Quote:
Originally Posted by Traduk
We are adopting the Canadian model which was used to very painful but good effect from 1993 to 1999. It worked for them because the most vigorous period of global growth started and ended during their grand experiment (1992 to 2000). We need the same burgeoning global growth but there isn't a snowballs chance of seeing it.
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The BBC seems to disagree with you on this.
http://www.bbc.co.uk/news/10254055
Quote:
When Canada started on its spending cuts in 1992, the country was still mired in an economic downturn.
And despite the Canadian economy not firmly picking up until 1996, Ottawa still continued with its extensive deficit reduction work.
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---------- Post added at 17:36 ---------- Previous post was at 17:33 ----------
Quote:
Originally Posted by Traduk
The end product is the same. Remove liquidity (spending power, money in circulation) and unintended consequences follow with the ripple or domino effect.
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The only solutions then are to either ignore it or to increase taxes. Taxation will reduce spending power, incentive to work and cause multinational companies that contribute so much of our tax revenue to leave likely resulting in no benefit.
Ignoring it will create a deeper deficit that must be funded and almost guarantee more expensive borrowing in the future further increasing deficit due to higher interest payments.
Before you're so nasty on the reference agencies by rights the UK and USA should already have been downgraded. The only reason we haven't is historical, we're the UK.