This is rather the point

Second, it is to effect the social, industrial and economic policy of the government. Fiscal policy is utterly different from monetary policy. It expects a government that intervenes to achieve its goals.

Yes, and when we see what Snippa, Owen Jones and John McDonnell want to do to society we understand why we’re against fiscal policy.

18 thoughts on “This is rather the point”

  1. I am against the abuse of fiscal policy to enforce the ideology or “socialist” megalomaniacs (or to line the pockets of their supporters e.g. the “film finance” boondoggle). OTOH William Pitt’s fiscal policy helped restore prosperity to England prior to the outbreak of the Napoleonic wars.

  2. But the question is what will Sir Keir Smarmer want?

    P.S. Did anyone else see him on the telly, poncin’ abaht in a levvah jacket, bein’ well ‘ard?

    It was so funny that my wife called me through to witness it.

  3. The FSA estimates we are going to get National Debt up to 95% of GDP so thats another splurge of future taxation on top of the £200 bn or so debt was allowed to expand to mitigate the recessionary affects of the Brexit referendum .
    They are dropping the Green book so as to allow inefficient use of public money and Boris Johnson is congratulating us at having escaped form the EUs rules on State subsidy for industries .
    Basically a few people wanted to leave the EU so as to escape from the soft;left economic model it required ( whilst promising not to ), far more , voted Brexit for communitarian reasons which would necessitate propping up domestic production (ie protectionism ) and transferring money for the bits of the economy that work to the bits that do not.
    John Redwood was actually recommending we write off QE debts …ie print money ..we seem to be slithering into precisely the sort of Butskellite muddle that brought the country to its knees in the 70s

  4. @ Newmania
    Rubbish! Rubbish!
    What brought the country to its knees in the 1970s was the abandonment of the Butskellite consensus by Harold Will Soon and the left-wing of the Labour Party. Not to mention that the 1974-9 disaster occurred *after* we joined the EEC

  5. Yes IFS excuse me the FSA is often in my mind for one reason or another, it was to this that I was referring so right again not 95 %
    https://www.bbc.co.uk/news/business-49961301

    This is still higher than Debt has been since the mid sixties which was about the time our neighbouring developed economies surged past us. During the Blair period debt was never above 35% of GDP although the economic cycles was clearly misjudged

    This is Jeremy Warner on the effect of the Brexit referendum

    ” George Osborne’s plans for restoring the health of the public finances have once again been reduced to rubble. This might seem like no more than a little collateral damage amid the wider explosion, but it should be remembered that these plans were the whole raison d’être of the post financial crisis coalition government. The vows made back then were renewed and further reinforced little more than a year ago in the immediate aftermath of the last election.

    Under the Chancellor’s “fiscal mandate”, the budget was supposed to be returned to surplus by 2019/20, ….

    https://www.telegraph.co.uk/news/2016/06/30/brexit-has-demolished-george-osbornes-deficit-plan-the-next-pm-w/

    So essentially I am right fiscal Prudence has abandoned due to Brexit and the Blue Kippers have been quite clera that they intend to meddle and muddle without money for their political ends which means pushing the Brexit bill into the future

  6. Newmania, if money is all that matters, and certainly it seems to be as far as you’re concerned, presumably I can blame you for your love of a soft-left economic model which, if memory serves, ten years ago meant that my daughter was born owing £80,000.

    Why is cost a problem only when you don’t get your way?

  7. @Newmania

    You’re wrong about pretty much everything. Your inability to do numbers really does underline how silly it is for remainers to be rude about leavers intellects.

    In reality the UK budget deficit has not fallen as far as originally projected primarily because of excess spending and the actual receipts have been higher than were originally forecast by the OBR.

    https://obr.uk/docs/dlm_uploads/Forecast_evaluation_report_December_2019-1.pdf

    This extra spending has little to do with Brexit – and note that receipts have been higher than expected.

    On the OBR’s numbers we’re pretty much where we would have been if the referendum had not been in favour of leave – and substantially better than the original post-referendum OBR forecast. The reason why the debt level is high is that the UK government spent heavily to cushion the effect of the global financial crisis and had expanded the state too much in the noughties. This has nothing to do with Brexit.

    You seem to be trying to tie the period of UK relative decline in the postwar period to the level of debt, which is a highly problematic statement. There’s not a great deal of evidence that middling levels of debt to GDP are bad for economic growth.

  8. Spud opines about the loan charge.

    “taxpayers who were largely unable to appraise the quality of the advice they were being given were paid via arrangements that were very obviously tax avoidance, which did not work.”

    Interesting.

    If the the EBT loan arrangements didn’t work, why was a major change in the law made in 2010? If the arrangements that replaced them after 2010 didn’t work, why was the loan charge legislation brought in in 2016?

  9. Nonsense, Pcar. It’d be hilarious. They’re all hilarious except, perhaps, that Lewis blighter. I say that only because I know nothing of him.

    My big regret is we can’t have SIR Starmer as leader, with Lammy, Abbott and Fivebellies as deputies. Throw in Philips as, what? The Charles Hawtrey, and we’ve got a full house of splendid Carry On stereotypes.

