Twenty Years of Spending Cuts and Increased Taxes

[Hume]

..and that is just to get debt back to below 40% of national income!

http://www.ft.com/cms/s/0/f33d398c-ebe3-11dd-8838-0000779fd2ac.html

Thanks a lot Gordon, and to think you angry at the way RBS has been run.

[Hume]

Sorry, just realised you need to be registered to read...here is the article in full though.

UK needs £20bn a year to repair finances, IFS warns
By Norma Cohen, Economics Correspondent

Published: January 28 2009 10:00 | Last updated: January 28 2009 10:00

The UK will need to raise taxes or introduce spending cuts worth an extra £20bn annually by the end of the next parliament if it is to repair public finances to the level forecast in November’s pre-Budget report, according to the Institute for Fiscal Studies.

In its 2009 Green Budget, an annual analysis of fiscal policy, the IFS concluded that even with spending cuts and tax increases of that magnitude, public sector debt may not be able to return to pre-crisis levels for more than 20 years.

It concluded that the spending cuts and higher taxes signalled by Alistair Darling, the chancellor, in his pre-Budget report, even if they work as the Treasury envisaged, would have to remain in place until the early 2030s before debt returns below the ceiling of 40 per cent of national income that Gordon Brown set as one of his two fiscal rules in 1997.

“So there is no prospect of a government being able to readopt these rules any time soon,” the IFS said. “We hope they will be reformed in any event.”

The IFS estimates that the Treasury’s own figures suggest that the credit crunch will cost the exchequer the equivalent of 3.5 per cent of national income – equal to a little over £50bn in today’s money – in lost tax revenue from individual and corporate earnings and in higher spending on social security.

In producing its document, the IFS noted that the average view among macroeconomic forecasters is that the recession will be deeper and longer than the Treasury thought at the time of the PBR. Mr Darling has also since hinted that he, too, believes the forecast will have to be revised to take account of the severe weakening in demand seen late in the fourth quarter of 2008.

But the IFS notes that although a longer, deeper recession will push government debt and borrowing further above the PBR forecasts, and it may prove unsettling for investors but may not necessarily increase the level of government borrowing and tightening of fiscal policy in the longer term.

Morgan Stanley, which is presenting the Green Budget in partnership with the IFS, notes that while sums quoted for intervention in the financial system are very large, actual taxpayer losses are most likely to be very small, and there may even be a profit. However, there are greater chances of big losses than big profits.

The Green Budget points out that currently, the impact of rising public sector net debt is limited because government is able to borrow relatively cheaply. There is considerable demand from banks and financial institutions for liquid, risk-free instruments.

However, there is a risk that investors will become frightened by the size of government debt and demand much higher yields on government bonds. If borrowing costs were to return to the average levels of the 1990s, then further tax increases or spending cuts would be needed to stop debt and interest costs rising unsustainably, the IFS said.

[bill]

Time to let the Tories in to sort out the mess left by Anthony Charles Lynton Blair and his cohorts.

[gizmo]

Do you think we could get Maggie back Bill? Just the chap to sort this mess out.

[Tosh]

Time to let the Tories in to sort out the mess left by Anthony Charles Lynton Blair and his cohorts.

Oh just what you need when you're in a hole, a bigger shovel!

[bill]

Do you think we could get Maggie back Bill? Just the chap to sort this mess out.

If only there was someone with her qualities,then at least there would be a light on the horizon.As it is,the Tories will do what they always do....get elected to run the country left in turmoil by Labour.

[four eyes]

come on bill your over 10 years old and surely dont believe in fairy stories anymore.by now you you should have noticed nothing ever changes despite whos in charge.they are only there to line their own pockets,they dont give a shit about the country.funny how you think the tories can save us,i dont remember it being great back then.ionns will give you a good kicking and deservedly so for spouting such nonsense.we can only hope they are not as bad as the last lot when they get elected.
i gave up on politicians 30 years ago.the present labour goverment remind me of the last torie one,just as they were about to go into the wilderness.

[Hume]

As it is,the Tories will do what they always do....get elected to run the country left in turmoil by Labour.

Then in a few years they will tire of doing such a good job and decide to let someone else have a go, just like they did in 1997 (can we please have a wee face with its tounge firmly in its cheek).

Then again, how can the public complain when its the public that continue to mandate this tired old game of political ping pong?

Edit - sorry, messed up the quote first time.

[bill]

come on bill your over 10 years old and surely dont believe in fairy stories anymore.by now you you should have noticed nothing ever changes despite whos in charge.they are only there to line their own pockets,they dont give a shit about the country.funny how you think the tories can save us,i dont remember it being great back then.ionns will give you a good kicking and deservedly so for spouting such nonsense.we can only hope they are not as bad as the last lot when they get elected.
i gave up on politicians 30 years ago.the present labour goverment remind me of the last torie one,just as they were about to go into the wilderness.

Certainly agree with you on certain points 4eyes.

1: I am over 10 years old.

2:I don't believe in fairy stories.

3: I believe most(not all) politicians are too busy with their nose in the trough to worry about the people who elected them to office.One thing I have never heard is any allegations of Mrs Thatcher having her hand in the till.

Where we disagree is that I think the Tories are better at running the country than Labour.I believe that Gordon Brown is doing his best,but his best is obviously not good enough.

I also disagree with you because I do believe it was better "back then".

As for Ionns ?Well I am proud that we have differing views on most everything.

Don't get it in to your head 4 eyes that I am a Tory.I am neither Tory nor Labour ,just someone who has views different from the crowd.Normally the crowd consists of those who shout the loudest and those with the sheep mentality...ie. they follow.


It would probably surprise you 4eyes to see the pms I have recieved agreeing with my views on Mrs Thatcher from other forum members.They all say the same thing,because they live in and around the town unlike me,they keep their views hidden.It is so popular now to ridicule Mrs Thatcher that many people keep quiet rather than stand up and disagree.

[four eyes]

sorry bill,what exactly was so great back then?oh yea and what did margaret thatcher ever do for us?i cant remember anything of any worth.99% of what were suffering now can be traced back to the policies of her goverment.I agree labour is also shite at running the country,never knew the toon was a hotbed of surpressed conservatisim though.i must be mixing with the wrong crowd.maybe we should give tommy boy a go at running things,him and solidarity cant do any worse than the rest of them.might even get an invite to one of him and gails partys.aahh the eighties a time of milk and honey when all was right in the world.

[Hume]

there might have been honey four eyes but did they not do away with milk?

[four eyes]

yes they did and it was maggie wot dun it,i was amongst the last to get it in castlehill.

[bill]

yes they did and it was maggie wot dun it,i was amongst the last to get it in castlehill.

Yes your right again 4eyes,though you don't mention that it was a continuation of Harold Wilson's policy,as Labour had already stopped the milk for secondary pupils.

[four eyes]

those big jessies never needed it but the youngsters did.

[Govangirl]

Don't get it in to your head 4 eyes that I am a Tory.I am neither Tory nor Labour ,just someone who has views different from the crowd.Normally the crowd consists of those who shout the loudest and those with the sheep mentality...ie. they follow.


It would probably surprise you 4eyes to see the pms I have recieved agreeing with my views on Mrs Thatcher from other forum members.They all say the same thing,because they live in and around the town unlike me,they keep their views hidden.It is so popular now to ridicule Mrs Thatcher that many people keep quiet rather than stand up and disagree.

Sometimes I just log on here for a laugh and that load of guff honestly burst my sides.

those big jessies never needed it but the youngsters did.

I was going to pm you foureyes just to say I agree with you here but thought that might be a bit pathetic. I do agree with you though!