Sir Mervyn King doesn't think it's all the banks' fault...

Discussion in 'Politics & The Economy' started by sidicks, Jul 28, 2012.

  1. sidicks

    sidicks
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    Last edited: Jul 28, 2012
  2. karkus30

    karkus30
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    Big boys did it and ran away.
     
  3. Pecker

    Pecker
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    Very interesting:

    So Gordon Brown and New Labour didn't cause the problem alone, and couldn't have solved it alone.

    Steve W
     
  4. la gran siete

    la gran siete
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    dont spoil his obsession:nono:.even Gideon has stopped ranting about NL spending
     
  5. sidicks

    sidicks
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    I have never said that Labour caused the credit crisis.
    :nono:

    However, rather than save some of the record tax receipts that were achieved between 1997 and 2007 (or even invested it, they wasted it then borrowed some more, spent /wasted that, then were forced to hide further borrowing off balance sheet through PFI. At the same time, other off balance sheet liabilties increased dramatically.

    That meant that, when the credit crisis hit, as per the infamous note left at the Treasury, "there was no money left" with which to support the economy.
    :lesson:
     
  6. gibbsy

    gibbsy
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    But they were very very naughty boys.:facepalm:
     
  7. sidicks

    sidicks
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    They were very stupid boys!
    :facepalm:
     
  8. karkus30

    karkus30
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    They tried to buy votes with public money. They ran out of public money and then gave large chunks to the banks so there was even less, then they borrowed increasing amounts from the banks to pay off the ever growing debt. If the public actually understood the scam that is being perpetrated on them then the central bank, treasury and most of the politicians would be enjoying a long stint at HM pleasure.
     
  9. Pecker

    Pecker
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    I never said you did.

    So why the patronising wagging finger?

    Steve W
     
  10. sidicks

    sidicks
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    I read that as the implication from your previous post - if that is not what you were suggesting then I apologise!
    :beer:
     
  11. Pecker

    Pecker
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    Sorry, but the facts do not support this.

    The increase in debt during the New Labour term was caused almost entirely by borrowing to support the banks, and borrowing to pay for pensions.

    The increased expenditure on other areas of public spending was easily supportable.

    The idea that NL 'bribed' voters by paying for schools, hospitals, welfare, etc, is simply wrong.

    Steve W
     
  12. sidicks

    sidicks
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    Please post the figures that support your view!

    Debt almost doubled (almost tripled if you count PFI) before the crisis! This was during record tax receipts - how can say that was sustainable with any credibility?

    We are talking about the borrowing pre-crisis - this is what was unsustainable.

    Borrowing to support the banks is a) one-off and b) most has been repaid.

    Borrowing to pay for pensions??? What are you talking about??

    You are very wrong indeed, but I look forward to seeing your facts to support your claims!!
    :hiya:
     
    Last edited: Jul 30, 2012
  13. domtheone

    domtheone
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    This is the Labour way.

    Bribery/Brainwashing/Stepford Wifes style social engineering, whatever you want to call it.

    On this occasion, I do believe that it is you who is wrong:smashin:
     
  14. la gran siete

    la gran siete
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    exactly! The idea that Labour was bribing voters is risible nonsense.Its aim always was to invest in badly neglected public services something for which we can thank previous Tory admins for, the very same admins that squandered billions of north sea revenues and that associated from the great sell off ( aka rip off)of national industries
     
    Last edited: Jul 30, 2012
  15. karkus30

    karkus30
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    We have been over this. It becomes a war between what is and what was. In this case the past is of no consequence. The result of Government policy was a rapid expansion of public debt, there is the beginning of an admission from Labour and the BoE that they simply got it wrong. What you don't see in graphs is the correlation between the contribution to GDP that was the result of reckless lending, which was the result of lack of intervention by the Labour Government. We had a GDP based on enormous debt ridden assets, in other words our GDP was comprised of an enormous phantom figure.

    It was this phantom figure that the Government failed to understand and lead to increased public spending which they believed was sustainable. We have had higher public debt in the past, but that was built on our real world ability to manufacture things as a world economic super power. From the 80s onwards we have shifted bias more and more to a banking lead economy. Labour presided over this economy for 10 years and they believed the bankers tales of increasing fortune just like something out of a fairy tale. On the back of that crazy belief they merrily spent money to buy votes.

