Miliband fails to learn Labour spending lesson

[Niceguy2]

Telegraph article

BBC Article

I linked the BBC article as apparently "David Cameron has himself acknowledged the difference between Labour and the coalition over the scale of cuts is only £2bn this year."

So in other words for all their talk on how nasty the Tories are, in fact if Labour were in power, the only difference would be £2billion of spending. That's peanuts really in the context of a £160billion annual deficit.

You prove my point

I think assuming that just because someone is anti the current cuts means that they think Labour had it spot on is rather simplistic. Also for many it's not about the amount which is cut but where it is cut from.

Robyn

"I think assuming that just because someone is anti the current cuts means that they think Labour had it spot on is rather simplistic"

Exactly, spot on.

I wonder whether our concerns over cuts when times are bad might in the longer term discourage governments from spending when times are good?

If a government expects to be in power over a 12 year period, say, isn't there a fair chance that during those 12 years, at some point there will be more money available to put into valuable projects, and at some point there will be less money available for those projects. Does the opprobrium caused when projects are not funded outweigh the applause when projects are funded in good times?

That has always been conventional wisdom. Ie. you save a bit of cash during the boom years to spend during the inevitable recession.

The only problem was Gordon Brown honestly thought he'd abolished boom & bust. Anyone with any ounce of knowledge of free market economics knows that its simply not possible. All you can do is cushion the rises & falls. You can't abolish them.

And by spending the money during the good times, we had no money in which to cushion the fall with!

b KingofHighVis-

"Of course financial crisis was a global problem, but this just served to highlight those economies that were living on credit. Many economies have not been hugely effected and are now continuing to show healthy growth. At the end of the day, the last government failed to manage the economy properly."

The financial situation we find ourselves in is neither the fault of the Tories nor New Labour - except insofar as New Labour deregulated the financial sector.

It is the banking crisis which has caused our deficit and debt to skyrocket. During the New Labour govt. and before the banking crisis, the UK deficit as percentage of GDP was at 3% - this is about average for the EU. After the banking crisis, it shot up to over 11%.

The financial crisis also caused a recession, leading to a loss of tax receipts, and putting thousands of people out of work and on welfare.

However much some people dislike New Labour 'profligacy' in public spending, it is not, and never was, the cause the budget situation.

You're right that economies which relied on credit were more vulnerable. In order to keep the economy going, consumers had to be given credit to keep consuming and not riot since their standard of living would have otherwise dropped dramatically. The fact is that wages in real terms have remained pretty much flat since the early 1980s. At the same time, the cost of living has shot up dramatically, as has wealth inequality.

The economies which suffered the most were also those which had the most deregulated financial sector: i.e. The US and UK. UK faired even worse because of it is so highly dependent on finance to bring in tax receipts, whereas the US still actually manufactures stuff.

ttosca

Spot on although the Tories on here wont agree, they would rather hang on to their comfort blanket which is "it's all Labours fault".

ah newwave, you really are a typically rabid Labourite.

Not everyone who has sussed what New Labour is about is a Tory! Silly girl. Rue the day you lost Robin Cook, John Smith, Mo Mowlam - with them went the valour of Labour as was. Brown should have stuck to his old fashioned ways, by playing up to Glorious Leader Blair he went down the New Labour route and that was that.

The view that Labour cuts would have impacted the rich and avoided disadvantaging the poor is preposterous. Seriously, what could you "cut" and really impact the rich? Rich people don't rely as much on state expenditure as poor people (fairly obviously). Therefore it was never going to impact them was it? Sometimes, the media's ability to state the frighteningly obvious makes my brain bleed.

I do find it faintly amusing that Ed Balls is back in town, banging on about the evil bankers when he was the biggest brown nose before the financial crisis. In fact, he was quite a regular at the industry dinners, telling the assembled financiers what a wonderful asset they were to the country.

Actually many of the Coalition cuts will have some impact on the more affluent. Most higher education students are middle-class and it's the middle classes who tend to use libraries. Plus cutting child benefit to the more affluent and keeping the tax increase for the most wealthy.

It's difficult to see what else they could have done given the wealthy aren't big consumers of public services (they just pay for them).

TSC :o :o

So very very true.