Re: [Update 2] PM Boris forms a government
 

OK, I'll keep it simple - you said "I do at least give him credit for understanding the core principle of creating wealth."

What is the core principle of creating wealth?

Re: [Update 2] PM Boris forms a government
 

Re: [Update 2] PM Boris forms a government
 

OK, then...

I thought it was creating markets for goods and services that people want and can afford, and also ensuring people earn/keep enough to recycle their earnings by purchasing goods and services, but also pay their fair share of taxes to support the things we value in society.

Depends if one means wealth for individuals or a wealthy society, which isn’t solely monetary...

Re: [Update 2] PM Boris forms a government
 

I'd love you to give an example of each and tell us how it's fundamentally different. I bet you can't :)

Re: [Update 2] PM Boris forms a government
 

It’s a simplistic two liner but the underlying fundamentals are quite true. Borrowing long term to meet day to day, month to month expenditure is more problematic than borrowing to “invest” in for example infrastructure projects that will yield long term economic benefits.

£30bn on the right infrastructure project (e.g. HS2 - note I’m not saying that is the right one it’s only an example) could employ thousands of people directly, tens of thousands more in the areas around construction. Many will be highly paid, skilled and relatively stable jobs. If the project reduces the costs to business, takes pressure off housing in the south east then it could yield benefits realised in the long term far in excess of £30bn. It has to be the right project though and not a big damp squib.

Note it's going to be easy to criticise the above specific to HS2 which is why I'm specifically not defending it.

Re: [Update 2] PM Boris forms a government
 

I'd love to but JFman did it for me.

Borrow money to just pay directly for public services and you'll always be borrowing that money.

Borrow to invest in projects, that increase productivity, create jobs and strengthen the economy, and you'll raise taxes to pay for your public services and pay of the debt that you borrowed.

Re: [Update 2] PM Boris forms a government
 

I don't often agree with Pierre ;)

You could borrow your way out the troughs in an economic cycle but that's a careful calculation and by exception.

Re: [Update 2] PM Boris forms a government
 

Don't borrow on anything that doesn't (normally) appreciate. Good for personal as well as national finances. The difference is you can choose not to get that new ?? and make do but nationally you are choosing for others.

The problem is the holes are nearly all "infinite". No matter how much you spend, someone will miss out. Projects nearly all over run or cost too much, usually because they aren't managed well and there are too many fingers in the pie looking out for their own interests.

When it comes down to it, our leaders have forgotten that they are really our servants.

Re: [Update 2] PM Boris forms a government
 

Re: [Update 2] PM Boris forms a government
 

Not true. Investment, underwritten by borrowing, invariably applies to "assets" that do not "appreciate" as you put it. Investing to improve the NHS, for example, does not lead to an appreciating asset in the way you have alluded to.

The mistake is to transpose maxims applying to personal finance to the national macro-economic stage ..

---------- Post added at 18:10 ---------- Previous post was at 18:08 ----------

They have not forgotten. They know *exactly* who they are responsible to ... and it is not the vast majority of people in this country.

Re: [Update 2] PM Boris forms a government
 

I think you need to think more deeply than this. For example, you say that investing in the NHS does not lead to an appreciating asset. Yet in believing that, you are completely ignoring the loss of productivity resulting from delays in treatment by the NHS and the decline in the nation's health resulting from delayed treatments and a lack of availability of appropriate remedial treatments. If you are relatively healthy and have not had to rely on their responses, you are likely to be completely ignorant of the problems patients face with its inefficiency.

I appreciate that many socialists don't like the comparisons between managing household budgets and the management of the national economy, but the same general principles apply.

---------- Post added at 19:36 ---------- Previous post was at 19:32 ----------

On the contrary, MP's are responsible to their (whole) electorate.

Re: [Update 2] PM Boris forms a government
 

Any investment in the NHS will only serve to lessen the amount you may have to spend on the NHS. Which is a good thing, but to pay for the NHS you need to to be directing your borrowing to fund projects that will increase your economic output and not at directly funding the NHS (there will be a blend obviously).