    When the banking myth went sour they were left back pedalling, what they had thought sustainable ruptured like a burst balloon. Their steadfast belief in the banking industry could not conceive that it wasn't possible to right the ship that had brought so much prosperity, so they poured tax payers money into the breach in the belief that the balloon would somehow re inflate.

    Our GDP is still based on that same debt, we don't know how much is toxic, or how much will become toxic as the world economy slows.

    It means I see that we are at a point when fluctuations and change are at such a high point that it's impossible to say what the total cost of tax payers bailouts will be, or the true GDP, or the real public debt figure. Essentially the chips are in play and the giant roulette wheel is spinning, it's like the battle of Britain in which all our aircraft are now committed to the fight, the direction of the battle is fixed and we have to await the outcome while hoping for the best, but preparing for the worst.

    Personally, as I have said many times, we are running an unsustainable economic and political model which will continue to create these messes until it is changed.
     
  16. Pecker

    Pecker
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    [​IMG]

    This is from the UK Debt Clock/Taxpayers Alliance site, so hardly pro-Labour.

    As you can see, the real massive growth in debt is from the two unfunded pensions strands and the money used to bail out the banks.

    If you just look at the other two strands (the bottom 'Official Debt' strand and the next to top 'Other') there's only been a relatively gradual and small increase in debt. Very easily sustainable.

    As you note, the bank-debt was short term, so that's soon sorted. The good news on the pensions problem is that the peak year for expenditure there was 2010/11, and it's now coming down.

    So when you ask "Borrowing to pay for pensions??? What are you talking about??" you now know.

    I'm amazed that anyone who sets themselves up as an authority on these matters should not be aware of this.

    Steve W
     
    Last edited: Jul 30, 2012
  17. sidicks

    sidicks
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    Oh dear - what this actually shows is the huge liability in respect of pensions (both state pensions and public sector pensions) which dwarf the other costs – yet plenty of people still dispute there is a pensions problem…

    If you take the figures shown with a total debt of £8 trillion, then annual interest at say 3% on this debt is £240bn. What percent is this of total annual income….??

    What is important is the income received compared with the amount spent. Anyone that suggests that an approach which involves continually increasing debt despite record income is ‘sustainable’, clearly doesn’t understand the issue very well. What happens when the economy slows down, then what, borrow some more?? You think 8% of spending on debt interest is sustainable when interest rates are at an all time low?


    As has been pointed out on numerous occasions, the figures for RBS / Lloyds are highly misleading, as they include all of the assets but none of the liabilities, making the numbers shown totally meaningless.


    We haven’t borrowed anything for pensions, the unfunded liability has increased significantly. Do you not understand the difference?
    :confused:

    Plus of course the projections for those pensions (which have been challenged as unrealistic) only refer to the size of the problem relative to GDP. The overall burden is not going down. If you believe that the liability is going to decrease in the future, that is only because the number of retirees is increasing relative to new joiners, which means the real cash outflows for these funds will increase significantly, placing an even bigger strain on the economy….!!!

    I’m amazed that you think that the above graph justifies any of your previous comments!
     
  18. Pecker

    Pecker
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    When you're in a hole, stop digging.

    Reverting to semantics doesn't change the facts.

    Steve W
     
  19. sidicks

    sidicks
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    Semantics??
    :suicide:

    Except that absolutely zero (£0) money has been borrowed to pay for pensions!!

    And the vast majority of borrowings to support banks have been repaid!

    So your claim, is laughably incorrect.

    You still maintain that continuing to spend a significant amount more than you 'earn' even with higher than normal income is 'easily supportable' ?

    :suicide:
     
  20. Dave

    Dave
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    Anyone who thinks the Tories or in fact any political party would have done anything differently prior to the credit crunch needs to wake up and have a real good smell of that coffee.

    In fact under the Tories it may even have been worse because no doubt tax receipts would have gone down meaning even more borrowing to support the expenditure.

    It still continues to amuse me no end when you see the current government bleating on about the situation they inherited from Labour despite not one opposition MP ever questioning the previous government on their fiscal policy. It really is two faced politicking of the worst kind.
     
