"hugh" ] wrote in message
...
In message
, Man
at B&Q writes
"The new official analysis, based on a report from the International
Monetary Fund (IMF), showed that Britain was running a so-called
structural deficit of 5.2pc in 2007 ?" far higher than the 2.5pc
initially stated by the IMF. "
MBQ
I don't think socialists understand structural deficit
It is clear you have NO IDEA of economics full stop. What you naively know
is the crap the Tory Party drive into you via its media.
Read this AGAIN and the graphs. That is if you can understand it of course.
More your lips when you read if it make it better for you.
To clear up the mythical Gordon Brown big debt:
Below: Note that Brown in 2008 was spending about the same as Major in 1992
and far less than Thatcher in 1983.
http://i54.tinypic.com/wbow0i.png
Below: It's not the level of spending that's important it is the deficit -
the difference between spending and revenue. As long as the chancellor
raises enough in taxes to cover his spending over the cycle there's not a
problem. Also the deficit gives you the full picture of the effect of the
recession where quite naturally both spending rises and tax revenues fall.
This is a graph of the deficit also to 2010.
http://i53.tinypic.com/jug3z9.png
The deficit went up in both the early 80s and the early 90s, due to two
recessions. As we came out of them the deficit fell and turned to surplus.
Then the deficit rose in the early part of the last decade. The UK under
Blair and Brown was in the 'longest period of sustained growth since the
Industrial Revolution. The borrowing was to fund infrastructure totally
neglected by the Tories. Record hospital and school building went on.
When the deficit rose again due to the recession it rose to dangerous
levels, forcing us to make painful cuts to avoid the fate of other countries
like Ireland.
From the Guardian:
"9 facts which George Osborne doesn't want us to know because they expose
the fiction that Labour spent all the money":
Fact 1:
In 2008, the first year of the UK recession, seven of the eight European
economies with a higher GDP per capita than the UK (Austria, Finland,
Holland, Denmark, France, Germany and Sweden) also spent more as a % of GDP.
The single exception was Ireland, which not so long ago Osborne held up as
an example to the UK, and which has since suffered economic collapse.
Fact 2:
Average annual public spending as a % of GDP was lower in the years
1998-2010 (38%) than in the years 1980-1997 (40%) whereas average annual
taxation was the same at 36% of GDP.
Fact 3:
Public spending fell from 38% of GDP in 1997 to 35% in 2000. From 2000
onwards, the Labour government began to spend money on Tory neglected
run-down schools, roads, hospitals, etc. Thus public spending increased to
39% of GDP in 2007 - and then to 45% in 2010, as the effects of the
financial crisis took hold and the government rightly followed the Keynesian
rule that spending increases should be counter-cyclical.
Fact 4:
Margaret Thatcher described Blair as "my greatest legacy" because he had
rejected what she saw as Labour's core principle of "tax and spend".
Accordingly, Gordon Brown kept to the previous Conservative government's
spending plans for the first 3 years. But they had been elected to improve
neglected public services and so were committed to increase spending. Much
of New Labour's electoral success was due to its appeal to voters who wanted
it both ways - better schools and hospitals but no tax increases. Likewise,
much of the vitriol now directed at Gordon Brown comes from those same
fools.
Fact 5:
As for the structural deficit, this was only 3.5% of GDP when Brown left the
Treasury in 2007, compared to 4% in 1997 and an annual average of 5.5% in
the years 1992-1996. According to IFS data, the UK has run a structural
deficit for all but five of the last forty years. In fact, the last 3 Labour
governments managed to earn enough to cover their spending for 3 of their 13
years in office, whereas Thatcher and Major only managed balance the books
for 2 out of 17 years. Sure, austerity drones can blather on about economic
cycles, but the fact remains that New Labour's fiscal policies were little
different from those of the Thatcher and Major governments.
Fact 6:
Brown is often criticised for failing to reduce debt during an economic
upturn. Yet Labour reduced the national debt from 42% of GDP in 1997 to 35%
in 2008 - when it was lower than in 11 of the 18 years between 1979 and 1997
and lower than corporate debt (250% of GDP) and private debt (70% of GDP).
The national debt has been higher in 200 of the last 250 years than it was
in 2010, when it was 52% of GDP. In 1945 it was 237% of GDP and yet Attlee's
post-war Labour government was able to bear the costs of introducing the
welfare state and nationalising the railways, the public utilities and the
coal and steel industries. Maybe that was because in 1945 we really were
"all in it together".
Fact 7:
In 2010, the UK's national debt was the second lowest of the G7 countries
and, at less than 60% of GDP net of bank assets, was within Maastricht
Treaty limits. It is expected to peak at around 73%. Germany is already
above that level and is expected to exceed 80% in 2013. The debt levels of
Japan and Italy exceed 100% of GDP.
Fact 8:
In 2007, Cameron promised to stick to Labour's spending plans. Then came the
financial crisis, the damaging effects of which he now chooses to deny -
unlike Mervyn King, Governor of the Bank of England, who told the Treasury
select committee that public spending cuts were the fault of the financial
sector (March 1st 2011). But it isn't surprising that Cameron is reluctant
to blame the banks, since he had previously criticised Gordon Brown for
regulating them too tightly - and more than half of the Tory Party's funding
comes from the City.
Fact 9:
Budget deficits are due to either excessive spending or an inadequate tax
take. Since it is clear that the problem is not the former (Facts 1-9), then
it must be the latter - which is around 36% of GDP compared to an EU average
of 40%, and is likely to be further aggravated when taxes are cut later
during this parliament to the benefit of high earners, corporations and
banks.
That Gordon Brown didn't overspend is indisputable. He did create the
longest period of economic growth since the Industrial Revolution. Remember
his nickname "Prudence" and the praise lavished on him by the Tory press?
New Labour's obsession with market liberalisation put it somewhere in the
middle on the scale of (in)competence, but on the same scale, the present
Tory rabble lie on the far side of disastrous.
The Tory press has managed to convince the nation Brown was responsible for
the Credit Crunch as well.
To the policies of the current rabble. If, by cutting hard, you cripple
growth by a roughly concommittant amount, then the cuts achieve little
except the redistribution of wealth from poor to rich - since public funds
are disproportionately spent on the poor.
There is data in the current financial figures to show this is indeed