To think some posters need a "reality check" re. views on benefit changes

[lesley33]

I have some concerns about some of the proposed changes to benefits and how these may adversely affect people. So this is NOT a thread about that. But I am getting increasingly fed up at some of the frankly ridiculous reasons some posters are giving against the proposed changes. Examples include:

1. That children 12 and over will be traumatised if both parents work - even if second parent only works 20 hours a week.

1. That a parent with children 12 and over shouldn't have to commute up to 90 minutes each way to work. Far from ideal I know and if someone is on low wages this might not be affordable. But perfectly doable.

1. That childcare is impossible to get for teenagers. Ignoring the fact that many parents, myself included use a combination of kids home alone and afterschool activities.

AIBU to think some people need a reality check? Plenty of people with children already work, many with both parents working full time by the time their kids are teenagers. Plenty of people have long commutes, struggle with childcare, etc. Things might not be "ideal", but these are things that many many working parents already do.

Mm. Not sure the current credit ratings agencies are much longer for this world, to be honest, wordfactory. That's a shoe waiting to drop.

The Enron scandal brought down Arthur Anderson, one of the largest five auditing and accountancy partnerships in the world, because their audits became instantly worthless.

The only thing keeping Standard & Poor, Moodys and Fitch standing is that they all gave duff ratings to CDOs and there effectively is no one else.

As soon as an alternative, more trusted structure emerges, clients will desert in droves.

But Nilgiri until such point here we are...

It's a bit like saying Simon Cowell knows nowt about music. Well no, of course he doesn't, but if you go on X Factor he'll be one of the ones judging you. So.

lesley I agree about so many amateur economists. So many people quoting anyhting and everything that supports their stance on cuts whichever way they lean.

On eof my FIL favourite sayings is 'as everyone with a business knows...' yet he has never ever been in business. Nor been interested in business. He has never run a budget. He has worked in the public sector all his life. Yet he fancies himeslf as quite the expert.

So it's ok to talk about economics and political spin when using it to support arguments for the cuts, but not ok when arguing against it?

Ok then.

And I'm sure Christine Lagarde and José Viñals would be delighted to hear themselves lumped in the same bracket as 'amateur economists'.

sunshine - I haven't used economics and political spin to argue for the cuts. Others have - but they haven't posted what I just did.

MN posts generally show more ideological support for benefit cuts than economic reasoning.

So if we accept that we all know bugger all about economics, why are we bothering to have this debate and why do some people feel that one person's 'amateur' opinion carries more weight than another's?

And I am not saying they are amateur economists. As I have raed economists don't agree on what the best thing to do is - there is as in all fields of expertise, differences of opinion. But I don't and I don't think most people on this forum have, the knowledge and understanding to realistically judge which economists have we think got it right.

I can't speak for other posters. But my posts have been about some of the reasons I think that are ridiculous, that some posters give for not working.

No, it's like saying you know Simon Cowell is seriously ill, so by the time you actually get on the X Factor it's unlikely he'll be judging you.

You don't know for sure, but you'd be wise to hedge your bets and plan your best performance, not your most Simon-friendly performance.

[disclaimer: don't watch X Factor so don't know how far one can push this analogy]

Anyway, it's not a big point. Well it is, but not for this thread.

Agreed lesley, and you have been more willing to engage with this discussion than many on both sides.

But when information is brought in, countered and then someone says "oh well what do they know" as a rebuttal, it suggests to me a loss of the argument or at least an inability to debate the point.

i liked sunshines link - i interpretted it is bit differently:

the top part is the eurozone & other doom then

Carlo Cottarelli called for a more ?gradual decline in the deficit? in the US and other countries & warned "both too little and too much adjustment will be bad for growth."

"The main risk is that too many countries will cut their budgets too deeply, too soon, sapping demand from the global economy."

is is not saying increase your debts. he is saying reduce them at the right speed.

Nilgiri the credit ratings agencies underestimated risk and reflected general complacency. The UK getting its risk level raised in a time when markets are very risk aware is at the polar opposite.

lose of AAA credit rating would increase costs of borrowing.

It's about the credibility of the agencies, not one or other specific mistake.

I agree that loss of AAA credit rating would increase the costs of borrowing right now.

But it's also possible to choose to defy the agencies and suck up the short term cost, in order to emerge stronger or less harmed in the long term. Various countries have told the IMF to fuck off over the years in similar vein.

I'm not at all saying that's necessarily the right decision for the UK, now (not expert, as discussed above). But it's also not true that the agencies word is an absolut diktat. It's a factor to be included, that's all.

