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Tottenham Riots

From a friend in England:

Using the riots as a cover, the cowardly racist thugs at the EDL are planning on firebombing masjids around the UK. This is news directly off their private forums from trusted contacts. Please ask all to be extra vigilant and ensure others know of this threat. We would much rather be safe than sorry. The police is unable to defend you or your property.
 
Oh, and by the way, here's another *Nobel Prize winning economist* advocating the same point of view as me:

http://www.ft.com/cms/s/0/c864cd58-c1d1-11e0-bc71-00144feabdc0.html#axzz1UcDLU4NX

How to make the best of the long malaise
By Joseph Stiglitz


The only good thing about the continuing barrage of bad economic news is that it could have been worse: all three rating agencies could have downgraded the US, stock markets could have fallen further and the US could have defaulted on its debt. The general view is now that in this, the next round of the Great Recession, there is a high risk of things getting worse, with no effective instruments at governments’ disposal. The first point is correct but the second is not quite right.

Throughout the crisis – and before it – Keynesian economists provided a coherent interpretation of events. Pre-crisis, America, and to a large extent the world economy, was sustained by a bubble. The breaking of the bubble has left a legacy of excess leverage and real estate. Consumption will therefore remain weak and austerity on both sides of the Atlantic now ensures the state will not fill the void. Given this, it is not surprising that companies are unwilling to invest – even those that can get access to capital.

Of course, those worried about the shortage of policy instruments are partially correct. Bad monetary policy got us into this mess but it cannot get us out. Even if the inflation hawks at the Federal Reserve can be subdued, a third bout of quantitative easing will be even less effective than QE2. Even that probably did more to contribute to bubbles in emerging markets, while not leading to much additional lending or investment at home.

The Fed’s announcement that it will keep the target federal funds rate near zero for the next two years does convey its sense of despair about the economy’s plight. But, even if it succeeds in stopping, at least temporarily, the slide in equity prices, it won’t provide the basis of recovery: it is not high interest rates that have been keeping the economy down. Corporations are awash with cash, but the banks have not been lending to the small and medium-sized firms that are, in any economy, the source of job creation. The Fed and Treasury have failed to get this lending restarted, which would do more to rekindle growth than extending low interest rates though 2015.

But the real answer, at least for countries such as the US that can borrow at low rates, is simple: use the money to make high-return investments. This will both promote growth and generate tax revenues, lowering debt to gross domestic product ratios in the medium term and increasing debt sustainability. Even given the same budget situation, restructuring spending and taxes towards growth – by lowering payroll taxes, increasing taxes on the rich, as well as lowering taxes for corporations that invest and raising them on those that do not – can improve debt sustainability.

The politics, however, are elsewhere. Markets know that the mix of low tax and debt fetishism sweeping the North Atlantic means that there are no instruments at hand: monetary policy won’t work, fiscal policy is constrained, growth will slow and the improvement in deficits (brought by austerity) will be disappointing.
But markets have a political agenda too, clearly evident in S&P’s downgrade. No economist would look just at the debt side of a balance sheet, yet that is what S&P focuses on. Even more telling is the fact that the US pays its debts in dollars, and it controls the printing presses. There is thus no chance of a default – apart from the kind of political charade we saw last week.

Markets are often wrong but the rating firms’ record does not inspire confidence – certainly not to justify replacing the aggregate views of millions with judgments of a few “technicians” working in a firm whose governance and incentives are problematic. Europe’s leaders were right in their recent meeting to call for less reliance on these ratings.
Europe and America now face extraordinarily difficult politics. It is hard to know which is worse: America’s gridlock, or Europe’s broken political structure. Europe’s leaders have taken decisive action but events move faster than their processes of ratification and implementation. Europe’s debt-to-GDP ratio is also lower than in the US; if it had an adequate common fiscal framework, it would be in a better position than America, too.

Europe’s other problem is too many think fiscal stringency is now the answer. Yet Ireland and Spain had a surplus and low debt-to-GDP ratios before the crisis. More austerity will only ensure that Europe grows more slowly and its fiscal problems will mount. Only latterly have Europe’s leaders finally recognised that Greece and the other crisis-plagued countries needed growth – and that austerity would also never bring that growth.

