Politics, politics, politics

[r-u-s-x]

Does a decrease in domestic demand always match the increase in overseas demand? I've never heard of that happening before and it sounds like an incredibly simplistic view.

Decreased domestic demand (or increased personal debt) happens when people have pay cuts with stagnant wages which was being discussed as the main tool for increasing overseas demand.

 

[Danishfurniturelover]

Sound to me a lot like "I'm not a racist but..." That is so much orthodox right wing bunk. This is the stuff that the establishment force feed everybody all the time and it is crap. Running a nation's economy is not like running a household, which is the normal false analogy that the Tories use when selling this snake oil. Christ, when are people going to wake up to this self serving rubbish?

I strongly disagree, I honestly think that it should be a legal requirement that the Government can only spend a portion of GDP on certain things, going into debt each year in your household bills and each year with the government ends the same way. The government can have some debt like infrastructure such as roads and new railway lines similar to how a person takes on a mortgage on the home. But similar to if a person wants a new sofa for their living room, if the NHS wants a new wing for a hospital it should come out of its NHS budget.

I actually think a tax just for the NHS would be a good thing and stop people moaning. But to finish, I strongly believe people and governments have a duty to be tough on their finances because if they get into trouble as Labour did with overspending running up to the 2008 recession then what follows is their fault. Just like all these people taking out loans on car they can not afford what is coming will be their fault.

 

[r-u-s-x]

We can afford a lot more if we address the productivity gap, when comparing to similar sized countries (exclude Norway and the smaller economies - this should be a major concern - why do we have to work longer than France / Germany to earn the same amount?


https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_hour_worked
Rank Country GDP (PPP)
per hour 2013
1

Norway 75.18
2

Luxembourg 73.22
3

United States 67.32
4

Belgium 60.98
5

Netherlands 60.06
6

France 59.24
7

Germany 57.36
8

Ireland 56.05
9

Australia 55.87
10

Denmark 55.75
11

Sweden 55.28
12

Austria 54.83
13

United Kingdom 51.38

 

[scaramanga]

Decreased domestic demand (or increased personal debt) happens when people have pay cuts with stagnant wages which was being discussed as the main tool for increasing overseas demand.

I understand that. My questions was why the increase in overseas demand can't outstrip the decrease in domestic demand. @Gilzeantoscore talks about it as if every £ spent from overseas is a £ not spent at home.

That's clearly not the case.

 

[StephenH]

All this "we must not burden our grandchildren with debt" dogma.

I always think of the family, who are trying to save money and pay the credit card debts by not putting petrol in the car to go to work.

 

[r-u-s-x]

I understand that. My questions was why the increase in overseas demand can't outstrip the decrease in domestic demand. @Gilzeantoscore talks about it as if every £ spent from overseas is a £ not spent at home.

That's clearly not the case.

not my understanding of this Gutterboy is talking about stagnating wages to increase overseas demand and Gilzean responded

"The whole economic policy of the last 7 years has been to shrink wages to improve international competitiveness. It's not a consequence, it's a design"

"And what you gain in increased exports you lose in falling domestic demand"

 

[scaramanga]

"And what you gain in increased exports you lose in falling domestic demand"

This is precisely what I'm arguing against.

There is no reason whatsoever that the the increase in one will be matched by a decrease in the other.

 

[r-u-s-x]

GB has been arguing that the increase in exports will be beneficial for the past page - but the question is equally why the increase in overseas demand will outstrip the decrease in domestic demand

 

[scaramanga]

GB has been arguing that the increase in exports will be beneficial for the past page - but the question is equally why the increase in overseas demand will outstrip the decrease in domestic demand

It's a much larger market for a start.

 

[r-u-s-x]

Ha - as you were then - a decrease in Wages in an economy will always lead to a great increase in overseas demand because it is bigger.

 

[Gutter Boy]

And what you gain in increased exports you lose in falling domestic demand. Snap! Austerity is a policy designed to smash the bottom line for worker's pay and conditions. Tories have been following this set of policies ever since they came into being. So forget about budget repair and all the other pretexts these neo-liberals use. When was a the last time these grubs ever supported a wage rise. I'll answer that for you....never!

