Quote:
Originally Posted by spanna
except things aren't always so straightforward, and spending money doesn't guarantee additional growth - if it was that easy we would all do it and all be millionaires
what if your investment had collapsed - remember investments can go up or go down suddenly your still on 50k with increased debt, what if you lost your job and only managed to get a new job at 45k
What you are showing is what happens if it works .. if it doesn't work then you find yourself up the proverbial creek
a bit like all those of us who bought endowment mortgages in the 80's - it was seen as stupid to pay off the money you owed, it was a much better idea to invest the money and then pay off your mortgage with the massive profit you would make and then walk away with a cash lump sum ..... of course then the endowments stopped performing and people were left with underperforming endowments that wouldn't clear their mortgages
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It was a simplification, but no worse than the nonsense about running a country's finances like those of a household.
Countries can do this amazing thing where they don't have to go to the boss and ask for a pay rise, they can increase their competitiveness and market forces do it for them.
Or they can do nothing and market forces take money from them. As they have to an extent already in London due to some missing infrastructure.
---------- Post added at 15:36 ---------- Previous post was at 15:34 ----------
Quote:
Originally Posted by nomadking
If the UK public deficit and borrowing was for investment purposes only, then it should be easy eliminate any deficit virtually overnight. Instead the surplus and borrowing went on ongoing(eg tax credits) and long-term(eg repaying PFI) spending and that cannot be simply stopped "overnight".
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Way to miss my point
It wasn't a party political post so why you're bringing Labour's actions of the past into it is a little confusing.
I am questioning why the Chancellor is seeking to bind this and subsequent governments to a 1% surplus rule when it would seem to make more sense to run a balanced budget.
To run that balanced budget means a current budget in surplus, so your point is irrelevant, as are the actions of the previous couple of administrations (the last one traded investment for higher current spending in some areas too).