How do you suppose the government pulls Britain out of a reccession?

[kaya'08]

How do you suppose the government pulls Britain out of a reccession?

Its come to my attention that this topic can be very confusing. First of all, common sense dictates that a constant level of decent government expenditure will help weather the worst of the economic downturn, though most beg to differ.

For instance, the governments own fiscal policies are not sufficient enough to stop the impact of the downturn. Now in the 21st century, our globalized economies own health and prosperity rely on the performance of others, so even if a constant level of good government spending is maintained, the economy will still contract and government revenue will begin to fall in the event of the global market being battered the way it has been. This will lead to budget deficits in spending and eventual government borrowing.

So, what is your preferred way out of the economic crises?

A) The government maintains a good level of public spending. This spending will be supported by government borrowing.

B) The government maintains a good level of public spending. This spending will be supported by an increase of direct and indirect taxation.

C) The government turns to protectionism and supports domestic firms by increasing subsidization through borrowing and/or increasing taxes, and thereby encouraging home productivity to increase and to avoid large economic contractions and unemployement.

D) A government cuts back on public spending and uses the budget surplus to stimulate the economy with regular stimulus/recovery packages.

 

[Infinite Chaos]

I think a balance between A and D - we spent hugely (we as in our Govt) supporting the same Banks that got us into trouble.

I'd rather have seen the Govt completely take over ONE bank and use that bank to guarantee lending - what happened was billions got poured into certain banks who still didn't respond to requests to generate fiscal spending and help small businesses. Businesses that died simply because their existing banks wouldn't extend the credit necessary to keep viable business alive.

Some of those same banks then went on to deny homeowners leeway with the mortgages they shouldn't have been given in the first place. Personally I would have let the other banks suffer - or at the very least demand the public money back when they gave it out in bonuses and pensions instead of supporting viable businesses who then went under through no fault of their own.

Some recovery programmes like building private and public homes and also be useful - there's a lot of brown-field land that could be regenerated but that money should go to British companies that follow guidelines on the minimum quality that housing associations have to follow - rather than the standards the private sector currently uses.

I also think unemployment should be earned - if people are long term unemployed there should be some level of community work - clearing brown field sites / keeping streets clean and even on-the-job training where people could be trained while renovating derelict houses. I was amazed when I traveled around Liverpool and Manchester a couple of years ago - there were whole streets of boarded up houses. Really well built houses standing empty that could be salvaged and made into perfectly good homes.

 

[PeteEU]

Government cant do jack as long as house prices keep falling. House prices are linked to the toxic assets, which are brining down the banks and forcing the government to prop them up. Once the house prices have stabilized then the toxic assets can be some what valued and we can go from there.

But one thing for sure, cutting government spending = shooting one self in the foot. We have historical evidence that doing so is very bad (one of the reasons the great depression not only became "great" but stayed so bad for so long), plus it is against all logic. The Government should not act like normal people in times of recession.. as in cut "fat" from ones budget.

But saying that, Governments should also save up during the good times, which no government has done in most western countries.. only Norway comes to mind of those that have.

 

[Infinite Chaos]

Government cant do jack as long as house prices keep falling. House prices are linked to the toxic assets, which are brining down the banks and forcing the government to prop them up. Once the house prices have stabilized then the toxic assets can be some what valued and we can go from there --

There are 4 million or so who need homes and the Housing Associations have been given (if I recall correctly) a billion or so to buy adequate housing.

The Housing Associations are struggling to but because private industry has been allowed to build sub-standard houses. One recourse could be to force the Housing Associations to buy substandard houses (respite for house builders) or they could force the house builders to upgrade and fix these properties.

There are also still many first time buyers who can't afford a house and there are public services people like nurses and fire-fighters who can't afford a house in London or the big southern cities. Many of these houses could be bought up or derelict ones upgraded for these people.

Govt can't sit on it's fat behind - but Gordon Brown has proven pretty good at doing this so far!

 

[PeteEU]

There are 4 million or so who need homes and the Housing Associations have been given (if I recall correctly) a billion or so to buy adequate housing.

The Housing Associations are struggling to but because private industry has been allowed to build sub-standard houses. One recourse could be to force the Housing Associations to buy substandard houses (respite for house builders) or they could force the house builders to upgrade and fix these properties.

There are also still many first time buyers who can't afford a house and there are public services people like nurses and fire-fighters who can't afford a house in London or the big southern cities. Many of these houses could be bought up or derelict ones upgraded for these people.

Govt can't sit on it's fat behind - but Gordon Brown has proven pretty good at doing this so far!

It is the same situation in every country, not only a British problem. Spain has had a building boom of epic proportions the last decade and yet a very large portion of young people up to the mid 30s still live at home because they can not afford to buy the huge overflow of new housing in Spain. Same goes in Denmark and other countries.

In such situations the government, conservative or socialist, can do jack **** unless they opt in to regulate housing prices on a national scale and no one wants to do that as that will further erode the wealth of the nation as a whole, as most peoples wealth is bound in their house/flat.

