From todays Daily Torygraph

“IMF advises delaying austerity until growth returns
Cutting government spending in a crisis will condemn a country to an even deeper recession and inflict “permanent” damage on the economy, the International Monetary Fund has warned. “

Well CD you obviously know much more than the IMF………………………………

So CD
AA/ You do not believe Governments can create growth.
BB/ You do not believe Governments can create jobs.

So, what is the point then in Goverments, politics or economics ?

Could you please come up with an economist or economic theory to back up your beliefs that Governments cannot effect the economy ?

The reason why the deficit has recently increased again is due to a sudden slump in the payment of Corporation Tax.

If this slump continues and all the indications are that they will what do you think is going to happen ?
Especially when an expedential reduction in the tax take starts to occur ?

Its a long time since I was studying economics but I was always taught that when putting forward point you need to back it up with a reasoned argument.

I know what you will reply……..lets keep cutting spending……well if that continues to occur take a tip.

Buy in lots of food and what-ever-else you need to survive. Since quite frankly an complete economic brake down could very possibly occur especially if the euro zone breaks up. And that situation might well be much closer than you think.

Still, capitalism has never worked successfully. Thanks to greed indemic in western society it always breaks down into war and depression, killing millions.

My model for recovery is to follow is FDR’s example plus a large dose of JMK. Further, for this country to return to a part planned economy other than slavishly following the free market principals which as I alluded to above dont seem to work.

What would be your approach CD ?

PS This inept, socially devisive and economically inept Government will be very soundly beaten in the next election.
Nick Clegg has assured that the Lim Dems will return to total obscurity.
UKIP will not feature strongly in the next election.
Labour will win the next election. Though I doubt this will improve things much since I dont think the two Ed’s have the intillect or economic policys to succeed. Things might be a little better if the other Milliband holds high office.

………..god help us all………..

The only difference between what is happening now and what happened in the 1930’s in my opinion is that in the 1930’s the crash resulted from the attempt to maintain the gold standard. Today it is the attempt to maintain government bonds.

The risk of plunging into a massive deprression remains very real indeed although much of this is related to the euro zone situation.

As much as the subject interests me I’ll skip a thesis on JMK and recoveries from situations such as exist presently.

I very much agree with you CD that the French situation will indeed be most interesting. There situation as I’m sure you are aware is very different from ours, since they are constarined by the euro zone meaning they cannot use the levers of interest rates and QE like we can.

In my very humble opinion……the economic policies of the coilition so far have not worked. I believe the figures show this. That is just my opinion. Though I am certainly not alone in these thoughts. some of which come from right of centre.

My interest is the welfare of the nation and the common good. this is NOT a case of party politics. It is about stimulating the economy, getting people back to work. I dont mind who does this as long as someone does.

Even the IMF is telling the country to attempt stimulus. In there case they suggest a further reduction in the base rate and have been doing so for some time.

In this thread I am looking for peoples opinions, stimulating debate and perhaps some interesting ideas from left field (like your giving money to the unemployed).

I think we need to change tack immediately.

I dont want to put words in anyones mouth but if you think the current policies and correct, hey, thats great, thats your opinion and thats just fine with me.

Me ? I think it is quite possible that a crash that makes the 1930’s look like a school outing to the seaside is a very real possibility and it scares me senseless.

Latest hedline from the Daily Torygraph

“Do more and do it now to kick-start the economy, business leaders tell George Osborne
George Osborne has failed to kick-start the economy and must cut taxes, reduce red tape and invest in new infrastructure to boost growth, business leaders have warned. “

“The Institute of Directors (IoD) says that the Chancellor’s growth strategy is largely “ineffective” and “too little, too slowly”, as demands increase for radical action in the autumn.

A survey of more than 1,200 business leaders found they have “serious concerns” that the recession will last throughout 2012 with only a modest recovery next year.

Their concerns come as official economic figures showed that the Chancellor has had to increase public borrowing.

The Government is on course to borrow £30 billion more than expected this year, which may lead to a new round of public spending cuts.

The Coalition has also been criticised for failing to invest in big infrastructure projects such as expanding Heathrow or building a new airport in the South East. “

CD
So how do you think countries recovered from the great depression.
Try reading a little John Maynard Keynes or looking at what FDR achieved.
If you do not believe governments can istigate growth what is the point of any government persuing any economic policies?

Re giving the unemployed £28,000.
The answer is using the money to get the unemployed , employed. the stimulus resulting from this is obvious. I wrote an essay over 30 years ago now about stimulating the economy by simply giving every man and women in the country a sum of money that they were required to spend, replacing QE. There is indeed an argument for this. Note thats every man and women.

Giving the unemployed £28,000. £3,00 above the average wage in the UK would be perhaps not the best form of QE. (please…….lets not get into the average salary thing again).

So having answered your questions could I please ask you one.

Since the plan of cutting the defficit through massive cuts in Government spending has failed since it has been showed to be increasing the defficit. What do you think we should do next ?

CD

Are you saying that it is not possible for a government to create growth through its economic policies ?

Billions and billions of pounds of QE has been distributed to the banks. Had that money been used to reduce VAT, invested in infastructure used to get people back to work by giving companies incentives to employ people long term etc at least we may have seen something for this money.

If people have money to spend then growth will be stimulated. Simple supply and demand.

Trouble is we closed down all our industry years ago (nice move Mrs T)

Ummmmmm
Germany, Norway (most of Scandanavia really), China (7 % growth this year I think). India, Brazil, UAE do you want me to keep going?

The simple fact is that the current coilition based there economic policies to reduce the defficit by a massive reduction in government spending……..and it has not worked. In the process of doing so they have dramatically reduced our economy (double dip recession) and caused much pain in the process. Although the rich and the bankers appear to have been spared.

So………lets try something different…………………..please. before its too late.