What's your problem?

For what it's worth I wasn't saying that most economists are anti-austerity or on the left, I don't pretend to know what the consensus of the economic community is. Although I do think this claim that "austerity is the consensus view of the economic community" is pretty unsubstantiated.

Has anyone else been noticing more and more of Blair in the media talking about domestic matters? IMO he should stop trying to play the statesman and stay out of the limelight. He's delusional if he thanks anyone wants him back in politics.

I want him back in politics
MWAHAHAHAHAHAHAHAAA

Melanie Philips is the nut low.
I think she's worse than Richard Littlejohn.
Both of them need to balls off though

all these Olympic flavoured strikes are doing my head in

Osborne pretty much gauranteed to either get chucked out or lose the tories any sort of chance of recovery. GG sir.
Any line on next chancellor?

Also... the weather. WHAT IS WRONG WITH ENGLAND?!?

Where's everyone hitting up London tonight?
Gunna be the greatest night of all time imo

Could you provide some links to where you got this information please?

Just because, as I said earlier, I disagree.

He can't.

He didn't understand what austerity was

So are there or are there not academic schools of thought which support the idea of austerity in the current economic climate?

If there are, I would like to read them. Please link here.

What I have been led to believe is that, basically, if no one has money, no one spends money (ground breaking stuff here), so in order for the economy to move in the right direction, the gov have to spend, even if that means borrowing more. In fact, it's times like now they should be borrowing more to invest in the economy.

That seems quite simple to me. I'd like to know why (if) that is not true.

What you want is the Austrian school as a leaping off point.

Generally speaking widespread economic thinking is that those countries that struggle with growth and can take on cheap debt should invest, which is fundamentally Keynsian, but when your debt is extremely high as it stands and the cost of borrowing is high, especially when you cant print your own currency which is a problem in the Euro zone, then austerity is the only answer which is Austrian.

Britain was right to take austeric measures when the Tories came into power. Even labour agreed with this, it just wasnt a controversial decision at all. The big question is whether it is worth some investment via debt and there isnt really any consensus on whether this is a good idea or not. The Austrian view is that there hasnt been enough Austerity to remove malinvestment, the Keynsian view is that malinvestment is a myth and that growth of GDP to fuel job growth is the only way out of the economic slump. As with anything the truth is almost certainly somewhere in the middle with a mix of Austeric and Keynsian measures to boost growth in a very focussed way but also offset debt where possible.

Poll the other day on conservativehome: 0% wanted George Osborne to lead the Tories into the next election. 2% wanted him as leader if Cameron wasn't an option.

I mean, even Michael Gove was out-polling him pretty spectacularly. That means George is done, right?

I'm only half serious - obviously drawing sweeping conclusions from an internet poll is kinda ******ed, but his support seems to have totally collapsed.

Perhaps I am unable to see the posts of some posters.

Nice cheap and completely incorrect cheap shot though.

If you owe X lots of money and the rate you are increasing your debt is increasing 24 Billion a month, you dont want X to charge you more to borrow, especially when any increase in costs would also be passed on private borrowers, which in Britain have the highest debt per capita in the world (an issue Leeds fan keeps dodging due to his vacuum of intellectual honesty.) This is completely ignoring any issues of Mal investment which I will get into later when I have more time.

Borrowing even more (when it is perecieved by lenders that you are at your absolute borrowing limit) increases risk of default, therefore increases risk of borrowing. I actually think in a vacuum that government spending in a recession is a good idea, much better than the horribly inequity of quantitive easing, however its not such a great idea when the fiscal situation is so utterly ****ed up. (Of course we could seize land or legalize drugs.....lol...leeds fan lol)

Its also important to understand that GDP can be a very misleading statistic. Upto the crash we had strong GDP figures, but the economic factors driving that GDP growth (unsustainable credit expansion) were baking economic disaster into the cake. If we could get banks to lend like they were in 2004 again, there would be massive GDP growth tommorrow, should we do that, of course not, because it would just mean a bigger crash. Its important to escape what Will Self calls the fetishisation of GDP were anything that increases GDP is seen as an a priori good. Things that increase GDP can be terrible for the economy in the long term, such as a government borrowing even more just to push string. Thats not to say dont seek to increase GDP, of course, but you must do it sustainably.

Also, and this a key key key super important issue.

There are two parts to Keyns, and one part is always ignored. Of course we all know he recommends spending in a recession. Guess what he advises doing in a boooooooooom? Yes of course, saving.

The problem with the whole Keynesian approach, is that Keyns presumes a government has saved up a health war chest during the boom times and has actively been trying to keep the boom from overheating and becoming unsustainable.

The problem is that this is the very opposite of what most western governments were doing during the boom. They were to lax with interest rates and they borrowed far to much money. Given that the saving part is a key part of his whole economic approach, its actually disingenuous for commentators to turn around and say Keynes would recommend spending now, when the key component of that spending has not been achieved.

