Gordo

Why has the electorate (and the media) focused on 'deficit reduction' rather than debt reduction?

Reducing the deficit will merely slow the level that the national debt is increasing - but things will still be getting worse. Why haven't the media called them to task on this?

It'd be like me spending £50k a year on a £25k salary with a £300k mortgage in the background. Reducing my expenditure to £37.5k a year ('halving the deficit') won't help - I'll have a mortgage that continues to grow and I'd still be fecked.

And why aren't the Tories stronger when Brown keeps talking about them 'taking £6bn out of the economy' if they don't increase NI as he wants to - how is NI any different - i.e. that would also be taking money out of the economy! The only difference is that Labour want to tax the private sector (as ever) whilst the Tories want to reduce the national expenditure.

Sigh - and odds are we'll get a hung parliament with the Euro/immigrant loving Lib Dems still saying whatever they want to please the voters as they know they won't have to ever implement any of it in practice. So much fro democracy.

Gordo

SJ_Skyline

The interview with Lord Digby yesterday alluded to this (and he made Emily Maitlis look like a complete airhead - I half expected him to call her "dear girl").

In short, he laid out that the public sector is required but that it is a cost and doesn't generate wealth whilst the private sector is the area that generates the wealth to support the public sector. There needs to be efficiency and value for money from the public sector whilst at the same time policies to encourage growth of the private sector and a balance between the two which is currently lacking.

If you make policy that is unattractive to the private sector (such as NI increases which prevent small business taking on that extra worker) then you lower your tax take in real terms which has the knock-on effect of lowering the amount of money available to spend on the public sector. Unless you borrow it or print it...


Sod the main parties, I'm voting for Digby!

Devildog

The simple answer to your headline question is that the media (TV media especially) and the electorate generally just don't understand it very well.

Debt is of course the most important issue, but then we can't reduce that debt without turning the deficit into surplus, and to do that, the deficit first needs to be reduced (obviously).

Its the speed of that reduction that concerns me. Its not just the manner of reduction over which the parties differ, its the timescales.

Labour seem to be happy for it to be a very gradual change. Short term gain for long term pain? - probably.

The Conservatives will probably seek to reduce it faster. Short term pain for long term gain? - again, probably.

ALi-B

iTrader: (1)

Amen to that; Public sector growth needs to be backed up by private sector growth across the board (not the the banking industry - which is what happened over the last ten years). Many of our clients are small businesses, and very few have made and significant expansion or growthover the past five years, and the ones that have are usually with just one big contract (funnily, one of our most succesful clients is payed by the public sector, so essentially, tax payers pay to fund a private company's expansion - a serious point I'll make in a minute ), the others that did well were fly-by-night; Ran the business to run the management's lifestyle, when it floundered they shut it down (leaving a load of unpaid debts) and setup again elsewhere. Nice.

Additionally, private sector growth/control needs to ensure what it is doing is efficient. Currently we have some public sectors and local councils contracting private businesses to do work, who in turn subcontracts out to another firm, and even then that subcontractor may contract out again! Each one taking a piece of the pie and resulting in the most grossly inefficient use of public funds I have ever encountered.

What we've ended up with is public sectors that pays the private sectors to do its work, and its the very same private sector that is expected to fund the public sector via taxation; bonkers!

Leslie

I believe that they have got us into the situation where they can only keep going by borrowing all the time now. They won't be telling us that of course but deficit is the only thing they are prepared or probably able to do anything about. They can't even borrow from Paul to pay Peter now!

Les

Gordo

Highlights more than ever what a cods the Labour government have made of our economy - and people still think they've done a good job!

bioforger

iTrader: (1)

politics

r32

Strangely one eyed Gordie has said they will not take money out of frontline services. Yet the 1% increase in NI will have to be paid by the Police (650 Million) and the NHS (800 Million) how odd.

r32

I was also stunned when Cleggy (wasnt he in Last of the Summer Wine?) said he didnt want to join the Euro at the last meeting when Cameroon said he did.

If he doesnt why is it in the LIBDEM manifesto, which was only issued a week or so ago.
Am I missing something?

dpb

He may have changed his mind - thats not quite lying

No politician , apart from the liberals . will tell you how bad it really is

but its ok - no one trusts em so they never win