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Why the lib-dems are shit

i_got_poison said:
how can you absolve reckless, greedy individuals of any responsiblity, for purchasing property they knew full well they had no right buying.

p.s. haven't we been here before with the housing crash of 87. surely we know by now these dreams come at a cost
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No right buying? What does that mean? What rights are you referring to?
 
Edie said:
Thanks a lot for your replies on the why we're in debt question. Seems to be cos we stopped making stuff and turned into a finance economy (I don't really understand why this would lead to us as a nation owing more, did we buy other countries debts because we believe long term they will be repayed. Or something :confused:), we've over spent and then it was all made worse by bailing out the banks. Is that fair?

Whatever the reason, it seems most people agree there is a debt and something needs to be done.

kyser showed that we can either cut spending or tax more or a mix. Other people seem to think that by investing a lot more (borrowed) money into the economy, we create jobs... make more money... then can tax people more... then pay off more debt. (this is called Keynesian stimulus).

So.. it seems that the last option is best for most people if it works cos there is less unemployment, less poverty, less people being made homeless. But it also seems like the most risk. What evidence is there that borrowing more to invest will work? If it doesn't I guess we're doubly fucked.
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New Deal & WWII
 
Edie said:
Thanks a lot for your replies on the why we're in debt question. Seems to be cos we stopped making stuff and turned into a finance economy (I don't really understand why this would lead to us as a nation owing more, did we buy other countries debts because we believe long term they will be repayed. Or something :confused:), we've over spent and then it was all made worse by bailing out the banks. Is that fair?

Whatever the reason, it seems most people agree there is a debt and something needs to be done.

kyser showed that we can either cut spending or tax more or a mix. Other people seem to think that by investing a lot more (borrowed) money into the economy, we create jobs... make more money... then can tax people more... then pay off more debt. (this is called Keynesian stimulus).

So.. it seems that the last option is best for most people if it works cos there is less unemployment, less poverty, less people being made homeless. But it also seems like the most risk. What evidence is there that borrowing more to invest will work? If it doesn't I guess we're doubly fucked.
Click to expand...

The evidence would be history. FDR's New Deal etc.
 
Edie said:
So.. it seems that the last option is best for most people if it works cos there is less unemployment, less poverty, less people being made homeless. But it also seems like the most risk. What evidence is there that borrowing more to invest will work? If it doesn't I guess we're doubly fucked.
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The long run is a misleading guide to current affairs. In the long run we are all dead. - John Maynard Keynes

that's why the option 'best for most people' is more viable.
 
i_got_poison said:
ymu - if you were a million euros in debt and you decided to cut back on food shopping for 2 years, would you expect the debt to be paid?
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That depends how many people I'm feeding, and how much I cut back. If I'm depending on them to go out to work to bring in an income, then starving them so that they are too ill to work isn't sensible.

You can't think about government economies as if they were households - they're not. Their income depends on tax, which depends on people in work and spending money in the businesses which employ people who spend money. I spent a considerable proportion of the 1990s living on almost nothing. Free bones from the butcher to make soup with pearl barley, emptying pub ashtrays to reconstitute the butts later on. That was about it for luxuries. Now, if every single person in the country did that, every shop and manufacturer would be fucked (and there would be no butchers to get free bones off).

Now, have you read anything about Keynes vs Friedman yet, or are you still going to insist that you can work all this out from first principles on a fucking bulletin board?
 
Edie said:
Thanks a lot for your replies on the why we're in debt question. Seems to be cos we stopped making stuff and turned into a finance economy (I don't really understand why this would lead to us as a nation owing more, did we buy other countries debts because we believe long term they will be repayed. Or something :confused:), we've over spent and then it was all made worse by bailing out the banks. Is that fair?

Whatever the reason, it seems most people agree there is a debt and something needs to be done.
Click to expand...

Us having debt isnt new, and present debt levels are not at insane highs compared to some other periods in our history.

One of the big reasons the debt is now seen as a problem that must be tackled, is not the level of debt in itself, but that the cost of being in debt and the availability of credit is changing. The credit crunch & associated knock-on effects means that the potential for the debt becoming harder and harder to service (gets more expensive to repay) increases, which coupled with a general decline in the economy causes some wailing and fears for the future. I think much of this is due to changing expectations for how much wealth we will be able to create in future, and when I say we I mean the world, or at the very least the developed world. Once sentiment on these matters goes bad, as it did a few years ago, it can be hard to get out of the downward spiral. Leaving issues of fairness aside, one of the big fears is that the cuts will affect the wider economy, further reducing our ability to service debt, and making our position worse not better, all the pain for no gain.

