General Election, June 8th

[Webbo]

23 minutes ago, toddybad said:

You cannot make any direct correlation between qe and unemployment rate. Why are people using lazy arguments rather than reading up on the subject?

 

Unemployment has indeed been falling but then wage growth has stalled makimg emoloyees cheaper as a % of income. There is also plenty of evidence to suggest unemployment has been helped by unscrupulous employers finding different means of keeping wages down and stepping back from employee rights (pretend self employment for example).

 

 

When you say read up on this do you mean read the same bias source as you?

 

Keynesianism economic theories don't suggest a stimulus while the economy is growing, at this stage in the economic cycle you should be cutting spending to pay back debt. If you massively increase borrowing now, how much are you going to have to borrow when the recession occurs?

[Webbo]

5 minutes ago, toddybad said:

So tell us what's improved for normal people in the last 7 years webbo.

Lots more people have jobs.

[Jon the Hat]

9 hours ago, Rincewind said:

Another politician who cannot get their figures right. Is 'I do not have the figures with me' a good enough excuse? 

 

http://www.lbc.co.uk/radio/presenters/nick-ferrari/michael-gove-numbers-hopelessly-wrong/

It is a more professional answer than guessing or making them up and apologising later.  I dont always expect everyone to have every figure in their head (I know i don't), but you should know what is likely to come up, and if you have a key pledge in your department you should know them broadly.  Anyone can forget, and this is the correct response if you have.

[Sharpe's Fox]

8 minutes ago, Jon the Hat said:

It is a more professional answer than guessing or making them up and apologising later.  I dont always expect everyone to have every figure in their head (I know i don't), but you should know what is likely to come up, and if you have a key pledge in your department you should know them broadly.  Anyone can forget, and this is the correct response if you have.

To be honest this type of questioning is getting on my nerves now no matter who is on the end of it. It's just journalists looking for their "gotcha" moment to get on the news. Pulling figures out your head under pressure is difficult most of the time.

[Jon the Hat]

9 hours ago, KingGTF said:

Fed up of the tuition fee debate. The current system is pretty decent and they shouldn't be scrapped. It's a vanity project

Agreed, waste of money.

[Jon the Hat]

8 hours ago, DJ Barry Hammond said:

 

But we have a shortage of Doctors / Dentists / GPs and it's not the most attractive of professions despite the wage at the moment.

You would need to support that assertion with evidence that we don't have enough people applying for medical school.  Whether people like the job and stick with it is a seperate point, nothing to do with tuition fees.  The same applies for nursing - are their places on nursing degree courses going because people don't want them?

[DJ Barry Hammond]

9 hours ago, KingGTF said:

Fed up of the tuition fee debate. The current system is pretty decent and they shouldn't be scrapped. It's a vanity project

 

Hmmmmm?

 

Pretty decent is not a description I'd give to be honest.

[DJ Barry Hammond]

17 minutes ago, Jon the Hat said:

You would need to support that assertion with evidence that we don't have enough people applying for medical school.  Whether people like the job and stick with it is a seperate point, nothing to do with tuition fees.  The same applies for nursing - are their places on nursing degree courses going because people don't want them?

 

So are we saying the shortage is more down to capacity... in which case more funding needs to go into Universities with a view to providing more courses? 

 

I take it you're not suggesting there isn't a shortage of people within these fields and that more will need to be trained? 

[Guest]

1 hour ago, Webbo said:

Lots more people have low paid jobs although changes to benefit rules means that the lowest paid have still lost out.

Fixed that for you

[Guest]

51 minutes ago, Jon the Hat said:

You would need to support that assertion with evidence that we don't have enough people applying for medical school.  Whether people like the job and stick with it is a seperate point, nothing to do with tuition fees.  The same applies for nursing - are their places on nursing degree courses going because people don't want them?

I'd be amazed that anybody wanted to do a nursing course given there's no bursary now so they'll come out with a ton of debt into a fairly poorly paid profession.

[Carl the Llama]

Tbh I'm not sure why I bother reading these threads: It seems when labour or the lib dems do something idiotic people across the spectrum on here give it the mockery it deserves but when they suggest a useful policy or the cons are guilty of messing up team Tory come out to criticise or defend as appropriate apparently regardless of the facts of the matter.  It makes for very frustrating reading and brings a certain NOFX track to mind, the one about it being a poor time for sobriety.

[Guest]

1 hour ago, Webbo said:

When you say read up on this do you mean read the same bias source as you?

 

Keynesianism economic theories don't suggest a stimulus while the economy is growing, at this stage in the economic cycle you should be cutting spending to pay back debt. If you massively increase borrowing now, how much are you going to have to borrow when the recession occurs?

The coming financial crash will occur because any growth there has been has resulted in inflated house prices and record personal debt. It has not been because of wage growth. 

