At last, a challenge to Svengali Osbornomics

Interesting to read the five points the LP is voting against:

1. It commits every government to running a budget surplus in normal times from 2019 onwards. However since 2010, he has missed his own deficit targets and changing the law won't help him to do any better.

2. Effectively it is a big political stunt from George Osborne so that he has an excuse to keep making ideologically-driven cuts.

3. But it's a dangerous stunt because if the Charter is followed to the letter it binds the hands of future governments, making it illegal to borrow money for investment in infrastructure or housing, even at times when investment would lead to faster economic growth.

4. In fact, the best way to reduce the deficit now is to invest to grow our economy. It’s for this reason that most economists disagreed with George Osborne’s cuts.

5. It could also force a government to keep making cuts, irrespective of the impact they have on public services and working families.

It's easy enough for people to criticise McDonnell and Corbyn, but neither of them really expected to be in this position. They have had a lot of work to do to keep themselves up to speed on this and anything else.
They have had do all this in just a few weeks, whereas anyone else who had been in the opposition on the front bench would know what to expect.
I think they are doing brilliantly in the circumstances, particularly with all the criticism they get from all directions.

Anyway, what exactly are "normal" times?

Exactly, Eloethan. Normal for who?

In law, for instance, you would expect a term to be properly defined before you would agree to a contract. Has a specific definition been provided as to what times would be considered to be "normal"?

Even if you on the face of it agreed with it being obligatory for governments to always hold a surplus - and many economists and businesses don't agree - surely it would be dangerous to bring in a law to this effect? It could stifle government investment in modernising and extending vital infrastructure projects.

That's why McDonnell is not agreeing to it. I do hope the Labour refuseniks see sense tomorrow.
There were two important votes today and the government won by 40+ votes on both. How can that be if their majority is only 12?

- if you were running a business and realised it was in danger of folding because it did not have sufficiently up-to-date equipment, you could do one of two things: let the business gradually slide into oblivion, or borrow the money to re-equip it and make it viable in the long term

Option 3 is to tighten your belts
Option 4 is to live within your means
Option 5 is to diversify
Option 6 is to take advice
Option 7 is to borrow some equipment or share with a similar company/pool resources

Borrowing and borrowing was not working.

It's easy enough for people to criticise McDonnell and Corbyn, but neither of them really expected to be in this position. They have had a lot of work to do to keep themselves up to speed on this and anything else

Alarming really.

Normal times - a wonderful bit of doublethink. Normal times will no doubt be when the government says it is.

It doesn't alarm me at all, soon. I find it quite refreshing to have politicians who have not been in the Westminster bubble, and who have strong convictions and are prepared to argue for them. Somehow I do not think you would ever vote for them anyway, so it does not matter if you find them alarming. They have always been good constituency MPs.

Makes me think of Alice in Wonderland, Gracesgran.

I can't say I'm alarmed either. These are people who haven't been practising being politicians for years they are people with convictions. I don't expect them to be Blue Peter "here's one I am earlier" people.

Much more worrying the Alice Jen it conjures a very Nineteen Eighty-Four style of politics for me

soontobe If you haven't got ready money to modernise your equipment, I can't see how you could diversify as this would presumably require further investment.

I would imagine any business that was afraid of going under would seek advice.

I would also imagine that any business that was experiencing difficulties would look for ways of cutting unnecessary expenditure.

I'm wondering how keen a company would be to share its equipment with, or loan its equipment to, one of its competitors.

Again, I would think that most companies would try to "live within their means" but if the economic climate changes this can result in higher material and labour costs which are less easily borne by small and medium sized companies.

Luckygirl was in any event referring to a situation in which a company is breaking even and working as efficiently as it can do with the resources it has at its disposal but which needs to update its equipment in order to remain competitive and profitable.

The Labour Party are now like headless chickens. That isnt good for the country. Hence alarming.

Sometimes diversifying doesnt involve a whole heap of new investment. That isnt always the case obviously.

re sharing equipment or whatever - some of the smaller business owners have relatives in the same type of business.

Luckygirl's example doesnt mean by a long way that the company is breaking even.

And the country is definitely not breaking even by a long long long way. I will google to find out when it last did that. From memory, it was somtime in the 80's but I will check.

The UK seems to have last balanced its books 15 years ago.

Does this include all physical assets?

I dont know. Does it matter?

You seem to want to compare the countries economy to a company. Their balance sheet would show the assets. Otherwise you are talking about cash flow and, while that is important, borrowing would not be added to it - only the cost of borrowing. Simplifying does not always give an accurate picture.

So Osbornomics argues that every government should be forced by law to run a surplus in " normal times"
Leaving aside the dodgy law making, I will give it much greater credence once Gideon has actually achieved said surplus himself.
He has to date not come close to clearing the deficit, so how he will ever clear the debt which he has overseen rise to more debt than the total of debt by all Labour governments combined?

The work penalty he has introduced to the poorest is the face of the austerity he argues must be borne by the poorest in order to achieve his dream of surplus.
So he is gambling on this work penalty in the form of tax credit cuts which will inflict hardship on millions of working families.

How can the Tories claim to be the party of working people when this work penalty undermines their claim?

True to all your post Gracesgran.
But that doesnt disagree with anything I have written.

How can the Tories claim to be the party of working people when this work penalty undermines their claim?

It is like looking at the whole of a person instead of just a part.

I dont get why people somehow think that austerity is going to be a bed of roses for most people. Why they would expect that. How can it be?

Noone expects austerity to be a bed of roses soon
It is just that the poorest families in the country who generally work extremely hard at often the grottiest jobs are being hit by this WORK PENALTY which is not being borne by anyone else. It makes no economic sense whatsoever, and is cruel and vindictive. Those who have a good or high level of income would not be able to point to any area of their life that has been hit by austerity.

The big problem with Osbornomics is that he, and others from his department, have said over and over again that they will not borrow to invest in infrastructure. I cannot see any economist, who has written or spoken about the economy, who is agreeing with this. They may disagree on the way the borrowing is done but none seem to think investing in infrastructure should not be done at this point.

I expect a lot of Labour MP's will abstain when it's voted for today.

Since they are literally making up the polisices as they go along, if I were a Labour MP, you may as well vote how you or perhaps your specific constituents want you to vote.