Also borrowing to increase spending on public services, increasing massive public sector jobs, a favourite of Labour, to reduce jobless figures is not the answer. current employment figures in this age of austerity shows that it isn’t necessary.

HS2, I think is a good thing and necessary and the links to the North far more important than Birmingham.

Northern Cross Rail and linking that to HS links to Manchester and Leeds is what is required. But it needs to be within the next 10 years and the problem we are so terrible at delivering big infrastructure projects on time, in budget and within a decent timeline we miss the opportunities.

Re: [Update 2] PM Boris forms a government
 

The NHS is a continuing expense. It's not the same thing unless you're talking about building hospitals or something. Every year the NHS requires funding so to make it sustainable you need to meet that funding via income not debt. You can borrow to fund HS2 because ultimately the bulk of that funding will end and you can start paying it back over a longer timeframe.

No, economists don't like the comparison. Households don't issue government bonds or have central banks. You can't print money. Your spending doesn't really impact the economy as a whole. You don't have the ability to literally shape the economy you're in. You Also if you spend money in a shop that's money gone for you and gained for them but government spending, at least that within the country, is money moving around the same system. That changes quite a bit about how you make decisions.

For what we're talking about the comparison with households work but really it would break down if went any further. It gets to what I said earlier that some economists don't see an issue with governments running managed deficits.

Re: [Update 2] PM Boris forms a government
 

I am thinking deeply I assure you. What is not needed is a cartoon-like 2 dimensional analysis of the complex socio-economic challenges. The application of simplistic analogies to reduce these issues to sound bites is why we are here today. "Labour bad, Tories good", "Free Market good, Nationalisation bad", etc."

The 4 decades old free market economy has run its course. It has failed to deliver what the original proponents promised. We are in the end game. If the country survives the No Deal abyss, the centre ground of politics lies vacant to accomodate a new social democratic approach: one that discards the blinkered Old Labour, New Labour, Right Wing Tory mindset.

The future will have to redeploy the wealth held in the hands of the few to invest in *all* the country for the benefits of *all* the citizens. The climate emergency demands no less. The wealthy do not care about you or me and they do not care about the planet.

Johnson claims to be wanting to spend 3 billion for the neglected North to try and address some of the reasons so many felt "left behind" and disenfranchised. To put this in context, the City of London had a bonus pool, remember these people already have very high salaries, of 20 billion in 2018. Yes, 20 billion for 1 year. These are the people that you, me and, yes, the people in the neglected north bailed out to the tune of 100's of billions in 2008 and caused the decade of austerity.

The childish responses like "politics of envy", etc. just do not work anymore. Everyone can see the evidence before their eyes. You would be a fool to believe the free market is the future. The market must be controlled: intervention where strategic and national interests dictate and control where it does not.

The system is broken and when people who cling to the debunked "rising tide floats all boats" maxim try and sell the "greed is good" snake oil, it really is depressing. I find it interesting to see the people defending the current system: they seem to be invariably those who comes from the baby boomer period where they had the fortune to find a good job easily, to have a final salary pension that we can only dream of today, to be able to easily afford to buy a house that now has risen many, many times in value and to have enjoyed the best of social service quality during this period.

These are the people who will now say: "I got where I am today through bloody hard work" .. well, truth be told, they were just very lucky. The sinister part is that they feel entitled: "how dare you take away what I worked hard to get". The awareness that the wealth and opportunities they enjoyed will never be available for the current generation is just absent. This lack of empathy underwrites a lot of the current politics.

While I am rambling on, I would like to thank Hugh for his many posts expounding, as I see it, his One Nation Conservatism. His views on how those that have most have a moral duty to those who do not is to be applauded ... loudly. Views like his are seldom heard from the political right .. :(

Re: [Update 2] PM Boris forms a government