It's taken some time but you're getting there

You missed out the "naa naa naa naa naa" from the end of that insightful post

I know. That's why we should have continued to run a surplus to put ourselves in a better position to cope when things did go wrong.



Yes they were sustainable, in the short term, for as long as the boom continued. Unfortunately we are now paying the price for that short-termism. In the medium term the boom was always going to end and Labour should have know that and they should have been preparing for it. Instead they choose to increase spending.



The boom was going to end one way or another. Labour should have (and could have) put us in a better situation to cope.

I thought Gordie promised an end to boom and bust?

He didn't promise anything. He actually claimed to have achieved it. Not his finest moment.

Out of interest, when would you run a deficit?
Just asking like.

[url=http://touchstoneblog.org.uk/2011/10/19040/The IMF, no bastion of social democracy, says …[/url



It's the crash, stupid!

(I paraphrase slightly)

Quote ="SBR"I know. That's why we should have continued to run a surplus to put ourselves in a better position to cope when things did go wrong. Yes they were sustainable, in the short term, for as long as the boom continued. Unfortunately we are now paying the price for that short-termism. In the medium term the boom was always going to end and Labour should have know that and they should have been preparing for it. Instead they choose to increase spending. The boom was going to end one way or another. Labour should have (and could have) put us in a better situation to cope.'" There was nothing wrong with Labour's spending levels before the crisis, the Conservative party supported those spending levels. Look at the 2007 Conservative Party Conference where Osborne responded to those that suggested the Tories were going to cut public spending from Labour's planned levels: www.telegraph.co.uk/news/uknews/ ... nding.html Quote The Conservatives sought last night to destroy Labour claims that they would cut public services by issuing a formal pledge to match Gordon Brown’s spending plans. In an echo of New Labour’s own 1997 manifesto promise to match the Tory Government’s projected spending levels, George Osborne vowed last night to stick to Gordon Brown’s plan of increasing public spending by 2 per cent in real terms over the next three years. “Today, I can confirm for the first time that a Conservative government will adopt these spending totals,” the Shadow Chancellor said. “Total government spending will rise by 2 per cent a year in real terms, from £616 billion next year to £674 billion in the year 2010/11. “Like Labour, we will review the final year’s total in a spending review in 2009,” Mr Osborne wrote in a newspaper article. He added that the effect of the commitment “is that under a Conservative government, there will be real increases in spending on public services, year after year”. “The charge from our opponents that we will cut services becomes transparently false,” he said.'"

Quote ="SBR"I know. That's why we should have continued to run a surplus to put ourselves in a better position to cope when things did go wrong. Yes they were sustainable, in the short term, for as long as the boom continued. Unfortunately we are now paying the price for that short-termism. In the medium term the boom was always going to end and Labour should have know that and they should have been preparing for it. Instead they choose to increase spending. The boom was going to end one way or another. Labour should have (and could have) put us in a better situation to cope.'" There was nothing wrong with Labour's spending levels before the crisis, the Conservative party supported those spending levels. Look at the 2007 Conservative Party Conference where Osborne responded to those that suggested the Tories were going to cut public spending from Labour's planned levels: www.telegraph.co.uk/news/uknews/ ... nding.html Quote The Conservatives sought last night to destroy Labour claims that they would cut public services by issuing a formal pledge to match Gordon Brown’s spending plans. In an echo of New Labour’s own 1997 manifesto promise to match the Tory Government’s projected spending levels, George Osborne vowed last night to stick to Gordon Brown’s plan of increasing public spending by 2 per cent in real terms over the next three years. “Today, I can confirm for the first time that a Conservative government will adopt these spending totals,” the Shadow Chancellor said. “Total government spending will rise by 2 per cent a year in real terms, from £616 billion next year to £674 billion in the year 2010/11. “Like Labour, we will review the final year’s total in a spending review in 2009,” Mr Osborne wrote in a newspaper article. He added that the effect of the commitment “is that under a Conservative government, there will be real increases in spending on public services, year after year”. “The charge from our opponents that we will cut services becomes transparently false,” he said.'"

That is not what I said about holding opinions. The questioning response to a post based an a seemingly wilful misinterpretation of its meaning is a pretty crude tool. You use it rather a lot.
The idea of you and Dally in a political coalition is obviously whimsical. You bit and he didn't.

