Once again on Labour’s ‘out of control’ spending

(35 Posts)
ttosca Wed 24-Apr-13 16:03:53

Some things are worth repeating because they are that important and some things should be repeated because they were not heard, or listened to, the first time.

Brown DarlingSome things fall under both categories.

It is testament to a failure in communication on the left that in the years immediately after the financial crisis the consensus was allowed to form that under Labour spending got out of control. The hangover from this communication failure persists in the public’s continued reluctance to trust Labour on the economy.

It is seemingly forgotten now, but the Tories promised to match Labour’s spending plans right up until 2008; in the aftermath of the 2010 election, however, a drawn-out Labour leadership contest allowed David Cameron to define the post-crisis landscape as the hangover of a spendthrift Labour Party.

The country was in a mess and the only ones who could clear that mess up were the Conservatives, who would reign in the excesses of the Blair and Brown years and bring some temperance to proceedings.

It is worth repeating, then, something pointed out by Martin Wolf in today’s Financial Times (£): in the years leading up to the 2007/08 financial crisis – the supposedly out of control, spendthrift years – UK net public debt was close to its lowest ratio to GDP in the past 300 years.

As the graph below shows, government debt as a percentage of GDP was well below average under Labour and rose, predictably, as a response to the collapse in GDP – as it would. And why does this matter? Because the relevance of the amount of money spent by government is related to how big a proportion of GDP it is, not how much is spent in total.

While debt is now higher than it has been for a considerable period of time, the blatant dishonesty in the claim that spending was out of control under Labour has more to do with finding a rationale for stripping back the state than it does with dealing with any perceived ‘debt crisis’.

www.leftfootforward.org/2013/04/once-again-on-labours-out-of-control-spending/

ttosca Mon 29-Apr-13 16:08:40

> Your figures don't match your claim:

LOL! You take pick and choose the four years which support your claim, even though the coalition wasn't in government for two of these years?!

Your claim was that the govt. wasn't cutting spending. The Coalition came in to power in 2010:

2010-10 692.4 46.8

2011-12693.645.4

2012-13674.343.1

2013-14719.944.4

This is a fall in spending.

Secondly, many of the cuts are falling disproportionately on the poorest and most vulnerable members of society, when it is corporations and the very rich who should be paying for the crisis, since it was they who caused it.

ttosca Mon 29-Apr-13 16:12:00

Yeah, sure, niceguy. Everyone is wrong but you.

The countries which are doing relatively well through investment simply haven't had the 'lightbulb' moment yet. Unlike our History major Tory chancellor, who has given the UK near 0 growth in 3 years, a double-downgrade of credit rating, poor performance relatively to europe, and repeated warnings from the IMF, no less, that austerity is killing growth.

Clearly, your advice is more sensible.

flatpackhamster Mon 29-Apr-13 17:37:17

ttosca

LOL! You take pick and choose the four years which support your claim, even though the coalition wasn't in government for two of these years?!

I picked the real figures which really exist and which really aren't estimates. You're looking at projected figures and claiming they've happened.

Your claim was that the govt. wasn't cutting spending. The Coalition came in to power in 2010:

2010-10 692.4 46.8

2011-12693.645.4

2012-13674.343.1

2013-14719.944.4

This is a fall in spending.

Serious question, what year is it? Is it 2015, where we can look back at the 2013/14 budget? No.

Because what you're quoting as 'falls in spending' are the budgets for years that haven't happened yet. So yes, you could claim that the government intends to cut spending. But you didn't, you said that there were 'cuts in spending' which the government has brought in.

Your own figures disprove your claim. The last five figures are even highlighted and it says very clearly that they are 'forecasts'.

ttosca Mon 29-Apr-13 18:55:54

flatpack-

The Coalition came in to power in 2010

2010 Spending as % GDP was %47.7

It is now 2012:

2012 Spending as % of GDP was %45.4

the 2013 figure is even lower:

2013 Project spending as % of GDP is %43.1

---

Which figure is higher? 47.7% or 45.4% ?

flatpackhamster Mon 29-Apr-13 19:17:58

Oh, so we're still playing the game of '% of GDP%', as if that metric is remotely relevant to actual spending.

Fair enough, have fun, I'm not interested in your silliness.

ttosca Mon 29-Apr-13 19:48:55

Good. Go away and learn something about economics. % of GDP is the only reasonable figure to use, which is why it is widely used with reference to statistics relating to an entire economy.

That's why things like growth and spending are always measured in terms of % GDP. Otherwise you can compare spending for micronesia and the United States and come out with some whacky conclusions.

flatpackhamster Mon 29-Apr-13 20:51:12

When you're comparing actual spending on a per-year basis, rather than using GDP as a comparator across nations with divergent populations, your method is a stupid one to use. Go and learn something about statistics.

ElBurroSinNombre Mon 29-Apr-13 21:23:23

% of GDP is not very relevent here.

What matters is the rate at which you can borrow money and whether that is sustainable in the long term. To keep the borrowing rate low you have to have a realistic plan to pay the money back.

Ttosca actually thought that government borrowing rates were set by a ratings agency (and not by trade in real auctions with real money - until this very salient fact was pointed out to her). He/She also has said that we could reduce the defecit by reneging on our PFI liabilities. And yet he / she comes on here and tells others to study Economics 101 - you have to admire his/her chutzpah! I would love it if you turned out to be a Tory troll, ttosca, - that would be quite brilliant!

ttosca Mon 29-Apr-13 21:46:35

> When you're comparing actual spending on a per-year basis, rather than using GDP as a comparator across nations with divergent populations, your method is a stupid one to use. Go and learn something about statistics.

No, it's also used across years for the same country and populations. It's why it's nonsensical to compare the absolute value of spending in the UK in, say, 1970, with the UK 2010. The economy was much smaller 40 years prior.

ttosca Mon 29-Apr-13 21:52:59

ElBurro-

Actually, reneging on debt is certainly one strategy to deal with the crisis.

www.guardian.co.uk/business/economics-blog/2012/aug/21/iceland-debt-relief-lessons-eurozone

As for PFI, ultimately, it is the state which makes the rules. It wouldn't be the first time that the government has retroactively changed legislation; it recently refused to pay people claiming JSA when they won a court battle that they were mislead over workfare schemes. It put through 'emergency legislation' to make what they did legal.

The ultimate question is whether Capital is subordinate to society, or vice-versa. If PFI has the potential to bankrupt the country (I don't think it does - although we are certainly being ripped off by PFI initiatives), then the possibility of annulling PFI contracts should be on the table.

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