Does Austerity work?

[Rivenink]

It looks like Sunak and Hunt will implement a yet another round of austerity measures to cut public spending.

We won't get details for a while on the exact measures being announced, but the way is being paved by the media; who all appear to think it is inevitable and the only option.

But my question is; does it work?

In 2010, Cameron and Osbourne, with assistance from the Lib Dems went slashing and cutting. The NHS thousands of lost doctors and nurses. The Police lost thousands of officers. Central tax funding for councils was cut and councils had to impelement massive cuts to the services they offer and raise council taxes year after year. And thats just the stuff off the top of my head.

It didn't produce economic growth. It'd didn't produce tax cuts; infact our tax burden is higher than ever. So why is it again being looked at as the answer?

[Countdown]

Of course it does.

We've had 12 years and look how things are

[iphonedyou]

Rivenink said:

It looks like Sunak and Hunt will implement a yet another round of austerity measures to cut public spending.

We won't get details for a while on the exact measures being announced, but the way is being paved by the media; who all appear to think it is inevitable on the only option.

But my question is; does it work?

In 2010, Cameron and Osbourne, with assistance from the Lib Dems went slashing and cutting. The NHS thousands of lost doctors and nurses. The Police lost thousands of officers. Central tax funding for councils was cut and councils had to impelement massive cuts to the services they offer and raise council taxes year after year. And thats just the stuff off the top of my head.

It didn't produce economic growth. It'd didn't produce tax cuts; infact our tax burden is higher than ever. So why is it again being looked at as the answer?

I don't think cutting public expenditure is intended to drive growth, in and of itself. It's predominantly intended to lead to balanced spending and inspire market confidence - which, as we've seen recently, we're pretty dependent on.

[Lotobear]

...Liz tried to do the other and look how that went!

[Zumbruk]

Rivenink said:

It didn't produce economic growth. It'd didn't produce tax cuts; infact our tax burden is higher than ever. So why is it again being looked at as the answer?

It's right-wing religious dogma.

[z4RRSchris]

don't have many other options:

1. tax raises / closing loopholes doesn't raise enough
2. borrowing more markets dont like
3. getting in a ton of immigrants to solve labour shortages not popular with tory voters.

[Biggy Stardust]

What exactly was 'slashed & cut'? It sounds like a fairly savage process but what exactly underwent this assault?

[Rivenink]

Lotobear said:

...Liz tried to do the other and look how that went!

Truss decided to lower taxes for the rich, paid for by unfunded borrowing, without the hint of a plan on how exactly that borrowing would be paid back.

There is/must be plenty of growth focused projects that could be initiated and funded by borrowing based on the projections of economic growth they would produce.

[Rivenink]

z4RRSchris said:

don't have many other options:

1. tax raises / closing loopholes doesn't raise enough
2. borrowing more markets dont like
3. getting in a ton of immigrants to solve labour shortages not popular with tory voters.

With 2, the market loves lending money. Its how they make money.

What they don't like is borrowing with no clear plans on how that money will be paid back. Which is where Truss and Kwarteng went wrong.

[z4RRSchris]

Rivenink said:

Truss decided to lower taxes for the rich, paid for by unfunded borrowing, without the hint of a plan on how exactly that borrowing would be paid back.

not exactly true, but good soundbite. the majority of spending was the energy bill, then corp tax, then 19%, the smallest one was the 45% tax cut for the rich.

[Zumbruk]

Rivenink said:

Lotobear said:

...Liz tried to do the other and look how that went!

Truss decided to lower taxes for the rich, paid for by unfunded borrowing, without the hint of a plan on how exactly that borrowing would be paid back.

There is/must be plenty of growth focused projects that could be initiated and funded by borrowing based on the projections of economic growth they would produce.

There are, but tax cuts for the already well off weren't it. "Trickle down" doesn't work.

[dundarach]

I suspect crime will increase.

[Ivan stewart]

Yes …. If you’re the Labour Party !!sounds awesome two years of cash trickling into the coffers and making the Tory government even more unpopular !!
Way to go Rishi ..

[Rivenink]

z4RRSchris said:

Rivenink said:

Truss decided to lower taxes for the rich, paid for by unfunded borrowing, without the hint of a plan on how exactly that borrowing would be paid back.

not exactly true, but good soundbite. the majority of spending was the energy bill, then corp tax, then 19%, the smallest one was the 45% tax cut for the rich.

The energy cap benefits people more the wealthier they are. It's being paid for by the tax payer; but its not targetted support. Those who are poorest, and already stuggling with the energy bills are already using as little as they can. The poorest are not hitting the typical usage figure. They can't afford that.

Analysis of the tax measures overall showed a significant benefit to the richest in society, and that was entirely intended by Truss and Kwarteng.

[General Price]

Has there been austerity in the UK since the 40's?

[Chicken Chaser]

dundarach said:

I suspect crime will increase.

The police is under funded as it is. Never been a better time to commit crime if you're intelligent enough. Lowest hanging fruit gets picked off

[Wadeski]

Mark Blyth wrote a book on it - just look up some of his interviews on youtube.

You dont cut your way to growth.

[Lotobear]

z4RRSchris said:

Rivenink said:

Truss decided to lower taxes for the rich, paid for by unfunded borrowing, without the hint of a plan on how exactly that borrowing would be paid back.

not exactly true, but good soundbite. the majority of spending was the energy bill, then corp tax, then 19%, the smallest one was the 45% tax cut for the rich.

Indeed, kind of my point!

I run a SME and may have struggled on for another year but the row back on Corporation Tax is the final straw and has made me think WTF, why keep knocking my pan in for diminishing returns when the tax will just be spunked anyway? I shall also be degistering for VAT next year so HMRC will be seeing less of me from now on.

That's not to say I support in any way what Truss did but the thrust was probably right if not the planning.

[Carl_Manchester]

Rivenink said:

So why is it again being looked at as the answer?

Unlike the first time around, I think the credit card is maxxed.

It did not work the first time around but there was a choice not to do it.

Most people seem to be keen on keeping 'the money' happy therefore, prepare for some of the biggest cuts ever seen.

But, at least the markets will be happy.

[paulw123]

Wadeski said:

Mark Blyth wrote a book on it - just look up some of his interviews on youtube.

You dont cut your way to growth.

First you reduce waste, there’s plenty out there to reduce.