When you make deep cuts and stop spending on projects like Alouisee's LA's housing, the economy grinds to a halt (this was the thinking behind FDR's New Deal, that government funded projects would stimulate the private sector). There is no economy without the circulation of money. A large scale housing project means money for suppliers of raw materials, tradesmen and contractors, and the money earned by those people gets spent on goods and services provided by other people and businesses -- it's like a pebble in a pond, with the ripples expanding outwards.

you are saying borrow more money at a higher rate than we are paying now? with the eurozone completely out of our control & looking decidedly dodgy?

if spending money is good for the economy, why hasnt the £££££ we spend in the last 5 years helped?

Also Argentina debt crisis from wikip:

"When the default was declared in 2002, foreign investment fled the country, and capital flow towards Argentina ceased almost completely. The Argentine government met severe challenges trying to refinance the debt. The state had no spare money at the time, and the central bank's foreign currency reserves were almost depleted.

The Argentine government kept a firm stance, and finally got a deal in 2005"

So if we default now, noone lends us any money until 2015 but we are in deficit now so would have to cut now..... also the City & loads of companies would go so a new big hole in taxes from them.

Maths the New Deal was when US debt was low (15% the current relative debt levels).

www.futuretimeline.net/subject/business-politics.htm

you cannot overspend in the good times, then spend even more money you dont have in the bad times.

Scroll down in that link of yours to the graph showing national debt as a percentage of GDP for a better picture. During the New Deal years (1930s), debt represented about 40% of the GDP, up from about 15% at the time of the Crash of 1929. You need GDP in order to have an economy, and you need growth, and not just an end to borrowing and spending in order to improve that ratio. At the moment, Britain's govt debt:GDP ratio is 64% ish. The danger zone is 90%. Economies whose GDP to debt ratio is over 90% experience slower growth than those with healthier ratios. The US ratio is about 60%. The trick in charting the future is to balance cuts with measures that promote growth. Sucking money out of circulation and clamping down on public projects is not imo the way to do this. Basing economic policy on Victorian ideas of morality is not sound.

maths i was looking at chart 3 - the one account for GDP - thats what i was refering to by 15% the current relative debt levels (in1929 before money was spent) the other chart would of course be meaningless.

So they spent the money during the new deal ("First New Deal" (1933) and a "Second New Deal" (1934?36)) & debt went up to 40%.

your % of GDPs look way off to me - where did you find them?
US debt is currently around 100% arrounding to that chart. wiki says:

US 102%, UK 79.9%

if they are correct, your statement Economies whose GDP to debt ratio is over 90% experience slower growth than those with healthier ratios is a bit worrying!!!!!!!!!!!!!!

This is from Bloomberg:
"The U.S. economy grew at a 2.8 percent annual rate in the fourth quarter, slower than previously calculated and less than forecast as state and local governments made deeper cuts in spending.

The revised increase in gross domestic product compares with a 3.2 percent estimate issued last month and a 2.6 percent gain in the third quarter, figures from the Commerce Department showed today in Washington. The economy, excluding inventories, grew at a 6.7 percent pace, the most since 1998.

Americans may be in a better position to keep spending after tax cuts put more money in their pockets, while companies such as Caterpillar Inc. benefit from faster economies overseas and business investment. A surge in oil prices sparked by turmoil in Africa and more cutbacks by state and local governments represent risks to growth. "

I think Bloomberg has signed on to the notion that you have to spend some to make some, including spending by the government.

Spending money you have is fantastic for a country, spending money that you don't have is crazy.

We had a long run of record breaking income as a country. We should have spent that time paying down our debts rather than going on a spending spree that made Abromavich look miserly.

Pay back time always comes quicker and bites harder than you could ever predict. Living within your means, as an individual, a corporation or a country is the way to a successful future.

As I said I don't knwo what is the best thing to do. But it does remind me of Margaret Thatcher talking about housewives balancing budgets.

I've got a chart that I want to post on here but I don't know how. It shows uk debt as a percentage of GDP.

Mrs Thatcher (whatever you may think of her) had more control over the economy than any politician before or since.

Then the Blair/Brown project undid all her good work spectacularly.

True Lesley and that echoes Adam Smith in the 18thC comparing what's prudent in the private home being prudent for the great Kingdom.

Our present model of capitalism isn't the one envisaged by Smith though, with roughly equal craftsmen and farmers selling surpluses and buying what they couldn't produce. ( Not entirely irrelevantly he also advocated an 'underclass' of the unemployed - about 5% he reckoned - to ensure that the scrabblng at the bottom would keep wages low and workers docile.)
Our version of capitalism (on a macro level) is based on credit and ever expanding growth. The model is that growth in the economy combined with inflation will outstrip the interest rates on government borrowing.

And they would've gotten away with it too, if it weren't for those pesky kids.

Perhaps she did. I know she made some decisions that I didn't agree with at the time, but in retrospect I do. But she also made some decisions that are still causing us problems, the most notable being selling off council houses without building new ones.

Although I think labours PFI initiativew ill also cause us problems for many years to come.