Wage rises are pointless.

Give everyone £1m a year. Then then cost to produce food rises to £0.5m. Then the most competent people demand £2m to maintain their quality of life. And the inequality is preserved.

The way to tackle inequality is 4 day working weeks, guaranteed incomes and performance-related top-ups.

 

[Gutter Boy]

Sound to me a lot like "I'm not a racist but..." That is so much orthodox right wing bunk. This is the stuff that the establishment force feed everybody all the time and it is crap. Running a nation's economy is not like running a household, which is the normal false analogy that the Tories use when selling this snake oil. Christ, when are people going to wake up to this self serving rubbish?

Anything other than meeting our costs is a ponzi scheme

 

[r-u-s-x01]

Wage rises are pointless.

Give everyone £1m a year. Then then cost to produce food rises to £0.5m. Then the most competent people demand £2m to maintain their quality of life. And the inequality is preserved.

The way to tackle inequality is 4 day working weeks, guaranteed incomes and performance-related top-ups.

Any other causes of inflation? Pay cuts are pointless especially if you have very little to start with

 

[parklane1]

Better for who? There are many millions of people who don't feel like this economy is working in their favour, not just here but in other countries too. This is where the winds of change are coming from imo, people have had enough of the politics/economics that they don't feel the benefit from.

This, this, this, it baffles me that there are ( supposedly) intelligent folks around who are still baffled by the results over the least few years ( UKip wining council seats, Corbyn wining not one but two leadership elections, Brexit, Trump) and they can not see why they all happened.

Talk about

 

[Gilzeantoscore]

Anything other than meeting our costs is a ponzi scheme

Sometimes it makes great economic sense for a government to borrow and add to the deficit. Say there is huge demand for a mineral that your country has huge deposits of. The problem is you can't export it in sufficient bulk quantities efficiently due to poor rail links and ports. The money to build this infrastructure has to be borrowed, but the profits in the future will be huge and far out weigh this. So a failure to borrow under these circumstances would cost the nation money. With interest rates at record lows, now would be a great time to borrow, instead of being forced at a later date when interest rates may be higher. Tories constantly argue for so called 'austerity' because it is all part of their aim of shrinking the state. You know as well as I do that they don't want too much government, so cutting spending is a way of accomplishing this aim. Driving down wages and conditions, the race to the bottom is the only solution these unimaginative dolts have for achieving profit. They are lazy, inefficient and reactionary too. They need to go. if this is the best that capitalism under the Tories can offer, then I want something else.

 

[Gilzeantoscore]

This, this, this, it baffles me that there are ( supposedly) intelligent folks around who are still baffled by the results over the least few years ( UKip wining council seats, Corbyn wining not one but two leadership elections, Brexit, Trump) and they can not see why they all happened.

Talk about

View attachment 3424

So true. As Nicholas Romanov said, "who is this Lenin of whom you speak?" You can say what you like about the Victorians, but they at least knew what side their bread was buttered on and gave in to the masses demands and the reform bill was passed. This lot are so blinded by greed that when the wave hits them, they will be in a state of shock. If the Tories had any sense of their long term interests and that of their spiv business mates, they'd hunker down behind the barricades and let austerity go. Consign it to the dustbin of history. If they don't, something might start that they may not be able to control.

 

[Gutter Boy]

Sometimes it makes great economic sense for a government to borrow and add to the deficit. Say there is huge demand for a mineral that your country has huge deposits of. The problem is you can't export it in sufficient bulk quantities efficiently due to poor rail links and ports. The money to build this infrastructure has to be borrowed, but the profits in the future will be huge and far out weigh this. So a failure to borrow under these circumstances would cost the nation money. With interest rates at record lows, now would be a great time to borrow, instead of being forced at a later date when interest rates may be higher. Tories constantly argue for so called 'austerity' because it is all part of their aim of shrinking the state. You know as well as I do that they don't want too much government, so cutting spending is a way of accomplishing this aim. Driving down wages and conditions, the race to the bottom is the only solution these unimaginative dolts have for achieving profit. They are lazy, inefficient and reactionary too. They need to go. if this is the best that capitalism under the Tories can offer, then I want something else.

