And the spin works. People can understand the concept of a maxed out credit card but don't understand how inflation affects debt and what the ability to print money can have on how you manage an economy. In other words the spin is deliberately misleading yet people fall for it.

This government has taken this kind of spin to a new level and my favorite has always been "Why should the postman pay tax towards the students fees?" which implied two things. 1. The postman was paying a significant amount of their taxes that was put toward to block grant. 2. If the block grant was abolished the postman would consequently save a shed load on their taxes.

Neither is true. Due to the progressive nature of taxation if you work out the %'s a postman on a basic postmans salary paid less than £30 [ia year[/i towards the block grant and their income tax didn't change anyway. They are no better off as a result.

What I don't get is what someone else mentioned is that when it's easy to see such obvious things like this is why Labour don't [udirectly challenge the spin[/u. In this example they don't even have to say they are opposed to tuition fee increases (though I wish they would) but to simply point out forcefully that the way the change was being sold was deliberately misleading and deliberately divisive. They would then be able to question the motive for the change. Is it really austerity or the privatisation of higher education?

It's very frustrating the government is being given such an easy ride.

Indeed, I don't know why they don't.
One of Blair's pre-election successes was the so-called "Rebuttal Unit", set up at Millbank to knock-back Conservative accusations of uncosted spending and to challenge/disprove fuzzy promises/predictions/claims of success from the Conservatives.
If set up again, once the press knew of it they'd be phoning it all the time.

Austerity measures mean that over 25% of the working population in Spain is on the dole.

What is the economy of Spain spending on them and their families to stop them from starving?

What is the economy of Spain earning from this 25% of what [icould[/i be productive workers?

What is the economy of Spain earning extra from sales tax etc by reason of these people having a hugely reduced disposable income?

As businesses wither and die for lack of customers with money, what is the economy of Spain earning as this infrastructure collapses in a heap?

But is not all that a direct result of a nation previously living above its productive means? EU subsidiay, piggy backing on Germany's strong currency, artificially high wages, cheap credit, property bubble. Isn't this just the awful reality of all those "good" years coming home to roost? All this talk of a choice between "austerity" and "growth" is utter nonsense.

The so called "growth" strategy of paying people artificially high wages (often to do artificial jobs) and providing them with easy spending power is what lead to the financial crisis. It has been tried and failed on a monumental scale.

People's thinking needs to move beyond the inane and think of how to tackle the reality. That's one of the reasons why Labour will lose the next election - they have no strategy for the UK that will stand up to the public's scrutiny.

And that's where it all falls down. The public, such as they are, are more interested in who the douche from One Direction is shagging at the moment and doesn't Kate look great now she's pregnant etc, than the realities of sorting out the mess the banks left us with. The public's scrutiny will be like the blind leading the blind (if there was any scrutiny worth the name now, Gideon's plans would be toast).

I'm sorry Dally but I've run out of patience with your (probably deliberate) missing of the point.

Apart from a bit about it raining on polling day and Emmerdale and Corry are on so not even bothering to cast a vote anyway, that is pretty spot on.

No.


Great. When will you start?

So, you must be arguing that Spain's "growing" economy was sustainable in its previous form. If that was the case why the austerity now, why isn't it still powering ahead and recruiting unemployed people from other EU member states?

It was sustainable pre-crash. GDP was growing slowly but steadily. Unemployment was falling slowly but steadily. Govt debt to GDP was falling significantly. Then the crash hit and the inability to print money and devalue their currency combined with falling domestic demand due to the crash and austerity measures has led to the current problem.

So there property prices were sustainable? This crash of which you speak is not something divorced from the "real" economy. It occurred because the real economy of the "Western" world was a basket case.

Spain and to a lesser extent, Portugal, embarked on a massive construction programme. Most of this construction was apartment and villa developments and strangely enough was funded by Irish banks or funded by Spanish banks on behalf of Irish investors. When the Irish economy (especially the banks) tanked, it led to an emergency stop on the Spanish property market. Couple this with a typical southern European method of conduting business, where 75% of any deal is legitimately declared and 25% is "black money" - i.e. paid in cash. There's no wonder the Spanish economy is in a dire position.

What boils my pi[is[/is is when I hear Osborne and other right-wing fukwits telling us we need to keep on the path of austerity because we don't want to end up like Greece, Portugal or Spain. There is absolutely zero chance of us following them into the catastrophic state they currently experience.

We desperately need to embark on a massive building programme, not to flog off to speculators, in the hope of a quick buck but to house our own population at a reasonable cost. This situation is not too dissimilar to the one we found ourselves in at the end of WW2 and as a nation, we were more skint then than we are now. I have previously given an example of how this could be achieved through issuing government bonds. The only thing preventing it is an ideological aversion to non-private renting.