 

Recession occurs when people stop spending. Putting money into the real economy would cause people to spend making recession less likely. 

 

This is like having an argument with a high-schooler who doesn't do their homework. 

[Guest Dirkster the Fox]

1 hour ago, Webbo said:

Lots more people have jobs.

Seconded. More than in the last 42 years.

 

 

 

[Guest Dirkster the Fox]

4 minutes ago, toddybad said:

 Recession occurs when people stop spending.  

Good job April retail figures were way up on the previous Month and like for like last year. Cause for celebration for you then toddybad?

 

[Alf Bentley]

15 hours ago, KingGTF said:

Well this has made me rack my

I think the key thing is, it doesn't matter who holds government debt in terms of security or cost etc, a foreign government couldn't buy it up and hold the government to ransom because they are fixed products. The government issues a gilt which is then brought on the market with the fixed income and maturity terms, it's not like they go out to an institution to request money in the way we do to the bank. I guess they could try to affect the secondary market which would change things slightly but it wouldn't really be beneficial. See I thought @toddybad was saying that it matters that the BoE holds some of the debt, as if this makes that portion of the debt different to the rest. I guess it matters to a degree that the BoE holds 25% of the debt because it could just wipe it if it wanted but it shouldn't and wouldn't. That's a different argument altogether

 

- Yeah of course it's not all long-term. Gilts make up most of the government's debt and the UK issues gilts with a maturity date between 5 and 50. They are fixed-income and once issued that doesn't change. Albeit, as they mature, the government has to issue more and so it could become more expensive with an interest rate movement but not anytime soon. And then we can go into yield curves and how bonds are actually priced, but I'm not sure anyone would want that. So what will actually be happening at the moment is that the cost of debt to the government will be fallings as bonds that were issued many years ago at 8%, for example, will be maturing and the government will simply issue new gilts but at a cheaper income. Also the treasury issues papers for debt less than a year but I'm not at all clued up on that side of it.

- Of course new terms will change with changes to interest rates but government debt is always (for solvent, developed nations) relatively cheap. This, in theory is all factored in to the yield curve of a gilt to smooth it out across the period to maturity so there is a lack of volatility in the cost of government debt. 

- Credit ratings are quite a superficial thing actually. Recent changes haven't really had much of an effect; they provide a guidance to investors but it doesn't directly affect borrowing costs. As I say, recent changes have been bad PR but had no real effect on cost of borrowing

- The UK government, as far as I'm aware, doesn't have any foreign-currency issued gilts. The government issues gilts in sterling (there has been occasions when they have issued small amounts of foreign-currency gilts) for exactly the reason as to not be vulnerable to exchange-rates. Theory would say that it might be more difficult to sell gilts if a foreign investor is going to take a hit from the exchange rate but they're desirable products for a reason; that will only really affect the secondary markets which doesn't concern the government.

- As I say, the BoE owns the same gilt as anyone else, the debt that it owns can't behave in a more favourable way than the debt owned by a different institution

 

 

Gilts are complex products so whilst I believe I have the basics worked out here, I might be wrong. I have friends that will be doing internships on fixed-income desks over the summer, poor sods. 

 

As for me, LSE and I may well be parting ways. 

 

Thanks for this attempted explanation. I wish that I was better at getting my head round the financial system, as it matters big-time. Maybe I should sign up for a course at the LSE? 

 

I understand that the slight downgrade in UK credit ratings has had little impact. Presumably, the same will apply if things just get slightly difficult during/after Brexit negotiations. If things get seriously bad, though, a bigger hit to credit ratings might have more impact on the cost of UK debt (and, even if it is a success long-term, Brexit could increase the UK deficit/debt in the short/medium-term - depending on negotiations, the economy & fiscal policy).

 

In those circumstances - and generally - it instinctively seems better for a chunk of that debt to be held by the Bank of England, rather than profit-oriented financial institutions or foreign countries. Obviously, the BoE has to exercise financial responsibility for the UK economy and cannot just do the bidding of the govt of the day. But it is more likely to be helpful over debt that it holds than a private bank or foreign institution, surely? As an example, I found this from 2012:

https://www.theguardian.com/business/2012/nov/09/bank-of-england-gilts-interest

"Big cash balances amassed by the Bank of England as a result of its electronic money-creation programme will be used to pay down the national debt by £35bn over the next 18 months, the Treasury has said.

[...] Sir Mervyn King, the Bank's governor, said the change to the arrangements made sense[...].The move will reduce national debt in the short term and cut the interest payments the government makes on the money it has borrowed". 

I can't imagine a bank, insurance firm, pension fund or foreign institution offering £35bn off a debt!

