Precisely. I am not an economist, so I can't give chapter and verse on anything. All I see is it's patently obvious that the Tory government's strategy of slash and burn has failed. Just as they were warned it would.

To many, including me, it shows the "austerity" motives were purely ideological.

I know you'll come back with a four-footer to explain how I am completely wrong and should worry my designery head about it.

The bad news is that economists would describe the chancellor's present strategy as a huge stimulus package. Look at the deficit we are running, and compare that with the rest of Europe and you will see what they mean. We haven't been slashing and burning, just pruning so far. And Labour's alternative is largely the same, but very slightly slower.

The reason why all parties are so closely aligned that they have to fight over the merits of extraordinarily slight differences is that, broadly speaking, the correct course of action in the present circumstances is more or less obvious, and only minor variations in degree are remotely plausible. Sorry, I know people like drama, but there isn't that much to be had here.

To be fair. None of the political patries could have expected the Eurozone problems to drag on this long and badly at the last election.

Corrected.

I'm told, however, that we're faced with a large debt. We'd be spending more than we earn, and that doesn't end well.
You can't just keep making up 'more' money, because that doesn't end well either.

I'm no economist, however, and I can only rely on the media for it's presentation of the available information.

Ah, you see, you were doing really well up until that point....

Jon

Apparently, it’s just 20% of the cuts planned from what was being talked about on the TV last night.

Here’s the problem: economists operate in a similar world to quantum physicists. It’s a nice, cosy, theoretical world wholly abstracted from reality where they can muck about with ideas, push them through an algorithm and enjoy the results. If the result is worth further investigation, then they like to go on and test them in a real environment.

This is where the two disciplines differ. For quantum physicists, they can hop over to CERN and run an experiment. No one gets hurt, and Brian Cox gets to say something profound on the news if they find something interesting. For economists, the testing ground is us. If it goes wrong, then we all suffer, the situation gets worse. The whole process is repeated. No one seems to consider impact on real people’s lives in this. It’s just theories being tested. At best they are guessing at what will fix the problem because if they knew, and they were competent enough to recognise the solution when they see it, we can only hope that they will implement it.

Now it may be the there is no solution that works. It may also be that there IS a solution, but it requires and ideology that those in power disagree with. There certainly seems to be no attempt to try a different tack, to look elsewhere for a way out. Instead we’re borrowing more, throwing more money at the IMF - (HOW can we afford that, BTW?), and starting to talk about more cut backs.

The issue is that its as much an art as a science - theres a saying - "Put 10 economists in a room and you will get 11 different answers"

Er, sure, but if spending public money spurs growth then it's worth doing.

We're currently in a situation where because of absolutely [LIFTED] economic performance, despite the cuts, the deficit (in % of GDP terms) hasn't budged.

sorry but, we haven't ever got out or over the first dip ...

I have a 'retro sweet' Double-Dip lying in my drawer in work - it could be worth less by the time George is done

Well, in fairness, I suspect it's all anyone commenting in this thread has to rely on, unless we're surprisingly harbouring economists who're sourcing their own research and first hand data.
And yes, even reading it in The Spectator or the New Statesman or The Economist counts you among the horde.



Indeed, anything that stimulates growth, at this point, is worth doing.
However, there is a point where the public spend outweighs the return we can expect - look at Greece (yes, I appreciate it's an economy riddled with tax avoidance and a heavy public sector reliance for employment and doesn't have great exportable industry and skills and is therefore entirely different to our own).

I just don't accept that there was something we could have done differently, right here and now. There were things we should have done differently over the last 20-30 years perhaps, like breeding a less selfish culture perhaps.

Spending out of a recession makes sense to me, but at the risk of sounding like David Cameron's bum boy, the last government spent all the money.

Now, I'm not saying that makes the current government great as they're not exactly covering themselves in glory right now, but what I will say is that I've been saying that the last government have been wasting money for the last ten years. I was saying it then and now, lo and behold, we have nothing to spend our way out with.

I don't think the comparison with quantum physicists is very apt. The latter are studying particles that under given stimuli must react in a given way. Economic transactions rely on human choices. Some aspects of economics are devoted to mapping and predicting the choices that we make, and on a very rough level sometimes this is effective, as long as you don't try to be very specific. Other aspects of economics are about arithmetic. If a country has contractual commitments to finance X amount of debt, then managing that debt requires Y amount of money. The uncertainties of the one are not reflected in the other.

Countries have run up debts and had to make decisions about how to pay those off countless times. We have a great deal of evidence about which strategies work and which do not. Mister Hitler spent his borrowings on a vast army, and then tried to pay that off via a world war, this is often seen as a mistake. The traditional Greek approach was to run up debt and then get other countries to fund it for them to annoy the Ottomans (which won't work for us), their more recent endeavors usually end up in them giving up and not paying - which can't be a very good strategy if you have to use it repeatedly.

So we are left with boring questions about how to balance cost cutting and tax increases of varying types. There is the inconvenience of having to predict how people will react with those individual decisions that they make, but you have little choice but to accept this proviso unless you want to remove all choice from purchasing and saving decisions for all. Which would be excessive in my ever so humble.