UK Economy Bounces Back

No, Maudi and Germanshepherdsmum, it is impossible for a sovereign currency-producing economy such as the UK has to go "bankrupt". In any case, the current Conservative government is doing worse on most economic indicators than any Labour government ever has.

We know that technically the country can’t go bankrupt growstuff. But Labour would spend very heavily and of course the taxpayer - individual or corporate - must foot the bill. High taxes don’t attract investment from people and companies which produce jobs.

Germanshepherdsmum

We know that technically the country can’t go bankrupt growstuff. But Labour would spend very heavily and of course the taxpayer - individual or corporate - must foot the bill. High taxes don’t attract investment from people and companies which produce jobs.

What is your opinion of investment for growth by a government?

Germanshepherdsmum

We know that technically the country can’t go bankrupt growstuff. But Labour would spend very heavily and of course the taxpayer - individual or corporate - must foot the bill. High taxes don’t attract investment from people and companies which produce jobs.

So why use the word "bankrupt"?

Incidentally, spending always precedes taxation. It doesn't fund it. With low interest rates, there is no reason why government spending ever needs to be "repaid". It's a number on a balance sheet - nothing else.

Sorry, I meant taxation doesn't precede spending.

Yes, economic growth is generally good but from an individual perspective the key issue is the cost of living which is rising fast with inflation, energy prices, transport costs and some extra red tape as a result of Brexit. Remember inflation in the 1970s hit over 14% (perhaps as much as a 22% spike) which impacted badly on fixed income pensioners.

Pensioners are going to be one of the worst hit, particularly after the cessation of the triple lock.

There will be deaths from fuel and food poverty, and most certainly worsening health outcomes.

Investment by a government for economic growth is of course a good thing if it can be afforded without driving away private investment through high taxation wwm.

Germanshepherdsmum

Investment by a government for economic growth is of course a good thing if it can be afforded without driving away private investment through high taxation wwm.

Do you see the two as being linked? I’m not clear how you assume that investment for growth equals higher taxation.

It has never done so in the past.

Well unless you borrow or print the money or you have Corbyn’s magic money tree …

Germanshepherdsmum

Well unless you borrow or print the money or you have Corbyn’s magic money tree …

Oh no! it is the Tory’s magic money tree, Corbyn has never been in power.

They found countless billions to give to their donors and friends, or hadn’t you noticed?

Whitewavemark2

That is a myth put out by the Tories. Once this established propaganda is understood for what it is, the voter will begin to understand the facts.

In fact the economy performs no better under the Tories than Labour, and by some measurements it performs much better.

Unfortunately, understanding government spending by both Labour and Conservatives requires research into boring facts and figures.

Relying on the media - from whatever perspective - is not an education on how the economy functions, but mostly political point scoring.

Liam Byrne's letter "I'm afraid to tell you there's no money left" was meant as a joke between one chief secretary and another but instead has been used as proof-positive that Labour did / will again, ruin the economy.

Doesn't anyone remember a similar note left by Tory Reginald Maudling to his Labour successor (Callaghan in 1964)... "Good luck, old cock ... Sorry to leave it in such a mess."

No, of course not. It would be inconvenient.

It’s surely widely known that these notes are always left as a joke. What wasn’t a joke was the appalling state of the economy which Labour left behind.

Germanshepherdsmum

It’s surely widely known that these notes are always left as a joke. What wasn’t a joke was the appalling state of the economy which Labour left behind.

The Labour government did not leave the economy in an appalling state. The economy was actually recovering from the depression caused by the GFC. Osbourne's economically illiterate 'austerity' policy dropped it straight back into recession from which it took years to recover. Even the IMF said that austerity was wrong.

It can't be very widely known that those notes are a 'joke', either. Byrne's note is widely held to be an admission that the economy was doing badly and Cameron even used it to condemn the Labour government. Surely such a wonderful politician as Cameron would have known that he was perpetrating a lie if it was 'widely known'?

And so many people fell for the lie...

11:04BlueBelle

^^My goodness maudi what a horrendous thing to say rather someone with no qualifications who went to a state school than a lying, conniving, Etonian who will ruin the country for his own importance and greed You ve just written off so many people including the BIG businessmen like Richard Branson , lord sugar etc etc
But what else would we expect^^

Richard Branson and Lord Sugar both who I admire are running their own companies not Britain there is the difference, surely you would want someone with at least some qualifications to be running the country.

Richard Branson and Lord Sugar both who I admire are running their own companies not Britain there is the difference, surely you would want someone with at least some qualifications to be running the country.

Oh, Lordy, Lordy.

Because all our 'educated' tories are making such a good job of it

Grantanow

Yes, economic growth is generally good but from an individual perspective the key issue is the cost of living which is rising fast with inflation, energy prices, transport costs and some extra red tape as a result of Brexit. Remember inflation in the 1970s hit over 14% (perhaps as much as a 22% spike) which impacted badly on fixed income pensioners.

Exactly! Economic growth is irrelevant, unless the wealth it engenders is shared, which it isn't.

Don't forget that, according the ONS itself, the bulk of economic growth in recent months has come from increases in spending on Covid PPE, testing and Covid-related activities, which has benefitted a handful of people.

Germanshepherdsmum

Investment by a government for economic growth is of course a good thing if it can be afforded without driving away private investment through high taxation wwm.

The government doesn't need private investment for economic growth. Government investment becomes a virtuous circle because the money being circulated increases productivity and growth and, crucially, tax income.

It's all very well talking about a growing economy and job creation, but if the jobs created don't pay a decent wage it's no good at all for the average worker.

What qualifications has Johnson got - 2nd rate journalist sacked twice. Just the qualifications needed to run the country.

Deedaa

It's all very well talking about a growing economy and job creation, but if the jobs created don't pay a decent wage it's no good at all for the average worker.

... and if the cost of living consumes the decent wage - and many are still waiting for that 'decent wage' to materialise, or even be on the horizon - then the growing economy means bugger all to the millions of households struggling to make ends meet.

Of course, some worthwhile jobs will be created, but they will probably be for the highly-skilled - and the hospitality industry might have to pay slightly higher wages to attract staff, etc. But your average 'man in the street' is going to be hit hard with the huge rise in energy prices, NI contributions and the ever-increasing cost of food and transport.

I suppose we have to wait for the 'trickle down' effect? Again.

Traditionally, economists, politicians and media have seen growing GDP as positive. Generally speaking, it reflects higher activity and more taxation to finance more spending. Not everyone necessarily immediately benefits but, over time, growth produces better living standards, certainly better than recession.

I suppose governments of any party could continue to print money to spend but this policy is generally associated with inflation. Once inflation becomes entrenched, it is difficult to combat. Inflation and low interest rates benefits borrowers rather than savers, hurting people on fixed incomes or incomes not adjusted for inflation. In my view, we have been fortunate to escape inflation until now. It has been made possible in some degree because we have sourced goods and materials from low wage economies in Asia.

MaisieD said that we fell back into recession after the set back in 2009. Actually, ONS figures show that we didn't. Growth continued until 2020 when the pandemic hit.

www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/ihyp/pn2

Have a look more closely, Cunco. There's a drop after 2010, when the tories came to power. Just about recovered to pre 2008 levels by 2014.

And please don't give me that 'printing money causes inflation' story.

Here are two of the most common 'examples' explained

positivemoney.org/2015/12/hyperinflation-how-the-wrong-lessons-were-learned-from-weimar-and-zimbabwe-a-history-of-pqe-part-2-of-8/

Japan has been running a deficit for years and years. No sign of runaway inflation.

And taxation does not fund spending. It's a myth, myth, myth.