Spain rescued - by Spaniards. Should Ireland take notice?

[feargach]

The Bank of England has kept interest rates at 300 year lows and printed £200 billion. What spectacular boom has resulted? .... 0% growth ( at best ) while gas, water, elecricity, petrol, diesel etc etc. are becoming scandalously expensive.

The BOE is fighting against Tory austerity.

You can't create a boom with low interest rates if the government is strangling aggregate demand and the population has no spending power.

That is the classic recipe for government-exacerbated depression that Keynes wrote about. It's as if David Cameron is hell-bent on creating a perfect case study of how to make everything pear-shaped for the benefit of economics students in 2015.

[Oblivion.]

The BOE is fighting against Tory austerity.

Those horrid Tories aren't strangling the country with austerity - they are keeping the country solvent with some long overdue fiscal sanity. They are NOT cutting spending. They are merely reducing the rate at which spending is INCREASING. The coalition government is spending more money than Labour were planning to spend, had they won the election. The UK's debt is still ballooning every month.

You can't create a boom with low interest rates if the government is strangling aggregate demand and the population has no spending power.

The Bank of England cannot create a boom, full stop. What they can do, is keep mortgage holders under their roofs and away from soup kitchens. The price is inflation, lots of inflation. What the government can do is try to prevent the country from being executed at dawn by the bond markets. They can buy a little more time before the music stops.

That is the classic recipe for government-exacerbated depression that Keynes wrote about. It's as if David Cameron hell-bent on creating a perfect case study of how to make everything pear-shaped for the benefit of economics students in 2015.

Economics students needn't wait until 2015 to study how one disastrous individual can bring a country to its knees. They need only look at Gordon Brown circa January 2010.

[feargach]

Those horrid Tories aren't strangling the country with austerity - they are keeping the country solvent with some long overdue fiscal sanity.

Every day, the pool of economists who agree with you gets smaller and smaller, and by now has excluded everyone who cares about evidence rather than ideological purity.

They are NOT cutting spending.

Yes, but they are underspending in relation to what the economy needs. It's like a patient's blood loss has increased, but the doctor isn't increasing new transfusions to compensate. He's not cutting the supply of new blood, but he is still causing the patient to get closer to death by not giving him enough.

They are merely reducing the rate at which spending is INCREASING. The coalition government is spending more money than Labour were planning to spend, had they won the election. The UK's debt is still ballooning every month.

The Bank of England cannot create a boom, full stop. What they can do, is keep mortgage holders under their roofs and away from soup kitchens. The price is inflation, lots of inflation.

Actually, the price is recession. You know, the economic state that the UK is currently in. Odds are the Osborne recession will be brutal enough to stifle inflation.

What the government can do is try to prevent the country from being executed at dawn by the bond markets. They can buy a little more time before the music stops.




Economics students needn't wait until 2015 to study how one disastrous individual can bring a country to its knees. They need only look at Gordon Brown circa January 2010.

Ignore the errors Osborne is making right now, check out this one some old guy made two years ago, that's the one that needs our immediate attention!

[Oblivion.]

Every day, the pool of economists who agree with you gets smaller and smaller, and by now has excluded everyone who cares about evidence rather than ideological purity.

Every day, the number of economists clinging to the desperate delusion that "one last hit" of debt binge spending will save the day, grows larger. They are wrong. The United States has spent the best part of $10 trillion on stimulus, and their jobs creation isn't even keeping up with population growth. People are dropping out of the labour force in unprecedented numbers. "But the stimulus will save the day!!!". No, it won't. It has simply brought forward national ruin by about 20 years.

Yes, but they are underspending in relation to what the economy needs. It's like a patient's blood loss has increased, but the doctor isn't increasing new transfusions to compensate. He's not cutting the supply of new blood, but he is still causing the patient to get closer to death by not giving him enough.

A better analogy would be a heavy drugs user, who's been off his face on class A (debt) for a decade. Now his organs are failing. He needs to go cold Turkey, immediately. But commentators like yourself are (rightly) worried that if the drugs are stopped too quickly, he'll do an Amy Winehouse and croak. That's the risk we have to take, because our current debt trajectories are fatal anyway.

Actually, the price is recession. You know, the economic state that the UK is currently in. Odds are the Osborne recession will be brutal enough to stifle inflation.

The Brits are already up to their necks in the brown stuff. How much more "fun" do you think they'd be having, if their interest rates were equal to Spain or Italy's? Their current predicament would look like a Sunday stroll in a winter wonderland. That's where Calamity Brown was taking them; to the land of 5% interest rates and 25% unemployment.

[beazlebottom]

Those horrid Tories aren't strangling the country with austerity - they are keeping the country solvent with some long overdue fiscal sanity. They are NOT cutting spending. They are merely reducing the rate at which spending is INCREASING. The coalition government is spending more money than Labour were planning to spend, had they won the election. The UK's debt is still ballooning every month.




The Bank of England cannot create a boom, full stop. What they can do, is keep mortgage holders under their roofs and away from soup kitchens. The price is inflation, lots of inflation. What the government can do is try to prevent the country from being executed at dawn by the bond markets. They can buy a little more time before the music stops.




Economics students needn't wait until 2015 to study how one disastrous individual can bring a country to its knees. They need only look at Gordon Brown circa January 2010.

......or our very own homegrown F**kwits, Clowen and Lendihand circa September 2008.

[feargach]

The Brits are already up to their necks in the brown stuff. How much more "fun" do you think they'd be having, if their interest rates were equal to Spain or Italy's? Their current predicament would look like a Sunday stroll in a winter wonderland. That's where Calamity Brown was taking them; to the land of 5% interest rates and 25% unemployment.

Wow, you really don't understand the point that Britain doesn't pay debts in someone else's currency, do you?

Spain and Italy can default. Britain can't. Japan can't. America can't. Brazil can't.

When you issue debt in your own currency, default ceases to be a possibility.

Spain and Italy's interest rates reflect high unemployment and awful demographics respectively. Both of them also factor in the possibility of default.

All three of those things are absent from the BOE's perspective. UK debt isn't like Euro-denominated debt.