Well, perhaps not on the street, but certainly in the corridors of Westminster, the coalition government's well-oiled PR machine is spinning away. In the past couple of days every news bulletin has suggested that the Winter Fuel Allowance is to be withdrawn/reduced/means tested (take your pick). All this to help reduce the deficit and because everyone must contribute to the cause you see. 'We're all in it together'. Dave and Nick can count me out. I'm not in 'it'. I'm not responsible for the country's financial state. It's government and big business that brought us to our knees, not me.
As many of you know I'm a 'young' pensioner so I've only received this handout for a few years. Nevertheless it has come in handy at a time of year when the heating is on full pelt most of the day and night and many people, not only pensioners, worry about fuel bills. If it was to be means tested then I'd qualify as one of those in fuel poverty as, in the winter months, I spend over 10% of my income on keeping my home warm. Would I be prepared to submit myself to means testing? If the procedure is anything like the Pension Credit system then the answer is a resounding no. Having never applied for any benefit in my life, I decided to see if I was eligible for pension credit a while ago and it was such a humiliating experience I decided never again.
If the Winter Fuel Allowance was scrapped I would manage to survive, but I know quite a few who would find great hardship in its withdrawal and possibly go without food and heating in order to pay bills. One suggestion would be to revise the Cold Weather Payment. Currently only benefit claimants can claim this, but if it was revised to cover all pensioners and the seven days qualification was reduced to two, that may be a cheaper way of ensuring the elderly can afford to heat their homes when the outside temperature is freezing.
But why are the coalition tinkering with benefits like the WFA? Why won't David Cameron confront the issues which would save money - and lots of it. He could start with the Afghanistan war which was in excess of £12 billion in 2009, then have a proper debate about the promise to renew Trident. Of course there's the vast sum poured into 'green' issues such as climate change and some dubious renewable energy projects (wind farms spring to mind); they need a little scrutiny and in particular the carbon footprint scam.
If he did tackle the big spending issues, without upsetting too many of his business pals along the way, then the public may be more understanding about national benefits reductions. Just maybe.
Posts
31 comments:
Plus a review of overseas aid to those countries that spend money on non-relieving activity that are of no direct benefit to their Nationals
Subrosa, I think I’m beginning to see a pattern emerge here …
- The age before one is entitled to the state pension, despite having paid into the scheme as man and boy, is being raised ever and ever higher.
- The Disability Living Allowance is to be reviewed, so that ever fewer people will be entitled to receive this benefit, regardless of their medical condition.
- In Scotland, the Blue Badge Parking Permit for the disabled is to be reformed, again, so that fewer and fewer people will be eligible for receipt.
- Now we have the possibility that their will be major reforms to the Winter Fuel Payment.
In a recent article in the British Medical Journal there was a clear link proven between fall in temperature and cardiac deaths.
It is becoming patently obvious that we elderly, especially if we are the disabled elderly, are a drain on resources.
The ConDems are now doing just that – condemning us all to an early grave.
The fewer of us who survive the lower the payments and the higher the savings.
Whatever next?
Voluntary euthanasia must be a consideration!
The ConDems have
Well said Rosie!
Austerity is total bull and it will make the economy worse just like 'stimulus' and bail-outs did. We should be demanding the bail-out money back before any cuts to the budget! None of these 'economic policies' helped anyone out except for bankers.
When they tell you to weather the storm tell them th let the bankers weather the storm. Demand cuts to war, Trident and other hugely expensive and unnecessary public expenses.
As this campaign takes off I would target obvious excesses and avoid getting bogged down in arguments about windmills versus coal mines. Stick to war, weapons and bail-outs - that will carry the population. In Scotland demand to know from your MSP why we need cuts if Scotland is in surplus. Give your neighbour an envelope with their MSPs address and get them to send a letter asking the question.
This might seem like just another campaign but it's not. The cuts are going to really hurt and they'll make the economy so bad the country WILL collapse economically and if you think things are bad now wait and see just how ugly that is.
