Financial Crisis

[RenewableCandy]

(Warning: I was being sarky. There isn't a Sarky icon so I have to make do with a " " )

[biffvernon]

The people who predicted this crisis are calling for a massive reduction in the size of government.

Its(sic) there(sic) conclusion, not mine.

I'm not calling for less government.

I think the laws of maths, physics and anything else you can think of are calling for a smaller government.

Did somebody re-write the laws of maths and physics while I wasn't looking?

[DominicJ]

So, did you publish any papers on it?
There were books, published in early 2000 that predicted the sequence of events accuratly and the causes, they said low interest and high government spending, the cure being sensible interest rates and small government.

http://www.ukpublicspending.co.uk/downc ... e=m&title=

Theres definatly a pattern there

[biffvernon]

Too much private spending.

[DominicJ]

Too much private spending.

The government is responsible for 45% of spending, it will hit 60% this year.


You are partialy right, the people have overspent as well, however, they did so because the government encouraged them too, via monetary policy, and they did so to a much lesser extent than the government, and they have largely stopped, despite el gordo's pleases that they carry on regardless.

[biffvernon]

The government is responsible for 45% of spending, it will hit 60% this year.

So?

[Bandidoz]

(Warning: I was being sarky. There isn't a Sarky icon so I have to make do with a " " )

In the world of smilies, the is more appropriate for sarcasm (or just general taking the pish)

(OMG I've turned from the Apostrophe Police to the Emoticons Police)

[DominicJ]

The Government spends more than everyone else combined, and everyone else is guilty of spending too much.

Do you not see a flaw in that logic?

[Andy Hunt]

Where does the government get the money it spends?

[MacG]

Where does the government get the it spends?

Basically trough force and fraud. Trough taxation is force, while lotteries and "deficit spending" is fraud. Very simple all of it.

[Mark]

Does Alastair Darling wake up on Christmas morning to find enough for the year in his stocking ?

Either that, or else he goes out and gets it printed........

[Andy Hunt]

I suppose I was getting at things like

- VAT
- income tax

If we didn't spend anything, people wouldn't be employed and therefore wouldn't have an income to tax, and there would be no VAT.

What government spends is a function of what people spend. That's why in a recession, government has to borrow to finance whatever programmes it wants to fund. Because nobody is spending anything.

But when what the private sector is spending has been borrowed in the first place rather than earned, then government tax revenue is based on consumer debt rather than the real economy.

So government assumptions that government borrowing will eventually be repaid could be wrong, because previous tax revenue turned out to be little more than a money laundering operation.

[RenewableCandy]

Where does the government get the it spends?

Basically trough force

'Snout like a good bit of extortion!

[happychicken]

Where does the government get the money it spends?

Well when things get desperate it just prints some and then calls it "quantitative easing"

[oilslick]

Too much private spending.

How can you defend anything this lot have done? They've actively encouraged this debt boom, joined in themselves and pretended they were doing good things.

GB will go down in history as the person who ruined the UK. We will be paying back the debt for 30 years...if we're lucky.

We need to come up with a new plan and adjust to a much lower standard of living, not keep throwing my son's future earning's (if there are any jobs) down the plughole.