Negative Inflation

[RubiconCSL]

Pretty much what I've seen - not an economist of course.

However, I feel the real problem is that the vast majority of us are processed and brainwashed to think it has to be Labour OR Conservative and there are no other options. Hence this aweful game of political tennis and both parties perpetually failing.

I just wish we could break the pattern and not have either of the ******.

...funded by massive borrowing which added 1-1.5% growth each year. The Tories are restricting borrowing hence weaker growth.

You seem to have missed that on-sheet borrowing has headed past £1.5trn and has only dropped below £100bn+ in 2014-15 when it was £90bn.

When Labour came to power, government borrowing was 42% of GDP. When the credit crunch hit the planet in 2008, it was 38% of GDP.

The real problem for the UK was that by 2008, total borrowing (govt, private, household etc) was 480% of GDP. Now, using a basic Keynesian critique, when the private sector is borrowing that heavily then the public sector should be saving. They weren't but even if they were, the impact of the credit crunch on the economy and the massive drop in tax receipts would have resulted in the same position. The problem was the over-reliance on the financial sector for income.

Labour can no more take credit for the economy's performance in their first 2 or 3 years in government than the Tories can be blamed for the 2010-2012 period. What do the averages look like then I wonder?

Oh yes they can be blamed for 2010-2012. They reduced government spending which has a multiplier effect on the real economy. The Office of Budget Responsibility figures estimate the cost to the average household as around £4k (based on a multiplier of less than 1). They panicked the public with nonsense talk of the UK being comparable with Greece hence creating a self-fulfilling prophecy as household spending dropped (saving/debt reduction increased).

In Q2 of 2010, the economy grew by 1.2%. Within a year of the Coalition nonsense, the economy was growing by 0.2% and the economy flatlined under Osborne (remember the debate as to whether the economy was technically in recession or not?). Thank gawd that after 2012, this was stopped and total government spending grew in between 2013-2015.

LiT, as I think you've said yourself before, stats can be interpreted to support most viewpoints, particularly when it comes to adjusting the scales to suit one side of the argument. But history (certainly over my lifetime) seems to suggest an economic cycle that goes something like this...

A) Labour get elected, the economy booms for a while and then descends into a spiral of chaos resulting in them losing a subsequent election.

B) The Tories get elected, clear up the inherited mess and get us pointed in the right direction again but **** a bunch of people off in the process so lose a subsequent election.

C) Repeat ad infinitum....

[Lost in Transportation]

Pretty much what I've seen - not an economist of course.

However, I feel the real problem is that the vast majority of us are processed and brainwashed to think it has to be Labour OR Conservative and there are no other options. Hence this aweful game of political tennis and both parties perpetually failing.

I just wish we could break the pattern and not have either of the ******.

LiT, as I think you've said yourself before, stats can be interpreted to support most viewpoints, particularly when it comes to adjusting the scales to suit one side of the argument. But history (certainly over my lifetime) seems to suggest an economic cycle that goes something like this...

A) Labour get elected, the economy booms for a while and then descends into a spiral of chaos resulting in them losing a subsequent election.

B) The Tories get elected, clear up the inherited mess and get us pointed in the right direction again but **** a bunch of people off in the process so lose a subsequent election.

C) Repeat ad infinitum....

Well the cycle is more the opposite - Labour get elected during economic crisis e.g. the 20s was the British economy being crucified by the Gold Exchange; 1945 immediate post-war enough said; the 60s saw Labour inherited an overvalued pound and spent two years defending that and not learning the lesson of the 20s; the 70s saw them inherit the Barber Boom and deal with the Oil Shock as the USA money printing to pay for the Vietnam War saw the post-war Bretton Woods agreement torn up and at that time we weren't producing oil ourselves.

1997 was different because the inheritance was benign but the public infrastructure wasn't great. However a global credit crunch wasn't the Labour Party's fault unless you are suggesting that they had the ability to regulate other countries economies. Normally Labour chancellors are tougher than Tory chancellors on spending. Gordon Brown is much more like Nigel Lawson and in turn George Osborne is much like those two.

Does it make much difference? Well its hard to know, my analogy is whether you want to be anally penetrated with lubrication or without but I object to squinnying about official figures. We have to describe what is actually happening to know what to change. Else we are on a treadmill as Dominic says. First things first - describe the economy as it really is. Then work out what you want to change.

[HappyHour@TheBreweryOfLife]

...funded by massive borrowing which added 1-1.5% growth each year. The Tories are restricting borrowing hence weaker growth.

You seem to have missed that on-sheet borrowing has headed past £1.5trn and has only dropped below £100bn+ in 2014-15 when it was £90bn.

So, is borrowing on a massive scale 'a bad thing' if the Tories do it, but a 'necessary strategic investment' if Labour do it, even if £80bn of it is being spent on government running costs and not actual investment?

[HappyHour@TheBreweryOfLife]

Pretty much what I've seen - not an economist of course.

However, I feel the real problem is that the vast majority of us are processed and brainwashed to think it has to be Labour OR Conservative and there are no other options. Hence this aweful game of political tennis and both parties perpetually failing.

I just wish we could break the pattern and not have either of the ******.

LiT, as I think you've said yourself before, stats can be interpreted to support most viewpoints, particularly when it comes to adjusting the scales to suit one side of the argument. But history (certainly over my lifetime) seems to suggest an economic cycle that goes something like this...

A) Labour get elected, the economy booms for a while and then descends into a spiral of chaos resulting in them losing a subsequent election.