The politicians are letting you down so action by the people must start to take form. Say 'NO' to cuts in services and 'Yes' to cuts to war and bankers!
At some point you'll have to make a stand. Better getting the show on the road now than later!
"It's government and big business that brought us to our knees" plus the greed of financiers. As for the winter fuel allowance, 65 should always have been the start point and should be higher for the poorest on a sliding scale with a cut off circa the average wage in The UK.
I totally agree with the big issue savings including ridding us of the parasites from all over the globe!
Jings John, yes of course. The whole DFID department should be deleted. My apologies for omitting it.
The deficit is real and the debt is real. Something has to be done. The problem is that everyone thinks that someone else should take the pain. Cut benefits and some group will complaint. Cut public sector spending and some people will lose their job. Cut quangos and other funding and someone else will complain.
Nobody is going to volunteer 'hey, we don't actually need this money' so decisions are going to have be taken that are unpopular.
I do agree with Cameron that the time to do this is now and do as many unpopular decisions as you can. There's no election for 5 years and the sooner you tackle things, the sooner, hopefully, things will pick up.
Morning John. Funny you should say that because earlier this week I was thinking along similar lines. I'd walked into the room, the television was on and Nick Clegg was being questioned. Think it was a lunchtime. One questioner said something about pensioners contributing nothing so why should they not have benefits cut. Unfortunately I was distracted or I would have recorded Nick Clegg's reply.
So yes I agree there's a pattern beginning to emerge and I think you, with your disability, will have to fight hard which is a disgrace. As for me, as I said I will survive, but I will possibly have to sell my home and move to one of these plaster boarded boxes for my last years. Can't have a pensioner living in the home they worked for all their lives can we?
I think by then I'll have given up. Our government is the biggest business in the UK and its heid bummers are the board of directors not politicians.
Thank you for your advice Alex. I will take it on board. That's always been a principle here Alex 'better now than later'.
OR what's wrong with women receiving it at 60 when that's the age they currently retire? Many women retire without even receiving the basic pension even though they worked throughout their lives, but because it was part-time or very low paid work they didn't pay the 'full stamp'.
But your idea is a good one. Should be simple for the Inland Revenue to give details of income surely. Maybe that's a daft statement.
Thank goodness "Global Warming" will save us!
Oh Joe, you cynic you.
William,
You know nothing about economics. If you want to know how 'austerity' works start here: http://www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/ and actually learn something.
Do you want to know how Britain went bankrupt? Wars, systemic fraud in The City which was started with too low interest rates and then deregulation. Stimulus which no doubt you were calling for last year took money from the productive economy in order to try to reinflate the bubble that was caused by too much cheap money (i.e. low interest rates). Predictably the bubble could not be reinflated but now the 'stimulus' which was borrowed has to be paid for and at interest. The other reason the budget is not balanced is because the share-holders in the finance sector were 'bailed out'. If they made investments in fraudulant companies without due diligence then the banks should have been allowed to go bust and they lost their investment. Instead the taxpayer bailed them out by borrowing more money which has to be paid back now and at interest.
The next stage in the theft - for that's exactly what it is, is austerity. They have us up to our eyeballs in debts we can't pay and now they are going to bankrupt the country so that it is even more desperate for money. It borrows more and to pay it back it will have to sell roads, schools, hospitals, ports etc etc. And all at fire-sale prices. People will stop going to hospital, will have to pay tolls etc etc and the debt will be higher - that's what austerity does. It is economic and social death - as you can now see in Ireland and Greece. Before that Argentina and lots of other countries - it always causes economic collapse. Why do you think Britain will be any different? Britain is being played by sophisticated, international financial fraudsters and scammers. Brown and Cameron hang on to their every word. You can not trust the political parties because they are captured by the global merchant banks.
The mantra of cuts and the fools that adhere to it have no clue that they are being robbed again. They seem to like the pain for whatever reason.
