Emergency Budget

Why I think that cutting hte budget so fast is gonna cause a double dip.

Whether we like it or not the previous government created a false economy based on high government spending. This had a lot of companies diversifying their previously high private trade to government contracts as they tend to be prompter payers and fairer clients. This has been going on for years so many companies, especially in the construction industry where I work, have become more dependent on government spending. This is compounded by the fact that private companies arent spending becuase of the recession. In my opinion companies shoudl have been given time to ween themselves off government spending and lift the economy, so that private investors start spending again and a switch back to private funding can take place. To give you an example, a contract we have been gearing upto has simply been axed with no explanation or time to plan our exit, consequently we will loose at least 60 staff it may even make our local office unviable so we will really loose 120 staff, this knocks on to all the companies that supply us and so on and so forth. The Tories did the same in 1992 and wouldnt spend and decimated industries then and the same is happening again.

In my opinion, raising income tax would have been the best way to do, so that the money in the economy is taking fairly from everyone and every company has a little hurt but can deal with it. This bull**** about a tax on jobs is rubbish. I woudl rather have a company stay stagnant in terms of employment for a year or two rather than see it shed jobs due to a massive decrease in its market.

A final point, please whoever keeps doing it, stop comparing our debt to Greece. I know Cameron said it in his 3 way leader debate, but it is complete bunkum. Greece and the United Kingdom have totally different economies both in makeup and scale and we have a different attitude to paying our taxes. A little scare tactic that should have been squashed by the other 2 at the time.

[Biker Biggles]

I think you could be right about the double dip.Not sure about your reasons but I think the impending collapse of the Euro will drag everyone down.This time round all the governments are skint(including us)so who will pay for the next lot of bailouts?
Looking at what happened in the twenties and thirties and compressing the timescales to reflect modern life there is a strong similarity.
Third world war set to start in November then?

Here we go again. Question time tonight John Redwood comparing Greeces debt to ours to scare people. In my opinion this is extremely misleading and they shoudl stop it now they are in power.

check out this linky to see the vast difference between the two economies.

http://news.bbc.co.uk/1/hi/business/10150007.stm

[Luckypants]

I think you will find it is the DEFICIT that is similar to Greece's (plus Spain's and Ireland's), and this is the concern. The deficit is the money the government spends that is more than it takes in tax, which leads to big debts. Our deficit is very similar to Greece's so if we do not cut the deficit we will end up with debts like Greece's (as a percentage of GDP) which will be catastrophic.

So yes, be scared because unless the runaway train that is government spending (from the previous governments policies) is slowed and brought back under control, we will end up in a similar position as Greece. Ireland has already made swingeing cuts to spending to try to head this off and plans more. Spain is worrying the Eurozone finance ministers as it has not made the cuts it needs to and seems to be following the same path as Greece.

Don't think we are immune.

[yorkie_chris]

Originally Posted by Rog

Why I think that cutting hte budget so fast is gonna cause a double dip.

You can't spend more than you've got indefinitely, whether you be Joe Bloggs, or GB, Plc.

IMO this is all caused by mis-distribution of wealth within the company.

How come someone can have a big house, flash cars etc . . . when we can't even get our hospitals to run properly?

How can you have Cameron with £3million quid when the country is billions in debt?

Taxing people more with higher earnings is always going to be the way to go. And it shouldn't be banded it should be % ratio on your earnings.
If the country is earning more money then people get taxed more, if they don't then the tax is less.

To answer Lucky Pants, yes I know that our defecit is similar in percetnage terms to Greeces but our economy is still completely different to that of Greeces and we are therefore far more likely to be able to pay that debt back and hence why we still have a AAA rating. I cannot deny its worrying but we do ahve the financial clout to get ourselves out of this.

Secondly, Yorkie Chris I totally accept that we have to get rid of this false economy based on hihg government spending but I maintain that this should have been more slowly and with more thought. As I said in my other post, alot of private companies have switched to government contracts because the private ones just arent there. if you are going to turn off the tap it has to be slower than this or the ripple through the jobs market and hence the economy is goignto be emense and defintely cause a double dip.

the only real way to tackle this is through higher taxation with some pruning and mostly wage freezes in the public sector. there are approximately 19,000,000 workers in britain so by increasing teh tax burden by say an average of £500 a year then we instanly raise 9.5bn I know that scares some people but I firmly believe we all have to dip our hands in our pockets. I dont like it anymore than anyone else but to snip the economy everywhere, i.e. through higher tax, will have a lesser effect than this random and blunt money axe they are wielding.

Some of you older types like me may remember what the tories did to the miners. whether it was right or wrong in terms of lossing coal production is immaterrial its the fact they simple shut them over night and then provided no support to the local communities. Some of those communities never recovered. Now imagine that but in macro as I believe it may happen.

All rather depressing working in the public sector at the moment

blanket tax is impossible, peole are breadline already to survive.

I still can't see how the richest in this country can earn money off everyone and then "move" abroad and expect to dodge taxes.

Taxing someone who earns £10 million a year another £10k is a lot easier than taxing 20 breadline families £500 a year.

Also there's easier ways of saving money like changing OAPs bus pass to 50p a journey or £1.

I think you have me wrong the poorest incomes would be very little increase teh higher earners would pay more, giving an average of £500.

I would point out that the rich are not a bottomless pit of money either. I would rather get £5000 from some one rich who considers it fair than hammer them, they hire someone to find a loop hole and then they pay nothing.