All of this makes it more likely that the North Atlantic will enter a double dip, but there is also nothing magic about the number zero. The critical growth rate is that which stops the jobs deficit growing larger. Problematically, America and Europe’s current growth rate of about one per cent is less than half of the amount required to do this.
When the recession began there were many wise words about having learnt the lessons of both the Great Depression and Japan’s long malaise. Now we know we didn’t learn a thing. Our stimulus was too weak, too short and not well designed. The banks weren’t forced to return to lending. Our leaders tried papering over the economy’s weaknesses – perhaps out of fear that if we were honest about them, already fragile confidence would erode. But that was a gamble we have now lost. Now the scale of the problem is apparent, a new confidence has emerged: confidence that matters will get worse, whatever action we take. A long malaise now seems like the optimistic scenario.
 
[quote author=Sunny link=topic=46360.msg1377388#msg1377388 date=1312984135]
[quote author=Jack D Rips link=topic=46360.msg1377387#msg1377387 date=1312984001]
[quote author=ctlovesred link=topic=46360.msg1377379#msg1377379 date=1312983287]
At the heart of government spending in every western society is entitlement programs.

And they are bankrupting all of us.
[/quote]

SPOT ON. Unfortunately the numbers who have to pay for those entitlement are dwinding, and are being squeezed more and more, and will continue to be squeezed until we have nothing left to give.
[/quote]

And yet the ones who receive want more
[/quote]

You mean like the people who are already >£100K salaries a year, getting 5 figure (or more) bonuses, all kinds of stock options etc, and yet it's not enough - so they have to diddle the system out of tax they should be paying, or hire expensive accountants to find loopholes to allow them to legally avoid paying tax on their earnings.

Such as the bankers who got us into this fucking mess in the first place.

Don't get me wrong, I'm all for picking on scroungers who stitch the rest of us up - but let's start with the people costing the country the most money eh? And that isn't the people on benefits - they're just the ones the people with money want you to pick on so they don't get any grief themselves
 
[quote author=LeTallecWiz link=topic=46360.msg1377406#msg1377406 date=1312986755]
From a friend in England:

Using the riots as a cover, the cowardly racist thugs at the EDL are planning on firebombing masjids around the UK. This is news directly off their private forums from trusted contacts. Please ask all to be extra vigilant and ensure others know of this threat. We would much rather be safe than sorry. The police is unable to defend you or your property.
[/quote]

Thing is shizzle like this just gets sent round absentmindedly, its the kind of viral text that spreads and will probably be sent around again in a few weeks.
I don't believe it personally...I'v seen it and its been sent to me already.

One of the guys who was killed in the hit and run leaves behind a wife who is four months pregnant.
 
[quote author=gene hughes link=topic=46360.msg1377412#msg1377412 date=1312987186]
Singlerider kicking ass.
[/quote]

Singlerider with too much time on his hands :🙂

regards
 
Thanks for the very eloquent reply SR.

Dont expect anything from our Tea Party propagandist.
They just cant see beyond their less taxes, less welfare state, cuts, less federal power, etc...
How nice would it be to come back to the western days, and slavery why not? good old days.

Italy GDP/debt ratio is circa 120% and is the main concern on the markets at the moment. If Italy defaults, Spain will follow and the whole Euro zone could implode.
And FWIW, Japan GDP/debt ratio is 220%.
 
[quote author=singlerider link=topic=46360.msg1377396#msg1377396 date=1312985839]
[quote author=Krump link=topic=46360.msg1377389#msg1377389 date=1312984216]
[quote author=singlerider link=topic=46360.msg1377386#msg1377386 date=1312983915]
[quote author=Krump link=topic=46360.msg1377373#msg1377373 date=1312982914]
But SR, we shouldn't be borrowing anything at all, never should have except in emergencies. Philosophically I don't agree with the concept of state, pragmatically I realise we're stuck with it. In the meantime tax rises alone aren't the answer. If we expect to operate not increasing the debt we need to generate 150 billion through extra taxes and cuts. Massve cuts. It doesn't matter what people are used to or what some assume to be rights, they're not affordable.
[/quote]

I don't know where the borrowing bit has come into this, but can I just ask if you own a house - and if you do did you pay cash or get a mortgage?
[/quote]