No, the debt was brought about by fraud and by a group of global, financial terrorists. They should be jailed, the bail-out money should be taken back, insolvent banks closed down (all of them are insolvent), the debt repudiated and soveriegn bankruptcy proceedings should take place. The wars should stop and Trident scrapped.
That done the economy would have a healthy future and the people would not live for generations in debt-bondage.
Now, go away and have a good long think to yourself!
There should not be a "winter Fuel Allowance" at all, all fuel needed for our pensioners should be free, they have paid for it many times over in the service to their society.
Had the powers that be listened to those same people years back then proper home insullation etc would have been rollled out and massive savings made, but as usual with governments it is too little too late and their attacks recently in 'favour' of a greener more sustainable system are just window dressing to suit their purposes.
Clegg needs putting down ASAP he has too much power on the back of too few votes!
The Winter Fuel Payment is an emotive thing, because removing it or altering the way it's paid out will always been seen as targetting those who truly need it and who could suffer during cold weather. But in some ways it's the same as Child Benefit, because it's paid to all - and not all elderly people truly need it.
More than one senior member of our family lives in a retirement flat, with 'communal' heating costs included in the rent or service charge, so there are never unexpectedly high fuel bills. Yet every person in these flats receives the fuel payment, even those whose rent etc is paid by the state - some spend the money on presents, others spend it on a 'little holiday'.
I don't pretend to know what the answer is, whether this payment should stay or not, or whether the money should be put towards an increase in the state pension as a whole - so individuals can at least try to plan ahead.
@Rosie,
Sorry, don't mean to preach strategy. I've just seen so many good causes collapse because of spinning off into other issues..
About the cold climate allowance. Never let it be forgotten that Brown could find 100s of billions for the finance sector at the drop of a hat. With free printed money from the Bank of England he gave them trillions - just like that. Yet Glasgow council can't find a few million to square their budget? Or a few million to help pensioners heat their homes?
Do not for a second imagine that Britain is run for the benefit of the people. It's all about shareholders and City bonuses.
The merger of government and big business is called fascism. Believe me, the people are of no concern to them at all. Tory or Labour - they are both bought and paid for. Just ask yourself why the war went ahead despite the country demonstrating against it and it being profoundly unpopular.
The people do not matter. The sooner people get that into their heads the better.
Alex, I’m struggling to understand the link you posted. Are you saying that the IMF and World Bank have imposed economic strategies on Britain? When?
The main reason the budget doesn’t balance is that predictions were made on future tax revenues (‘the proceeds of growth’ as Cameron called it in Opposition) which did not materialise due to the financial crisis from 2007 onwards. Tax revenues plummeted but projected spending remained in place. It was considered too dangerous to cut spending immediately but to cut it is a necessity until spending matches tax intake.
One could argue about lots of things – about the failure to build up surplus funds in good years, about the expansion of public funds on areas with very little return, on the myth of ‘free’ trade with the developing world – that have contributed to our present economic problems but, fundamentally, the deficit is a straightforward imbalance between expenditure and income that has to be addressed. Of course, no-one wants their slice to be reduced so no doubt we’ll hear more crackpot conspiracies and generally wailing and gnashing of teeth.
Your calm, rational suggestion for Britain’s economic growth – debt to be repudiated, the financial system to be shut down and criminal charges brought against international business people - is thankfully one that will be ignored. God bless.
I'm sure you think you sound sensible William but you don't. You are merely regurgitating economic theology which has now been proven to have failed.
During the Savings and Loans crisis in the states thousands of bankers were indicted and jailed. It will have to happen again as there will be no 'recovery'.
The IMF/World Bank have not imposed sanctions. What they did was force countries to implement 'austerity' measures which then crippled those countries. Those austerity measures which were adopted by Ireland and then Greece are now seeing both those countries economies worsening drastically.
The 'Cuts' in Britain are the same and will drive down the tax take further. It is NOT a solution and all the evidence points to the contrary.
