Right I get it, the nation is in debt and we need to claw the money back but really

I agree, we can not increase public spending mainly because to do so will result in borrowing from the world banks who are the root cause of the problem I agree, it will take years to build up high tech manufacturing. We are good on design and management but weak on the ground in terms of manufacturing capability. This is driven in part also by the world banks, we need massive capital/private investment into the means of production, this won't happen because we don't own or control investment either as a government or as a people, the means of production.

When investors seek to increase profit and have no national loyalty (the shareholders) they will seek out areas of high skill and low wages. ie china and India. What no one is prepared to tackle is the fact that capital chases over the globe, shows no loyalty and no social conscience.

We allow the world banks to print money, not based on the gold held but through a system which allows them to conjure up mickey mouse money, print it and then charge interest. It is this interest that makes uber wealthy investors very rich and governments afraid. Tax is rising and governments are finding ways of raising taxes that are less transparent, not to pay for their social responsibilities but to meet interest payment.

Governments are not in control of the situation and they need to fess up. We need fundamental change, why do governments not try to reform the banking system? Why are we indebted, not by how much........ but why?

Excellent film here, history of money and the World banks & explains George's inability to manage our economy.

I completely agree that we relied (and continue to rely) too much on the finance sector. Unfortunately right now it is a necessary evil which the powers that be didn't forsee.

But to change the basis of our economy will take years. It's not a quick fix. I've said before we need to invest heavily in high tech manufacturing and those companies will take years, even decades to grow into powerhouses. So from that point of view we must take a long term view. And in my opinion, raising taxes now puts off investment.

If we HAD a brilliant manufacturing sector which counter balanced our financial sector and we were doing fantastic in the world economies then yes....we could get away with raising corporation tax. But if we were doing that well, we wouldn't need to would we? Our coffers would be overrunning.

Funnily enough I am from Hong Kong where the government have been the model of frugal public spending for decades. They have one of the lowest tax regimes in the world, no VAT and a incredibly basic welfare system by our standards. Do you know what problem they had recently? They had too much money. Yes that's right, too much. So their solution? Every citizen gets £500 back.

My point is that much can be done with a low tax regime too. We just need a sensible government whom spends only what we can afford and not make us think they can perform miracles like increase public spending without raising taxes.

Sorry I was terse earlier

We are the third largest economy behind Germany and France. Germany & France have something in common, they both have strong unions. We have relied too heavily on the finance sector.
(historically the first nation to have a national bank, one ex) our debt is to this institution and it controls the issue of money which it charges interest on. We are indebted to the very same people we bailed out, so why did we bail them out?

The German economy is strong on manufacturing and they have local agreements/laws with factories that penalise them if they off-shore or move their manufacturing else where, even within Germany. This would take years to institute similar here, plus we don't have a strong manufacturing sector but we did once.

We need to examine ways in which we can create loyalty and just as with Germany it doesn't have to be done through low corporate taxation or low wages. In 2012 the effective corporate tax rate, including trade tax and solidarity tax is about 30%-33% in Germany.

If we insist upon attracting businesses to stay here, come here or set up just through the supply of low waged labour and low taxes we might compete with china on their terms but bear in mind, this low waged labour will not have buying power and we can't export to regions who similarly have lower living standards.

Susan George states that America no longer manufactures and exports, mainly because the Fed, IMF and world banks prevent nations from paying down debt, prospering and increasing living standards. This leaves the USA and indeed us, with few options for increasing exports.

And how does the UK government....any UK government compel private businesses to pay higher wages? Raise the minimum wage again? What to? The mythical "living wage"?

Someone will now say "Ah well....Germany manages it". Well yes....they have a fantastically strong manufacturing industry, backed by a first class education system and a government which believes in prudence.

We have no strong manufacturing industry, our education is pretty damn shoddy and a budget deficit which makes a grown man weep. And somehow you expect the government to wave some sort of magic wand and make wages higher? Really?

