[Publically-funded body] warns the government that budget cuts will affect services

But the problem is that its not the wealthy its the higher up bankers and the bearucrats that are the problem, i bet if most of them were taken their power away, i bet we could even lower deficit and debt levels eventually.

Raising taxes gives people less reason to work, if your wealthy move to another country or if your poor why work and just stay on welfare i mean its good enough and money doesn't matter right? To another extent it is arguable that the minimum wage causes more starting bussinesses to close down.

Just because it seems like a good intention, doesn't mean it is a good idea.

 

The people who have power over the volume of money printed are not private sector employees, they're public sector workers who are appointed or elected (depending on how broadly you want to consider fiscal policy). If you don't want your government to define your fiscal policy then you're a little bit nuts really.

No offence, but I think you're conflating the Bank of England, the UK's central bank, and other private sector banks and investment firms.

 

Yeah i meant those types i don't mean privates like Nationwide, Santander and that thanks for saying what i meant i genrally mean the people who control the value of the British pound more than my notes.

 

It's the banking and bonus culture which is to blame, not the individuals. Large cash bonuses encourage the employee to look at short term strategies which maximise his return in the form of bonuses, often at the expense of the long term health of the bank. Bonuses and wages need to be controlled or reorganised to encourage long term growth.

 

From figures published May 2010, UK public sector net debt was £927.4 billion or 63.7% of National GDP (Source: Office National Statistics, last update August 21, 2010). Excluding Financial sector intervention, public sector debt is £816.2 billion or (56.1% per cent of GDP). This means that the banking crisis put the UK in debt by 7.6% of its GDP.

Its net contribution to the UK GDP was therefore 2.4%. Not looking quite so good now. Another problem is that with the financial crisis, the government have added an extra £500bn of potential liabilities (the Government has offered to back mortgage securities). They are unlikely to spend this money, but in theory the government could be liable for those extra debts. If we include this bailout package as a contingent liability national debt would be well over 100% of GDP, thus wiping out any net contribution by the financial sector to the GDP.

Seems if we lose the financial sector, the UK would break even or possibly even come out slightly better.

Another spin-off is that the UK economy would be forced to diversify. Regardless of Cardinal Kasper's remarks, currently the UK is like a Third-World country in its excessive reliance on one single economic product or service. The UK fails to invest in science, manufacturing or agriculture; most of the country is in decline with all political attention focussed on a few square miles in the center of London (but with a typical lack of ability to connect the dots, the nearby biggest UK airport, Heathrow, has an abysmal public transport connection to London). Just like a failure of its monocultured crop spells doom for an African country, a failure of the UK's financial sector has almost brought this country to its economic knees.

When asked about the mythical hidden hoards of WWII Japanese stolen gold that are still supposed to be scattered all over the Phillipines, a Phillipino once remarked sadly that gold, or other material wealth, is a country's biggest curse. Not only does it make it the target of greedy conquerers (as Iraq found out), but it also prevents the country from recognising and developing its true resources: the talents and abilities of its people.

Without an obsessive reliance on the financial sector Britain might recall what it actually used to excel at: engineering, manufacturing, science, farming. Perhaps in becoming more self-sufficient it could reduce its carbon footprint too. In any case it could be leading in those areas rather than seeing India, China and the rest of the Far East overtaking it on the global market while the UK raises the next generation of Macdonalds waiters, work shy chavs and unemployed college/uni graduates with a token degree in pointlessness, punctuated by the occasional overpriviliged City broker who makes millions out of callously screwing over what little economy and currency the UK has left.

 

Meh, my last day at the job tomorrow due to the cuts. I knew, and wanted the cuts to happen as, lets face it, we weren't going to get out by leaving it later on. I'm not going to be a hypocrite and complain now my jobs lost. Although I'm annoyed at how my Manager's handling it.

 

I've heard that the actual debt levels are at 4.8 Trillion pounds :eeek, but yeah i agree mostly with the rest, Britian needs to prosper without the fincial sector yeah it gives of a good amount of GDP but other areas such as Science, egineering and farming can give us more wealth and real growth than the fiancial sector than ever, i'm not saying we should go to every bank and trash them but we need to have over stuff if we want to stay important in the world, printing and chucking notes at everything is not the solution.