The man who was in charge of the Savings and Loans investigation in the US, William K Black (former banking regulator) is now calling for the same in the US but much deeper and expects that international bankers will be jailed. So much for your cap-doffing nonsense about not being taken seriously. If you want to know what intelligent people are taking seriously then you can watch a recent interview of his here: http://maxkeiser.com/watch/the-keiser-report/keiser-report-68-12-august-2010-guest-william-k-black/
Growth predictions as you call them were false and based on City fraud through the sale of OTC derivatives - a market which was valued at 700 trillion dollars in a world economy of 55 trillion dollars. How is that possible without endemic fraud?
In a capitalist system a bank fails when it is insolvent. It wasn't allowed to and so now there is no market and no capital to have capitalism with.
Do you understand that this is not a recession but a system collapse? Credit is frozen and trust will not come back to the financial system until the criminals are jailed and the debt is repudiated. by not taking these measures we are now heading for a collapse in the currency and hyper-inflation.
An accountant can tell you that to balance the books you have to cut expenditure but an economist will tell you that there is a cost to cutting expenditure on the scale being proposed. The tax take will fall further and services according to you will have to be sold off to 'investors' until we are completely controlled by debt. That is the vision you are offering and I hope no-one in their right mind will take you seriously.
We need high interest rates to that capital can be formed and manufacturing increased. None of that can happen while the insolvent financial system is kept on life-support.
Like I said, go and have a real think to yourself.
Indyanhat 12:33 said...
"There should not be a "winter Fuel Allowance" at all, all fuel needed for our pensioners should be free....."
Have to disagree there IH. As soon as any commodity becomes "free", it gets wasted.
Alex, spare us the Ol’ Faither Wisdom routine.
Ireland’s economy is getting worse? http://subrosa-blonde.blogspot.com/2010/07/ireland.html
If banks like RBS and HBOS were allowed to go under then savings would have been obliterated and thousands of businesses would have vanished overnight. It simply wasn’t an option. Anyone who thinks otherwise is simply off their rocker.
Yes, there is going to have to be a significant contraction which is why all Government spending has to be reviewed – including winter fuel payments.
Whilst you make some decent points, which might be worth pursuing, too much of your post is hysterical and on a par with the people advocating buying shotguns and months of tinned food 3 years ago.
I don’t accept that credit has frozen. Credit is not as easily available as it was pre-2007 which is no bad thing. Simply put, the bar for credit has been raised and many will complain banks are not lending to them whilst ignoring the plain fact they no longer fit the lending criteria of the bank.
I never said services will have to be sold so I don’t know where you get that idea.
Ireland according to Ambrose Evans Pritchard of The Telegraph:
"pull themselves out of a tailspin if they act fast. It is the laboratory for debt-hangover cures in the eurozone.
The nation has certainly been bold, cutting public wages by 13pc (including pension levies) to restore competitiveness. This is known as an “internal devaluation” in IMF parlance, the only option left for a country that cannot devalue its currency.
Less clear is whether it can work. The budget deficit seems stuck at 14pc of GDP, and unemployment has risen to 13.7pc. The severity of the slump is eating away at the tax base. Critics say the country is chasing its tail.
Under the deflation, nominal GDP has contracted by almost 20pc. Yet the debt stock has risen. Ireland is uncomfortably close to a debt-deflation trap along the classic lines described by Irving Fisher in the 1930s.
Read more: http://www.businessinsider.com/irish-debt-fears-reemerges-2010-8#ixzz0x3ofLmhC"
If that's not enough look up Krugman in the New York Times.
Ireland is collapsing as is Greece. (see my own blog on the subject: http://scotlandunspun.blogspot.com/2010/08/tory-cuts-death-spiral_18.html)
A year ago when everyone and his granny went along with the economic theology of 'stimulus' I was against it and predicted the outcome we have now. I knew we were heading into depression before that. All can be checked on my blog entries. Austerity was a predictable policy outcome after the failure of 'stimulus'. And it will be just as stupid.
Right now presidential advisers and many others are predicting that the Western world is heading into recession. International investors and the very top trend forecasters are forcasting hyperinflationary depression in the US, Britain and other places. There are forecasts of currency collapse in the pound, the dollar, the euro and others and more war.