If you have the answer I suggest you tell No 10 right away and I'm sure they'd get rid of gideon in a heartbeat for a costed, alternative proposal which doesnt cause pain to those most needy or cripple the economy.

"Just to be clear: Osborne expects that households will increase their borrowing to spend money, just so the economy can limp on at a slow rate"

Osborne believed that capital investment from the private sector would increase 10% 2012. In 2011 it feel by 2%. Businesses are not investing and employing at the rate we need to stimulate the economy and there is no uptake in consumer demand. So Osborne is now relying on people to spend.

How can we stop borrowing when we are being relied upon to spend to drive growth in the economy. (if employers don't employ or don't agree to pay higher wages)

There are two simple steps that could cut government borrowing and stimulate demand in the private sector.

Capital investment into jobs, the private sector must employ and produce, even where there seems to be little demand, it will stimulate demand.

Government must focus attention on it's social responsibility by cutting tax credits and other in work benefits which subsidise business and they must compel the private sector to pay decent wages.

At the moment we are socialising risk and privatising profit. The state is not too large in relation to private business, it is too expensive in relation to the social benefits that business provide. Cost of maintaining the state is too high because business pay too little in tax, people pay too little in tax (low wages) and because of lower living standards and high unemployment the deficit will increase, the economy will stall and the wealthy are not investing in areas that grow the economy, rather they invest only in assets that have no direct impact in the real economy.

Fine, whatever Mini. Given I quoted from your previous post, that would be a small suggestion that I read your posts, even if I disagree. But by all means, you don't need to engage me at all. Lefties rarely engage with those with an opposing point of view because their position only works in theory and never in practice.

Julia, I've looked at the PCS link. The first graph showing the debt as a percentage of GDP has no dates or sources on it at all. A quick google and I find these two:

2008 and 2010

Both seem vastly different to the one quoted in the PCS article and both have dates and the sources the author used. Both show the UK is way behind France & Germany.

Public spending is an investment To a point that is certainly correct. But there does come a point where putting more money into public services becomes inefficient. And our current public sector is too large compared to our private sector.

The deficit is due to the recession Nope. We've always had a deficit, well practically always. The recession just magnified it. A more true statement would be "The deficit was increased due to the recession" And when we borrow money, we have to pay it back. Economic flatearthers will deny this but anyone with an ounce of common sense will understand that. The only question is when.

Julia, I'm off to look at the coalition for resistance. I like Tony Ben

www.pcs.org.uk/en/campaigns/campaign-resources/there-is-an-alternative-the-case-against-cuts-in-public-spending.cfm

Read this for another view

coalitionofresistance anticutsprotests

Sorry... thought you were asking a question.... didn't realise it was rhetorical.

I won't engage with what you have to say until you go back up thread and read everything Ttosca and I have had to say.

....started to hold the money men to account for the horror they are inflicting upon us.

You know the best way to do that? Spend less than we earn. If we don't have a need to borrow money, we don't have to be beholden to the lender.

Otherwise it's like saying me saying I've taken out loads of loans from my bank but because I don't like the conditions he's putting on my new loans, I'll get tough on him.

If I didn't need to borrow money, I could do what I like and probably find HE came to beg ME instead.

We're in this situation because for whatever reason (insert your own reasons here), we're spending more than we earn. And whilst we do that, we will always have to dance to the tune of the person with the money.

The IMF purports to operate like an international credit union, you pay in and then you can borrow. Countries that have borrowed are being laid to waste, look at the pigs. Greece is on austerity measures which are not only preventing growth & therefore repayment but will most probably result in complete collapse and an over throw of their government.

Not all of the resources available to the IMF are raised through quotas, a percentage is provided by the same uber rich bankers who fund/control the US federal bank and these people have also held seats on the board of the bank of england.

Former chief economist of the IMF Joe Stiglitz was fired & he took a large stack of secret documents out of the World Bank.