I borrowed based on an ability to pay it back over a fixed term and not with the full certainty that I was going to overspend my budget by 15 or 20% again this year and need to borrow that too. I borrowed once and that was it. The kind of borrowing the govt does is getting a credit card to pay off another credit card, all the time. It's the kind of borrowing that we all rightly try and discourage our friends from getting involved in. It's the kind of borrowing that leaves you entirely reliant on the whims and terms of your creditors.
[/quote]

That's not exactly true though Krump. The kind of borrowing the government does is more like re-mortgaging rather than using one credit card to pay off another, because that implies that it doesn't actually bring in any money, it's just playing a game shuffling it around from place to place while all the while it gets deeper and deeper into debt.

Not true.

Now that I'm back home I can post pictures again, so hopefully with the aid of shiny pictures I can make my point clearer. This is what the public net debt looks like for the UK over time - I'm showing this as a percentage of GDP as that is far more relevant than as sums of money (you can spend as much as you like, as long as you earn more, but if you earn nothing then even spending a little will fuck you up):

ukgs_line.php


So over the past century and a bit it's actually been a lot worse for a fair bit of the time. We're around 60% of GDP now, which isn't great - but to put this into context think about the mortgage analogy - people are getting 3x mortgages, which is the equivalent of 300% of GDP - at the height of things, people were getting 5x mortgages - 500% of what they were earning. As a household how much more do you owe than you earn in a year? Twice as much, three times as much, more?

Scary, no?

Well actually, no - because as long as you've got employment prospects and can keep the money coming in, you'll be okay. Same for the country - borrowing is fine, as long as there's money coming in.

So what about the interest? Some people get interest only mortgages and they spend everything just paying off that and not even touching the capital. Well, as a country the interest is currently about a shade under 3% of GDP, no biggie. Again, in the context of the past century and a bit, it looks like this:

ukgs_line.php


So in actual fact, apart from the time when "Labour went crazy with the credit card" - you have to go all the way back to before WW1 to find a time when we were paying less interest.

This whole rhetoric that borrowing is out of control and dangerous is a complete fallacy, as is the idea that things keep getting worse and worse. Sure, the amounts of money keep getttng bigger, but that's just the way of things - Mars bars used to cost under 20p when I was a nipper, cans of Coke were 14p, an Escort only cost a few grand, a house was 30K. Times change, money goes up.

The only truly important measure is against GDP - against what is being earned. In that context, the problems are being hugely exaggerated to promote an agenda that really will send us into a spiral of doom - because these savage cuts and austerity measures will damage growth - and that is the most important thing.

We can spend as much as we like, as long as it's affordable relative to what we're earning. The austerity measures are causing significant damage to how much we're earning.

Once again the forecast for growth has been revised, down from 1.8 to 1.4 now.

I've been banging on about this for ages now, and so far of all the people talking shit about the economy (on this site at least) I'm the only one who has A) backed up his argument with solid evidence, and B) been proven right time and time again.

Seriously, I can do this shit all fucking day
[/quote]

This is all bullshit. From the first paragraph. It's not comparable to a repayment mortgage because no one is ever talking about repaying a principle - only growing the debt.

It's ridiculous, it's a pyramid scheme.

Of course we had to borrow fuckloads when we were in a war, but we borrowed through the 2000s for stupid reasons. Now we're skint because of it.
 
[quote author=Le Chacal link=topic=46360.msg1377421#msg1377421 date=1312987354]

How nice would it be to come back to the western days, and slavery why not? good old days.

[/quote]

Can you please stop with these generalizations? From relating Breivik to Tea Party activists, and now CT's position (which a few other established posters on the site agreed with) to slavery - you're going a bit too far with your ______ (whatever you want to call it) of political positions that aren't your own.

Please stop.
 
[quote author=singlerider link=topic=46360.msg1377427#msg1377427 date=1312987810]
We're not in a war right now?

Wonder what Iraq and Afghanistan think about that?
[/quote]

OK, we spend 50 billion on the military and 50 billion on interest. I'd be looking at getting both closer to zero tbh.

And how is this good?

206.gif


*excluding interventions means excluding bank bailouts.
 
