What will the future be?

It has been mentioned in this thread that all should look to the United States in the 1930s and Britain in the immediate aftermath of the Second World War for examples of how to lift a nation out of depression or avoid such an instance happening.

No one is a greater enthusiast than me of the policies and actions of the post war Labour government of Clement Atlee for much of what that government brought about is still with us all today.

However, all developed nations during those times had the discipline of the gold standard regulating their currencies and through that government restrictions on levels of borrowing and spending. The gold standard was abandoned in the 1970s which allowed governments to borrow more easily and even print currency without the requirement of actually have that gold value to back up that printed money in the vaults of the Bank of England.

Throughout the period following the Banking crisis of 2008 Britains governments used a combination of borrowing and printing currency (known as quantitative easing at that time) to at least partly elevate the effects of the crisis. That action however brought about a fall in the value of the pound from which it has never fully recovered.

The Banking crisis in the scope of the effect on the nation will be as nothing in comparison to the Coronavirus crisis and its impact on this country. Printing currency will doubtless be a key component of government economic policy, but any government carrying out such a strategy must retain investor and user confidence in that currency. in that, such a widespread loss of such confidence can lead to very high inflation and an entire collapse of any nations economy.

Therefore I believe government growth spending will be the correct policy to lead Britain out of the Coronavirus economic impact. However, it will be a fine balancing act between further borrowing and quantitative easing if confidence in the British currency is to be maintained.

grandad the U.K. left the gold standard in 1931.

The USA effectively abandoned it under a Roosevelt in 1933. He understood that adherence to the gold standard exacerbated the Great Depression.
And it was completely abandoned by the USA in 1971.

Whitewave, the gold standard was not completely abandoned until 1973 by international agreement. The term "Flat money" was then used as a replacement for a government supported currency.

Link to the above can be found here:-
www.investopedia.com/ask/answers/09/gold-standard.asp

Q/E Used post 2008 banking crash was used to prop up the banks and rather than providing fiscal stimulus it was simply squirrelled away by the banks. This was never the intention but it nevertheless happened.

This crises is however very different. The economy needs a fiscal stimulus and this can be provided by the government directing its spending in areas that provides economic growth.

grandad .

Sterling was no longer pegged to gold from 1931. This allowed the government post 1945 and indeed the war time government to run up debt without recourse to the level of gold held in its vaults.

1Whitewavemark2, government borrowing and debt was very much supported during world war two by the United States program of lend lease to Britain.

That was the only way that Britain survived physically and economically during that world War.

Whitewavemark2, in regard to your post @15:22 today, I would agree that fiscal stimulus will be required to prevent or lift Britain out of recession following the Coronavirus crisis. However, even in these times, governments are required to maintain a level of financial discipline or risk international and domestic loss of confidence in its currency.

There is also the international aspect in regard to the financial implications of this unprecedented crisis. That aspect will without a doubt push the worldwide economy into recession or even depression. Britain will not be able to prevent that impacting on its domestic economy no matter how much stimulus is forthcoming from the government.

To prevent the worldwide recession or depression will require international action, but with the United States and China at "loggerheads" and the European Union very much looking internally for action among its member states, there may be little that Britain can carry out as a single nation to affect the above prospective international situation

Some posters believe that the Bank of England can print money with no limits, that’s not true. It can increase money supply to ensure liquidity, making sure banks can lend to businesses and indeed residential customers. So it makes loans to finance companies to keep the system working, if it did not do that asset values would fall - negative equity. These loans have to be paid back at some stage, we saw in 2009\10 more lending to support banks followed by several years of no increase at all - austerity.

I hope we see economic stimulus to get businesses on their feet again, however don’t expect a consumer boom we are going to have to work hard to get a recovery going.

Some posters believe that the Bank of England can print money with no limits, that’s not true

Well, David , it absolutely is true. The only real limit on money creation is that you have to have a use for the created money. Just pouring squillions into the economy for no purpose would be utterly ridiculous and cause galloping inflation.

The bit that you and Grandad don't seem to be understanding is that the money created by QE ( or even directly by cutting out the bond purchasing) is money owed to the government by itself. A situation which is difficult to understand but which in effect means that there is nothing to repay to anyone.

'Austerity' had nothing at all to do with repaying anything. It was a political decision by the tories because it made it easier to cut state funding to public services and achieve the tory objective of 'shrinking the state'. So they shrank the economy in doing it. They didn't 'repay' anything; what they did do was to massively increase this debt that everyone is so worried about. See the chart. It records the 'debt' from 2000 to the present. Tories came in in 2010.

Boris has promised no return to austerity measures after all this. Good. That’s a start.

Get Brexit done by the end of the year too. A game of chicken is being played at the moment but at the 11th hour pragmatism will prevail. The EU knows Boris has an 80 seat majority so that will help to focus minds. They’re not dealing with Theresa May who had to ‘sell’ any deal through a Remainer HoC. Big difference Mr. Barnier (who’s looking a bit rattled these days - the clock is ticking - but not to his liking).

The Labour Party are beginning to formulate a post virus economic plan.

It is intended to be a contemporary equivalent of what happened after 1945.

It will be an ambitious proposal based on an environmental revolution which focuses on the young who will find themselves unemployed in the months and years ahead. It is intended that they will be re-trained in the green industries.

Ed Miliband has unveiled this ambitious vision. He is working with Dodds to begin to think about the future.