  21. sidicks

    sidicks
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    This discussion was in no way intended to suggest that the situation would have been better or worse under the Tories had they been in power during the same period.

    However, to suggest that the situation would have been worse under the Tories is at best hugely subjective and more likely totally false, given that the Conservative plans (which were followed by Labour) produced a surplus in the early years.

    Also, simply because tax may or may not have been lower, does not meant that tax income would have been lower.

    As has been identified previously, there is no incentive for the opposition to be honest about what they would have done about spending - the electorate like people promising to provide 'shiny things' and there is no upside in suggesting otherwise.

    For the same reason, Labour can currently deny that if in power they would be forced to make any cuts.
     
  22. la gran siete

    la gran siete
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    one needs to remember that whatever figures /data one produces, unless they fit in with Sidicks view on things he will dismiss them out of hand claiming his as the only "hard" evidence worth considering. His delusional arrogance is beyond amusing
     
  23. sidicks

    sidicks
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    I have explained the shortcomings in the data that Pecker posted - the same shortcomings have been explained in the government reports producing the same statistics.

    The point is that the statistics he provided do not support the claims being made. As you would appreciate if you were able to differentiate between a debt, an unfunded liability and a contingent liability.

    Maybe you should try and read and understand the data before you make such comments.
    :nono:

    You have at least received a 'thanks' from sharger, once again demonstrating that he knows or understands as little about these issues as you!!
     
    Last edited: Jul 30, 2012
  24. karkus30

    karkus30
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    No one suggested that was the case. Again it comes down to timing, it really doesn't matter who, why, what or the when of it. Labour happened to be sitting in the driving seat and so the blame must rest squarely on their shoulders. The problem with shifting the blame around is that theory entail for a solution gets forgotten because the focus becomes that of intention and not fact. The coalition have not found a way out of the current situation either, so let's put blame on hold, but not forget who held the reins of the disaster.
     
  25. John F

    John F
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    I will tell you what have been worse under the Tories if they had carried on in power after 97. The NHS would now be gone as it stands today, education would have suffered just as badly. The police and other emergency services would have been deeply cut and the crisis we are now in would seem like a storm in a teacup. The Labour party and people in general have to shoulder some of the blame but the banks should all stand up and say sorry we were playing russian roulette with your money and we lost, however can we please have a second chance.
     
  26. sidicks

    sidicks
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    So on the one hand we have the 'left' stating the the Tories would have matched the Labour spending plans and others on the 'left' stating that they would not have matched the Labour spending plans....

    Both of who are convinced about what would have happened (with minimal evidence to support it) whilst seemingly unable to recognise what actually happened!
    :confused:
     
  27. domtheone

    domtheone
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    That's the lefties for you:facepalm::laugh:

    Sadly, they're slowly taking over.:(

    Cameron barely stands up to them as he knows he cannot win if he doesn't appease at least some of them. He won't be getting my vote again unless he takes the fight to them.
     
  28. John F

    John F
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    *** are you on about. Public services were already been cut, the NHS was dying. Tories would never curtail the bankers.
     
  29. sidicks

    sidicks
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    I wasn't the one claiming that the Tories would have spent the same amount of money....
    :hiya:
     
  30. karkus30

    karkus30
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    That is such a narrow minded view point, I understand why you say it, but Health, Education and public services are imperfect anyway. They are not fit for purpose, they were not fit for purpose under Labour, Tories or the Coalition. I find it frustrating that these services simply become a chip in a political game. Neither side is able to modernise or change something without the other side creating political points scoring out of it. The net result is no one dare to take a grip on the situation, discuss the issues and offer a way forward. Instead it is done by stealth which results in a private/public hybrid solution which is bureaucrat heavy, complex, tax inefficient and usually the worse for it.

    Ultimately, if we don't sort out the current health service it will destroy itself. However it's only part of the story because successive Governments have become dependent on an economy in which banks play a major part. The Gas is now turned down to simmer and the economy has flat lined. There is no stomach for more bank profiteering or growth, we have all said in one way or another "no more". We don't have any sign of an alternative private revolution in manufacturing, sciences, building or innovation which means growing unemployment and an ever growing older population creating a huge drain on public resources. So, now we have the added problem that we no longer have the money or the means of getting the money ( if it ever really existed in our Gross Dept Product ).
     

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