Coalition - "Plan for 40% cut in departments' budgets"

[Darat]

Since "the markets" were fine with Labours pre-election pledge to cut the structural deficit by 50% over the course of the next parliament I can't see how it can be claimed that it is now necessary to get rid of it within the course of one parliament.

 

[Captain.Sassy]

I don't have any numbers to hand, but one question I have heard asked (but not answered) is along the lines of "Much of the deficit is due to the loans we paid to bail out the banks. Since they're loans they're going to be paid back, with interest. Why, then, do we need to wipe out the public sector in the meantime?"

"At end-September 2009, the contribution to public sector net debt (PSND) from
financial sector interventions amounted to £142.0bn"

and at the end of October 2009:
• net debt was £829.7 billion, equivalent to 59.2 per cent of gross domestic product."

http://www.statistics.gov.uk/pdfdir/psf1109.pdf

GDP, of course, also tailspinned around this time, so the public sector debt as a share of GPD figures tend to spike more than they would have otherwise. Add to this the fact that tax revenues decline in a recession, so to maintain the current level of services generally requires more borrowing, and you may very well have a point, Rich.

 

[Captain.Sassy]

Since "the markets" were fine with Labours pre-election pledge to cut the structural deficit by 50% over the course of the next parliament I can't see how it can be claimed that it is now necessary to get rid of it within the course of one parliament.

Structural deficit is one thing but how big was the structural deficit prior to the recession?

 

[Giz]

Since "the markets" were fine with Labours pre-election pledge to cut the structural deficit by 50% over the course of the next parliament I can't see how it can be claimed that it is now necessary to get rid of it within the course of one parliament.

"The markets" were probably not that interested in what Labour might have been expected to do. Labour were expected to lose the election, so "the markets" would have been judging likely Tory policies.

 

[Darat]

"The markets" were probably not that interested in what Labour might have been expected to do. Labour were expected to lose the election, so "the markets" would have been judging likely Tory policies.

And what actually happened? The Tories didn't win and the "the markets" didn't go into free fall and we weren't de-rated and placed slightly above Zimbabwe even when everything was up in the air.

 

[uk_dave]

In the early 80's, when I were a lad, all you would hear was how Labour would never again be voted into office after the mess they made of the economy.

Then, in the mid 90's when I was a strapping young go getter, all we would hear was how, now the dust had settled and the party was over, the Tories would never again be voted into office because of the mess they made of our society.

Now I'm old, wizened and crotchety it is my opinion that the current 'coalition' is desperate to paint the last Labour government as reckless and irresponsible and so they are talking up the debt because, quite frankly, they really are still not fit for government.

Now, you kids get off my lawn.

 

[Giz]

And what actually happened? The Tories didn't win and the "the markets" didn't go into free fall and we weren't de-rated and placed slightly above Zimbabwe even when everything was up in the air.

Perhaps "the markets" still thought that the next PM would be Tory - even when it was a bit up in the air.