Not goady, I ACTUALLY just want to understand!!

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Right the big anti Labour argument I'm hearing is that Conservatives are better for the economy but national debt/borrowing has hugely increased under Tories while services are cut to bugger all.

I work in a service where I can see how much has been lost and yet the deficit is bigger??

I'm the first to admit I am not an economist so this isn't goady, I've asked on a few threads and no one will answer :(

Fukwitery, confused is exactly right but every time people asked it's assumed it's goady and in my case I just wanted some insight

One view is the problem is short termism (whatever political party). A large part of our infrastructure we owe to the victorians who believed in investing in the future and leaving a legacy.

With economics you definitely have to bear in mind the saying: put two economists in a room, you'll get three different opinions.

However, three links which are relatively moderate. The first two are from soft-left-social-democrats - from a tax researcher about government borrowing and debt repayment and from an economist about government spending.

The final one is a bit more heavy-going but from an economist who I would say is harder to pin down in terms of his politics (but who gets very cross about the macro dimension being ignored) - about growth

FWIW I remember going back to the 2015 election the FT did a survey of a selection of economists of varying political shades. The majority of them were definitely critical of austerity from an economic viewpoint.

Omg a sensible thread on this topic at last! I also think we have to take into acccount things we know that are uncertain. For example we don't know what type of deal we will get when we leave, its so hard to predict what will happen with our economy so the prudent thing to do (as you would do with your own money) is save for raining day and pay off your debt. This is what you will get with the Conservatives, clearing the deficit so the debt can be lowered as we go into uncertain times. We will be able to weather the imapct better.

Labour want to borrow more to spend and invest but with the uncertainity of the brexit deal is that really wise to do so? Look at the chart another poster showed....you had Alastair D taking a budget in surplus and going on a spending spree and then recession hit and now we have austerity because we need to balance the books. Had we stayed in a surplus we would of go through it much better and would have faced the type of cuts we have had to.

Anyway thats my view on it.

The other saying is "if all the economists in the country were laid end-to-end, they still wouldn't reach a conclusion".

I tried to study economics once. Had to give it up. As far as I could tell it was a complete non-science. You make it up as you go along.

The deficit is the gap between the income and the expenditure of the government each year. In household terms it would be how far into the overdraft they go.

The debt is the overall total debt, which will be a combination of past years' deficits, plus interest costs, minus payments made towards the debts.

The reason it's so important for the Government to avoid recession and keep its good financial ratings is in part because if we get downgraded it becomes more expensive to borrow money and it causes us more financial difficulty.

Some feel that if the Government can reduce spending (austerity) then the deficit reduces and the overall debt can reduce. Others feel that you need to spend money to make money.

It's really great that most posters aren't giving their own opinion or political view and instead are just answering the factual question.

Thank,you for this post. It's the most sensible election one I've read, and I think,I vaguely understand the economic difference between the two parties for the first time ever.

Now got to,work out which philosophy I prefer.

The other view is we would be unwise not to invest given Brexit. We need to be looking to replace in our economy what we will lose in high end jobs that generate high end tax revenue. We should certainly invest in education and Im not sure the country could take more cuts.
Our current economic policy gives tax benefits to high earners.
Labour are considering some increase to corporation tax and there are concerns this will put off investment, however globally corporation tax will still be on the low side.
One view is that the future conservative view of the economy is Singaporean. (tax haven). But it must be remembered that Singapore as a nation was founded in a kind of socialist semi dictatorship. It has high immigration and 90% live in state provided housing. It's like comparing apples and pears.

Bump

Theworldisfullofidiots Its quite hard isn't it having this view and the other. I keep flip flopping between where to vote.

This is the best election thread I've read - thank you to those more knowledgable than I for stating facts and not descending into a 'whose opinion is right' argument.

The likely outcome of Brexit is recession (banks are preparing for It now - my dsis us a v senior director). It just depends which party you think will most likely see us to the other end successfully.
The same thinking or different thinking?

