News - Gordon Brown wants 100% super-fast broadband access by 2020

[TheAnimus]

Is there "solid" proof that Brown could of done something differently and it would of worked out far better than what it has?

YES!

This is what the simplification graph posted above clearly shows, we really messed up. Compared with Greece when brown came to number 11 he had the country in a much better state than Greece has been in.

As such we can see that his performance was the worst out of the group, he didn't drop the ball, he threw it hard in the wrong direction.

The worst part is over, (banks are still very wary of who they lend too atm) - Jobs here are flowing, mate wanted a job the other week and he got one in the same week, but that's this part of the country. A lot of work is back as our hotel are full with work based guests i.e. builders.

The problem is the worst might not be over, we don't know, and we can't know for sure.

What we can see is the big pile of debt we've got which will be around for decades to come, as a direct result of tax and spend spend spend. So do we do nothing about that and just hope that everything works out OK?

the majority of people who vote are clueless to what politics is and how it works.

Remember that your sentiment of superiority over the majority of people, and how clueless they are might well be thought of you as you deride anyone who doesn't align themselves with you, whilst you show shocking ignorance of the most simple indicators.

[Saracen]

Is there "solid" proof that Brown could of done something differently and it would of worked out far better than what it has?

The worst part is over, (banks are still very wary of who they lend too atm) - Jobs here are flowing, mate wanted a job the other week and he got one in the same week, but that's this part of the country. A lot of work is back as our hotel are full with work based guests i.e. builders.

When I was watching the polls on Sky News not too long ago, popularity vary between what is shown on the TV and newspaper tbh, the majority of people who vote are clueless to what politics is and how it works.

First, nobody but nobody knows if the worst is over or not. Anyone that says they do is either a fool or a liar, or both.

There certainly are some positive indicators, but there is a lot of negative too. Many other countries that came out of recession before the UK have either slid back into "negative growth", or at least had the rate of growth slacken off a fair bit.

Next, our own indicators have shown a very slow and lacklustre emergence from recession. And that was when we actually had a LOT of money being pumped in to the economy by government. But the stimulus has already been cut back heavily. The single biggest and most visible example of that is the return of VAT to 17.5%. If cutting it boosted the economy, as Labour insists it did and many retailers have stated it didn't, or not in significant ways at least, then putting it back up must inevitably remove that stimulus. So .... what will be telling is the effect on the economy of that change, bearing in mind it'll take a few months to feed through?

And contrary to what government likes to portray, that VAT cut stimulus wasn't free. The cost was billions of lost VAT revenue. Government has spending programs, and to spend, it has to get the money. It can essentially either raise it through taxation, or borrow it. So when the government decide to "stimulate" the economy by cutting VAT, the direct implication is that they have to borrow the lost revenue in order to do it. So, part of the absolutely enormous deficit we now face is the direct result of that government stimulus. It's borrowing from Peter to pay Paul, but now we have to pay Paul back .... with interest.

And as for the worst being over, well, in the last recession, unemployment continued to climb for years after we came out of recession. If we take the last recession as indicative, we can expect unemployment to continue to rise for a long time yet, and as it does, the economy suffers because less people are producing, and more are claiming benefit. But can we take the last recession as a guide? Only with some very large health warnings. The causes of the last recession were very different from this one, and so were the symptoms. If you doubt me, go compare the interest rate record during and after the last recession and contrast with today's situation. Last time, rates were high, and then fell. This time they are at a historic low, and now starting to climb .... in that actual rates are going up, be it rates to consumers for loans or credit cards, or be it government gilt rates.

And that's where one of the big unknowns comes in.

The UK has an absolutely vast national debt, and it's set to pretty much double over the next few years. For all the talk about reducing the deficit you hear on TV from politicians, remember that that's the rate at which debt increases, not the debt itself. What they're arguing about is fast we get even deeper in debt, not about reducing the debt. For all the talk about tax rises, public spending cuts, efficiency savings and so on, they're simply trying to slow down the rate at which our debt grows.

Consider this. Assume you have an annual income of £100,000. You have living expenses of £40,000 (paying mortgage, bills, etc.). That leaves you with £60,000 after essential bills have been paid. You therefore have a chunk of change to spend, yes?

But now add the fact that you owe £1,500,000 on your credit cards and the interest alone on that is costing you £90,000 a year.

So ... you have £60,000 disposable income after living expenses, and £90,000 of interest to pay. Year on year, your debt grows. That £1.5m goes UP, despite all the money you pay on interest, and as a result, the interest goes up too ... and compounds .... because you have a deficit of £30,000.

So you cut your living expenses, you move to a cheaper house and reduce your mortgage, and you get your living expenses down from £40,000 to £30,000. You still have a £20,000 shortfall, and your debt is still going up. Year on year, you get deeper and deeper in debt, because you're borrowing merely to live.