We havent stopped making stuff, but we have reduced certain key industries in a way that affected our exports, leading to trade deficits that dont exactly help matters. The financial service sector, and other services, are supposed to plug the gap but even when they were booming it was not enough to balance trade with the rest of the world properly. Im not sure whether the finance sector made our debts worse during the good times or not, the main reason they put us in peril now is because they are so exposed to all the financial woe going on around the world, although some still seem to be making a tidy profit. For this and other reasons Im not convinced we will easily find out how much the bank bailout has really cost us, there are so many other things going on that it maybe hard to separate the costs of that from all the other stuff thats costing us.
 
ymu said:
That depends how many people I'm feeding, and how much I cut back. If I'm depending on them to go out to work to bring in an income, then starving them so that they are too ill to work isn't sensible.

You can't think about government economies as if they were households - they're not. Their income depends on tax, which depends on people in work and spending money in the businesses which employ people who spend money. I spent a considerable proportion of the 1990s living on almost nothing. Free bones from the butcher to make soup with pearl barley, emptying pub ashtrays to reconstitute the butts later on. That was about it for luxuries. Now, if every single person in the country did that, every shop and manufacturer would be fucked (and there would be no butchers to get free bones off).

Now, have you read anything about Keynes vs Friedman yet, or are you still going to insist that you can work all this out from first principles on a fucking bulletin board?
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for the purposes of the question i posed, you're feeding yourself. it's implied.

a poster has already stated the idiocy of monetary policy; BoE - government - people - tax. bank of england creates the money, loans it to the
government, government distributes it to the populace, populace pays tax on income. a perpetual cycle of debt which can never be paid.
obviously the debt we're discussing is between countries.

keynes - spend spend spend. friedman - there's a correlation between price inflation and money supply (no shit sherlock).
 
i_got_poison said:
for the purposes of the question i posed, you're feeding yourself. it's implied.

a poster has already stated the idiocy of monetary policy; BoE - government - people - tax. bank of england creates the money, loans it to the
government, government distributes it to the populace, populace pays tax on income. a perpetual cycle of debt which can never be paid.
obviously the debt we're discussing is between countries.

keynes - spend spend spend. friedman - there's a correlation between price inflation and money supply (no shit sherlock).
Click to expand...

So you've not read anything about Keynes then. How shocked I am.

Keynesian economics is about government spending to prop up the economy in a recession and building up a surplus during the boom. It is about smoothing out the economic cycles. You cannot use Keynes in a recession and Friedman in a boom.

And you definitely cannot use Friedman in a recession. It's murderously stupid. Literally.

Friedman came along after the 1929 crash, but he only really put a monetarist layer on the free market ethos that existed pre-1929. Keynes came into prominence in the 1930s, and was abandoned for Friedman in the Reaganomics revolution in influential parts of the west in the 1980s. Now, look at this graph and say what you see:

income_inequality_us.jpe
 
ymu said:
So you've not read anything about Keynes then. How shocked I am.

Keynesian economics is about government spending to prop up the economy in a recession and building up a surplus during the boom. It is about smoothing out the economic cycles. You cannot use Keynes in a recession and Friedman in a boom.

And you definitely cannot use Friedman in a recession. It's murderously stupid. Literally.

Friedman came along after the 1929 crash, but he only really put a monetarist layer on the free market ethos that existed pre-1929. Keynes came into prominence in the 1930s, and was abandoned for Friedman in the Reaganomics revolution in influential parts of the west in the 1980s. Now, look at this graph and say what you see:

income_inequality_us.jpe
Click to expand...

tell me ymu, what does keynes have to say about booming economies funded with debt, like the uk, ireland and america.
should a surplus be collected from the debt used to run the economy?

the political elements to an economy is often overlooked by these theories.

reaganomic = deficit spending.
 
Tax breaks for the rich in a boom is a massive error, yes. As is masking falls in real incomes with cheap credit in order that the rich can siphon even more out of the economy. What the fuck do you think Keynes would say? :confused: Oh yeah - you've not actually read anything at all. You're just making it up as you go along.

Now, any chance of an answer to my questions because all you're doing is spouting ill-informed factoids and heavily discredited dogma. If all you want to do is use this thread as a platform for your ideas, fine - just don't go asking people to answer your questions when you have no intention of answering theirs.
 
the graph says in times of recession, income equality is at it's most pronounced. question, answered.

ymu, you can't say go off and read several tomes by keynes and friedman and expect it to be done.
you set yourself up as someone who knows about the economic theories of these two economist. why shouldn't i, for
expediency sake, tap your vast reservoir of knowledge on the subject :D

the question i posed is partly rhetorical, because logically, it makes no sense to collect surplus funds from a debt fuelled boom.

economic theories can suggest all they want, as all i'm interested in, is economic reality.
 
What would the graph look like if you extended it to 2008 and beyond? We've had dozens of recessions in that period, but only two serious crashes. When did they happen, in relation to income inequality, and what does this tell you about free-market economics?