Except it wasn't. The vast majority of the "real" economy of the Western world was perfectly fine. 1 part of it was not due to the greed/incompetence/short-sightedness/short-termist culture that had developed in the financial sector.
Everyone knows something was wrong to cause the crash, that's not the issue being discussed. You were inferring that the Spanish economy was unsustainable pre crash, it wasn't. It was perfectly sustainable. As in most countries, the reduction in demand post crash is the main reason why the economy has contracted. That reduction in demand has been exacerbated by austerity measures and the Euro. In Britain we're lucky to have the BoE to print money and lower interest rates to try and stimulate demand. Sadly the government has been undermining that with contractionary measures.
In Spain they don't have the option to print money and lower interest rates, so the austerity measures have an even more deleterious effect. Spain was in a weaker position to us, no doubt, but had they still retained monetary control and pursued an expansionary fiscal route instead, they would not be in the current horrible position they are.
Of course if we didnt have a government determined to pursue ideology and stopped contradictory fiscal & monetary policies by increasing government spending to fill the demand gap then we would be a lot better off too.

The financial sector does not operate in isolation! The apparent boom in economies was primarily (if not wholly) down to cheap money creating asset price bubbles. The construction of which you speak was the most tangible and obvious example. Eire is the extreme case of its effects - a booming "tiger" economy built on building. I spent half a day in Dublin a couple of years before the collapse and they were all buzzing. When I pointed out the obvious - that there was no need for all these buildings and it would end in tears they didn't seem to see that. In short, the real economy was not in good shape or else all those secured loans could be serviced and the banks would not be shakey now. Your naivety and head-burying is staggering.

Must I? How do you work that out, then? You asked:
" =#0000FFis not all that a direct result of a nation previously living above its productive means?"
..to which I replied "No." I.e, no, it is not a direct result of a nation previously living above its productive means.

I did not refer to "Spain's growing economy", I did not mention its sustainability or otherwise, and so as per you are commenting from the wrong orifice.

The economic "boom", as you inaccurately put it, was not wholly or even primarily down to asset price bubbles, and that bubble wasn't solely due to increased money supply.
I didn't speak about any construction, you're confusing me with someone else, in much the same way as you are confusing financial gambling/greed/short-termism in the financial sector as representative of an entire economy.
You spent half a day in Dublin looking at buildings and so worked out the Irish economy would fail? Did you walk back across the Irish Sea too?

That was pretty much exactly what happened in Portugal, particularly on The Algarve, I have a friend who operated as an architect designing two, sometimes three huge multi-million euro villas per year on the most expensive strips of land on The Algarve since around 2000, he's pulled back from that business now as the market is completely dead but up to 2008 or so his clientele were 100% British and Irish clients, particularly Irish, and some very famous names too.

I was out there with him last June socialising with one of his Portuguese main contractors and he was speaking of which millionaire pad was up for sale, which one was slashed to half its price (you never see for sale signs on the streets but they are being handled by sales agents), and the fear that the new money being invested on The Algarve now was Russian and former Russian states, the Portuguese don't like the situation, they have traded with the British and Irish for as long as there has been an Algarve and they just don't trust the Russian money but they have very little choice.

There is a new project emerging for my mate later this year and so he's spending more time out there again, I'll be partaking in a little "business trip" of my own in a few weeks time, four days of "research" for paintings which is chargeable on the "other job" business account of course

Really? The financial crisis was caused by 'artificially high wages'? Unless you're talking about the 'artificially high wages' received by the greedy, irresponsible s who made a fortune gambling on sub-prime debt, I must respectfully suggest that you're talking crap.

No, but I walked back.

"It will fail" is Dally's default setting.

Credit where it's due (pun unintended) ... knee-jerk as his judgement was, at least it was better than Osborne's pronouncements that the Irish economy was an example to us all, a shining beacon that we should be praising and following.

The differences between us and the other countries are several.

The BofE is willing to act as a lender of last resort which mean it will buy bonds if there is a liquidity shortfall. The other countries don't have that. They have to get a bail out from the ECB which doesn't just happen and so lenders are less willing to hold the debt of these countries and if they are they charge a premium for it.

It is easier for us to service the debt as the interests payments always have been and still are low. A lot of the debt is long term (more than 10 years) so we don't have to find the cash now whereas these countries are in the exact opposite situation (a lot of Greek debt is for just 3 years or less).

Historically we have had even higher levels of national debt relative to GDP. It was something like three times GDP on the 1950's. We didn't go belly up then and so there is confidence the debt is manageable now.

We have much more flexibility than these countries in that we can do stuff like quantitative easing (print money) and devalue the currency.

Therefore the problem isn't that we are in the same boat as these other countries but that despite the advantages all the above gives us in our ability to deal with the current situation the current government has made a total pigs ear out of it.

Despite loads of quantitative easing, lower currency value and virtually no upward pressure on wages they have managed to choke off any demand that would lead to increased taxes, lower benefit bills etc by cutting so fast and deep. Osborne is basically the worst chancellor we have had since the end of the second world war.

You really think Osborne alone decids such serious policy?

But it seems that many on this thread are still extolling those policies!! After all, it has been said they were great and sustainable until something mysterious happened in "casino" banks (which is, of course, utter tripe) and we should have more borrowing to build more property and thereby grow the economy!

You are falling into the "all borrowing is bad" trap.
That's like letting a burns patient freeze to death.