I agree with whoever posted upthread about parties choosing an economic theory to follow.

This is over-simplifying things, but historically what tends to happen in this country is that you have a period of Conservative governance of low -tax,low-spend where business tends to do well but public services do not. Then the public gets fed up and elects a Labour government, who redirect the economy towards greater spending on public services to build them up. Then after a few more years, the public decides the government has been spending too much and re-elects the Conservatives to "steady the ship".

I'm sure the British public will only put up with "austerity" for so long before the pendulum swings back the other way, but I would have thought that will be more likely at the next election than this one. What is interesting at the moment is that the two main parties have both moved to the more extreme ends of their political and economic spectrums, whereas more usually they're hovering either side of the centre.

I also would like to thank all these posters for being informative and nonpartisan. Extremely helpful in understanding a complex issue. I really really hope no assehole spoils it!

Spectre8 I've decided but refraining from saying (but you've probably guessed) on this thread. I'm a floating voter so have switched my vote a few times
I am pro protecting our economy and I listened carefully to the leadership debate and that answered my question.

Theworldisfullofidiots I myself have been personally planning for that scenario, cutting back my spending and saving more incase I lose my job or things get expensive and this is where my dilemma is on where to vote. The only thing I can go back to is that we spent so much before a recession hit us but this is a bit different because of the brexit angle.

Sometimes I think well we reduced deficit by 2/3 now so actually lets spend and borrow more but argh I just don't know

GraceGrape love your post its how I describe it to other people too when they don't know.

Theworldisfullofidiots thanks for being open. I agree with bits from both manifestos. I think which ever way I vote it will be done with a heavy heart.

I really appreciate the replies, we've had plenty of blaming either party and nastiness but not a lot where people can safely ask questions about policies and stances.

A question to see if anyone has a better idea - how high can our debt get before we are seriously screwed. I know some will say it is right now but just thinking say we do go borrow more, what are the consequences to and even bigger deficit and debt.

GraceGrape - in that as well, I remember reading an interview with someone who'd worked closely with John Major in his campaigns, in it he made the observation that when the economy is doing well and booming, there's more money going around and people feel they can afford to be more generous to the poor and public services, essentially people can afford to be kind, so vote Labour, but then when the economy is doing badly, people feel they can't afford too much public spending and debt, so vote Conservative to be 'trusted' to sort out the economy.

His view that the Conservatives had a tricky paradox, they were elected to sort the economy out and make people feel well off, and at that point they get booted out for being too tight! That the best situation for the Conservatives was to be seen to be handling the economy well, but not so well that voters don't think they need them anymore.

"Strong and Stable" and "austerity" fit in well with this mindset.

Balancing act, look like you are improving the situation, but not so well improved that the economy drops off the "things voters worry about" top 5 list.

This is a great thread and probably the best I have seen on here re the election.

If you can cope with a fairly heavy programme, the (independent) Institute of Fiscal Studies did a programme about a week ago on BBC Parliament where they picked through the conservative and labour manifestos in terms of economics.

It was very interesting (but quite hard work and I'm an accountant!) to see the costings on both sides be independently reviewed and criticised.

I admit I haven't yet watched it all but the themes are as generally accepted, conservatives want austerity and to save money, labour wants to borrow money and invest.

Whilst conservatives were criticised for not putting great detail in some of the policies, it was clear though that many of the costings given by labour of where they will raise extra money were not reliable and the IFS predicted less than half of the extra money to actually be raised than the amount calculated by labour.

It's not as simple as pure debt but credit rating. Do the lenders think you are good for it? Look at Greece. Some people think the EU harmed Greece's economy, another, probably more realistic view was it was already shot.

IFS predicted less than half of the extra money to actually be raised than the amount calculated by labour.

Sorry must add to my last sentence that this is in terms of extra income tax on higher earners.