[Ignitionnet]

Originally Posted by dazzer89

We don't produce anything anymore, If you live in a service economy such as ours it's an act of gross stupidity to take cash out of that economy, the only effect it can ever have is to slow consumer spending and confidence and set off a chain reaction that will drive the economy straight back into recession.

Agreed, time to cut spending more harshly and correspondingly cut taxation in order to reduce the amount of money being taken out of the economy by the government.

Incidentally services produce revenue, revenue means government gets some money in taxes on that revenue. That's what I was referring to by 'productive'.

Originally Posted by dazzer89

The socialists dropped us in it blah blah blah.

1. First of all it was the BANKERS who really dropped us in this mess and how many bankers do you know who are socialists?
Yes, I will concede that Labour govts failed to get to grips with that reprehensible City culture but it was Thatcher and the Tories who invited Financial Services to this country (at the expense of industry) and introduced rampant deregulation that allowed a lot of clever, rich bankers to make even more money off the backs of decent hard working people.

No, it wasn't bankers alone who dropped us in this mess, it was us, assisted by government policy. We're the ones who borrowed ourselves senseless, they just facilitated it. We were encouraged by the previous two governments to purchase property and the last Labour government indeed substantially incentivised using property as an investment by raiding pension funds. Property boom, people borrowing more than they could afford, writing on the wall.

Private debt was the root cause of these issues. We were the ones doing the borrowing, the banks borrowed to service our borrowing requirements, not for their own entertainment. Those mortgage backed securities fundamentally were backed by the (bad) mortgages of real people. That same debt bubble that powered the economy to such an extent burst. Either the banks were bailed out or they went under taking depositors' funds with them. I would have leaned towards the second option but that's me

It is interesting to note that no-one is commenting on how much government revenue came from those bankers, and indeed how much is coming from them again.

Easy scapegoat, morally questionable in their own right and partly to blame, little interest in defending themselves, easy to throw the whole blame at them. They did what most of us would in their position, and wouldn't have done it if the demand hadn't been there.

Originally Posted by dazzer89

Election before next spring? You heard it hear first.

That's about as likely as Ed Balls admitting Labour spent too much in government pre-crisis and crippled the country's ability to execute a full stimulus to recover more quickly. Something he has in common with Gordon Brown is an inability to accept responsibility.

If there is an election it's because the Tories want it. There is no way the LDs will be wanting one right now, it would be simply suicidal.

The economy was structurally broken, austerity had to happen if for nothing else so that we could afford Labour's PFI bills. How they managed to raise taxes and run deficits during a boom while hiding all that future liability off the books is a mystery to me, they must have been really spending, that Stephanomics graph is just the on the books stuff.