 

Unfortunately we are all responsible for the demise of the manufacturing industry in the UK. With our demand for lower prices and higher wages we effectively put our own mass manufacturing businesses out of business ourselves. The government (of any flavour) is not to blame for this. This left us with the financial 'market' as our only real export and income generator. We cannot claim to support the manufacturing sector until we are willing to either accept the higher prices that it would inevetibly mean, or accept lower wages to enable cost effective export. If we are not willing to accept (probably both of these things) then mass manufacturing in the UK will never be viable.

At the same time as this we have built up a hugely inefficient public sector which has not had to bear the brunt of any real cuts in the past (unlike the private sector which always has to match itself against the economic climate). In fact it seems that over the last few years it has got fatter and more inefficient than it ever was.

It is inevitable that we are all going to feel some pain as there will be cuts that hurt us all one way or another. But, I hope that the process will produce a leaner, meaner public sector that does what it is supposed to do and provide essential public services and a safety net for those in dire need.

 

Yes the government is to blame, along with the unions. Germany has maintained its status as a manufacturing power house by keeping a tight control on wages and working with the unions. They also focussed on quality so they could compete on something other than cost and as a result they have a stronger economy and a better quality of life than us.

We are an industrious and inventive nation and we have pissed it all away.

 

Germany has managed to do this with the support of the population who were willing to buy German despite it not necessarily being the cheapest option. I am not so sure the British population would have stomached the policies the German govermnent put in place. I agreee that the unions have (and still) worked to inflate wage demands beyond the level that can make competition sustainable for British companies, but at the same time those unions have members who could choose not to support them.

As a nation we are losing the capability to stand up to our own responsibilities which is not surprsing considering the amount of 'nannying' that has been forced on us over the last ten years. We have to learn to be responsible for our own actions individually and collectively and to stop blaming others for problems that we ourselves are contributing to.

I agree that we are an industrious and inventive nation (much more than the Germans who tend to improve existing technology rather than invent themselves) and we should provide more support to those that persue these fields. To do this I think we need to stop acting so sorry for ourselves as a Nation and get on with making the country great again. We have become dependent on support and have forgotten how to support ourselves.

 

IIRC taking into inflation/delfation we actually earn LESS money per hour, so it wasn't really just us being gready workholics who want the children of third world countries to suffer, just that if we want to live comfartable and have a life we would have to buy cheaper and work longer really...

 

Cuts, Cuts, Cuts... I've seen some councils locally with £150,000,000 in their accounts, and cut 3000 jobs... nice people.

I work for a private sector company that deals with Housing and Council tax benefits, so my job is more... "safe"... than most public sector workers. Saying that I do worry about alot of peoples jobs.

But at the same time I really do have to think selfishly and go "Right, this is what I've got".

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I agree with Nexxo's comments, a nice big juicy investment in the general population would do wonders for the economy! Pretty sure anyone unemployed could be 'forced' to work and actually earn their keep? surely?

Forgive my rather strange statement (as I know little of this) Why couldn't the government invest in factories/research centre's etc, put people in jobs (Sure it puts a strain on the economy initally) then in a medium to long term it would surely be bringing money back into the country because we'd be selling things? I never understood why your prices HAVE to be the highest otherwise it's not worth doing? I don't see supermarkets offering the same product for 5p more than another supermarket close down due to "not being bothered" because that's all I seem to see these days :/

Anyway rant over, Nexxo summed up my thoughts perfectly with

^^^this. Fantastic bit of writing there squire

 

I could not agree with that more.

 

Care to substantiate this statement with any facts? Federal revenues grew to "unexpected levels" under Bush tax cuts. The same happened under Harding in 1921, Kennedy in 1964, Reagan in 1981. The facts are that money-in increased. In most cases, by unpredictedly high levels. If you want to say that the "would have been" even higher revenues if the cuts were not in place (which smacks of the "jobs saved or created" distraction) then I would like to see some actual proof or historical evidence.

The problem under Bush (and now even moreso under Obama) is that he increased spending by 104%. There is a well established and concrete historical record of cutting taxes increases revenues and grows GDP. In all the examples above only Harding in '21 had the fiscal discipline to actually cut spending which lead to a turnaround in the economy after the largest crash in US history (at that point) to an unremarkable event. Same happened with Reagan in the crash of '87, he did nothing and the market recovered in a matter of months. Contrasting this with Hoover and FDR's "solutions" bears no grounding in reality.

