flatpack-
And as I've explained over and over, borrowing is not what got in to this mess. It was not public spending which caused the financial crisis. It was the casino gambling of bankers.
Who's talking about the financial crisis? I'm talking about the moribund economy.
The 'moribund economy' is the result of the financial crisis.
No matter how much you try to propagate this fantasy narrative, it will not change the facts that prior to the financial crisis, public spending was not unprecedented and historically low. The deficit increased from 3% to over 11% after the financial crisis and subsequent recession.
No it wasn't. Firstly, it was low compared to 1944, when we were engaged in a global war. At no other point in history has our spending been as high.
These statements are factually incorrect:
First of all, public spending has been higher for decades in the past. The period between 1960-1985 shows higher public spending as a percentage of GDP than 2008, when it was at 40%.
www.ukpublicspending.co.uk/downchart_ukgs.php?chart=F0-total&year=1900_2011&units=p&state=UK
Secondly, there is absolutely nothing wrong with public spending per se, or even an increasing share of spending as percentage of GDP, so long as money isn't wasted and we can afford the spend it.
Thirdly, the public net debt is at a historical low-point, despite the financial crisis and subsequent hundred billion pound bailouts. Prior to the crisis, it remained at a level which was very roughly the same since about 1990:
www.ukpublicspending.co.uk/downchart_ukgs.php?chart=G0-total&year=1900_2011&units=p&state=UK
Secondly, there was heaps of spending off-balance sheet, such as PFI, which is still money we owe but doesn't appear on the books.
Perhaps. Care to hazard how much this is - and back it up with figures and facts, seeing as you've already got so much so wrong?
Finally, there was also structural deficit, being paid for by borrowing.
The real risk from government debt is the burden of interest payments. Experts say that when interest payments reach about 12% of GDP then a government will likely default on its debt. Chart 5 shows that the UK is a long way from that risk. The peak period for government interest payments, including central government and local authorities, was in the 1920s and 1930s right after World War I.
Interest payments are at a historical low point now. There is no danger of the UK interest paryments getting out of hand:
www.ukpublicspending.co.uk/downchart_ukgs.php?chart=90-total&year=1900_2011&units=p&state=UK
The recession caused a loss of tax receipts and increase in welfare spending due to larger unemployment.
Which is manageable within the constraints of a normal, healthy economy not burdened by immense debts, which our economy isn't and hasn't been for decades.
Based on what information? All the wrong assertions you've made so far? We aren't burdened by immense debts.
You will also find that 'this mess' is a global crisis, hitting almost every developed Western country, whether they ran their budgets in surplus or with a larger deficit than the UK.
And those nations who haven't overspent are in a better position to recover. The lower your debts, the easier it is to get going again and the higher your growth rate.
Better position to recover how? By spending money, you mean? Like a Keynesian stimulus, you mean?
Relentless overspending has caused the low growth rates.
Utterly nonsense.
So you can stop spreading this nonsense that spending too much on schools and hospitals is what caused a global financial meltdown and the worst recession since the 1920s, because it's absurd and not credible in the least bit.
Keynesianism doesn't work. It doesn't work because politicians like the bit about spending, but when they're told to stop spending they can't. It's a failed creed, like socialism, and it's long past the time both of them were consigned to the scrapheap where they belong.
Keynesianism certainly does. The fact that you hate government spending and government per se doesn't change that fact. WWII is an excellent example of the fact that it works very well.
Counter-Keynesianism, where you cut spending during a recession, is counter-productive, as we seen in the UK, where we've experienced the longest double-dip recession on record.