The Dirt on Sadiq Khan

[Brian Peacock]

Borrowing has risen stupendously since 2010 because the economy has been incredibly depressed, but the difference since then is that the government committed to paying it back more quickly than before. We borrowed a shed-load of money in 2007/8 to keep the international financial services sector going and now we're borrowing more to meet the interest on that borrowing. The Tory government have rather cleverly passed the assumption that their austerity program is cutting borrowing, it hasn't, and any economist (either of the tenured or arm chair variety) will tell you that the most significant factor in reducing a nations borrowing is economic output. The New Austerity is just a mechanism by which the poor pay for the folly of the rich. It's a never ending story, "Some of you will die, but that's a price I'm willing to pay..."

Now, if say 10% of welfare spending was the result of fraud, which would amount to c.£16bn, do you think that the money in people's pockets would make a positive or negative net contributes to economic growth?

[mistermack]

Now, if say 10% of welfare spending was the result of fraud, which would amount to c.£16bn, do you think that the money in people's pockets would make a positive or negative net contributes to economic growth?

I don't call it growth when it's borrowed. That's false growth.

Would you, if you borrowed ten thousand pounds? Would that make your family more prosperous, if you spent it on consumption? No, it would make you and your family poorer.
It's fake growth. It makes you look richer now, but makes you poorer overall.

The only circumstance that borrowing is a good thing for, is when there is a project that you know will make money. Or save money that would otherwise be spent.
Borrow for consumption, and you end up fucked.

[pErvinalia]

Another person who doesn't understand economics.

http://economicsonline.co.uk/Managing_t ... ffect.html

[Brian Peacock]

Now, if say 10% of welfare spending was the result of fraud, which would amount to c.£16bn, do you think that the money in people's pockets would make a positive or negative net contributes to economic growth?

I don't call it growth when it's borrowed. That's false growth.

Borrowing isn't a factor here. That hypothetical money would come out of hypothetical tax revenues. Now, while I accept that government spending commitments outstrip tax revenues at the moment, that is a political taxation policy decision and not a force of nature.

Would you, if you borrowed ten thousand pounds? Would that make your family more prosperous, if you spent it on consumption? No, it would make you and your family poorer.
It's fake growth. It makes you look richer now, but makes you poorer overall.

This is by-the-by, but to the above I'd say, not necessarily. If one frittered away 10k on booze an whores that wouldn't lead to an increase in one's household income, even if the local alcohol and sex industries experienced a small increase in demand. However, if the money was invested in a rising asset, like a parking space in London for example, it could very well generate income in the short, medium, and long-term.

The only circumstance that borrowing is a good thing for, is when there is a project that you know will make money. Or save money that would otherwise be spent.
Borrow for consumption, and you end up fucked.

Indeed, as noted above. But the question still remains.

[mistermack]

Another person who doesn't understand economics.

http://economicsonline.co.uk/Managing_t ... ffect.html

Everything's so simple to you isn't it?
Borrow loads of money, and everyone will be rich?

You really ought to read to the end of some of the stuff you link.
There is a negative multiplier, every bit as powerful as the positive one.

And it comes into play when people buy imports, increase savings or when taxes rise.
When spending rises in this country, it's more likely to be on imports, than domestic services.
And people tend to save a bit more, and taxes have to go up, when governments borrow more.

So overall, more government borrowing is bad for the economy long-term.
The only time it's any good, is short-term, to give an injection when the MOOD is so gloomy it's causing harm. The objective is to snap the country out of a downward spiral by changing sentiment. A short sharp shock that can't be sustained, but does a job.

That's the only time that borrowing for consumption can make sense. And it's a very rare set of circumstances.

[pErvinalia]

Wrong. The economic multiplier is larger at the lower end of society than the upper end, as the lower end spends more money in the local economy whereas the rich spend more money on imported luxuries and on savings. Your failing is the same as Seth's and the "zero sum game" fallacy. This idea that wealth associated with 'x' dollars disappears when those dollars are spent. That's a fallacy, as spending generates wealth.

[cronus]

Wrong. The economic multiplier is larger at the lower end of society than the upper end, as the lower end spends more money in the local economy whereas the rich spend more money on imported luxuries and on savings. Your failing is the same as Seth's and the "zero sum game" fallacy. This idea that wealth associated with 'x' dollars disappears when those dollars are spent. That's a fallacy, as spending generates wealth.

Spending clutters houses up with cheap, heavily carbon-based, products from the far east whether you are rich or poor lately. These economic simplifications are wrong at either end of the political divide. What we need is a economic malaise of sufficient magnitude that people take to slaying one another wantonly...and so bring the human population down whilst preserving vital infrastructure. Why I'm voting Leave.

