies for growth. Until we get one tax receipts will continue to fall both from income tax and indirect taxation. I suspect the government will try and redress some of the inbalance by a hike in fuel duty, which in itself could be self defeating.

Plan B, before we go the way of Greece.

[Ed Selley]

Originally Posted by gibbsy

Latest figures for borrowing shows a big increase. Benefit payments up 12%. Tax receipts down 7%. The feckless cannot account for the rise in benefit payments, these are people thrown on the dole and needing the safety net of our welfare state.

Where or where are the policies for growth. Until we get one tax receipts will continue to fall both from income tax and indirect taxation. I suspect the government will try and redress some of the inbalance by a hike in fuel duty, which in itself could be self defeating.

Plan B, before we go the way of Greece.

For what I wish is the last time (but won't be); GOVERNMENTS DO NOT CREATE GROWTH. If your definition of growth is "spending more on the state" you can pretend that they aren't passengers. Actual economic growth is not a function of Government.

The only control governments can be likened to have on an economy is the brake. The Government could reduce VAT, company NI contribs and raise the minimum tax threshold but given every commensurate reduction in spending to allow this is fought lock, stock and barrel by the people who define growth as above, the brake stays on.

[gibbsy]

Originally Posted by Ed Selley

For what I wish is the last time (but won't be); GOVERNMENTS DO NOT CREATE GROWTH. If your definition of growth is "spending more on the state" you can pretend that they aren't passengers. Actual economic growth is not a function of Government.

The only control governments can be likened to have on an economy is the brake. The Government could reduce VAT, company NI contribs and raise the minimum tax threshold but given every commensurate reduction in spending to allow this is fought lock, stock and barrel by the people who define growth as above, the brake stays on.

So what you are saying is that we don't need government to interfere with the economy and let business lead the way. When and if we get out of this recession then the present government should not take the plaudits and by the very essence of what you are saying the previous government was not at fault in way shape or form for us landing in the do dah.

So it's back to the bankers. Somebody f***ed big time.

[BISHI]

I think government creating debt is a little different to one not creating growth.
The only way a government can create growth is by state infrastructure schemes - these are often short term and require debt to finance them - catch 22..!

[Ed Selley]

Originally Posted by gibbsy

So what you are saying is that we don't need government to interfere with the economy and let business lead the way. When and if we get out of this recession then the present government should not take the plaudits and by the very essence of what you are saying the previous government was not at fault in way shape or form for us landing in the do dah.

So it's back to the bankers. Somebody f***ed big time.

If you are trying be childishly simplistic, I suppose I am.

A slightly more nuanced view is that direct economic growth is not a function of government. Regulation however need not be detrimental (or even relevant) to the economy- indeed creating a level of confidence in the basic functions of the state is positive and necessary.

What the government cannot do is turn some magic tap on and make things happen- to keep the car allusion it has no throttle. Any spending by the government must either be found from direct taxation or added to the never, never. Because of the temporary nature of this money, as we've seen in the United States, companies will still not take the decision to expand because they know the money will be turned off at some point (and most likely, then paid back)- hence the endlessly used "jobless recovery."

As BISHI notes, infrastructure has to be paid for and doesn't guarantee a return. HS1 is on dodgy ground for this reason as the costs rise and the projected benefits look less clear cut. Spending on the rest of the state is even harder to quantify returns on (and in a world where we jump on quarterly figures and elections loom large, no politician has thought long term for over forty years). I do hold the previous government partially responsible because- as I said right at the beginning- they confused "growth" with spending more money. The current government isn't doing much better at this either.

[domtheone]

Originally Posted by Ed Selley

For what I wish is the last time (but won't be); GOVERNMENTS DO NOT CREATE GROWTH. If your definition of growth is "spending more on the state" you can pretend that they aren't passengers. Actual economic growth is not a function of Government.

The only control governments can be likened to have on an economy is the brake. The Government could reduce VAT, company NI contribs and raise the minimum tax threshold but given every commensurate reduction in spending to allow this is fought lock, stock and barrel by the people who define growth as above, the brake stays on.

Absoultely.

The government couldshould reduce spending massively. Might be able to afford to reduce the rediculous tax burden then which should lead to an increase in growth. Cameron should have the balls to push ahead with this agenda. Even if it almost certainly leads to a defeat at the next election.

[gibbsy]

Originally Posted by BISHI

I think government creating debt is a little different to one not creating growth.
The only way a government can create growth is by state infrastructure schemes - these are often short term and require debt to finance them - catch 22..!

But by doing that the country would just be treading water. A policy of just cutting suits the rich. The poor will just get poorer and make any recovery much harder, but those in well paid jobs seem to care not a jot.

When government policy of sitting back and relying on plan A only reaches the pockets of the middle England (I hate that phrase) will we see a different approach. The medicine will just keep getting more and more expensive.

[BISHI]

Originally Posted by gibbsy

But by doing that the country would just be treading water. A policy of just cutting suits the rich. The poor will just get poorer and make any recovery much harder, but those in well paid jobs seem to care not a jot.

When government policy of sitting back and relying on plan A only reaches the pockets of the middle England (I hate that phrase) will we see a different approach. The medicine will just keep getting more and more expensive.

It is those in the middle giving up most at the moment. I know because I am one of them. I am worse off because of government policy but realistically something has to be done, and though no fan of Osborne and the Tories they do seem to be treading a steady path through a minefield of problems most of which they have no control over.