B) The Tories get elected, clear up the inherited mess and get us pointed in the right direction again but **** a bunch of people off in the process so lose a subsequent election.

C) Repeat ad infinitum....

1997 was different because the inheritance was benign but the public infrastructure wasn't great. However a global credit crunch wasn't the Labour Party's fault unless you are suggesting that they had the ability to regulate other countries economies.

Again, it was Labour's deregulation of the financial sector which allowed the ultimately fatal high-risk trading to operate in the first place, alongside excessive borrowing (3% of GDP, the max allowed under EU rules) and high taxation...which meant that when the crunch came, we had the highest deficit in the West and no room to increase tax. The only option was to cut spending.

[Earl Grey]

I feel the real problem is that the vast majority of us are processed and brainwashed to think it has to be Labour OR Conservative and there are no other options. Hence this aweful game of political tennis and both parties perpetually failing.

I just wish we could break the pattern and not have either of the ******.

Sadly a great many of the electorate treat politics like football and 'support' a side through thick and thin, no matter how inept their Party is at the time of the GE.
We have to stop this mentality.

As voters we have to deal with an undemocratic voting system where it's even happened in the past where, out of Con or Lab, the Party with the least votes gets to run the country.

And as for constituency voting, it's also often the case that the majority of people are dissatisfied with their representative. With a better voting system this could be corrected but neither Lab nor Con want to yield from their monopoly and introduce a more democratic way of selecting your MP.

But of course so many voters 'support' either Lab or Con unchangingly that a proper democracy is difficult to foresee happening. They are concerned that a fairer balance of representation in Westminster may put their 'team' in the shade you see.

For crying out loud stop 'supporting' a particular Party no matter what. We've all seen that too many terms for any Party and things go pear-shaped.

With a properly designed voting system things might change for the better.

The ancient Greeks who 'invented' democracy would be appalled that the voting system hasn't improved much, if at all, in two and a half thousand years!

[Locky_McLockface]

I thought the Tories had fixed the economy....

They never claimed that, as I'm sure you're actually well aware, being an admitted Labour supporter. They did say that they had started to fix it, but that the job was not finished.

Pretty much what I've seen - not an economist of course.

However, I feel the real problem is that the vast majority of us are processed and brainwashed to think it has to be Labour OR Conservative and there are no other options. Hence this aweful game of political tennis and both parties perpetually failing.

I just wish we could break the pattern and not have either of the ******.

LiT, as I think you've said yourself before, stats can be interpreted to support most viewpoints, particularly when it comes to adjusting the scales to suit one side of the argument. But history (certainly over my lifetime) seems to suggest an economic cycle that goes something like this...

A) Labour get elected, the economy booms for a while and then descends into a spiral of chaos resulting in them losing a subsequent election.

B) The Tories get elected, clear up the inherited mess and get us pointed in the right direction again but **** a bunch of people off in the process so lose a subsequent election.

C) Repeat ad infinitum....

Well the cycle is more the opposite - Labour get elected during economic crisis e.g. the 20s was the British economy being crucified by the Gold Exchange; 1945 immediate post-war enough said; the 60s saw Labour inherited an overvalued pound and spent two years defending that and not learning the lesson of the 20s; the 70s saw them inherit the Barber Boom and deal with the Oil Shock as the USA money printing to pay for the Vietnam War saw the post-war Bretton Woods agreement torn up and at that time we weren't producing oil ourselves.

1997 was different because the inheritance was benign but the public infrastructure wasn't great. However a global credit crunch wasn't the Labour Party's fault unless you are suggesting that they had the ability to regulate other countries economies. Normally Labour chancellors are tougher than Tory chancellors on spending. Gordon Brown is much more like Nigel Lawson and in turn George Osborne is much like those two.

Does it make much difference? Well its hard to know, my analogy is whether you want to be anally penetrated with lubrication or without but I object to squinnying about official figures. We have to describe what is actually happening to know what to change. Else we are on a treadmill as Dominic says. First things first - describe the economy as it really is. Then work out what you want to change.

I don't claim to be an economics expert.

All I know is that within my lifetime, I have been aware of Labour losing two elections whilst being the incumbent government, 1979 and 2010.

In 1979, I was 8 years old, and frankly I don't remember a huge amount of the background of economic activity. I do remember that during the preceding winter, pretty much every single union went on strike, I remember power cuts, I remember being scared of the house burning down because the firemen were on strike. I remember there being huge inflation. I have just done a quick Google and the unofficial CPI for 1979 was 13.4% (given that inflation wasn't measured in terms of CPI back then, this is extrapolated). In 1975, the extrapolated CPI inflation rate was 24.2%. That seems to indicate to me that the economy was not in a healthy state.

In 2010, I was a little more clued-up. I can remember that Gordon Brown had sold some of our gold reserves. I remember there being a global financial crisis, which yes, you can't blame Labour for, but you can see how our economy measured up to others' economies. Labour left a note at the Treasury saying "there's no more money". It was claimed in the run up to this election that our deficit was worse (or at least at about the same level) as Greece's. I don't recall anyone from Labour denying this claim, so I can only assume this is true. Therefore, to me, it appears that Labour did not manage our economy as well as other countries.

On that basis, I can't find fault with Sherl's assessment.

[RubiconCSL]

And let's not forget Brown's pension raid in (I think) his first mini budget - couldn't even wait for a full budget. It must have been one of the highest yielding taxes any government has put in place in decades - and it gets little mention.

I'm not saying he's the only ****** to have messed with pensions, but if Labour represents the less well off, attacking pensions was hardly going after the rich was it?