I didn't say read a couple of tomes, I asked you to read a couple of articles. You demanded the links again (they were a whole page earlier in the thread) and I gave them to you again. I can't read them for you too. Sorry.

The debt-fuelled boom was only debt-fuelled because the rich got the tax cuts they wanted (why the fuck do you think we've been cutting staff at HMRC when they're the only workers in the public sector who make a massive profit?), and wages were allowed to grow at far less than any measure of inflation. For the avoidance of riots, this had to be masked by cheap credit and and sucking people into home ownership when it was a risk they could not afford. Rockefeller is said to have sold his stocks pre-1929 when he heard an elevator boy boasting about his own portfolio - he realised that if the stock market needed the savings of small investors to support prices, it was about to go boom. Plus the subversion of sexual equality to mean both partners in work, instead of just one, so we all get to work more but our joint incomes are barely worth more than a single income was in the 1970s, in terms of the quality of roof over our heads and food on the table.

In the 1970s wages as a share of national income was around 60% or more. Now they're down to just 53%. Anyone earning less than £120k or so (currently) saw their incomes drop or stay the same in relation to productivity, whilst the super-rich, who pay fuck all tax, pocketed the boom-time cash.
 
free market economics. is there a greater misnomer. the markets are neither free nor fair. in america you have the plunge protect team
ready to intervene if the dollar falls too rapidly. the 1000 point drop in dow industrial average and it's remedy, high frequency trading and a host
of other tools that prove the markets are fixed.

homes are one of the few assets the bank has complete control over. they finance the purchase, the interest rate and ultimately, create the
conditions in which repossessions occur.

cheap credit was brought about by low interests rates in america, which lead to low inter bank lending rates. with so much credit in the system
lending to anyone who wanted a mortgage became normal practice. what do wages (in relation to inflation) matter, when you can get a 100% mortgage.
who would riot in paradise?

the rest of your post is about egalitarianism. while a good ideology it's something which won't happen in a capitalist society. another fallacy.
 
i_got_poison said:
free market economics. is there a greater misnomer. the markets are neither free nor fair. in america you have the plunge protect team
ready to intervene if the dollar falls too rapidly. the 1000 point drop in dow industrial average and it's remedy, high frequency trading and a host
of other tools that prove the markets are fixed.

homes are one of the few assets the bank has complete control over. they finance the purchase, the interest rate and ultimately, create the
conditions in which repossessions occur.

cheap credit was brought about by low interests rates in america, which lead to low inter bank lending rates. with so much credit in the system
lending to anyone who wanted a mortgage became normal practice. what do wages (in relation to inflation) matter, when you can get a 100% mortgage.
who would riot in paradise?

the rest of your post is about egalitarianism. while a good ideology it's something which won't happen in a capitalist society. another fallacy.
Click to expand...

Are you a bit simple?
 
i_got_poison said:
the rest of your post is about egalitarianism. while a good ideology it's something which won't happen in a capitalist society. another fallacy.
Click to expand...
No. You're wrong on a number of counts there:

1. Inequality is not a yes/no characteristic. You have to talk about levels of inequality, not just a simplistic presence or absence of it.

2. The graph shown in the earlier post which I referred to shows the pattern of income inequality over the last century. If you look at the dates, the pattern as it relates to instances of global economic meltdown is quite interesting.

3. You seem to assume I want to live in a capitalist society. What on earth gave you that idea? :confused:

Apart from the obvious bit (yes, 'free market' should be in scare quotes), I can't understand what much of the rest of your post is trying to say, so forgive me if the rest of this is irrelevant.

It was not so much cheap credit as easy credit, which of course brings the price of credit down. The banks were competing with each other for more and more business, tapping the 'subprime' market and paying off the ratings agencies to mark these loans up as sound lending decisions so they could sell the losses on to some other suckers in a huge game of toxic pass the parcel - hedge funds were betting against their own advice to their clients (the less wealthy ones, of course). The boom in home ownership in the UK and US put a lot of people's savings onto the stock market via their mortgages (with the rest dragged in by PEPs and ISAs and "tell Sid"). And all the while the irresponsible lending practices were fuelling an obvious housing bubble for speculators to bet on, that has yet to wreak the worst of its havoc on the people who live in those houses when the bubble really does burst.
 
ymu - you once question why i'm still on this thread, and believe me i've asked myself the same question.
but i think i've boiled it down your disagreeing with my assertions about QE and the lose of commodities in a domestic market,
despite the empirical and circumstantial (and indeed physical) evidence to support my claim.

i fully accept you could be on here for shits and giggles and that's fine, but it would be nice to have some coherent narrative
on why you feel i'm wrong.
 
Yes it's genius, they're cutting their ties with the only social bloc they had (upwardly mobile public sector managers) and becoming a regional class parasiste (south-east private sector managers) on the tories. Fantastic.
 
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