Cuts to public spending...

As I understand it, Labour wanted to pay down the cuts in twice as much time as the Tories are doing.
Any idea how much extra interest this would have cost, and consequently how much more/less would the cuts have been overall?
Any figures?
Reply to
Jake

Well, I saw on the BBC that they are cutting 83 bn and raising an extra 29 bn in taxes, so essentially that's 112 bn overall.
Currently the debt repayment is at 44 bn annually...
Reply to
Jake
Labour were being highly disingenuous with this claim (deliberately misleading).
They hoped that by claiming to pay down the deficit at half the rate, the coalition are doing, would somehow plant the idea in the electorate?s head that they would therefore have needed to make only half the cuts in any one year.
Which, of course, thanks to the wonders of compound interest, is a completely bonkers assumption.
Unless, you've been on the receiving end of a New Labour education, in which case it's a highly benevolent idea of a kind those nasty Tories would never dream of.
In reality, paying down the deficit at half the rate would have translated to less than £2bn a year off the coalition?s cuts agenda.
In other words, somewhere less than f**k all difference and, unlike the coalition, Labour have never admitted to what they would cut, only that all the cuts the coalition have chosen to make are wrong ? every single one of them.
Then they wonder why Galloway f**ks them over?
The coalition has committed to paying down 20% of the deficit with tax increases and 80% with spending cuts.
So far, we?ve more or less had the tax increases that should achieve this but so far only around 20% of the deficit?s worth of spending cuts.
A further 20%?s worth have just been announced in the latest budget with 40%?s worth still to come.
Though the ongoing public sector pay freeze (3 years in all) will go a long way to meeting the eventual target.
Reply to
allantracy
"Jake" wrote
There's little doubt that it would cost more in interest payments, but that would have been reduced by increased tax revenue from those working in the public sector who would have remained in jobs for a longer period before being forced onto benefits, which in turn increases demand on the Treasury.
Also those remaining in work for longer would have had more spending power and would have contributed more to the revenue in VAT payments and other indirect taxes.
John.
Reply to
John Turner
In article , snipped-for-privacy@nospam.invalid says...
Public sector workers do not contribute to the treasury when they "pay" tax, they just draw their net pay.
And as for it costing more to keep ex-public sector workers on the dole than in jobs, it depends on what their pay was, how their ex-job is now being covered and their family circumstances. If it was a non-job, they earned an average wage plus pension contributions and have a minimal number of children, the dole is a cheaper deal than the dole.
Of course, the cost of redundancy payments also needs to be brought into the mix.
But this is just the recirculation of tax money which does not therefore add to the wealth of the treasury.
Reply to
Moles
Remembering, that the true cost of employing someone, on an average wage, can be close to double what your actually paying them, then it?s easy to see that bunging people on the dole is a lot cheaper for the state than keeping them employed.
The argument Labour used for keeping people employed by the public sector, even when some jobs had been identified as pure waste, was that this helped growth in the short term, whilst the rest of the economy was on its knees, was entirely bogus.
You won?t find that theory in any economic textbook.
Indeed, a German finance minister, at one of the G20 meetings, described such an approach - as being desperately promoted by Brown at the time no doubt in order to save the world - as crass-Keynesian.
The fact that keeping people in none jobs also had the effect of putting off as much bad news, as was possible, until after an election was, of course, purely coincidental.
Reply to
allantracy
"John Turner" writes:
It's been easier to find out a little about the manufacture of atom bombs than about economics, for me at least.
It's said that highly complex mathematical models are used to aid government decision making. (Though you might wonder.) Such things would have to be Utter Top Secret, because you wouldn't want other countries to know too much about your decision-making.
But these models must have been much simpler in the past, because computers were simpler.
So I have a couple of questions:
(A) Is a simpler model, maybe something dating back 30 years, and therefore within the capabilities of today's PCs, available for free download? It would surely be interesting to tweak the parameters and see if you could believe the results.
(B) Are there now good Economics textbooks? Popular stuff like 'Free Fall' tell you nothing much, except who said/did what to whom. 'Economics for Dummies' now exists, but is it any good? Too basic maybe? Not providing a balanced view of a controversial subject? Too much mathematics and not enough psychology, or the reverse?
Reply to
Windmill
....
In any sphere, mathematical models can be good fun, and they'll always produce highly /precise/ results. Sometimes the results can even bear some vague approximation to reality.
Reply to
Mike Scott

They should, still, contribute to the wealth of the nation, as a result of the work they do, and that contribution will be lost if they are laid off.
The biggest problem with unemployment, as I see it, is that it tends to waste human resources, or even encourage them to be used for counter-productive purposes: crime and disorder, or put costs on in terms of reduced physical and mental health. (On the other hand, being employed is not a strict requirement for being able to contribute to wealth of the nation - even someone re-papering their home or looking after the grand children does that. Also, one of the big de-motivators for employment is when people do not perceive that they are contributing to anyone but their employer's wealth.)
Reply to
David Woolley
But slave labour has gone - people are now paid for working and if they don't like their employment they can always set up their own business just to prove how easy it is. They'll then have to cope with social engineering such as the minimum wage which, in itself, is an inhibitor to employing others in the smaller business.
Reply to
テδεつづδづつョiテδεつづδづつゥardo
Traffic modelling is particularly good fun, especially when you end up with traffic lights controlling traffic flow at roundabouts. Delays at such places then get worse and worse until you have a power cut and suddenly the roundabouts are being used as they were designed to do in the first place.
Reply to
テδεつづδづつョiテδεつづδづつゥardo
In article , snipped-for-privacy@ex.djwhome.demon.invalid says...
I am referring to financial wealth - fundamentally, money that comes to us from other countries, as that is the only way we can get richer or raise funds to pay our debts. All the public sector does is circulate money that has already been paid in taxes or money raised through borrowing.
I do not disagree that the public sector contributes to our "spiritual" wealth, as a nation.
Again, you are confusing wealth as in well-being, with financial wealth.
Reply to
Moles
An inhibitor for unscrupulous employers to pay peanuts. Would you work for less than £3 an hour?
Reply to
Mark
In article , snipped-for-privacy@dontgetlotsofspamanymore.invalid says...
Surely, it would depend on the job and on the person's circumstances.
If you are young, single and living at home, it is better than the dole.
Reply to
Moles
Not when the pay is this low.
Better for employers to pay a decent wage, I'd say.
Reply to
Mark
In article , snipped-for-privacy@dontgetlotsofspamanymore.invalid says...
If you are young, single and living at home, it is better than the dole.
Better that you take a low paid job and move forward from there, I'd say.
Reply to
Moles
That's a big if. What if they're not all of the above?
Why would you assume they could move forward? A lot of employers are likely to take on low paid employees short term and then sack them.
What kind of employees do they get for this kind of money? Pay peanuts and get monkeys.
Reply to
Mark
In article , snipped-for-privacy@dontgetlotsofspamanymore.invalid says...
Not really as there are 10s of 1000s of unemployed, young single people, living at home with their parents.
Then you will might well do better financially on welfare.
It's a bit like asking how someone with a £500,000 mortgage is supposed to cope in a minimum wage job. The answer is, they won't.
It's all down to people's individual circumstances.
Why would you assume that not taking a job is better than having one?
Plenty of people work their way up by impressing their employer who then lets them take on more responsibility with more pay. They also gain experience that can be used to help get a better job next time.
Or you could just sit at home, watching tv, not moving anywhere.
Depends on what the job is.
Reply to
Moles

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