The historical record of raising taxes to generate more revenue for the government has only proven to be a short-term politically expedient solution with long-term destructive effects. FDR's term provides the most evidence in this regard where taxes where not only raised to historically high records but new taxes were created to fund dramatically high new spending in government. Several serious economic studies of this era have concluded that this technique prolonged the Great Depression by around 7 years longer than if he had done nothing. He presided over 8 years of double digit unemployment and it took an entire decade for the GDP and DOW Jones to return to historical levels.

We had a deficit in the trillions prior to Bush (you can throw a dart over your shoulder and hit a website to verify this simple fact) but you are piling it all on just his 2 terms. Even with your argument, that was over 8 years. We are 2 years into Obama and he's already added 5 trillion using your math.

All of this is obviously in a US context. My knowledge of UK economic history is lacking.

 

Sorry, but I disagree with you (and agree with Da_Rude_Baboon):

People faithfully bought Rover cars right up to the point that they went into demise for frankly, being shite cars. Don't blame the factory workers: Honda cars are manufactured here also and they are just fine and don't cost the earth. Obviously it was a design problem, not a manufacturing or production cost issue.

But nobody invests in British engineering. Or agriculture, or manufacturing, or science. the UK government privatises and sells off assets and utilities to foreign companies and UK business prefers to invest in services catering to chavs (junk food chains and night clubs) or to big finance, where the easy profit lies.

 

Again, I don't know the UK stats as well. But saying that factory workers don't have anything to do with the success of the company when in the same paragraph you cite production costs seems to leave some important factors out. Labor is the lion's share in virtually all manufacturing. Toyota is the US' #1 manufacturer of cars and they pay around $45/hr vs UAW workers for GM at $77/hr. That's a huge difference in "costs".

I agree with you that you could have great workers and the company could still be run into the ground by management and/or design snafu's. But the high cost of union labor to make comparable products does take a toll and can eliminate any margin of error for any of the mistakes made by the company.

BMW Z5's are made right in my backyard. If it weren't for the fact that we don't allow a unionized workforce in my state, we would never have the opportunity to those jobs. These are also some of the most coveted, highest paid jobs with the least amount of turnover in the state.

 

I would argue that not enough people bought Rover cars! It's not good enough to build crap and expect people to buy it though. The hard fact is that it is not economically viable to mass produce stuff in this country. It is true that nobody really invests in British Engineering, but I know from very personal experience that consumers in this country are not willing to invest in it either.

 

I was not saying that (exactly). I was pointing out that it is not nearly always about workers' wages. Factory workers at Honda Swindon get paid about the same as factory workers at Rover were. Yet Rover produced bad cars; Honda doesn't.

Consumers will if the goods are good enough. Think Skoda: from zero to hero. Why? Because with the help of VW/Audi it suddenly started building good quality cars (again) at a keen price. Many people will also pay extra for brand names (Audi, VW, BMW, Jaguar), just like they will pay extra for organic or free-range food. What UK manufacturing must do is re-establish a reputation for quality and people will buy it, even if the price is a bit higher.

There is a trend in agriculture to revive traditional varieties of vegetables and livestock that had got lost in mass-production. Again, there is some consumer interest. It could be taken much further with some investment.

 

Although it is true that GM pays UAW workers more than their counterparts at Toyota, the $77/hr is largely a myth. In reality, the union guys working on the GM floor make closer to $55/hour. As I understand it, the $77/hour figure is generated by adding in the costs to pay retiree benefits and dividing that cost among the total hours of the current workforce.

According to the article linked above, the labor equates to only 10% of vehicle production costs, so it not really the lion's share in this example.

 

I may stand corrected on the percentage. Automobiles have a much higher cost of raw materials compared to industry as a whole. But you separating the retirement obligations is still a cost burden directly related to the labor force, or the taxpayer depending on your perspective. In the end, the company can only price the car for more than the total costs it takes to make it if it stands any chance to stay in business. Separating the two makes no difference to the corporation or the customer.

And to my original point, the pension is a direct product of the union's bargaining of contracts over the years.