I agree - R&D and infrastructure are worthy things to throw public money at, because they pay back exponentially. We haven't done this in decades, which is why our productivity levels are so low.

But borrowing to bloat the public sector with high-wage Guardian-reading Business Solutions Architects and the like (cough Gordon Brown) is always a bad thing.

The solution is to abandon the ambition of universal work, stop people doing pointless jobs (most of the population) and divide the worthy jobs (and crucial resources generated by automisation) around fairly. Capitalism is completely broken, but socialism is as bad too. They both the things the old guys got stuck on 100 years ago. Neither are the future.

 

[scaramanga]

So true. As Nicholas Romanov said, "who is this Lenin of whom you speak?" You can say what you like about the Victorians, but they at least knew what side their bread was buttered on and gave in to the masses demands and the reform bill was passed. This lot are so blinded by greed that when the wave hits them, they will be in a state of shock. If the Tories had any sense of their long term interests and that of their spiv business mates, they'd hunker down behind the barricades and let austerity go. Consign it to the dustbin of history. If they don't, something might start that they may not be able to control.

I agree - R&D and infrastructure are worthy things to throw public money at, because they pay back exponentially. We haven't done this in decades, which is why our productivity levels are so low.

But borrowing to bloat the public sector with high-wage Guardian-reading Business Solutions Architects and the like (cough Gordon Brown) is always a bad thing.

Quite. Borrowing to invest is one thing. Borrowing to cover the gap between income and earnings is not a sensible solution.

Of course you can always use Labour nuspeak and relabel spending so the public don't notice. Next time they're in government (probably fairly soon as people seem to have forgotten the horrors of the last leftie govt) keep an ear our for phrases like "We're investing in another 1000 nurses" or "We're investing in a pay increase for all of our sustainability consultants". That's not investing, that's just spending.

 

[Gilzeantoscore]

Sometimes it makes great economic sense for a government to borrow and add to the deficit. Say there is huge demand for a mineral that your country has huge deposits of. The problem is you can't export it in sufficient bulk quantities efficiently due to poor rail links and ports. The money to build this infrastructure has to be borrowed, but the profits in the future will be huge and far out weigh this. So a failure to borrow under these circumstances would cost the nation money. With interest rates at record lows, now would be a great time to borrow, instead of being forced at a later date when interest rates may be higher.
During the GFC, the one western capitalist nation to avoid recession was Australia. They gave every household a cheque for $2500 and told them to spend it, they also spent billions on infrastructure for schools. This maintained demand, kept unemployment at bay, maintained growth and Australia came out of the GFC in better economic shape than any other nation. Meanwhile, the USA and Britain did the standard austerity thing and all it did was to allow for the GFC to bite so much harder and to last for longer. Clearly the present lot are no students of history, because this was the same lame response as the Tories put the nation through during the Great Depression. Tories, they are so predictable.
Tories constantly argue for so called 'austerity' because it is all part of their aim of shrinking the state. You know as well as I do that they don't want too much government, so cutting spending is a way of accomplishing this aim. Driving down wages and conditions, the race to the bottom is the only solution these unimaginative dolts have for achieving profit. They are lazy, inefficient and reactionary too. They need to go. if this is the best that capitalism under the Tories can offer, then I want something else.

 

[Gilzeantoscore]

I agree - R&D and infrastructure are worthy things to throw public money at, because they pay back exponentially. We haven't done this in decades, which is why our productivity levels are so low.

But borrowing to bloat the public sector with high-wage Guardian-reading Business Solutions Architects and the like (cough Gordon Brown) is always a bad thing.

The solution is to abandon the ambition of universal work, stop people doing pointless jobs (most of the population) and divide the worthy jobs (and crucial resources generated by automisation) around fairly. Capitalism is completely broken, but socialism is as bad too. They both the things the old guys got stuck on 100 years ago. Neither are the future.

Economies need to find ways of investing so as to provide the multiplier effect.