Quote:
Originally Posted by Ignitionnet
The BBC seems to disagree with you on this.
http://www.bbc.co.uk/news/10254055
---------- Post added at 17:36 ---------- Previous post was at 17:33 ----------
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. |
Did you miss the fact that I used "global"
.
The only thing that replaces a local economy is exports to a larger "global" economy and that is what made the Canadian experiment work. They drastically reduced the public sector and thanks to a burgeoning global economy the private sector eventually took up the slack. The private sector found business in exports.
We have done some things in reverse inasmuch as we lost over a million jobs in the private sector, many of which found their way into the public sector. The coalition, in its wish for list, hopes that the private sector will take up the slack with the unemployed flowing back the other way along with all the people it deems fit for work. The private sector will be constrained within a smaller domestic economy so exports will be the only solution. The major UK trading partners are in no shape either now or the foreseeable future to engage in buying anything much of what we may produce and we are in no position to compete with the Far East.
With the options available I agree that we are between a rock and a hard place but I do think that rather than rushing off like hares the busy young men should have taken a more tortoise approach. There are levels of structural debt ratios that are internationally acceptable and it may have been possible to operate on a slower less socially damaging timetable. However the guys in charge are on a mission and have such a short window of opportunity to make their mark on history.
I like the tongue in cheek last paragraph. Good to have friends in the right places. I thought it was funny that Cameron went to the USA with press comments of "heck you guys are doing it wrong" and came back with a ringing endorsement of "hey that's great idea but not for us"
BTW Quietly and without fanfare, my sister informs me that, Canada are still cutting back and at an increasing pace since the global economic mess. They have been fixing the fix ever since they started the fix.