And then the interest rates start going up, and you find yourself paying a lot more in interest. Now, maybe you pay £120,000 in interest, out of your £100,000 annual income. Oops.

That, broadly, is the situation the country is in, thanks to gross incompetence by "prudent" Gordon Brown. I'm not suggesting the comparison are proportionate, but the principle is sound.

And why are we in so much debt? Because Brown, as Chancellor, spent years getting us into it, building it year after year. He so much enjoyed standing there in front of the cameras boasting about how he was "spending £x billions" on this or that, that he spent money that we, the country, didn't have.

He boasted so proudly, and by God so regularly, that he had "abolished boom and bust" that the idiot believed it himself. He came to assume that because tax revenues and growth were what that were, that they always would be, and entirely missed the fact that his actions and policies had helped set the scene for the bubble he was fuelling.

Example 1. He made the "Bank of England independent", but that isn't quite what it seems. Sure, the Bank gets to set interest rates, but the Chancellor defines what objectives they are to seek to achieve, and the target level. He then set the prime target as maintaining inflation below a target level, and that's fine in and of itself. But it ignores the fact that low interest rates fuel the housing market, and the housing market is a classic example of the laws of demand and supply at work. The supply is relatively inelastic, simply because it takes a long time to build more houses. But keeping interest rates low ensures demand is high, fuelling the housing boom, which in turn fuels demand, because everyone comes to believe that buying a house is a sure thing, and even a pension alternative. After all, the always go up about 15% every year, right? Wrong. It's a bubble, and one that follows directly from Brown's interest rate policy.

Example 2. Brown's pension pot raid. Go do some reading on Brown's actions on pension funds. Start with the miner's pension fund, that he's been bleeding every chance he gets, and then look at his changes to taxation on pension funds. Until Brown started monkeying with pension taxation, most funds were doing fairly well. Sure, there was the occasional aberration, but most were healthy. But Brown wanted the money so he could fund his spending binge, and taxed them to the point where many are now in dire trouble. That, for example, is part of the current problem with BA ... a huge pension hole.

I could keep going, but the tone is pretty clear.

Yes, Brown is directly responsible for much of our current woes. Yes, there's a credit crunch and yes, it came in large part from the US, but the reason it's hitting us so hard is because of the way Brown managed the national finances for his decade as Chancellor. While times were good and revenues strong, he could have been storing up reserves for a rainy day. Instead of which, he sold everything he could that wasn't nailed down, including our gold reserves .... right at the bottom of the market. He then maxed out the country's credit cards and instead of heeding that as a warning and paying some of it off, took out more cards. He also took out some dodgy loans with moneylenders, called PFI initiatives.

The idea is this. When you need a hospital, or school, or whatever, let the private sector build it .... and provide the money. They then get their payback by having a contract to manage the facility, doing all the upkeep and maintenance, etc. The trouble is, you then wind up with a hospital where when you need a new light switch you can ONLY get one company to do it and that can charge pretty exorbitant rates to do it. And they typically have a 30 year contract to do it.

So .... you can boast about building a new hospital and without having to find the capital to pay for it, but the local authority will be paying through the nose for several decades. This is known as "off balance sheet", because the annual running costs show up as a revenue item year by year, not a capital item on the balance sheet.

That absolutely vast and ever-growing national debt I mentioned that we're going to be paying for for decades?? It excludes such off balance sheet items, and PFI is far from the only example.

20 years of boom and 3 years of bust is better than 100 years of average growth.

Oh please. Do you know know daft that statement is?

First, if this were just three years of bust, we'd be lucky. You'll be lucky if your grandkids aren't paying off some of our current mess. And yes, I mean that quite literally.


Secondly, without knowing what "average" growth means, and the magnitude of both boom years and bust, it's an absolutely meaningless assertion. Finally, if there's anything business likes, it's predictability, because it's so much easier, and far less risky, to plan long term if you can predict with some accuracy how things will be.


And as for electing Cameron or Brown ... we know how competent Brown is or isn't. We have a track record to prove it. What we don't know is what Cameron will be able to do. Moreover, in exactly the same way as we can't take Labour's pre-Blair policies and principles as being indicative of what Blair would do, we can't take Tory history under Thatcher and Major as being indicative of what Cameron will do.

Not only are times very different, and the problems we face very different, but most of the people are very different too.

Nobody knows who will win the election, and while I'll say I think it's likely that Cameron will win, it's far from certain. What I will say with some confidence is that it's distinctly unlikely to be anyone other than Brown or Cameron that'll be PM in a few weeks, and that given what we know about Brown, Cameron can't conceivably be worse.