  10. Loath as I always am to be a dissenting voice, the idea of Sir Keir as Great Leader fills me with gloom. Allowing the ridiculous quiff and a face like a suet pudding, the man has no other redeeming features and to have him droning on at the despatch box is something we can well do without.

    Unlike Mrs Dearieme, bless her for the kind soul she is, I feel that his dressing up as Paul Mason is just not enough to raise a smile.

    Let’s instead hear it for Richard Burgon, the thinking man’s whoopy cushion or David Lammy with the creased nose. I am alone in thinking that this distinguishing feature makes him look as though he might once have stood up too quickly in a space with limited headroom.

  11. Ken in your world in may be necessary to explain that our high debts began in 2008/9 but not mine.
    You are confusing yourself .Actually the OBR do note the drag on growth caused by Brexit( which is hardly required ) but that is not the point After the referendum with every sign pointing to recession the apron strings were loosened fiscally by the formal abandonment of George Osborne`s consolidation plans this was in conjunction with the B of E ceasing to have normalising interest rates as an objective effectively cancelling as long trailed 2% rise . This is explicit Policy not tea leaf reading you moron
    This created a consumer boom whilst investment continued to fall which , naturally created better than expected tax receipts
    The reason for this was purely political . the Conservative Party saw that its own survival depended on delivering Brexit and calculated that bad economic news had to be delayed util it was too late
    By now we should have been approaching Maastricht compliant levels in the 60s instead we are heading up towards about 90% . That is a prodigious historic level of voluntary debt and it was due to Brexit which has cost our children incalculable sums already
    I do not especially tie the UK`s debt levels to its poor growth compared to its neighbours outside the EU ( and better growth inside the EU) ,by the way .Clearly under some circumstances not having any money is not going to help but the state ownership of large swathes of industry a highly unionised and immobile labour force and isolation form the Continent were all to blame.

  12. @Newmania

    Once again, you’re wrong on all counts.

    https://obr.uk/docs/dlm_uploads/Forecast_evaluation_report_December_2019-1.pdf

    Look at Chart 1.2 – this shows the range of outcomes for the budget deficit based on pre and post referendum forecasts. The adjusted outturn shows that we are exactly where we expected to be pre-referendum. The difference between the pre- and post referendum forecasts is about £20 billion, which is around 1% of GDP.

    If we then take a look at what drove spending up – table 3.4, we find that the largest contributor is increased gross investment at £11.1 billion, net social benefits at £4.6 billion and current spending on goods and services at £4.2 billion. The last one is mainly increased departmental pay (NHS iirc). The rise in net social benefits was driven by higher than expected disability payments and around half the rise in gross investment was local governments, using their own borrowing to invest in commercial real estate page 41 note 3.44. If the apron strings were loosened, we might call the increase in central government gross investment and departmental spending this – which comes to a whopping £11 billion, which is about 0.5% of GDP. Since government spending on the NHS constantly outran their forecasts during the coalition, it also seems likely that this is an overestimate of the loosening of the apron strings.

    On your monetary policy “analysis” – the cut in interest rates drove a massive consumer boom. But in fact the OBR thinks that consumption was lower than expected prior to the referendum by 2.1%.

    “By now we should have been approaching Maastricht compliant levels in the 60s “.

    You are utterly deluded if you think the UK economy was going to get back to 60% debt to GDP. The OBR numbers show that we are pretty much exactly where they forecast that the UK would be prior to the referendum. If you meant that you expected that the direction we would be going in was to be reducing the deficit, you should say so rather than making absurd claims. in reality UK debt to GDP is going to be under fairly consistent pressure upwards because of the aging of the population and the consequent pressures on social security and health services. This is not unique to the UK. (Would it be preferable for us to lower the deficit? Yes, but Brexit has little to do with it – it doesn’t make it easier, but the impact is marginal at best.)

    Yes, the UK economy is smaller than it would have been without Brexit. But the effect on debt to GDP is tiny.

    And you were the one ranting about debt to GDP levels being currently high, I simply explained why.

  13. Some of what you say is interesting I don`t actually have the outsources to judge if its wilfully misleading n or not . It is certainly true that Carney had been promising interest rates were going to go back to normal for years and in effect cancelled the whole thing because, “as he said,” every sign pointed to recession. That has to have vast effect on the expectations of income for the average household ( Certainly did on mine )
    You say there was not a consumer boom and yet …..
    The Economist Feb 2017
    ” FOR the past seven months the British economy has defied the predictions of analysts, most of whom expected a recession to follow the Brexit referendum in June. GDP grew by 2% in 2016, faster than in any other G7 country—and the economy did better in the second half than in the first. The unexpectedly strong performance is largely thanks to the efforts of households, which have been spending liberally. ….. ”

    I daresay we are going to get an unremitting diet of Its nothing to do with Brexit as of now but it is going to wear very thin very soon

  14. Newmania

    I christen thee captain new potato. You’re ill informed and yet rant about how brexiteers are stupid. I’m showing you just how ill informed you are, just like most fanatical remainers. I favoured remain, but I understand why some preferred leave and find the rantings of those who think remain was the only possible logical choice odd. And the post referendum “despite Brexit” stuff made me laugh.

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