 

I appreciate your point about much debt being long-term via gilts that hold their value for years and have stable interest rates. But there are clearly mechanisms that mean UK debt does get more or less expensive overall, albeit gradually in many cases. Presumably short-term/new borrowing, secondary trading of gilts and other market mechanisms that I don't understand are part of this. The system is obviously set up to have a strong degree of stability, but the flexibility to respond to market forces - including market assessment of the British economy, British creditworthiness etc.

 

 

Are you not enjoying the LSE, then? I saw your recent post about girlfriend issues and hope that's not the only reason you're thinking of quitting? I don't mean to be intrusive or patronising. I know nothing about your life, obviously. Maybe you hate the course or hate London, and maybe you'd be right to leave? It would just seem a shame to leave for the wrong reasons, when you seem to have a strong interest in the subject - and presumably some ability to have got a place at the LSE. There's a summer ahead to clear the mind - and other options, like a transfer to a different uni or a year out...though I imagine you've already considered such things. Good luck, whatever you decide. 

 

 

[Guest Foxin_mad]

6 minutes ago, toddybad said:

The coming financial crash will occur because any growth there has been has resulted in inflated house prices and record personal debt. It has not been because of wage growth. 

 

Recession occurs when people stop spending. Putting money into the real economy would cause people to spend making recession less likely. 

 

This is like having an argument with a high-schooler who doesn't do their homework. 

There may not be wage growth but, there are more people getting wages.

 

Labour aren't putting money into the real world. They are giving unions too much power, taxing the rich and businesses who will ironically stop spending and or more away.

 

They them propose to buy Royal Mail back, who will be beaten by cheaper more efficient private competition especially once they start striking every week. They want to buy back the railways and water board, and invest a load of money into the vote labour union public sector.

 

How is that going to stimulate the economy??

 

The plans Labour have will cost a serious number of jobs across the board.

[Guest]

23 minutes ago, Foxin_mad said:

There may not be wage growth but, there are more people getting wages.

 

Labour aren't putting money into the real world. They are giving unions too much power, taxing the rich and businesses who will ironically stop spending and or more away.

 

They them propose to buy Royal Mail back, who will be beaten by cheaper more efficient private competition especially once they start striking every week. They want to buy back the railways and water board, and invest a load of money into the vote labour union public sector.

 

How is that going to stimulate the economy??

 

The plans Labour have will cost a serious number of jobs across the board.

But we are entering a period where wages are rising slower than inflation, according to the bank of England. If you are worried about recession then the reduction in consumer confidence caused by wages falling in real terms is a disaster.

 

After 7 years of tory rule we have a situation where we have falling wages, near record personal debt and house prices are at price/wage levels that are clearly unsustainable (look back at historical house price/wage records to see the peaks and troughs of bubbles and crashes in the past if you doubt this), whilst at the same time we have record low interest rates. The whole thing is teetering on the edge of oblivion. And if there's another crash there's very little leeway for QE or interest rate drops to try to save things. 

 

Jesus, the stock markets are at record highs whilst wages are on the verge of falling - how much more evidence do you need that the economics of this government (and most western governments) aren't working?

[ramboacdc]

polls are starting to look interesting if they are to be believed. seems labour are on the rise and tories staying at the same high level. thing is will they catch before polling day and are the polls worth their weight in salt? 

 

lib dems seem to be falling with UKIP too. as much as i love the lib dems, farron did himself no favours last night. 

[Jon the Hat]

45 minutes ago, toddybad said:

I'd be amazed that anybody wanted to do a nursing course given there's no bursary now so they'll come out with a ton of debt into a fairly poorly paid profession.

Then you clearly don't understand the tuition fee loan system.  You would have to be a successful nurse moving into management position to pay back more than a fraction of it.  It is 9% tax on earnings over £21k, not in fact a loan.

[Jon the Hat]

1 hour ago, DJ Barry Hammond said:

 

So are we saying the shortage is more down to capacity... in which case more funding needs to go into Universities with a view to providing more courses? 

 

I take it you're not suggesting there isn't a shortage of people within these fields and that more will need to be trained? 

I think that is probably more likely.  I think the issue is qualified people leaving the profession or choosing to work in other countries where it is better, not the lack of applicants due to bursaries. 

[Guest Foxin_mad]

19 minutes ago, toddybad said:

But we are entering a period where wages are rising slower than inflation, according to the bank of England. If you are worried about recession then the reduction in consumer confidence caused by washes falling in real terms is a disaster.

 

After 7 years of tory rule we have a situation where we have falling wages, near record personal debt and house prices are at price/wage levels that are clearly unsustainable (look back at historical house price/wage records to see the peaks and troughs of bubbles and crashes in the past if you doubt this), whilst at the same time we have record low interest rates. The whole thing is teetering on the edge of oblivion. And if there's another crash there's very little leeway for QE or interest rate drops to try to save things. 

 

Jesus, the stock markets are at record highs whilst wages are on the verge of falling - how much more evidence do you need that the economics of this government (and most western governments) aren't working?