The only thing government can do, is to make laws that make it easier to buy and sell homes plus other laws to make the whole experience more pleasant. But there are many factors in place here. One of the main factors is the difference in opinion between what the government as a whole wants and what local government wants. It is often this, that creates the biggest conflicts.

Local planning laws and regulations often reflect a wish to kick out low earners and get middle class families in, because this will lower the burden on the local council in social payments and boost the tax coffers. This wish is often reflected in various laws that prevent certain types of homes to be built.

For example, in Copenhagen there has been a local ordinance that states that no flat under 60 square meters is allowed to be built. Now this does not sound as a bad law you might think, but consider most university dorm rooms and similar housing for one person housing is under 60 square meters in Denmark, it has meant that the lack of housing for the higher education system in Copenhagen has been at a near starving point for decades, because they are not allowed to build them. It has also meant that people who are not in a relationship often have to accept (if they can afford it) in renting or buying apartments that have 2 to 3 bed rooms just to have a place to live. This is just one of many many examples.

Now this does not mean that the government should lax the regulations for safe building.. no way. It is after all the lack of regulation in the financial market that got the US into this mess and took us down with them. But it does mean that in other areas, the Government are often powerless to do anything because it is the prerogative of the local council to do what they want, and they do NOT want "council dependant" people living in their area if they can avoid it.

 

[Wessexman]

The recession is here and will likely be around for a while. The gov't should not take drastic action like greatly cutting spending or drastically raising trade barriers.

It should then focus on long term sustainability in our economy.

To aid the house marketing and the economy in general I'd advise moving to a more land value(or Georgist) based taxation system.

 

[lunecat]

"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."


Mr. Micawber

Charles Dickens


It isn't rocket science - don't live beyond your means!


Of course I understand the principle of a "National debt" but under the last 18yrs of NuLabour mismanagement the UK is seriously in debt and must cut back on public spending. An end to the limitless NHS budget and an end to public sector workers non-contributary final salary pension fund.

Smaller government and more self reliance on the population.

 

[B L Zeebub]

"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."


Mr. Micawber

Charles Dickens


It isn't rocket science - don't live beyond your means!


Of course I understand the principle of a "National debt" but under the last 18yrs of NuLabour mismanagement the UK is seriously in debt and must cut back on public spending. An end to the limitless NHS budget and an end to public sector workers non-contributary final salary pension fund.

Smaller government and more self reliance on the population.

Im never bothered by the size of government, more by its quality, hence luners mate, my resignation from the party I loved sometime ago,and the fact that I am being wooed to stand as an single term, single issue, independent candidate

 

[lunecat]

Im never bothered by the size of government, more by its quality, hence luners mate, my resignation from the party I loved sometime ago,and the fact that I am being wooed to stand as an single term, single issue, independent candidate

Well then I very much agree with you, quality is far better than quantity.

(I'm aware of the old Russian saying that "Quantity has a Quality all of its own")

Thinking back to the origins of the NHS and what it aimed to provide to the British population and now compare that to the monolith that cost us tax payers £100billion pa.

There is definately a need for a serious rethink to the needs of a socially responsible government of Britain, without the social dogma attached from a liberal guardan reading elite that refuses to accept any reform of the public sectors....


I'd vote for you - but only if you employ me as a PA and pay for my swimming pool to be cleaned each year

 

[B L Zeebub]

Which reminds me of an old Yiddish saying, Never mind the quality feel the width.

You request is granted on my winning, I will also see that the moat around Lunecat Towers is cleaned of all your old champagne bottles


Ps post some good northern soul ect on the relevant thread, and pay your tab in the Tiki bar:wink:

 

[lunecat]

Which reminds me of an old Yiddish saying, Never mind the quality feel the width.

You request is granted on my winning, I will also see that the moat around Lunecat Towers is cleaned of all your old champagne bottles


Ps post some good northern soul ect on the relevant thread, and pay your tab in the Tiki bar:wink:

OK will post some good Northern Soul ....

but I'm shocked about what you say about my tab at the "Tiki" bar - as my local Edinburgh boozer is called the "Antiquary" aka "the Tik" - have you been following me again?

 

[B L Zeebub]

OK will post some good Northern Soul ....

but I'm shocked about what you say about my tab at the "Tiki" bar - as my local Edinburgh boozer is called the "Antiquary" aka "the Tik" - have you been following me again?

My tentacles know no domain:drink

 

[Wessexman]

Im never bothered by the size of government, more by its quality,

The two are rarely unrelated.

 

[Infinite Chaos]

-- In such situations the government, conservative or socialist, can do jack **** unless they opt in to regulate housing prices on a national scale and no one wants to do that as that will further erode the wealth of the nation as a whole, as most peoples wealth is bound in their house/flat --

I think we're talking at cross purposes.

I'm talking about micro changes that would make a small difference somewhere (4 million waiting for houses and the current pool of new houses that remain empty / unsold) - I recognise that the housing market as a whole is another story i.e. pulling the UK out of recession.

I'm simply pointing out that there is a pool of money set aside to buy houses and at the very least, the Govt could ask the private sector that has built sub-standard houses to correct the faults so that the Public Housing bodies can actually spend some of the money sitting around waiting to be spent.