How the Conservatives are dealing with the Economy. (UK)

IanExMachina

The Autumn budget shows that economic growth is down.

So how do they plan to go about fixing it?

By giving tax cuts to businesses whilst firing more public sector workers and cutting benefits for low income families.

Fucking Brilliant.

glennmagusharvey

Why do conservatives seem to not understand that the existence of an economy depends on the existence of demand?

IanExMachina

As they and all their friends are well off and won't have to worry about it as much as anyone else.

captainbrass

^^ It's more to do with being in the grip of ideology. If you basically believe that a small government + lower taxes = good, that's what you're going to do, regardless of whether the circumstances require it. The Conservatives basically made the same mistake in dealing with the Depression in the 1930s. With politicians, ideology can be stronger than sanity.

You can get the same thing with left-wing governments, of course - but we haven't had many of those lately.

IanExMachina

I'd rather we had a hard line left wing government now though.

IanExMachina

Oh what a surprise it turns out that the private sector despite a lot of tax cuts and benefits hasn't risen to the challenge of creating jobs to offset the the mass redundancy of public sector workers.

'That was largely driven by 67,000 job losses in the public sector. The private sector added just 5,000 jobs over the same period.'

Icalasari

^ But but but Trickle Down!

glennmagusharvey

In physics, if you have water trickling down, a lot of it gets stuck at the top, and it takes forever for the water to get to the bottom.

The same thing happens in economics.

Tax cuts do not cause prosperity, nor do tax hikes do the opposite: http://www.pbs.org/newshour/bb/business/july-dec11/makingsense_12-12.html

captainbrass

I can personally vouch for the public sector job losses. My organisation has shed a lot of people over the last year or two, although admittedly that has all been voluntary so far (basically, how you achieve that is to take a lot of fed-up and demoralised people in their 50s, wave large lump sums money in their faces and drop hints that they won't get as much if they hang on and get made compulsorily redundant).

The trickle-down theory is nonsense. Rich people don't get a tax cut then go and blow the proceeds on a new Lexus, thus benefitting the car factory workers. If they were like that, they would never have got rich in the first place. They just invest the money to earn even more, benefitting themselves and their bankers. It's not about what you can buy with the money, but the status having lots of it buys for you.

Malkavian

Here is how I explain Trickle down theory.

Imagine I have this delicious bottle of Newcastle beer. Now, I could share this beer with those who are more beer deprived, but instead I will drink the beer. Eventually it will trickle down my digestive system and the lower classes can enjoy the refreshing urine I trickle upon them.