Do we really need to make so many cuts?

[JoyceBarnaby]

I'm not happy about the cuts for manyreasons but I know if I start a conversation about this with my Tory BIL, he'll just say they're all necessary because Labour fucked us up and left us with so much debt, we have no choice.

Is this true?

I don't want to discuss individual cuts, I just want to know whether people think making so many drastic cuts is really necessary to save our economy from certain doom.

Its interesting to look at the level of debt repayments as a percentage of government spending over time (which is a pretty good measure of how much of a problem the debt really is).

Since 1948 it has been higher than the current level in every year apart from the early years of the 2000s.

Similarly, debt repayments as a % of GDP are higher now than they were in the early 2000s, but lower than for most of the post war period (apart from roughly between 1989-1992).

So it is just not true to say that national debt levels are historically high, nor that they are unserviceable.

Yes, the UK has run a deficit over the past few years, but it was not historically high nor unsustainable. The deficit only became substantial when tax take fell at the same time that there was a huge amount of government spending on propping up the banks.

byrel, yes they should have taxed more but were scared of the "Daily Mail" types, the 50% band should have come in, in 1997 but they pledged to stick to Tory spending plans and did (Dave and Clegg take note about keeping your election pledges).

If the banks had not almost destroyed the GLOBAL economy then the debt would not have been a problem.

What would you prefer a lower debt or a better less selfish society?

Just remember after the next election Labour will again have to repair all the Tory damage to the least well off in society.

I don't think you can pin all the blame on the banks, we were running a structural deficit before the financial crisis and although the recession has increased Labour were already setting us up for this fall.

As for your question I don't think that society is any less selfish now then it was in 1997 to be honest and yet we now have an economy that is a mountain of debt.

thesecondcoming- Utilities prices have gone up and continue to do so because the cost of raw materials has increased not because of privatisation.

Utility companies return profits of course otherwise they would go out of business

No I don't believe that they should be re-nationalised. Monopolies are very bad as there is no competition to drive efficiency and innovation which will lead to higher prices. Nationalisation creates the purest monopoly of all.

I've only had a chance to skim the rest of this thread tonight and I will come back to it tomorrow so I can consider it in more detail. Especially before I talk to BIL!! Thanks again to all.

Takver - that website is very interesting indeed. Thank you!

@ThisIsANiceCage... I haven't studied the economics of the Reagan administration. I was just pointing out a kind of simplified 'venn diagram' of decision-making that is going on at the moment. We're governed by an administration that think running a large deficit is a problem requiring urgent action. The Opposition don't think the problem is urgent and will look at it all again in 2014/15. Reagan's team presumably were of the same opinion as today's Labour party if they did the same thing. Where/how public money is spent is always a matter of philosophy and ideology.... regardless of whether the economy is strong or weak.

Actually.. I read that wrong. If you're saying Reagan adopted a coalition-style approach to spending and the result was higher deficits... yes... turned out to have been the wrong strategy, didn't it? I would have to assume that government advisers are aware of the economic conditions that led to that result, are taking lessons from history and that conditions/forecasts are sufficiently different today. What I would point out is that Reagan's tax cuts are not being copied... spending is going down but my tax-bill, at least, is going up!

Idiotic to just blame the banks. EVERYONE lived beyond their means. Think its a right to have latest gadgets, holidays etc. Its not. Need to sort out need rather than wants. "I need a boob job on NHS as I can't get through life with a bcup". Get a job , save some money and pay for it yourself

Link to some graphs of the UK National debt in the 20th century.

The debt was, as Takver pointed out, huge. This was because the Second World War was immensely costly and there was a deliberate decision about the need to share it forwards across a generation.

That debt was cleared by the 1970s, and National Debt continued at more or less the same level until 2000.

Then it rocketed.

The banking crisis didn't destroy the global economy. The global banking crisis exposed that a lot of the money slashing around the economy had never existed in the first place.

Chil, your first reading was right - I was wondering why in 2011 a big deficit is seen as a problem requiring urgent action, when in the 1980s it was just, "Oh and by the way, I'll be doubling the deficit, none of you Chicago boys mind do you?"

So it really is just ideology.

But what is wrong with ideology?... Surely the definition of politics is governing according to a particular ideology or set of principles? Isn't the ideology of a party what we vote for?

Yes indeed, but if something is being done because of ideology, then we have choice - we can choose to follow this ideology, or choose not to.

Cameron repeatedly says, "we have no choice". That's not true. What he means is, "I am claiming there is no choice if you want to follow my ideology."

And that's the OP asked: is there a choice? The answer is Yes.

'[The economist Milton Friedman ] observed that, "only a crisis ? actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is out basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable." Some people stockpile canned goods and water in preparation for major disasters; Friedmanites stockpile free-market ideas. When a crisis has struck, the University of Chicago professor was convinced that it was crucial to act swiftly, to impose rapid and irreversible change before the crisis-racked society slipped back into the "tyranny of the status quo." He estimated that "a new administration has some six to nine months in which to achieve major changes; if it does not seize the opportunity to act decisively during that period, it will not have another such opportunity." '
Naomi Klein, The Shock Doctrine, London: Penguin 2007, p6

That's what we're seeing here: a government for which the banking-induced crisis is a good thing - a wonderful opportunity to impose specific ideas they know damn well the populace would never vote for, like reducing aid to disabled people and the assault on the NHS.

Returning briefly to utilities, there is an alternative model to either profit making companies, or nationalisation.

Dŵr Cymru/Welsh Water is a mutually owned company, with no shareholders, which exists to provide water for the benefit of the Welsh people. (Company info here )

Obviously, its not possible to draw definite conclusions from one company, but they seem to provide a good service at a reasonable price, and any profits are returned to customers as a dividend.

Sorry, that should be Dwr Cymru - I guess MN doesn't like the welsh w with a hat.

(Or perhaps it is an English right wing conspiracy against the solidarity of good Welsh mutual aid?)

Ideological in the main.

Some cuts could be amde absolutely; waste is waste.

Some will destroy lives (won;t go into it here but see this thread

There are also strange priorities being revealed: absent fathers still largfely getting away with it whilst the disabled are cut.

Some cuts and over a longer scale- OK. This scandalous slashing? no

Newave. 'After the next election' Labour certainly will not be in power, if the electorate votes them in, after all the debt they have left us with, they must be mad! The last labour adminstration was the worst thing to happen to this country for a long, long time! (and not just for the debt either!)

It's drivel to say the country's current economic problems were entirely caused by the previous Govt.

Just about every Western economy has the same problems, some to a greater extent than us, some less.

What do all these countries have in common? Is it:

1. they all have banks and bankers

2. they were all run by Gordon Brown.

Finance capitalism ate itself, and now we must all pay. The stuff about Labour overspending is an ideologically motivated smokescreen to make you look in the wrong direction.