These secret documents from the World Bank and the International Monetary Fund reveal that the IMF required nations:

1. To sign secret agreements containing 111 destructive items.

1. To agree to sell off their key assets ? water, electric, gas, etc

1. To agree to take economic steps which are devastating to the nations involved.

If they do not agree to these steps they are cut-off from all international Import/Export. If you can?t borrow money in the international marketplace, no one can survive, whether you are people, corporations or countries.

After the war we nationalised and the debt as a percentage of GDP fell from over 240% to just 45%. When Maggies came to town she privatised (neo-lib economic policy) dictated by the fed and the IMF and our deficit climbed.

If the deficit continues to climb our AAA rating will be removed (by the same bankers) and we will be plunged into even greater austerity.

Whilst I can see Osborne et al have their hands tied and they have my sympathy on this! however it is time the rest of us, got tough, got clued up and started to hold the money men to account for the horror they are inflicting upon us.

My question is this, people are being made poor through globalisation and the free market economy, if the bankers lend the money, set the terms, lend us money to bail them out (strange circs) and then impose measures on countries that will not permit economic growth, remove AAA status, what is their over arching plan? Who is making money out of the economic disaster inflicted upon us? Someone clearly is.

Where the IMF gets its money It's a quota system funded proportionally by the members themselves. Outside of the IMF there are also investors that take on government-issued bonds i.e. financial organisations and other governments that are looking for a return.

"Give me the control of the credit of a nation, and I care not who makes the laws." The famous boastful statement of Nathaniel Meyer Rothschild, speaking to a group of international bankers, 1912: "The few who could understand the system (cheque, money, credits) will either be so interested in its profits, or so dependent on its favours, that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests."

The IMF dictates the terms of repayment, it dictates government policy over taxation and freedom of corporate interests, it also dictates the privatisation of all state held assets and the sale of gold!!

Who stumps up the money and takes the risk of lending through the IMF?

MrsCustard. The govt raises about £134 billion in income tax, £95 billion in NI. Corporation tax is only £33billion.

Our deficit is around £150 billion.

What on earth are you talking about? Do you mean the deficit is £150 billion annually? Or are you yet again confusing debt with deficit?

Where did you get the above figure from?

Oh dear here we go again.....

I would keep quiet if I were you, you have no reason to be haughty in light of your repeated ignorant comments about the debt and deficit.

Basically we need businesses in order to create jobs. Taxing them higher means less money to create jobs, encourages more companies to offshore and you only need a few big companies to move abroad to leave a massive hole in the nation's finances and thousands jobless.

This idea that we need to keep taxing businesses at lower and lower rates is wrong-headed and, in fact, dangerous.

Firstly, many governments in europe have much higher business tax rates than the UK; the UK corporate tax rate is already very low. Germany and France both have much higher corporate tax rates. France's economy is doing better than ours, while Germany is the 'powerhouse of europe'. So it is indeed possible not just to survive, but to thrive with higher corporate tax rates.

Secondly, trickle-down economics has failed utterly. The idea that we should keep stealing from the poor to give to the rich in order that the rich will create jobs and spend, trickling back wealth to the poor has shown the be a pile of garbage. We've have decades of trickle-down economics, and wealth inequality has skyrocketed.

What the govt should be doing is lowering taxes for businesses and making life easier so more come to our shores. But politically it's hard to do in the UK when so many are economic illiterates.

The UK corporate tax rate is already very low. You are a fine example of an economic illiterate.

Do they need to keep hitting us as individuals and families? Why on earth are they not hitting businesses and corporations and taxing them properly? They won't ALL go abroad if taxes rise will they? Surely there's always some business to be done in the UK even if they did?

Firstly, simply because the Tory party are a party of the rich, for the rich. The Tories receive 50% of funding from the City of London. The cabinet is made up for Oxbridge millionaires.

Secondly, they'll keep hitting working families because it fits well with Tory small-state ideology. They are trying to continue the work of Thatcher. The ultimate goal is to shrink the size of the state down to absolutely minimum, regardless of the impact this will have on the welfare of the populace.

