John Maynard Keynes was a life long member of the Liberal Party

[fedsron2us]

Wonder what he would have made of his former party's contribution to the recent budget ?

[non sociopath skin]

1. Could that thumping sound be him rotating in his grave?

The Skin

[Anarcho-Socialist]

2. Cutting spending while barely out of a recession...

...it's never worked before. But god bless the ConDems for having another crack at it.

On a more serious note, the coalition's plans depend on the USA/Germany/Japan/China spending to maintain global demand so that a lower-deficit Britain can ride the global recovery out of recession. It's little wonder that Obama is furious at the British government for not spending its share to keep the liquidity going in the global economy.

[LeftishBrit]

3. Agreed

'It's little wonder that Obama is furious at the British government for not spending its share to keep the liquidity going in the global economy.'

One of the few good things about the present situation is that the American president is Obama and not someone like Bush! At least, the pressures from America will be mostly in a constructive, rather than destructive, direction - whether or not they are effective.

[FunkyLeprechaun]

7. The big problem with that is

Spending is part of what caused the recession. It sounds to me that the Labour party left a huge black hole for the Tory-LibDem team and they have to find out how to climb out of that hole. How do you suppose Tory-LibDem keep the spending up when they have barely any money to spend?

I don't know what you've been reading but Obama is thinking of doing the same track as the Tory-LibDem, cutting spending as well as adopting IMF-style austerity measures. We have a similar problem in the US, a huge deficit that the Republicans created and left it like a big stinky poo lying on the floor for the Dems to pick up. He initially criticised it at first but I think he accepted that it had to be done. It doesn't help when the Republicans continually block good programs such as unemployment benefits.

We could tax the rich but then the rich would move out of the country (Tracy Emin has stated she would move if taxes are raised on the wealthy). We could keep up spending but it puts us in the danger of being bailed out by the IMF (a la Greece).

How can we keep up spending and try to claw back the deficit at the same time? It cannot be done.

[miscsoc]

8. transnational efforts against capital flight?

at the european level, but also at the global level

[FunkyLeprechaun]

9. I don't think that is actually legal

As much as I support companies creating jobs in the country (not outsourcing to India, etc) because I think that is important in creating new jobs and retaining experienced workers, I don't think it's right to detain a wealthy person from leaving the country because they don't want to pay more in taxes (even though it shows that they are greedy misers).

[LeftishBrit]

10. I seriously doubt that a high proportion of rich people would leave the country if taxed more!

Quite a lot would moan about it, and might threaten to leave; but when all is said and done, they are generally going to be able to live quite comfortably even after taxation, and moving would be an upheaval - they've got their lives and families and friends here, and it's hardly the same as poor people becoming 'economic migrants' out of sheer necessity. Any rich person who does leave for these reasons probably isn't that committed to this country anyway; and I don't think that our country should run its policies on the basis of blackmail by a small and in the true sense unpatriotic minority.

Scandinavian and some other Europaean countries have high taxes on high earners, and I haven't heard that they have all deserted in droves.

I disagree that the economic crisis was mainly caused by high levels of public spending. It is a global crisis affecting many countries with varying levels of public spending. The biggest cause is the banks messing up.

There would have been *some* degree of cutbacks under any government, given the world economic circumstances; but the level of cuts being proposed by Osborne is a serious threat to recovery of the economy. As I said in the other thread, even the CBI, who started out all in favour of cuts-and-no-tax-rises, are now worried about the damage to business that could result from this level of cuts.

[FunkyLeprechaun]

11. What about people like Tracy Emin?

She said that she wanted to leave the country if she got taxed more.

[T_i_B]

12. I doubt that very many people would miss Tracey Emin.

She's hardly the best artist in the world now is she?

[FunkyLeprechaun]

13. Well..yeah you're right

Hell... even my unmade bed is more arty than hers! :-)

[LeftishBrit]

14. So Tracey Emin should be able to hold the country to ransom?

Let her leave if she likes. It's her right to do so.

[Nihil]

16. She should be taxed more purely as punishment for inflicting herself on the world.

Talentless slapper.

[fedsron2us]

15. Debt is sustainable so long as earnings are sufficient to cover

the interest on the principal. The problem arises when earnings fall below that level or the interest burden rises to a point when the debt can no longer be sustained. At that point default becomes inevitable.

Paying down debt by restricting spending is fine so long as your economy is growing. The problem is that austerity programs can cause economic contraction since they essentially suck money out of circulation and pay it to lenders who may or may not lend the money out again. If that happens then earnings may fall faster than the balance of debt to be repaid so that while the amount outstanding may be smaller the actually ability to fund the interest payments has declined at an even faster pace. This is the austerity trap that Keynes spotted so brilliantly

Of course one way round this conundrum is simply not to pay the debt. In fact the current governments attempts to chisel money out of employees and the public by reneging on contractual agreements with regard to redundancy rights and pensions is precisely that type of activity. HMG are simply defaulting on their obligations. Unfortunately for our rulers just screwing the little people is no going to save our rotten financial system since the amount of private debt and malinvestment dwarfs any public sector liabilties.

Of course you will not find out any of these facts from listening to the paid hacks of the Con-Dem government who simple recycle the public spending bad/private spending good twaddle that neoliberals have been churning out for 30 years. Nonetheless there are independent economists such as the Australian Steve Keen who have done good analysis of what is really at the root of our problems

http://www.nakedcapitalism.com/2010/07/steve-keens-scary-minsky-model.html

You can also read more in this excellent article written by Reuters man John Kemp in 2009

http://www.reuters.com/article/idUSTRE50I4BU20090119

What we are seeing in the UK, Ireland and the USA etc is a massive fraud whereby those in the financial sector are trying to dump their debt liabilities on the taxpayer and then pretend the whole debacle had nothing to do with them. When this scam finally collapse and IT WILL BLOW UP then you are looking at economic collapse and possibly revolution

[Ken Burch]

4. So, I believe, was Bertrand Russell

I can't believe he'd be any to happy with his party's agreement(as part of the coalition)to keep British troops in Afghanistan and support the status quo on nuclear weapons.

[fedsron2us]

5. Treasury orders cabinet ministers to brace themselves for 40% cuts

http://www.guardian.co.uk/politics/2010/jul/03/treasury-orders-cabinet-plan-40-percent-cuts

Disaster Capitalism at its finest. An object on how to use a crisis to engineer a catastrophe

On past form for every public sector job lost there will be one will go from the private sector as capital projects are axed and money is sucked out of the economy.

Great Depression here we come

I think the Olympic committee should add rioting as an event because there are going to be more than a few before 2012 is finished.

[miscsoc]

6. And what about Beveridge?