Keynesian Meddling.
Discussion
What a surprise are blessed political classes are reaching for the old fraud John Maynard Keynes in times of trouble. The idea that if they just spent a bit more of the taxpayers money on their grand schemes everything will turn out just rosy is just to tempting.
“The chancellor has signalled he will use public spending to boost job-creating areas of the economy.”
source
Of course none of this will work but it will saddle future generations of taxpayers with huge obligations.
For those that doubt it look to the East. Japan’s miracle economy and joyous housing boom collapsed at the end of the ‘80s and 0% interest rates and letting government debt amount to about 170 percent of GDP did not prevent a decade or more of misery.
Things are going to be a lot worse than people imagine for a lot longer.
“The chancellor has signalled he will use public spending to boost job-creating areas of the economy.”
source
Of course none of this will work but it will saddle future generations of taxpayers with huge obligations.
For those that doubt it look to the East. Japan’s miracle economy and joyous housing boom collapsed at the end of the ‘80s and 0% interest rates and letting government debt amount to about 170 percent of GDP did not prevent a decade or more of misery.
Things are going to be a lot worse than people imagine for a lot longer.
Fittster said:
Things are going to be a lot worse than people imagine for a lot longer.
I need statistics, what % of bad debt has been written down and at what cost? What rate is it likely to happen at?While I don't dispute Japan being a valid case study we need to remember Japan has some unique charecteristics economically and socially that contributed to the Japanese asset price bubble ('86 - '90). I agree though, in principal, that this may hinder economic progress.
plasticpig said:
To oppose that view. Look what Japan did in its post war reconstruction and the role of MITI.
The role of MITI being to inforce protectionism?So,
Slash interest rates, spend taxpayers money on gaint white elephants to keep everyone busy and then move on to protectionism.
We can see the first signs of protectionism with labours new found desire to manage immigration.
If you don't like my example from Japan, how about the US in the 1930s, the New Deal was a great success. Although I suppose government spending for WW2 to get the economy moving.
speedy_thrills said:
Fittster said:
Things are going to be a lot worse than people imagine for a lot longer.
I need statistics, what % of bad debt has been written down and at what cost? What rate is it likely to happen at?While I don't dispute Japan being a valid case study we need to remember Japan has some unique charecteristics economically and socially that contributed to the Japanese asset price bubble ('86 - '90). I agree though, in principal, that this may hinder economic progress.
"Take one popular myth, that Japan's property bubble was bigger than anyother. In reality, as the The Economist points out this week, Japanese house prices rose by just 51% between 1985 and 1991. That compares with a 90% jump in the US from 2000 to 2006, and a 118% surge in Britian between 2001 and 2007"
Source: Money Week 29th August 2008.
I'll try and dig out some more figures.
Edited by Fittster on Sunday 19th October 14:30
The sad reality is that the Labour party want to put the whole thing off until the Conservative party get in. The rationale being that it's going to give them more of a chance to get out of the doldrums eight years from now.
Gordo, and some of his mates think that they're still in with a chance of another term next time, so they're not going to just hand over to those that most people think are realy going to have to deal with all of this.
From what I've heard the Labour party is (loosely) considering a general election next spring. It doesn't matter much if they do or not. That they are thinking that way now is confirmation (IMO) of their absolute selfishness.
Gordo, and some of his mates think that they're still in with a chance of another term next time, so they're not going to just hand over to those that most people think are realy going to have to deal with all of this.
From what I've heard the Labour party is (loosely) considering a general election next spring. It doesn't matter much if they do or not. That they are thinking that way now is confirmation (IMO) of their absolute selfishness.
Edited by dilbert on Sunday 19th October 14:30
Fittster said:
plasticpig said:
To oppose that view. Look what Japan did in its post war reconstruction and the role of MITI.
The role of MITI being to inforce protectionism?So,
Slash interest rates, spend taxpayers money on gaint white elephants to keep everyone busy and then move on to protectionism.
We can see the first signs of protectionism with labours new found desire to manage immigration.
If you don't like my example from Japan, how about the US in the 1930s, the New Deal was a great success. Although I suppose government spending for WW2 to get the economy moving.
... and the government says it won't interfere in how the newly-nationilised banks are run... well, that lasted a few days before they were saying how they wanted the banks to go easy on reposessions and also to bring lending levels back to those of last year (thus proving the government were happy with the unwise lending going on - surely they understand that was one of the main problems). No, government interference is only going to get worse and they're looking for any excuse (creating situations too I suspect), for them to rack it up.
Fittster said:
speedy_thrills said:
Fittster said:
Things are going to be a lot worse than people imagine for a lot longer.
I need statistics, what % of bad debt has been written down and at what cost? What rate is it likely to happen at?While I don't dispute Japan being a valid case study we need to remember Japan has some unique charecteristics economically and socially that contributed to the Japanese asset price bubble ('86 - '90). I agree though, in principal, that this may hinder economic progress.
The Nikkei 225 went over nearly 40,000 and 18 years later it's still at under 9000 (possibly less by the time you read this
). I duobt it will take us 18+ years to recover.Fittster said:
"Take one popular myth, that Japan's property bubble was bigger than anyother. In reality, as the The Economist points out this week, Japanese house prices rose by just 51% between 1985 and 1991. That compares with a 90% jump in the US from 2000 to 2006, and a 118% surge in Britian between 2001 and 2007"
Source: Money Week 29th August 2008.
I'll try and dig out some more figures.
No doubt the property market will fall a lot more, the only way to support prices is to increase peoples income.Source: Money Week 29th August 2008.
I'll try and dig out some more figures.
The government's plan to spend its way out of the looming recession is "misguided and discredited", say leading economists.
Chancellor Alistair Darling wants to bring forward spending on key state-funded projects to kick-start economic recovery.
But a group of 16 economists say it risks damaging private sector recovery.
http://news.bbc.co.uk/1/hi/business/7691839.stm
Chancellor Alistair Darling wants to bring forward spending on key state-funded projects to kick-start economic recovery.
But a group of 16 economists say it risks damaging private sector recovery.
http://news.bbc.co.uk/1/hi/business/7691839.stm
Fittster said:
The government's plan to spend its way out of the looming recession is "misguided and discredited", say leading economists.
Chancellor Alistair Darling wants to bring forward spending on key state-funded projects to kick-start economic recovery.
But a group of 16 economists say it risks damaging private sector recovery.
http://news.bbc.co.uk/1/hi/business/7691839.stm
Read that this morning.Chancellor Alistair Darling wants to bring forward spending on key state-funded projects to kick-start economic recovery.
But a group of 16 economists say it risks damaging private sector recovery.
http://news.bbc.co.uk/1/hi/business/7691839.stm
Letter stops just short of calling him an incompetent buffoon.
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