Labour have started consulting business, workers, trade unions etc to see how best to develop the green recovery.

The proposals will then be put to Johnson’s government.

Should it be that Kier Starmer is planning a complete reorganisation of the British economy as outstanding and fundamental as that which was brought about by the Clement Atlee led government of 1945 I am sure he would have all in the Labour movement very much on board with that.

Indeed it is being stated that Kier Starmer has in his House of Commons performance very much in common with Atlee by way of his calm in-depth questioning of those holding various offices in parliament.

However, as I have stated very often in recent weeks, I feel there is much to be overcome in the Labour Party and wider movement before all can move on in terms of structures, financing and fresh policy formation.

However, such statements as Kier Starmer has made in the above could form the basis of a new beginning for very many in the Labour movement.

To: Matt Hancock, Secretary of State for Health and Simon Stevens, CEO NHS England
STOP the new plans to dismantle our NHS.

Why is this important?

This is the biggest attack on the NHS you've never heard of.

For the last few years the news has been full of winter and summer crisis in the NHS, with A&E's closing their doors and ambulances unable to discharge their patients.(1) In late 2015 the Chief Executive of NHS England, Simon Stevens, created a plan to solve this by CLOSING more A&Es. He thinks if you close hospitals people will stop using them. (2)

Called Sustainability and Transformation Plans he has split England into 44 areas - called 'footprints'. Each 'footprint' was told in late December in 2015 that they must have a plan by 30th June 2016 to completely change the way the NHS works. To work they had to be able to prove they could clear their massive debts within a year.

To do that they have to close services and sell land and hospitals.

Has a hospital closed near you? Is it under threat? Simon Stevens says that to make the NHS affordable we, the public, must get used to no longer having a major hospital within easy reach. This was planned in 2013, but shelved until after the 2015 election as being 'politically sensitive'. It looks like the STP has taken that off the shelf and that is very bad news. In 2013 there were 140 full A&E hospitals in England. We could be be left with between 40-70 A&Es. Closing A&Es is very bad for your health. (3)

There was a link to TTIP.
Jeremy Hunt hired Simon Stevens to take over NHS England in 2014. Before that he was President of global operations for United Health of America where he was a lobbyist for the Transatlantic Trade and Investment Partnership. He didn't oppose it. He fought to open up public health services like our NHS to US private health corporations. We know TTIP and the NHS are top campaigns for 38 degrees members. (4)

Now he's in charge of our NHS! He is driving through a change which will eradicate our NHS and replace it with a US style health service. These new organisations could even be run by US corporations, holding the budgets and deciding what care will be provide and who can get it. This is what the Sustainability and Transformation Plans are doing to our NHS. See blogs.bmj.com/bmj/2016/08/05 and Updates, below.

TOGETHER WE CAN MAKE THIS A MILLION SIGNATURES FOR THE NHS!

We think this is the last big battle to save our NHS. If you want it to be there for your children and grandchildren in their time of need then fight now. (6)

BECAUSE WHEN IT’S GONE, IT’S GONE

you.38degrees.org.uk/petitions/stop-the-plans-to-dismantle-our-nhs

The UK government has just sold £3.8 billion of three year gilts at minus 0.003% interest.

Despite earning no interest on their money (in fact, they'll end up owing money), investors still have confidence in the UK government. Some, of course, will be "shorting" against even worse future interest rates and a collapse in other sources of income.

It looks like we're going to end up like Japan, which hasn't collapsed, but it throws current thinking on its head. Interesting times!

Japan has been fine for a few years with a deficit running at over 200% of GDP!

I suppose the current unknown is the fact that many countries will have struggling economies as a result of C19 and global trade looks set to falter. So we have to take a fresh approach, not expect to carry on the the old ways. Lots of suggestions of job guarantees and Green investment. in infrastructure.

As far as the UK is concerned, BREXIT is an additional issue. I'm extremely concerned by the the toadying up to Trump because there won't be any choice.

Some people are going to lose out massively. Their businesses might never recover. However, there will be others who profit from it all - in fact, some of them already are. One way or the other, markets won't keep us afloat and we're going to have to rely on state intervention.

I wonder whether the government will keep all its expensive election promises to the "left behind" areas which gave it its massive majority.

The matter which has failed to be discussed on this forum is the extent that unemployment will be a major factor in the British economic position as the lockdown is lifted.

In the last week or so we have witnessed Rolls Royce announce nine thousand redundancies, British Airways announce twelve thousand with retail bringing forward smaller numbers almost on a daily basis. The effects on the suppliers to the above companies can often double the announced number redundancies, and in the case on Rolls Royce and British Airways the Jobs lost are highly skilled well-paid employment.

Some conservative estimates now place the number of unemployed in Britain by the end of the year at between five to six million, with even the chancellor of the exchequer now stating that the United Kindom will face a recession the nature of which is unknown in living memory.

The problem for the national economy is that when unemployment reaches such numbers it then takes on a nature of "feeding on itself" as those unemployed have no spending power in the economy.

The above means that once again that the government will have to undertake huge spending in an effort to offset the above, and whether credibility can be maintained in the British currency in that situation is debatable.

It also has to be remembered that the above will be part of a global economic crisis with very many developed countries facing the same situation.

The government seems to think they can all pick fruit Grandad.

PS. I agree.