Brexit and the waning days of the United Kingdom

[Josquius]

Look up gaslighting in the dictionary and it will say simply to read the entry for the tory party.

[Tamas]

I guess if there's any point where a state should spend borrowed money like there's no tomorrow is when bonds are going for near-negative rates and there's a pending recession.

[Sheilbh]

Yes!

But we've had a decade of near-negative rates and the Tories have gone on and on about the need expansionary austerity and the need to balance the books. They are so shameless it's incredible

[Tamas]

Yes!

But we've had a decade of near-negative rates and the Tories have gone on and on about the need expansionary austerity and the need to balance the books. They are so shameless it's incredible

Well yeah. But it seems like having Boris Effin' Johnson in charge lets them pretend its a new party.


If it is any consolation, I am fairly certain in ten years we will be terribly in debt and in deep trouble.

[Sheilbh]

If it is any consolation, I am fairly certain in ten years we will be terribly in debt and in deep trouble.

Meh - I feel like you said that ten years ago when I was still pushing for an end to austerity

[Tamas]

If it is any consolation, I am fairly certain in ten years we will be terribly in debt and in deep trouble.

Meh - I feel like you said that ten years ago when I was still pushing for an end to austerity

I probably did. 

[crazy canuck]

If it is any consolation, I am fairly certain in ten years we will be terribly in debt and in deep trouble.

Meh - I feel like you said that ten years ago when I was still pushing for an end to austerity

If there is any consolation in knowing your government is not the only one, take a look at the province of Alberta.

[Admiral Yi]

Yes!

But we've had a decade of near-negative rates and the Tories have gone on and on about the need expansionary austerity and the need to balance the books. They are so shameless it's incredible

You've also had a decade of positive growth and low unemployment.  Why the overwhelming, morally righteous demand for more deficit spending?

[Sheilbh]

You've also had a decade of positive growth and low unemployment.  Why the overwhelming, morally righteous demand for more deficit spending?

Do you mean now for the Tories or then for me? My view's been consistent throughout this decade - we aren't returning to a normal period of growth (I think we've had two minor recessions and generally very low growth, limited wage pressure and very low inflation), we had record low borrowing rates and you needed fiscal as well as monetary policy to play a role.

The Tories have turned on a dime because they are winning in areas that have done bad economically for decades - they want to invest there to in Johnson's phrase "level up" the UK. But this also reflects how London-centric the UK government is. Infrastructure spending, for example, is supposed to be based on an analysis of the investment benefit. These analyses are published and despite that a huge number of ones that are lower cost in the North and Midlands have been shelved, while more expensive but lower impact projects in London have been approved.

I've also seen more concern among Tory-aligned think tanks about the UK's ridiculously low productivity. Part of that is probably linked to our R&D and capital investment spending as a country which is lower than most European countries or the US.

Plus I think the mood has changed - I think ten years ago people bought into austerity, the whole "we're all in it together" and need to balance the books. Now I don't think that message cuts through, but people do feel their public services have got worse, which they have.

[Admiral Yi]

Then for you. 

You seem to be suggesting a link between deficit spending and productivity growth.  That's not the Keynesian model.

Frankly I think your position is muddled.  You shouldn't, given your desired outcomes, have been lobbying for increases in the deficit; you should have been lobbying for measures to increase investment and liberalizing labor markets (i.e. all the stuff lefties hate).

[Sheilbh]

Then for you. 

You seem to be suggesting a link between deficit spending and productivity growth.  That's not the Keynesian model.

Frankly I think your position is muddled.  You shouldn't, given your desired outcomes, have been lobbying for increases in the deficit; you should have been lobbying for measures to increase investment and liberalizing labor markets (i.e. all the stuff lefties hate).

What was my position or desired outcomes?

My position is we've not had a normal recovery and we're not returning to trend levels of growth. We're relying solely on monetary policy when I would rather get to a position where fiscal policy is doing the heavy lifting and our monetary policy can revert to something approaching "normal". And the low rates of interest for long-term government markets are a signal from the market to spend.

Obviously that should primarily be on infrastructure and capital spending.

All of the stuff where I say the Tories or about Tory think-tanks is about the Tories, not me

Though I'd query the investment and liberalisation point - it's a really long-standing point but we are way behind Germany, France, the US, Italy. So countries with more or less liberalisation. It's the enduring British problem - but it's been talked about a lot on the right for the last year or so, because I think they see it as key to doing well post-Brexit:

[Admiral Yi]

Your position is more deficit spending.  Your desired outcomes are higher GDP and productivity growth.

I've limited my comments to you. 

The fundamental flaw in your thinking IMO is that you equate spending on anything with deficit spending.

[Sheilbh]

I don't follow I'm afraid. We have a deficit and I want more spending, so surely it'll have to be deficit spending? What's the alternative if I think there should be more spending?

[Admiral Yi]

I don't follow I'm afraid. We have a deficit and I want more spending, so surely it'll have to be deficit spending? What's the alternative if I think there should be more spending?

Raise taxes.  Cut spending in other areas.

[Sheilbh]

Okay I think I get it.

We need to raise taxes - especially on wealth - and possibly cut spending but I think that's around a big re-think of what the state does and should do when we have an ageing population, more chronic conditions etc. I think structural spending should be balanced, or in surplus.

But yeah, as a general preference, I think spending on infrastructure should be borrowed. To my mind that's what borrowing is ideally for.

Does that help?