[quote author=singlerider link=topic=46360.msg1377414#msg1377414 date=1312987231]

You mean like the people who are already >£100K salaries a year, getting 5 figure (or more) bonuses, all kinds of stock options etc, and yet it's not enough - so they have to diddle the system out of tax they should be paying, or hire expensive accountants to find loopholes to allow them to legally avoid paying tax on their earnings.

Such as the bankers who got us into this fucking mess in the first place.

Don't get me wrong, I'm all for picking on scroungers who stitch the rest of us up - but let's start with the people costing the country the most money eh? And that isn't the people on benefits - they're just the ones the people with money want you to pick on so they don't get any grief themselves
[/quote]

Those people need sorting out as well mate. I'm not disagreeing with that.
 
[quote author=LeTallecWiz link=topic=46360.msg1377422#msg1377422 date=1312987354]
Single - are the others who advocate the other way round? And if they are, can you share those too?
[/quote]

The vast majority advocate Keynesian principles, as the basic macroeconomic principles have been proven to work time and time again.

Off the top of my head, I don't think there are any respected economists who now think that austerity measures and cuts are the way to go. Everyone can see that the lack of growth is gonna be the killer issue, and in actual fact most of them think things have already gone too far, the wrong policies have been adopted and that a double dip recession is inevitable
 
[quote author=singlerider link=topic=46360.msg1377414#msg1377414 date=1312987231]

You mean like the people who are already >£100K salaries a year, getting 5 figure (or more) bonuses, all kinds of stock options etc, and yet it's not enough - so they have to diddle the system out of tax they should be paying, or hire expensive accountants to find loopholes to allow them to legally avoid paying tax on their earnings.

Such as the bankers who got us into this fucking mess in the first place.

Don't get me wrong, I'm all for picking on scroungers who stitch the rest of us up - but let's start with the people costing the country the most money eh? And that isn't the people on benefits - they're just the ones the people with money want you to pick on so they don't get any grief themselves
[/quote]

Okay, but don't those who supposedly cost us money through tax loopholes etc also make the economy huge amounts of money? Surely the banks, for all their faults, are essential for the economy because of the amount of money they make as organisations?

Even down to an individual level, yes some people get paid a fortune in salaries and bonuses, but they also pay a great deal of tax on those salaries and bonuses, as well as paying a great deal of tax on everything they buy.

Some people (and its not only enormously wealthy people) can avoid tax on some of their money, yes, but I would suggest that a lot of them already pay a lot, and all they are doing is using processes that are already there, have been for some years without any sign of being closed, and are totally legal. You can say these people are greedy for not wanting to pay tax, but surely it is just human nature isn't it? If someone asks if you want to pay x amount or double x amount, what would you say?

Now, of course if the tax rate was a lot lower than it is then the people who spend lots of money on those expensive accountants you talked about might consider that they would be better off just paying the tax, and we would then have a smaller % of a lot more coming in rather than a bigger % of a total that hasn't be avoided, but then that would be an example of cutting taxes for the rich wouldn't it, and I guess that wouldn't be acceptable!
 
[quote author=LeTallecWiz link=topic=46360.msg1377428#msg1377428 date=1312987836]
[quote author=Le Chacal link=topic=46360.msg1377421#msg1377421 date=1312987354]

How nice would it be to come back to the western days, and slavery why not? good old days.

[/quote]

Can you please stop with these generalizations? From relating Breivik to Tea Party activists, and now CT's position (which a few other established posters on the site agreed with) to slavery - you're going a bit too far with your ______ (whatever you want to call it) of political positions that aren't your own.

Please stop.
[/quote]
I answer with generalizations to his generalizations. That one was a bit sarcastic but really not very far from reality.
Their constant provocation needs a provocative reaction. Thats the way to show what their true colour is.
Populism and provocation are their MAIN political strategy, why would we let them alone on that platform?
 
[quote author=singlerider link=topic=46360.msg1377433#msg1377433 date=1312988178]
[quote author=LeTallecWiz link=topic=46360.msg1377422#msg1377422 date=1312987354]
Single - are the others who advocate the other way round? And if they are, can you share those too?
[/quote]

The vast majority advocate Keynesian principles, as the basic macroeconomic principles have been proven to work time and time again.

