Simple Economics ?

[JemimaMuddleFuck]

I have cut back on everything.
I am going to cut back futher.

I will not be buying anything because I do not know what the future holds.

It's the Thatcher recession all over again. Tories. Cuts will hurt eveyone that works for a living; but not them.

Normally I would buy from John Lewis; Boden; Vertbuadet; La Redoute, Next.

I have spent not a penny; because the household budget is too tight.

It's a typical Tory recession. Look after your own is the Mantra. Those that have money will make more money.

Interest rates will rise. Production and unemployment will increase; but be carefully hidden in statistics.

Because I am not spending; like thousands of others; jobs will be lost..

Verbaudet, Boden, John Lewis. No sales.

No sales mean more unemployed. It fits the Tory profile because we will all be working for a pittance

Diabolo what I mean is not so much to do with individual cuts in income, but the way a lot of the cuts have impacted community programmes which then have a knock on effect on indiviuals.

For example, my husband worked on a very poor estate. There were a number of community centres that attempted to help the people around with a variety of different things- parenting classes, teaching computer skills, literacy, numeracy, creating CV's, interview skills etc. They also provided after school childcare to help parents be more flexible in working hours and therefore more attractive to employers. It worked well. In June last year, the pitance of funding they did receive stopped.

Please understand, the people who ran these centres did not earn mega bucks, to be honest most were part time and earned the minimum wage.

You might have to cut down on Ocado as well (shock horror)

Yep OP

Thanks Labour!

NOT

"MrTumble, you say those being hardest hit are those who can least afford it?
Who do you mean exactly, I genuinely would like an example."

Well, I'm not MrTumble, but - just for example - my friend just lost her job because funding for the local women's refuge has been cut. I reckon the women there are probably pretty high on anyone's list of those in need.

Ha ha ha at the OP -- I'm so sorry you are having to go without Boden and John Lewis ... that must be so incredibly difficult.

Takver It's horrible when someone loses their job. I was in a women's refuge during the last Tory government. We "wanted" for nothing necessary. Staff were "mostly" volunteers who'd come out the other side of abuse - they certainly weren't in it for the money/perks. We were treated to clothes/cosmetics/toiletries by donations and the Rotary Club took us all on a day trip to the seaside. Perhaps that's 'big society' - I doubt women in refuges will be left destitute.

what gets me is this: I work 16hours. I have 3 kids. My dh works long hours.
I thought I might work a couple of shifts at the local hotel to help with our household finances. It's not worth me doing it after I have calculated the loss of tax credits. Now what is that about? Tell me how, working more hours at minimum wage, see less of my dh and kids in order to help my family I and get penalised for it.

The whole system is crackers.

Some posters haven't read the OP properly. Jemima isn't complaining because she can't afford to shop at her usual stores, she's making the point that because she isn't shopping there, those stores will suffer. Therefore the people who work for these retailers (often on minimum wage) could be at risk of losing their jobs. If they think they might be about to lose their job they are not going to be buying any non-essentials for the foreseeable future. So retail sales decline further, more shops go under.

It's already happening. Retail sales are the lowest since records began 16 years ago apparently.

It is a shame we haven't all got it but it is generally a good thing when there are people who have money to spend, and a bad thing when nobody is spending anything.

You are quite right OP, and it is extremely simple economics. But still too much for george osborne to comprehend. I expect he has never heard the idea of not being able to afford something, and expects VAT income will rise forever, like the magic private sector jobs he expects to come flying in like pigs do.

There is a lesson to be learned here: Tories are idiots.

They will sell this country off to the highest bidder. Vested interests will take our taxes while destroying our public services.

I cut back on my heating bill because the greedy private sector companies were taking too much, while making record profits.

This winter we have had NO HEATING. Hats and warm jackets all round. We have saved hundreds of pounds, which will go towards covering whatever essential gets cut next. Unfortunately we cant do the same for our stratospheric water bill (half of which goes directly to pay private profits).

All parties proposed the most drastic cuts for a generation. It is not really a Coalition thing.

However much you might want to spend spend spend and go for growth until the planet is annialated and people consumerise themselves into moral oblivion if the money isn't there it isn't there.