When your tax revenues are less than your intended spending on public services - simple really

Quote ="sally cinnamon"There was nothing wrong with Labour's spending levels before the crisis, the Conservative party supported those spending levels. Look at the 2007 Conservative Party Conference where Osborne responded to those that suggested the Tories were going to cut public spending from Labour's planned levels: www.telegraph.co.uk/news/uknews/ ... nding.html '" Brown wanted to continue increasing spending even after the banking crisis, he was in complete denial. If Labour had got in again there would have been a massive hike in taxation. In 2007 the tories were trying to get in a position to be elected, they are hardly going to alienate a big chunk of potential voters by showing their hand.

Quote ="sally cinnamon"There was nothing wrong with Labour's spending levels before the crisis, the Conservative party supported those spending levels. Look at the 2007 Conservative Party Conference where Osborne responded to those that suggested the Tories were going to cut public spending from Labour's planned levels: www.telegraph.co.uk/news/uknews/ ... nding.html '" Brown wanted to continue increasing spending even after the banking crisis, he was in complete denial. If Labour had got in again there would have been a massive hike in taxation. In 2007 the tories were trying to get in a position to be elected, they are hardly going to alienate a big chunk of potential voters by showing their hand.

That isn't "not showing your hand", that's blatant lying

Maybe they could get Dave Hartnett to chase up some of the [url=http://www.bbc.co.uk/news/business-16253205£25bn tax owed by big business[/url?

Quote ="cod'ead"Maybe they could get Dave Hartnett to chase up some of the [url=http://www.bbc.co.uk/news/business-16253205£25bn tax owed by big business[/url?'" or maybe the Labour Party would be able to repay the nation at least some of the £12 billion wasted here ? www.dailymail.co.uk/news/article ... apped.html

Quote ="cod'ead"Maybe they could get Dave Hartnett to chase up some of the [url=http://www.bbc.co.uk/news/business-16253205£25bn tax owed by big business[/url?'" or maybe the Labour Party would be able to repay the nation at least some of the £12 billion wasted here ? www.dailymail.co.uk/news/article ... apped.html

Ooh David !! You naughty man, that is the definition of what a deficit is, I was already aware of that.

What I was asking was [uwhen[/u would you run a deficit if not during a boom period?

It's called Keynesian economics.
It's also called stimulus.


So they lied.
Right ... got it now, thanks.

It's called getting into more debt.

If things were that easy all governments would spend willy-nilly and we'd all be better off!

Er, I'm not an economist, but I don't think the Keynesian approach is synonymous with 'spending willy nilly'. My understanding is that the spending is targeted towards projects that are of long term benefit and that will bring money into the economy by keeping people in work. If you don't agree with adopting this approach, fine, but to dismiss it as 'spending willy nilly' seems a little simplistic.

Those things are being done - there are some major capital projects on the go - eg the Olympics site - but that's hardly bailed us out.

In case it escapes you we are in the midst of a soveriegn debt crisis and so a traditional Keynesian solution is probably not an option (although I'm not an economist either. Having said that, I read have articles by many economists and most talk drivel and their predictions are invariably wrong!).

In case it escapes you, I wasn't advocating any particular solution, merely taking issue with your description of Keynesian economics as 'spending willy nilly'.

and I was pointing out the current context. I firmly believe that if Mr K were still alive he would not be advocating the particular policy that everyone thinks he would. From what I gatherr he was a man of some intellect and vision and not a sheep who accepted conventional, broken wisdom.

Context is neither here nor there. I've not heard a single person, on here or anywhere else, say we should just 'spend willy nilly', or anything like it.



And what policy does 'everyone' think he would advocate?

No its not Keynesian economics - Keynes prescribed major infrastructure projects - roads/housing etc not frittering away borrowed money on inefficient quangos, public services and benefits.

The "traditional" Keynesian solution is specifically deficit spending as a way of keeping things moving, lifting confidence and priming the pump for recovery.
Add to that the fact that with bond yields at such a historic low, it's cheaper to spend now than any other time.

Osborne would argue that this spending would "crowd-out" spending by private industry in the same areas of spend.
Hence his limp call for private industry to embark on infrastructure projects... i.e. Trying to get the Keynesian result without the Keynesian method.
Won't work, they'll be wanting short-term paybacks.

Did Labour propose increased spending on any of those areas at the last election? How much has the benefits bill decreased by so far? How much has borrowing decreased by so far?