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Chancellor Alistair Darling has forecast that for the full year the public sector public borrowing would reach £43bn.
The government has said it will keep investing money into public works to prevent a recession.
Bit late now we are already there!
govt should be looking at cutting back in spending urgently before the govt gets any deeper in debt otherwise tax will go up.
[are they wasting money knowing they will loose the next election knowing that the bigger the uk debt the harder the tory govt will have to do anything due to lack of funds and make them look bad resulting in labour coming back the following term]
either way a big tax rise coming our way.
So much for the government keeping public spending down.
And Labour can lead us into a big recession as is normal with their type of borrowing.
And who will they blame it on in years to come, but the Tories.
Brown as chancellor borrowed & borrowed with leaving little in the purse for emergencies.
Expect this recession to be bad for at least for 2 years!
Well done Gordon, prove why Labour can never be trusted in power!
want to increase the amount of spending and it has two ways of doing this:
1. Increase public spending
2. Tax cuts
Unfortunately, Labour governments only know one tactic and that is to try and spend their way out of trouble, something that never works however many times they try it.
The idea that the government might actually consider reducing tax receipts has forever been abhorrent to GB. Not taxing returns from shares in pension funds (as he started in the year Labour came to power) would be good start, but it will not happen.
Greed has not left the government. Why should the banks ever change when political leaders continue in such a way?
who told the government - in the late 1930's - that the way to lift an economy out of depression was for the government to spend money on public works projects (road-building and the like), and to lower interest rates.
Put very simply, the theory behind increasing public-sector spending is that it creates wealth. The government initiates a road-building programme, for instance, and the work is done by contractors. They are paid by the government, and in turn they employ people to do the work. The workers spend their wages buying goods, which means employment for more workers, and so on. The money that is spent on materials also means employment for the workers in production companies.
It becomes very involved, and there plenty of critics of the theories expounded by Keynes. Nevertheless, there's an underlying logic in increasing public expenditure to stimulate an economy, provided you don't have to borrow the money to do it.
I doubt if there will much in the way of tax increases, apart from the usual, before the next election as it would be political suicide, but we are going to get hammered afterwards, they reckon that apart from all the borrowing that this governments commitment to CO2 emmisions is going to cost every family £1000pa. Most of the rest of the EU have already said that they cannot afford it, but according to GB we are going ahead anyway, plus the increased burden on the taxpayer for shortfalls from business re the olympics.
Yes there is some logic if taken on a simplistic viewpoint, and as you say if the government has the money in the bank, which it does not, also assuming the money circulates within the countrys economy, but the situation we have is that the money in this instance will have to be borrowed, and later repaid, certainly a portion of it will go abroad in various ways, we have virtually no manufacturing for example, we already have a balance of payments problem.
But what is the alternative, unfettered capitalism?
Ask the US where 'the markets' took them, and ourselves.
Are you an ex-pat or non-UK taxpayer?
Was puzzled by your statement "...YOU will all pay more...". (;-)
Sorry - should have copied and pasted!
cutting taxes achieves the same thing - more people will have more money to spend.
The problem with building new roads etc. is that the same people you employ will be unemployed once the economy has stabilised.
I'm also not sure quite how much more money the government can usefully spend on public services... diminishing returns and all that.
And yes, of course, it doesn't help that the government can only borrow (certainly now corporate revenue has plummeted).
I guess that buy out of the 10% debacle doesn't look like it was such a good idea now...
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