Austerity will shrink the tax base and the government will simply resort to printing more money to pay its debt - then you'll have hyperinflation.
Harvard economic historian is telling us that he sees the end of the Western financial system and the collapse of the US economy within 2 years as well as the collapse of the Euro. See here: http://www.niallferguson.com/site/FERG/Templates/Home.aspx?pageid=1
You really have to stop reading the captured mainstream UK media and go for a walk. Reality is hitting home and the pace is picking up quickly. Cameron knows nothing - you have to realise that the political class is servile to the bankers who have kidnapped the economy. They are simply song and dance men for international financiers. I am not coming from the point of view of an ideological socialist or whatever, the problems we are facing is the death of the market by the collusion of banking and government otherwise known as fascism.
You can not trust government anymore and certainly not banks so yes, get your cash out of fiat currency and buy some gold, silver, commodities. land but not paper.
Austerity is simply the process of cheapening soverieng assets to be bought by said financiers. In the process the people will be locked into debt-peonage for generations.
It is time to wake up William. There's been a coup and Britain is about to collapse - 'stimulus' and 'austerity' are propaganda.
Similar "delay, deny and how that they die" approach that the MoD have toward Veterans'. From asset to liability and this is about reduction of that population.
@JRB mentioned a clear and proven link between temperature and cardiac death. Let me extend that by pointing to the disinformation campaigns on cholesterol http://www.thincs.org/ and statins http://statinvictims.org/ and if you don't mind, a few of my recent tweets on prescription drugs:
http://twitter.com/veterans_uk/status/21536757947
http://twitter.com/veterans_uk/status/21536811088
http://twitter.com/veterans_uk/status/21537016851
The purpose of which is to simply highlight that that illness can be engineered. If you take ill then you can be made more ill. A forced fight for benefits is designed to be extremely stressful and stress causes heart attacks!
Thus, if they can't get you one way then they will deploy a range of alternatives to increase their chances of success, and that's exactly what I belive they are doing.
Hi SR. an interesting argument.Would have to agree with a lot of Alex's comments but I will also say that a lot of problems will be solved in this country by a warmer climate.
So each night as you go to bed, say a few words for global warming, the sooner, the quicker, the better.
William K Black (former banking regulator)seems to have an excellent idea, let us employ it here.
And I am still waiting for some one to tell me where all the money went that the banks "lost".
Ireland according to Ambrose Evans Pritchard of The Telegraph:
"pull themselves out of a tailspin if they act fast. It is the laboratory for debt-hangover cures in the eurozone.
The nation has certainly been bold, cutting public wages by 13pc (including pension levies) to restore competitiveness. This is known as an “internal devaluation” in IMF parlance, the only option left for a country that cannot devalue its currency.
Less clear is whether it can work. The budget deficit seems stuck at 14pc of GDP, and unemployment has risen to 13.7pc. The severity of the slump is eating away at the tax base. Critics say the country is chasing its tail.
Under the deflation, nominal GDP has contracted by almost 20pc. Yet the debt stock has risen. Ireland is uncomfortably close to a debt-deflation trap along the classic lines described by Irving Fisher in the 1930s.
Read more: http://www.businessinsider.com/irish-debt-fears-reemerges-2010-8#ixzz0x3ofLmhC"
If that's not enough look up Krugman in the New York Times.
Ireland is collapsing as is Greece. (see my own blog on the subject: http://scotlandunspun.blogspot.com/2010/08/tory-cuts-death-spiral_18.html)
A year ago when everyone and his granny went along with the economic theology of 'stimulus' I was against it and predicted the outcome we have now. I knew we were heading into depression before that. All can be checked on my blog entries. Austerity was a predictable policy outcome after the failure of 'stimulus'. And it will be just as stupid.
Right now presidential advisers and many others are predicting that the Western world is heading into recession. International investors and the very top trend forecasters are forcasting hyperinflationary depression in the US, Britain and other places. There are forecasts of currency collapse in the pound, the dollar, the euro and others and more war.