Off the top of my head, I don't think there are any respected economists who now think that austerity measures and cuts are the way to go. Everyone can see that the lack of growth is gonna be the killer issue, and in actual fact most of them think things have already gone too far, the wrong policies have been adopted and that a double dip recession is inevitable
[/quote]

It's inevitable either way. We spent next decade's money last decade. The cure to this debt crisis isn't more debt. It's an end to debt. What is happening right now is Keyensian, that's why we're borrowing at record rates.
 
[quote author=Richey link=topic=46360.msg1377435#msg1377435 date=1312988310]
[quote author=singlerider link=topic=46360.msg1377414#msg1377414 date=1312987231]

You mean like the people who are already >£100K salaries a year, getting 5 figure (or more) bonuses, all kinds of stock options etc, and yet it's not enough - so they have to diddle the system out of tax they should be paying, or hire expensive accountants to find loopholes to allow them to legally avoid paying tax on their earnings.

Such as the bankers who got us into this fucking mess in the first place.

Don't get me wrong, I'm all for picking on scroungers who stitch the rest of us up - but let's start with the people costing the country the most money eh? And that isn't the people on benefits - they're just the ones the people with money want you to pick on so they don't get any grief themselves
[/quote]

Okay, but don't those who supposedly cost us money through tax loopholes etc also make the economy huge amounts of money? Surely the banks, for all their faults, are essential for the economy because of the amount of money they make as organisations?

Even down to an individual level, yes some people get paid a fortune in salaries and bonuses, but they also pay a great deal of tax on those salaries and bonuses, as well as paying a great deal of tax on everything they buy.

Some people (and its not only enormously wealthy people) can avoid tax on some of their money, yes, but I would suggest that a lot of them already pay a lot, and all they are doing is using processes that are already there, have been for some years without any sign of being closed, and are totally legal. You can say these people are greedy for not wanting to pay tax, but surely it is just human nature isn't it? If someone asks if you want to pay x amount or double x amount, what would you say?

Now, of course if the tax rate was a lot lower than it is then the people who spend lots of money on those expensive accountants you talked about might consider that they would be better off just paying the tax, and we would then have a smaller % of a lot more coming in rather than a bigger % of a total that hasn't be avoided, but then that would be an example of cutting taxes for the rich wouldn't it, and I guess that wouldn't be acceptable!
[/quote]

But then all the accountants will lose their jobs and we'll have to pay them benefits Richey
 
[quote author=Krump link=topic=46360.msg1377430#msg1377430 date=1312987992]
[quote author=singlerider link=topic=46360.msg1377427#msg1377427 date=1312987810]
We're not in a war right now?

Wonder what Iraq and Afghanistan think about that?
[/quote]

OK, we spend 50 billion on the military and 50 billion on interest. I'd be looking at getting both closer to zero tbh.

And how is this good?

206.gif


*excluding interventions means excluding bank bailouts.
[/quote]

Well yeah, close enough to 50 on both. Obviously reducing them both is the ideal - however, I didn't, haven't and at no point will say that the situation is *good*.

My point is this:

Things are nowhere as bad as people are trying to make out, the situation we are in is not 'unprecedented' and it is not as a result of Labour going on some mental profligate spree. Had it not been for the banking sector realising it was sucking its own cock and suddenly pulling out, things would be carrying on (for the most part) as usual.

More importantly my main point is this:

Yes, things are bad, but the solution is not austerity. Right now the *only* way we can recover is by stimulating growth. Now, that growth is not going to come from the private sector (ie you and me) because we're too busy shitting our pants to go out and spend money, so it has to come from the government. Basic Keynesian macroeconomics that have been proven over time
 
[quote author=Krump link=topic=46360.msg1377442#msg1377442 date=1312988521]
[quote author=singlerider link=topic=46360.msg1377433#msg1377433 date=1312988178]
[quote author=LeTallecWiz link=topic=46360.msg1377422#msg1377422 date=1312987354]
Single - are the others who advocate the other way round? And if they are, can you share those too?
[/quote]

The vast majority advocate Keynesian principles, as the basic macroeconomic principles have been proven to work time and time again.