In truth most Keynesian are half Keynesians. They want to spend during the boom, and they want to spend during the bust. The saving part never seems to get a look in.

If we had a war chest I would be all for spending it now. The problem is that cupboard is utterly and completely bare. (Though we could ring father Christmas and see if he would let us legalize drugs.)

This is the truth and its the tragedy of the left. Long before keynes the idea of saving during the good years to survive the bad years was noticed. Its all very well bleating about austerity now but the time the bleating needed to be done was during the good years (Iwhy aren't we thinking of the people and saving for the bad years they should have cried), its too late now to avoid the suffering all we can do is adjust who suffers a bit and try to get through as best we can. Its those most pro public services, support nets etc who should argue most strongly for saving during the good years because its the services, pay, pensions and support they cherish so much that will get hurt most during the bad years.

The ridiculousness of those who demand stimulas is that they never have an end point, is it right now? if it is and things get worse will it still be right? do we have to wait until literally we cannot borrow the money to stimulate with before we concede its not right anymore? even then they would probably blame the people who wont lend us anymore money.

I think its a problem with both sides and a problem with GDP. Keynes posits solutions to two problems, an overheating economy and over cooling economy. The problem is that during a boom, because GDP is going up, there is little perception of a problem existing, and there is of course zero political will to acknowledge a problem.

Of course Gordon Brown is the embodiment of this with his "No more boom and bust" but both sides are equally culpable imo of making political capital out of any period of boom, and therefore if there is no problem, there is no need for a solution.

Of course reductions in GDP are immediately seen as a problem and normally after a bubble has burst, and finally too late there is the acknowledgement that a problem existed prior to the bubble bursting.

If we dont move the terms of the debate and political discourse to a place where bubbles and unsustainable GDP growth are more likely to be admitted as problems and dealt with when they are actually occurring and not after the fact, then discussion about what to do after the bubble has burst such as now are in fact moot, as we are just doomed to repeat the mistake of ignoring unsustainable growth over and over again.

Was Osborne ever popular? Serious question, i dont remember him having any support outside of the Cameron circle.

I think its far too soon to judge whether he has been successful at his job. Like Maggie it will take a generation to be able to objectively look back and say she was 100% right economically and Cameron and Osborne are going to receive a lot of misplaced hate in the short term even if they are right about the economic choices they have made. Hopefully they win the next general regardless of how they do, they are the leadership we need and deserve even if they arent the leadership we want.

WAHOO someone's helping me try to end this God-awful austerity derail. Thanks.

Osborne was considered the heir apparent for a long while. He hoovered up a bunch of support from Fox after the weird-as-hell Adam Werrity thing to go along with Cameron's gang. Lots of the movers and shakers like him on a personal level, I've read. I find that weird, buy hey-ho.

I think calling Maggie 100% right on the economy is a pretty big claim. It's not one I agree with. She got a lot right, I'll grant.

The bolded part makes me think you've watched too much Batman.

Yea because Austerity is a derail in a thread about UK politics. Of course, silly us for debating the main economic policy of the current UK government.

Is this real life?

Ok, maybe derail was the wrong word. It's a little tedious though when there is no chance in hell any of you will change your minds.

If that is how you measure the entertainment value of a thread (how much mind changing there is) then better stop posting in this forum.

I dunno about that. What he said makes sense to me, although I'm no economist. If your values are rigid then you'll never learn. I think some people do have the ability to retain an open mind.

Yes but the right are far more ambivilent (and frequently opposed) to public services, the tragedy is for the more left leaning. If i was determined to destroy the NHS I would have done exactly what Gordon Brown did, spend on the NHS like crazy during the boom while mortgaging its furrure with PFI and leaving nothing in the pot for the bust (selling the gold was a nice touch). Currently the NHS is fairly ringfenced but if things dont recover quickly it will be simply unsustainable in its present form.

I totally agree with the rest except in my lifetime the right have had a better record of saving during booms, maybe that's an accident but maggie did pay down the national debt during the boom in contrats to Gordon and Tony who increased it. That may be more of a sign of the times than a left/right thing.

As for Osborne's low political stock the comparison shouldn't be with Maggie but with Geoffrey Howe. Now is irrelevent, if things are picking up before the election 'now' will have been forgiven and he will be talked of as being right and making the correct hard choices (whether this talk is true or not is irrelevent). I dont think he has time but then nor did Howe without the Falklands war.

I was reading an old polictiacl analysis of the crises which had 2012 as the worst year with things picking up significantly by 2014. If this is correct Osborne may be a political genius.

I see where you're going with the Howe comparison, but iirc Howe had a lot more respect among the party coming into the job and the fact that he was seen as temperamentally different from Thatcher insulated him from a lot of the criticism aimed at here. Osborne had no experience of government before entering the Treasury and is just a copy of Cameron.