HHLimbo - "half of which goes directly to pay private profits" Oh you mean the profits that will help fund more private sector jobs and the same profits that boost our pensions funds?

Onky - no I mean a private company in Malaysia. They pay dividends into private pockets, not employees wages.

Their profits for this part of the country are equivalent to several hundred pounds per customer, per year.

I'm surprised noone has yet.

Xenia - the way the cuts are targetted will have the greatest impact on the most people. Measures such as eg raising tax by increasing VAT will damage the country and the economy the most. As well as increasing inflation, it lowers demand and hits the most vulnerable most, in the most unfair way. Like I said, idiots.

The majority of economists agree the coalition are taking the wrong direction. This includes nobel prize winners, even previous tory party economists, economists from other countries such as america.

It is supported by historical events and we can even see the effects right here and nowover the last year. Before these draconian and unecessary cuts, the economy was growing. Now we can see it has been significantly weakened.

And you can look at our friends in Portugal to see what happens to countries who don't want to make big cuts to live within our means.

HHLimbo - actually when you raise VAT and people decide not to spend their money at Boden they can do positive things, like reduce their mortgage debt.

I have really seen the effects. I'm a photographer ( not a rip-off one)
Last year I did 10 weddings plus lots of family children portraits. The year before I did 18 weddings and average spend on a portrait was higher.

Now this year I have 2 weddings and people are not spending on luxury items like portraits I think I will be lucky to break even this year accounting for my insurance and advertising costs, running the car etc

I'm also due to loose our child benefit as my dh is just on the threshold.
I am having to thighten my belt massively this year

If interest rates do go up it will be terrible for some families

They will have to eventually Very worrying.

On the subject of Portugal, here is a nice explanatory quote from the FT:

"Investor worries were exacerbated after it was reported that Portugal?s economy contracted in the last quarter of 2010 for the first time in a year as austerity measures curbed consumer spending."

Does this ring any bells? Because it should.

But you miss the point. It is not consumer spending or the lack thereof which has caused Portugal's problems. It's the fact their government has been vastly overspending (ringing any bells?) and given they are unwilling to take the steps needed to tackle this problem (and take the inevitable results of), investors are MORE worried than they otherwise would.

There is NO choice from cuts. Those who think the cuts are ideological or just simply Tories looking after number 1 are neatly forgetting that both Labour & Lib dems also said they would make cuts.

The only difference is where those cuts would be made and over what period. Every cut is opposed by someone. That's just human nature. We all like "free money". The main difference I can see is the Tories said cuts over 5 years and Labour over 6-7 years. Hardly a massive difference is it?

There is NO way out of the current economic mess without austerity. Anyone who thinks otherwise is an idiot.

Agree with Niceguy2.

I think what's probably upsetting most people is that a majority of job cuts are going to come from the Public Sector.

Sadly from what I have read / seen / experienced, local councils (usually Labour ones) are deliberately targetting jobs like police officers, woman's refuge workers and nurses for redundancy (knowing it will lead to a huge public outcry), instead of getting rid of the "Five Portions of Fruit A Day Co-ordinators and "Smoking Cessation Counsellors" who earn £30K a year for preaching at people and IMO are totally unnessary.

Flame me if you will, it's just my opinion.

HHLimbo - It's perfectly common in our globalized world for something like Wessex Water to be owned by the YTL corporation (who own Malaysia's national grid). British Gas are owned by a company called Centrica who own companies all over the world. Try not to be too much of a Little Englander.

"Normally I would buy from John Lewis; Boden; Vertbuadet; La Redoute, Next".

Well those are expensive shops - you should have been shopping at primark and tesco previously and saving your money for the harder times. You overspent instead of saving just like the previous government.

After all the economic crises I've witnessed, it saddens me so much that people are still prepared to swallow all that yah boo party dogma. This is the thing that more than anything allows our Politicians to be so hopeless; the fact that they know whatever party they are in they can blame it on the others. It's all a farce and the real culprits are laughing into their champagne.

As for the daft "we've maxed the credit card" stuff - you can borrow loads and spend loads (Labour and Tories have both done it - yes really), but when you do, you're beholden to the organisations that leant you the money - and when they change theirs minds, you're in trouble. It's laughable to say "the money isn't there" because it never was any more than fiction in the various databases of banks and governments.