Off the top of my head, I don't think there are any respected economists who now think that austerity measures and cuts are the way to go. Everyone can see that the lack of growth is gonna be the killer issue, and in actual fact most of them think things have already gone too far, the wrong policies have been adopted and that a double dip recession is inevitable
[/quote]

It's inevitable either way. We spent next decade's money last decade. The cure to this debt crisis isn't more debt. It's an end to debt. What is happening right now is Keyensian, that's why we're borrowing at record rates.
[/quote]

You need to read up on your Keynes
 
[quote author=singlerider link=topic=46360.msg1377384#msg1377384 date=1312983854]
[quote author=ctlovesred link=topic=46360.msg1377379#msg1377379 date=1312983287]
At the heart of government spending in every western society is entitlement programs.

And they are bankrupting all of us.
[/quote]

So you think that having social security programs are what caused the mess?

I'm tempted to ask you to back that up, but I'm also concerned I might actually decide I can't be bothered to prove you wrong and just call you names instead.

Let's hope for your sake you're never out of a job, eh?
[/quote]

Have been out of a job. With a mortgage and huge school loans. And 4 children.

Good thing I learned to work hard, study hard, take responsibility for myself and my family, and do what had to be done.

While I'm not saying that the riots are a direct result of crushing domestic welfare spending, the connection between huge government entitlements and sluggish economies is axiomatic. When the earners are outnumbered by the non-earners the only outcome is reduced productivity. Eventually the earners figure out that there really is no amount of taxation that will finally be deemed "sufficient" to support the non-earners. Then what?

Why do the young people feel like they have no future? Who is to blame? Do the immigrants feel the same way who left truly poor countries to find opportunity in Britain?

And don't even try to tell me it is the fault of big banks and politicians. People have succeeded for generations in spite of those two groups of idiots.
 
[quote author=Richey link=topic=46360.msg1377435#msg1377435 date=1312988310]
[quote author=singlerider link=topic=46360.msg1377414#msg1377414 date=1312987231]

You mean like the people who are already >£100K salaries a year, getting 5 figure (or more) bonuses, all kinds of stock options etc, and yet it's not enough - so they have to diddle the system out of tax they should be paying, or hire expensive accountants to find loopholes to allow them to legally avoid paying tax on their earnings.

Such as the bankers who got us into this fucking mess in the first place.

Don't get me wrong, I'm all for picking on scroungers who stitch the rest of us up - but let's start with the people costing the country the most money eh? And that isn't the people on benefits - they're just the ones the people with money want you to pick on so they don't get any grief themselves
[/quote]

Okay, but don't those who supposedly cost us money through tax loopholes etc also make the economy huge amounts of money? Surely the banks, for all their faults, are essential for the economy because of the amount of money they make as organisations?

Even down to an individual level, yes some people get paid a fortune in salaries and bonuses, but they also pay a great deal of tax on those salaries and bonuses, as well as paying a great deal of tax on everything they buy.

Some people (and its not only enormously wealthy people) can avoid tax on some of their money, yes, but I would suggest that a lot of them already pay a lot, and all they are doing is using processes that are already there, have been for some years without any sign of being closed, and are totally legal. You can say these people are greedy for not wanting to pay tax, but surely it is just human nature isn't it? If someone asks if you want to pay x amount or double x amount, what would you say?

Now, of course if the tax rate was a lot lower than it is then the people who spend lots of money on those expensive accountants you talked about might consider that they would be better off just paying the tax, and we would then have a smaller % of a lot more coming in rather than a bigger % of a total that hasn't be avoided, but then that would be an example of cutting taxes for the rich wouldn't it, and I guess that wouldn't be acceptable!
[/quote]

If you're going to put "those who supposedly cost us money through tax loopholes etc" then I'm going to start putting "those that supposedly cost us money through welfare etc".

There's no 'supposedly' about it. They cost us money, simple fact.

Far far more than the benefit cheats. Now, I'm not saying they're good for nothing, but what I am saying is that we should be concentrating on the ones who are thieving money by illegally not paying their tax, and close down the loopholes that allow them to not pay other bits
 
[quote author=ctlovesred link=topic=46360.msg1377450#msg1377450 date=1312989648]
And don't even try to tell me it is the fault of big banks and politicians. People have succeeded for generations in spite of those two groups of idiots.
[/quote]

What?

Are you actually fucking mental? Are you on a wind-up?

I don't think I can talk to you any more as I can't guarantee civility
 
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