In your opinion.

 

So Socialist economics are working successfully where exactly? Venezuela? Greece?

 

There are huge problems in the world, aging populations, mass migrations of people. Growth is not something that will ever be at levels of 3-5% again in the western developed nations, that is something we need to understand and accept. There are huge demographic problems we have, the aging population (baby boomers who had life so good), who pays for their retirement and care? population growth/immigration straining public services, who pays for new schools, hospitals, police stations, fire stations etc? New homes, who pays? who builds?

 

Borrowing and spending a shit tonne of money we do not have on some vanity projects (like buying a train set) and throwing a load more money at an already inefficient public sector whilst giving unions the power to hold the country to ransom isn't going to fix the economy or boost anything.

 

The economy needs private run business to grow and invest and provide money for the public sector. Treating business with spite and distain like socialists do will always end very badly.

[Alf Bentley]

1 hour ago, Webbo said:

Keynesianism economic theories don't suggest a stimulus while the economy is growing, at this stage in the economic cycle you should be cutting spending to pay back debt. If you massively increase borrowing now, how much are you going to have to borrow when the recession occurs?

 

The economy is already starting to struggle (falling real incomes, rising household debt, stagnating housing market, growth forecasts downgraded etc.). So it's a good time to plan a stimulus.

 

Even if Brexit is a success long-term, economic uncertainty and postponement/cancellation of investment is bound to have a negative short-term impact. So it's a good time to plan a stimulus.

 

Much of our "success", with high employment and adequate growth, has been based on low-productivity, low-paid work, often done by immigrants whose numbers we apparently plan to drastically restrict. To fill jobs with qualified Brits and to improve productivity, we'll need to increase investment in technology and/or education/training. So it's a good time to plan a stimulus.

 

Much of our infrastructure (roads, housing stock, hospitals, schools) is inadequate. The impending downturn makes it a good time to plan a stimulus in a labour-intensive sector like construction so as to sustain spending in the real economy.

 

If the stimulus is well planned, some of the debt incurred to finance it will be covered by higher tax revenues from higher growth and higher productivity. Yes, any that is not covered should be repaid responsibly when times improve. We also need to avoid unjustified spending, which is why I oppose Labour's policies on tuition fees, the triple lock on pensions and some of the nationalisation plans (though I think these are largely "aspirations" to please the Left, which would be binned, apart from Rail). Likewise, I think the Tories are right to keep their options open over rises in income tax/N.I.  

[Guest]

15 minutes ago, Jon the Hat said:

Then you clearly don't understand the tuition fee loan system.  You would have to be a successful nurse moving into management position to pay back more than a fraction of it.  It is 9% tax on earnings over £21k, not in fact a loan.

Ok. I think we can both agree that £21k is a relatively low wage given that it is around 20% below the national average. Nursing is not a career with prospects of huge wealth in the future. You can be managing wards on £25k (still below national average).

 

You're happy for low paid workers to pay an extra 9% tax but yet argue against workers earning over £80k paying an extra 5% just on the top slice of their earnings? The whole country needs nurses and I'm more than happy for them to be given free tuition. 

[Jon the Hat]

2 minutes ago, toddybad said:

Ok. I think we can both agree that £21k is a relatively low wage given that it is around 20% below the national average. Nursing is not a career with prospects of huge wealth in the future. You can be managing wards on £25k (still below national average).

 

You're happy for low paid workers to pay an extra 9% tax but yet argue against workers earning over £80k paying an extra 5% just on the top slice of their earnings? The whole country needs nurses and I'm more than happy for them to be given free tuition. 

Personally I would increase the threshold to £28k.

[Guest]

16 minutes ago, Foxin_mad said:

In your opinion.

 

So Socialist economics are working successfully where exactly? Venezuela? Greece?

 

There are huge problems in the world, aging populations, mass migrations of people. Growth is not something that will ever be at levels of 3-5% again in the western developed nations, that is something we need to understand and accept. There are huge demographic problems we have, the aging population (baby boomers who had life so good), who pays for their retirement and care? population growth/immigration straining public services, who pays for new schools, hospitals, police stations, fire stations etc? New homes, who pays? who builds?

 

Borrowing and spending a shit tonne of money we do not have on some vanity projects (like buying a train set) and throwing a load more money at an already inefficient public sector whilst giving unions the power to hold the country to ransom isn't going to fix the economy or boost anything.

 

The economy needs private run business to grow and invest and provide money for the public sector. Treating business with spite and distain like socialists do will always end very badly.

Unfortunately the behaviour of big business and unregulated markets deserves a certain level of distain. 

100 years ago you had companies like cadbury building communities and understanding the value of society to their operations. Nobody dislikes entrepreneurs or small business but big business no longer acts with anything other than distain for society and, frankly, humanity.