[mistermack]

Wrong. The economic multiplier is larger at the lower end of society than the upper end, as the lower end spends more money in the local economy whereas the rich spend more money on imported luxuries and on savings. Your failing is the same as Seth's and the "zero sum game" fallacy. This idea that wealth associated with 'x' dollars disappears when those dollars are spent. That's a fallacy, as spending generates wealth.

I suppose you have a link for that, but are just too tired to provide it.
Or is it another of your made-up facts?
I suspect the second, because the poor people I know all have better phones than me, and are more likely to buy new than used, and to go to Disney. True they are unlikely to save, but they are more likely to borrow less, which has exactly the same effect as savings.

So all a government has to do is borrow loads of money, and give it to the poor, and we'll all be rich?
Go for it, Chancellor !!

[pErvinalia]

Wrong. The economic multiplier is larger at the lower end of society than the upper end, as the lower end spends more money in the local economy whereas the rich spend more money on imported luxuries and on savings. Your failing is the same as Seth's and the "zero sum game" fallacy. This idea that wealth associated with 'x' dollars disappears when those dollars are spent. That's a fallacy, as spending generates wealth.

Spending clutters houses up with cheap, heavily carbon-based, products from the far east whether you are rich or poor lately. These economic simplifications are wrong at either end of the political divide.

No it's not, because the poor spend most of their money on food, education and health care and local entertainment. No doubt they do send some money offshore to China et al, but much less so as a percent of income as the middle class and above.

What we need is a economic malaise of sufficient magnitude that people take to slaying one another wantonly...and so bring the human population down whilst preserving vital infrastructure. Why I'm voting Leave.

The human population doesn't need to come down. Unsustainable consumption needs to come down.

[pErvinalia]

Wrong. The economic multiplier is larger at the lower end of society than the upper end, as the lower end spends more money in the local economy whereas the rich spend more money on imported luxuries and on savings. Your failing is the same as Seth's and the "zero sum game" fallacy. This idea that wealth associated with 'x' dollars disappears when those dollars are spent. That's a fallacy, as spending generates wealth.

I suppose you have a link for that, but are just too tired to provide it.

What do you want a link for? That poorer people spend more of their money in the national economy than richer people? Seriously? Or the fallacy of the zero sum game fallacy? Seriously?

Or is it another of your made-up facts?

Go fuck yourself. You're the "opinion man".

So all a government has to do is borrow loads of money, and give it to the poor, and we'll all be rich?
Go for it, Chancellor !!

Who said anything about borrowing money? There is more than enough money from corporate and rich tax dodging to fund a super generous welfare system. And in any case, as long as the rate of return on the multiplier effect is greater than the borrowing rate, then it will pay off. FFS, that's what investment is! Of course, you can't just borrow money and hand it out, as rates will eventually rise due to the greater demand and likely worse credit rating and therefore the multiplier return will fall below borrowing rate.

Edit: Sorry, forgot:

Edit2:

[cronus]

Human population needs to come down. It is driving inequality, climate change and resource depletion. If you fail to see the fundamental driver of the situation then you are in denial. A intelligent policy of culling is necessary. This does not need to be inhumane and uncivilised. Things like euthanasia booths and the notion of a good death whacked out on drugs in a warm comfortable room....and a advertising policy/ media campaign to propagate the morality angle. It's doable. And it should be done. You can tell the ones who can't count, they always ignore the population argument regarding social malaise. And they might need more mandatory prodding into the booths....not being aware of the issues. A test for discalculia or number blindness would identify these and prevent a misalocation of resources on time wasters.

[Svartalf]

then why the heck are we intervening to keep wars down in Africa na the East? let them kill each other, and let us defend ourselves if we need to... meaning we must put more money in our militaries, it could be needed.

[pErvinalia]

Human population needs to come down. It is driving inequality, climate change and resource depletion.

Nonsense. Consumption is the problem, as can clearly been seen by the disparity in resource consumption per capita in the West vs the third world. You better be first into the euthanasia booth so we can reduce poor critical thinking skills from the gene pool.

[cronus]

I'm not discounting the third world which wants to either increase productivity or directly interlope on the first worlds standard of living....

then why the heck are we intervening to keep wars down in Africa na the East? let them kill each other, and let us defend ourselves if we need to... meaning we must put more money in our militaries, it could be needed.

Yes, we need regime change at home first before we can do the other things that are necessary. And what's good is every death brings us closer to our goal of a reduced population. So I'm all for that.

[pErvinalia]

I'm not discounting the third world which wants to either increase productivity or directly interlope on the first worlds standard of living....

Huh?