Austerity will shrink the tax base and the government will simply resort to printing more money to pay its debt - then you'll have hyperinflation.
Harvard economic historian is telling us that he sees the end of the Western financial system and the collapse of the US economy within 2 years as well as the collapse of the Euro. See here: http://www.niallferguson.com/site/FERG/Templates/Home.aspx?pageid=1
You really have to stop reading the captured mainstream UK media and go for a walk. Reality is hitting home and the pace is picking up quickly. Cameron knows nothing - you have to realise that the political class is servile to the bankers who have kidnapped the economy. They are simply song and dance men for international financiers. I am not coming from the point of view of an ideological socialist or whatever, the problems we are facing is the death of the market by the collusion of banking and government otherwise known as fascism.
You can not trust government anymore and certainly not banks so yes, get your cash out of fiat currency and buy some gold, silver, commodities. land but not paper.
Austerity is simply the process of cheapening soverieng assets to be bought by said financiers. In the process the people will be locked into debt-peonage for generations.
It is time to wake up William. There's been a coup and Britain is about to collapse - 'stimulus' and 'austerity' are propaganda.
Ireland according to Ambrose Evans Pritchard of The Telegraph:
"pull themselves out of a tailspin if they act fast. It is the laboratory for debt-hangover cures in the eurozone.
The nation has certainly been bold, cutting public wages by 13pc (including pension levies) to restore competitiveness. This is known as an “internal devaluation” in IMF parlance, the only option left for a country that cannot devalue its currency.
Less clear is whether it can work. The budget deficit seems stuck at 14pc of GDP, and unemployment has risen to 13.7pc. The severity of the slump is eating away at the tax base. Critics say the country is chasing its tail.
Under the deflation, nominal GDP has contracted by almost 20pc. Yet the debt stock has risen. Ireland is uncomfortably close to a debt-deflation trap along the classic lines described by Irving Fisher in the 1930s.
Read more: http://www.businessinsider.com/irish-debt-fears-reemerges-2010-8#ixzz0x3ofLmhC"
If that's not enough look up Krugman in the New York Times.
Ireland is collapsing as is Greece. (see my own blog on the subject: http://scotlandunspun.blogspot.com/2010/08/tory-cuts-death-spiral_18.html)
A year ago when everyone and his granny went along with the economic theology of 'stimulus' I was against it and predicted the outcome we have now. I knew we were heading into depression before that. All can be checked on my blog entries. Austerity was a predictable policy outcome after the failure of 'stimulus'. And it will be just as stupid.
Right now presidential advisers and many others are predicting that the Western world is heading into recession. International investors and the very top trend forecasters are forcasting hyperinflationary depression in the US, Britain and other places. There are forecasts of currency collapse in the pound, the dollar, the euro and others and more war.
Austerity will shrink the tax base and the government will simply resort to printing more money to pay its debt - then you'll have hyperinflation.
Harvard economic historian is telling us that he sees the end of the Western financial system and the collapse of the US economy within 2 years as well as the collapse of the Euro. See here: http://www.niallferguson.com/site/FERG/Templates/Home.aspx?pageid=1
You really have to stop reading the captured mainstream UK media and go for a walk. Reality is hitting home and the pace is picking up quickly. Cameron knows nothing - you have to realise that the political class is servile to the bankers who have kidnapped the economy. They are simply song and dance men for international financiers. I am not coming from the point of view of an ideological socialist or whatever, the problems we are facing is the death of the market by the collusion of banking and government otherwise known as fascism.
You can not trust government anymore and certainly not banks so yes, get your cash out of fiat currency and buy some gold, silver, commodities. land but not paper.
Austerity is simply the process of cheapening soverieng assets to be bought by said financiers. In the process the people will be locked into debt-peonage for generations.
It is time to wake up William. There's been a coup and Britain is about to collapse - 'stimulus' and 'austerity' are propaganda.