Since the 1980s, Western governments have been implementing neo-liberal policies of the promotion of a small state, privitisation, deregulation, and lower corporate taxation.

In fact, the total share of the tax burden has shifted massively in the past few decades away from corporations on to individuals. That's why people feel so shafted and overtaxed. Private taxes have had to compensate for the decrease in tax revenue from corporations - some of which pay little tax at all.

I don't as a general rule object to being taxed because there is a need for it but I am getting increasingly angry with Labour for their reckless spending and increasingly angry with the Con-Dems for their ruthless unfair clawing back of funds.

The deficit crisis we are experiencing, along with almost all of europe, was not the result of Labour's 'feckless spending'. The deficit was at 3% before the financial crisis. What has caused the deficit to shoot up to 11% is the financial crisis and bailout of the banks funded by taxpayer money.

niceguy2 , no need to sound so bored. We know austerity is tedious but did you know how duplicitous this rallying call of the elite is?

Some facts about corporations and Tax, profit and inequality

The 400 richest Americans got richer as a result of the banking crisis as
47 million people were plunged into poverty (thats 1 in 6 people)
G.E paid no taxes last year on $5.1 bn profit
2011 CEO Goldmans was paid $ 12.6 million
In the US 1 in 3 families is either in or near poverty
3.8 million children in the UK living in poverty 1.6 million in severe poverty
Many of these children live in homes where the parents work

So my question, do you really believe that allowing Zombie capitalism to prevail, markets to dictate, the rich to preside over government policy and escape all social risk in pursuit of profit, how will that feed our children? Has it ever fed our children? NO and it merely gets worse.

Socialism is often mistakenly assumed to be a race to the bottom but liberal economic policy and the tax avoidance of corporations and those that profit is socialising risk, environmental harm, welfare and health in pursuit of profit. The logical conclusion of competition is a race to the last man standing. Corporations pay low taxes, they avoid taxes, they make tax payers subsidise low wages, health and education through taxation in order to increase their profits.

I'm sorry your bored nice guy but those who persist in clap trapping the government and corporate line, will be bored.

Why not give yourself a break a watch a film

The real problem in my mind is we've grown accustomed to living a lifestyle we cannot afford. The government has given the illusion for far too long that it can do anything and everything. It can't. We need to accept that there are limits to what the govt can do and if we do want world class welfare, health & education systems then we need to have a world class economy to pay for it.

And given we don't, guess what - we can't have the welfare, health and education systems we believe we deserve.

MrsCustard. The govt raises about £134 billion in income tax, £95 billion in NI. Corporation tax is only £33billion.

Our deficit is around £150 billion.

The problem is that there are not actually that many corporations around to tax. Very few make billions of profit. Most companies are small to medium enterprises which make very little.

Tax those too heavily and businesses fold, work relocates and soon people are out of jobs. You then get a triple whammy effect of having no corporation tax, no income tax/NI and having to pay out more in benefits.

That's why even countries like Ireland who are effectively bankrupt (unlike us who are just near bankruptcy) have clung onto their beloved low corporation tax rate.

The real problem in my mind is we've grown accustomed to living a lifestyle we cannot afford. The government has given the illusion for far too long that it can do anything and everything. It can't. We need to accept that there are limits to what the govt can do and if we do want world class welfare, health & education systems then we need to have a world class economy to pay for it.

And right now we don't. Economically speaking we're having our asses handed to us by the Asian's.

If you go back to 1997, a certain new Chancellor of the Exchequer said (and I precis) that there was no need to change anything at present. Because he had inherited a VERY healthy economy.
Unfortunately socialists are very good at spending other people's money whilst lining their own pockets.

I think some of the clawback measures have been badly implemented and are unfair, but on the whole I agree with niceguy2.

Everyone has a 'good' idea about how someone else should pay for our debt!