Government expenditure and the economic downturn..

[max_tranmere]

Mark Thomas has had some interesting things to say over the years. He says interesting things here.

[David Johnson]

Well it is certainly true that there are lots of different sets of data out there. And Cockneygeezer is correct in stating that it is too early to know how much the bank bailouts will cost.

For at least two reasons:

1. We still have billions of pounds worth of shares in UK banks like RBS and currently we have no idea whether a gain or a loss will be made when they are eventually sold.

2. Secondly the cost at which the government borrows money is rising and therefore, the debt is going up in terms of interest.

You are right that some of the decisions that governments make are very strange i.e. why cut disability benefits at the same time that you are dropping the tax rate for the richest in society by 5p in the pound?

Personally I would much rather my taxes went towards famine relief than providing a tax break for millionaires or underwriting an interest free loan for a number of years for 20% of the value of a mortgage on a ?600k house.

One of the questions many people seem to ask is how can we afford to give foreign aid when we are cutting universal benefits. My answer would be is that it is a political decision the government has made to take an axe to the welfare state and the public sector. The UK is the sixth or seventh biggest economy in the world and if we cannot afford an NHS or a welfare state than just about no country can, even taking into account the deficit.

THe government would argue that we have to axe large parts of the public sector because of the size of the deficit. However, one thing that Osborne has proved without doubt is that austerity doesn't work in a recession. Despite throwing hundreds of thousands of public sector workers out of work, the deficit is the same year ending in April as it was the year before and will be about the same in the coming year.

Osborne was supposed to balance the books by 2015 and he is way off to the point of undertaking to sack well over a 100,000 public sector workers in 2015-16 alone. The reason that Osborne gives for completely missing his own targets is that it is all due to Jonny Foreigners fault in the EU.

And why are many of the EU countries suffering so much? Right in one. Austerity regimes. When everybody is cutting, then surprise, surprise, you don't get growth.

[Porn Baron]

[max_tranmere]

Interesting information. I suppose time will tell on the issue of the bank bailouts as it is, from what you and others have said, an ongoing thing. I was under the impression it happened 6 years ago and that was it.

Regarding the matter of taking the axe to public sector jobs, this rarely saves money. I was a Civil Servant in a large Government department near Parliament Square for years and there were some redundancies which happened when I was there. Some of the pay-offs were very large, several times a persons annual income, so it is often years before the tax-payer even starts to see a saving by axing a person from the public sector. Would have been cheaper to have kept many of them on. They also have their generous tax-payer funded pension to come when they're older.

[max_tranmere]

Thanks for that. I'll have a read.

[cockneygeezer2009]

Max you can debate this till you are blue in the face. People will NEVER agree on all government expenditure. If it really is that annoying vote the government out at the next election. Simples. The government are there to govern. Not to make people happy.
I will not lose sleep over foreign aid or HS2.