Ireland according to Ambrose Evans Pritchard of The Telegraph:
"pull themselves out of a tailspin if they act fast. It is the laboratory for debt-hangover cures in the eurozone.
The nation has certainly been bold, cutting public wages by 13pc (including pension levies) to restore competitiveness. This is known as an “internal devaluation” in IMF parlance, the only option left for a country that cannot devalue its currency.
Less clear is whether it can work. The budget deficit seems stuck at 14pc of GDP, and unemployment has risen to 13.7pc. The severity of the slump is eating away at the tax base. Critics say the country is chasing its tail.
Under the deflation, nominal GDP has contracted by almost 20pc. Yet the debt stock has risen. Ireland is uncomfortably close to a debt-deflation trap along the classic lines described by Irving Fisher in the 1930s.
Read more: http://www.businessinsider.com/irish-debt-fears-reemerges-2010-8#ixzz0x3ofLmhC"
If that's not enough look up Krugman in the New York Times.
Ireland is collapsing as is Greece. (see my own blog on the subject: http://scotlandunspun.blogspot.com/2010/08/tory-cuts-death-spiral_18.html)
A year ago when everyone and his granny went along with the economic theology of 'stimulus' I was against it and predicted the outcome we have now. I knew we were heading into depression before that. All can be checked on my blog entries. Austerity was a predictable policy outcome after the failure of 'stimulus'. And it will be just as stupid.
Right now presidential advisers and many others are predicting that the Western world is heading into recession. International investors and the very top trend forecasters are forcasting hyperinflationary depression in the US, Britain and other places. There are forecasts of currency collapse in the pound, the dollar, the euro and others and more war.
Austerity will shrink the tax base and the government will simply resort to printing more money to pay its debt - then you'll have hyperinflation.
Ireland according to Ambrose Evans Pritchard of The Telegraph:
"pull themselves out of a tailspin if they act fast. It is the laboratory for debt-hangover cures in the eurozone.
The nation has certainly been bold, cutting public wages by 13pc (including pension levies) to restore competitiveness. This is known as an “internal devaluation” in IMF parlance, the only option left for a country that cannot devalue its currency.
Less clear is whether it can work. The budget deficit seems stuck at 14pc of GDP, and unemployment has risen to 13.7pc. The severity of the slump is eating away at the tax base. Critics say the country is chasing its tail.
Under the deflation, nominal GDP has contracted by almost 20pc. Yet the debt stock has risen. Ireland is uncomfortably close to a debt-deflation trap along the classic lines described by Irving Fisher in the 1930s.
Read more: http://www.businessinsider.com/irish-debt-fears-reemerges-2010-8#ixzz0x3ofLmhC"
If that's not enough look up Krugman in the New York Times.
Ireland is collapsing as is Greece. (see my own blog on the subject: http://scotlandunspun.blogspot.com/2010/08/tory-cuts-death-spiral_18.html)
A year ago when everyone and his granny went along with the economic theology of 'stimulus' I was against it and predicted the outcome we have now. I knew we were heading into depression before that. All can be checked on my blog entries. Austerity was a predictable policy outcome after the failure of 'stimulus'. And it will be just as stupid.
Right now presidential advisers and many others are predicting that the Western world is heading into recession. International investors and the very top trend forecasters are forcasting hyperinflationary depression in the US, Britain and other places. There are forecasts of currency collapse in the pound, the dollar, the euro and others and more war.
Austerity will shrink the tax base and the government will simply resort to printing more money to pay its debt - then you'll have hyperinflation.
Harvard economic historian is telling us that he sees the end of the Western financial system and the collapse of the US economy within 2 years as well as the collapse of the Euro. See here: http://www.niallferguson.com/site/FERG/Templates/Home.aspx?pageid=1
You really have to stop reading the captured mainstream UK media and go for a walk. Reality is hitting home and the pace is picking up quickly. Cameron knows nothing - you have to realise that the political class is servile to the bankers who have kidnapped the economy. They are simply song and dance men for international financiers. I am not coming from the point of view of an ideological socialist or whatever, the problems we are facing is the death of the market by the collusion of banking and government otherwise known as fascism.
