Political views of realists and rosetinters

[frankbutcher]

we have a massive GDP deficit

Eh? In that one phrase you have demonstrated you haven't got a clue what you are talking about.

We have a massive deficit as a percentage of our GDP. In other words we spend more than our GDP every year. I know exactly what I'm talking about.

[frankbutcher]

I'm working on the assumption the business and the country come up with the money in exactly the same way
whether they borrow it or find it down the back of the sofa
thats the nature of a sensible comparison
(amazing and illustrative that in your world companies HAVE money v=but countries borrow it)

you won't be able to find a single economic model that compares countries and businesses

yes GDP doesn't really work as either turnover or P&L... it's kinda my point
Gross domestic product (GDP) refers to the market value of all officially recognized final goods and services produced within a country in a given period. It's not the same as cashflow, turnover or P&L.

But if you keep borrowing more money, you pay more interest. And if you borrow too much money, the interest rate goes up. It gets to the point that it is impossible to out-weigh the cost of debt compared to the monetary return from handing it out (investment in the economy). Do you not see this balance? I lend money to businesses. Believe it or not, on my say so alone I can lend hundreds of thousands of pounds to a business. If i lend £250,000 at an 8% interest rate, a Company needs to make a bloody good return on any investment they make off the back of it. This is why the UK goverment is concentrating on getting the deficit down. We are better off bumping along the bottom with little or no growth. At the same time the deficit comes down and eventually we can start repaying our debt.

[highburyJD]

the UK is not a business
you may well know loads about business
you have established beyond doubt you don't know about a countries economics and are simply projecting the knowledge you do have into a sphere in which in doesn't apply

the debt/interest issue isn't relevant here, in the hypothetical the money would of course come from identical sources.

It did illustrate your assumption that a countries money is automatically borrowed but a businesses money somehow isn't.

[frankbutcher]

the UK is not a business
you may well know loads about business
you have established beyond doubt you don't know about a countries economics and are simply projecting the knowledge you do have into a sphere in which in doesn't apply

the debt/interest issue isn't relevant here, in the hypothetical the money would of course come from identical sources.

It did illustrate your assumption that a countries money is automatically borrowed but a businesses money somehow isn't.

If you stick your fingers in your ears and keep talking, you get what you're doing now.
You haven't dis-proved any of my points at all.
The UK owns things (assets), owes money (debt), makes money and spends money. We need to live within our means, I know that businesses can use their own money, but we're talking about the UK in this discussion. We have a DEFICIT . Therefore all of your "give-aways" would requie the UK to borrow more money. Borrowing costs the country interest payments. If you borrow too much money intertnaional rating agencies change yourr rating and you pay more interest. On the topic of mis-understanding you don't know whay GDP is. You also think that £100 of investment flows back to the goverment 100% in taxes from income tax, PAYE and profits from Sole Traders.

[flash gunner]

we have a massive GDP deficit

Eh? In that one phrase you have demonstrated you haven't got a clue what you are talking about.

We have a massive deficit as a percentage of our GDP. In other words we spend more than our GDP every year. I know exactly what I'm talking about.

Sounds like youre trying to convince yourself now

[highburyJD]

first Chippy's right and your reply doesn't actually make sense

we have a massive GDP deficit

Eh? In that one phrase you have demonstrated you haven't got a clue what you are talking about.

We have a massive deficit as a percentage of our GDP. In other words we spend more than our GDP every year. I know exactly what I'm talking about.

If you stick your fingers in your ears and keep talking, you get what you're doing now.
You haven't dis-proved any of my points at all.
The UK owns things (assets), owes money (debt), makes money and spends money. We need to live within our means, I know that businesses can use their own money, but we're talking about the UK in this discussion. We have a DEFICIT . Therefore all of your "give-aways" would requie the UK to borrow more money. Borrowing costs the country interest payments. If you borrow too much money intertnaional rating agencies change yourr rating and you pay more interest. On the topic of mis-understanding you don't know whay GDP is. You also think that £100 of investment flows back to the goverment 100% in taxes from income tax, PAYE and profits from Sole Traders.

so many points
hardly worth the time

Therefore all of your "give-aways" would requie the UK to borrow more money.

the £100 bonus give away was not an action plan
it was an illustration that countries and businesses are at their core fundamentally different
that similar actions affect the two structures totally differently

On the topic of mis-understanding you don't know whay GDP is.

I know wiki can be controversial, but not on this issue
http://en.wikipedia.org/wiki/Gross_domestic_product

Gross domestic product (GDP) refers to the market value of all officially recognized final goods and services produced within a country in a given period.

You also think that £100 of investment flows back to the goverment 100% in taxes from income tax, PAYE and profits from Sole Traders.

no you're getting confused again Frank. We're talking about the country remember? You said the UK is a business. Now you seem to think the government is a business and the UK is it's government - neither of those are the case either. There's no suggestion £100s of money put into the UKs economy by the government returns to the government - I even mentioned some blackmarket non-tax paying examples which implied this (drugdealers and stockbrokers probably). What it does is EFFECT THE ECONOMY. Money passing from a company to it's employers (or customers) does not have this compound impact - once outside the company the money makes no difference to the company.