You can not trust government anymore and certainly not banks so yes, get your cash out of fiat currency and buy some gold, silver, commodities. land but not paper.
Austerity is simply the process of cheapening soverieng assets to be bought by said financiers. In the process the people will be locked into debt-peonage for generations.
It is time to wake up William. There's been a coup and Britain is about to collapse - 'stimulus' and 'austerity' are propaganda.
Apogee,
Where the money went is a complicated story. Firstly, it was created out of thin air to start with. When you put €1 into a bank they can then lend €10 - that figure got bigger and bigger. Then the banks lend it out and then you pay it back with interest and your loan is backed by security like your house. The problem was that no-one had any security left with which to borrow so the banks then made loans to people with no security knowing that it wouldn't be paid back. At the same time the traded derivatives with each other. This was a bet that loans would not be repaid. Every time the banks trade fake money they take commission and bonuses so the bankers (not the banks) pushed their banks into insolvency so that they could keep taking bonuses.
So, all the money that was loaned out could not possibly be paid back. And so lots of debts (trillions) ended up on the balance sheets of the banks. They owed each other trillions and stopped lending money to themselves and to business - this is called the credit freeze.
As they owed trillions the banks should have been closed down. They weren't and instead the government started giving them your money to try and fill the gap - that is why there is a problem with the economy.
The banks are still insolvent but now taxpayers and governments are too.
The banks should never have been allowed to create so much money but that's where the bonuses come from.
It was and is systemic fraud but no-one is going to be made to asnwer for it except that the ordinary person will be made to pay for it for generations.
Much of the loans ofcourse inflated the economy but that had to stop and then the loans have to be paid back with interest. The loans were based on economic figures which were based on the fraudulant creation of money so the loans were going to fail and the bankers knew that. that is why the debts need to be repudiated.
Hi Alex, yes, will go along with all that.
If the money never existed except in the minds of the bankers, the bankers should have been thrown to the wolves.
But who pocketed the cash the banks were wrongly given.
would it not have been cheaper and more effective to have divvied up the cash and give equal shares to the people.
Oh, I forgot, its fiat money, worthless, and I seem to remember reading that Britain has been bankrupt since about 1859 anyway.
Why do we put up with our rulers?
Apogee,
The problem seems to be that the bankers (not those who own the bank) got bonuses by trading with fake money. Then the banks went bust. The owners (shareholders) and bondholders were then bailed out. Then the Bank of England kept (and still is) giving more free money to the banks and they are trading fraudulant derivative products which will again pay them bonuses whilst parking the debt on the taxpayer.
Above I mentioned that the banks should have been liquidated. This does not mean, as William thinks, that the depositors are wiped out. Indeed they are protected. Instead the shareholders and bondholders are wiped out. The way things stand, the banks will still go under and the depositors will get hit.
The orginal problem of credit freeze was easy to sort out as you say. The bail-out money was enough to pay off every credit card and mortgage in Britain. had they done that people would have no debt so would be able to borrow and save and would also be spending money and so the consumer economy would be back on track.
No, for some reason the super rich were to get bailed out at our expense and now the 'capo' Brown gets to cash in. Job done!
There's all this panic about heating during winter when we are standing, literally, on centuries-worth of fuel. It's called 'coal'. We have it, we can mine it and we can burn it. Why don't we?
It would be cheaper to drop off a couple of hundredweight of coal at each pensioner's house than it is presently costing trying to figure out how much money to give to them for the ever costlier gas and electricity.
Let's dig up out own fuel, it's got to be cheaper.
Steve, there's still coal mined here locally, although it's opencast. Of course it's got to be cheaper, but it was Thatcher who first decided that we could buy imports more cheaply then the greens got onto the pollution effect etc.
I converted two fireplaces to gas some years ago now, and although they're 'coal effect' they're nothing like the real thing, only far less work.
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