This is not a complicated point.

At no point have I said companies or countries should just give money away. That said it is a long standing (ancient in fact) national economic lever - can't remember many business giving away money as a strategy...

[highburyJD]

we have a massive GDP deficit

Eh? In that one phrase you have demonstrated you haven't got a clue what you are talking about.

We have a massive deficit as a percentage of our GDP. In other words we spend more than our GDP every year. I know exactly what I'm talking about.

2 seconds on google
budget deficit approx £100B
GDP approx £2.25T
so thats GDP is 22 times as much as the deficit
the idea we could

spend more than our GDP every year.

shows there's no way you can understand what GDP is - its a quite ridiculous suggestion
a deficit is spending more than the govt will receive in taxes (which has often been a good idea for a country)

stick to the business Frank

[frankbutcher]

JD - just give up. Everyone can see that you're talking nonsense. The Coalition are doing the right thing. They are reducing the deficit. If we keep spending as you suggest we do, we will increase our cost of debt and our rating will worsen. This will simply increase our interest cost, which will out-weigh any benefit from investment. The UK is a business. We must work within our means. We have borrowed too much money. Now we need to pay it back. We won't pay it back by borrowing more money. I will remind you for the last time - WE DON'T HAVE ANY MONEY!!!!!!!!!

[mcdowell42]

Hey guys you should get Babatunde involved in your discussion on this subject it might take his mind off other things

[highburyJD]

thanks

the UK is not a business

the idea we could spend more than GDP is hilarious

stick to the business

[frankbutcher]

Returning to the point. You still think we shouldn't be making cuts.. We should instead be investing more money to increase taxes etc? Isn't that what Labour did for the last decade?
Talk me through how this grand plan reduces the deficit and at the same time keeps the international economy confident in our recovery plan. I'm all ears.

[highburyJD]

Returning to the point.

classic
is that you accepting you were wrong?

[frankbutcher]

Returning to the point.

classic
is that you accepting you were wrong?

No. I'm completely right as usual. I'm accepting you're wrong. At the moment we spend more than we earn. Even under the Tories a deficit will remain for years..... How is increasing the deficit (under your plan) going to reduce the deficit? You must be some sort of economical alchemist. I want to hear the intricacies of your grand plan....

PS - Does it involve playing the Euromillions every week?

[highburyJD]

JD - just give up. Everyone can see that you're talking nonsense. The Coalition are doing the right thing. They are reducing the deficit. If we keep spending as you suggest we do, we will increase our cost of debt and our rating will worsen. This will simply increase our interest cost, which will out-weigh any benefit from investment. The UK is a business. We must work within our means. We have borrowed too much money. Now we need to pay it back. We won't pay it back by borrowing more money. I will remind you for the last time - WE DON'T HAVE ANY MONEY!!!!!!!!!

Talk me through how this grand plan reduces the deficit and at the same time keeps the international economy confident in our recovery plan. I'm all ears.

in the grand spirit of politicians, babatunde and me after revising badly for exams I am instead of asking your question
going to do something completely different that I find more interesting (also I havent got a coherent economic recovery plan preprepared)
Lets accept the UK is a business and 'work within our means'
1st things 1st do we need unproductive members of society? No we don't we're a business.
So lets retire those that cant work and incentivise those that don't...
how does that work for a country...?
ok euthanasia for all who can't pass a fit to work test
mums at home looking after kids? - easy, send the kids to work (their little fingers are good for getting into machinery and they accept very low wages) they can live in the factory reducing a housing cost. Mums can work too - unless they fail the fit to work test in which case they join granny at the glue factory.
I've just taken unemployment benefits, pensions and education off our P&L sheet - CEO of the year?

the UK is not a business

[highburyJD]

No. I'm completely right as usual.

amazing
so you're standing by...

we have a massive GDP deficit

Eh? In that one phrase you have demonstrated you haven't got a clue what you are talking about.

We have a massive deficit as a percentage of our GDP. In other words we spend more than our GDP every year. I know exactly what I'm talking about.

the comedy misundertsanding of GDP first illustrated by Chippy
that you then exaggerated into full blown 'the govt is outspending GDP' insanity
(its prob not even possible - very difficult to even think of a way of doing it
the govt would have to borrow money and then invest it 100% outside the country...)

On the topic of mis-understanding you don't know whay GDP is. You also think that £100 of investment flows back to the goverment 100% in taxes from income tax, PAYE and profits from Sole Traders.

you standing by this too..?
I can't read it as anything but a misunderstanding on your part that the UK IS the Govt...
is there another explanation?
What is your definition of GDP? Mine was the standard dictionary definition.

money released to individuals in the UK economy (from the government or the euromillions) effects the economy (in a compound fashion) to the extent it is spent

This is not the case with a business. When the business pays an individual the money it no longer has any financial impact on the business.

It's almost unbelievable you could continue to deny this...