Labour pays homage to Iron Lady

[Incongruous]

Well, we all knew they were true blues on the inside didn't we?

I am not shocked but I am angry.

http://http://www.independent.co.uk/news/uk/politics/for-sale-one-bridge-a-bookmaker-and-millions-of-student-loans-1801328.html

I fail to see how this will help Labour one inch, can they even be called Labour anymore?
What will the sale of student debt do to the country? I'm not sure but I have few guesses. I am sure however, that it will ensure no student votes Labour in a long time.
Well done Gordon!

What do my fellow orgahs think?

[InsaneApache]

http://www.independent.co.uk/news/uk...s-1801328.html

This it?

[Tribesman]

Selling assets on the cheap is never a good idea as the very small short term benefit makes for no long term advantage.
Selling assets on the cheap when the market is buggered means the very small short term benefit is even smaller

[InsaneApache]

Gordons got form for selling low and buying high. Moron.

[Incongruous]

http://www.independent.co.uk/news/uk...s-1801328.html

This it?

Yep, Ithink the linky is fixed now.

[Banquo's Ghost]

Gordons got form for selling low and buying high. Moron.

To be fair, he slavishly followed the Iron Lady in this too. The price obtained for the country's infrastructure, from water to railways was hardly market value, was it?

Though even Gordon should have clicked that gold might possibly rise in value at some future date - oh, of course not, his world view was that there would never be a bust again.

[KukriKhan]

Selling off the URENCO stake sounds risky, and concerns more than just the UK. Do the other 2 partners (Netherlands & Germany) have some say in the matter? Is that sale merely for the real estate, or the entire uranium-enrichment business?

[InsaneApache]

God knows what is happening. Anything is possible with Elmer Fudd in charge. If they manage to get £16 billion, and it's a big ask in this day and age, it's eqivalent to one months debt, So that's October sorted. Roll on November.

[Subotan]

To be fair, he slavishly followed the Iron Lady in this too. The price obtained for the country's infrastructure, from water to railways was hardly market value, was it?

Private Finance Initiatives routinely screw the public over, yet nothing is ever done to combat that load of waste.

Besides, this sale is practically irrelevant. What matters is debt to GDP, rather than gross debt.

[Evil_Maniac From Mars]

When I see Gordon Brown and selling in the same sentence, the first thing I think of is gold.

[Beskar]

This is what happens when the government is ran by monkeys with typewriters.

[Vladimir]

Given an infinite amount of time they may produce...well, nevermind. You already had one.

[rory_20_uk]

Private Finance Initiatives routinely screw the public over, yet nothing is ever done to combat that load of waste.

Besides, this sale is practically irrelevant. What matters is debt to GDP, rather than gross debt.

PFI was a god awful mess and I've no idea how it were to be otherwise. If the government needs more money, it is cheaper to go on the gilts market.

Debt to GDP is what got us into this mess. "Geniuses" such as Brown can then continue borrowing as everything is fine as the GDP goes up. When the crash happens we then need to borrow even more - AND the GDP plummets.

In times of plenty the government should be running at a surplus to insure against the next downturn.

[Vladimir]

Government should do only what its people allow it to do.

In times of plenty, good government should be running at a surplus to insure against the next downturn. If they don't, people should grab a pen instead of standing with their hands out.

[Beskar]

In times of plenty the government should be running at a surplus to insure against the next downturn.

That is something I agree with. Also, I think banks should keep a surplus of money and never go into debt at all.

[InsaneApache]

That is something I agree with. Also, I think banks should keep a surplus of money and never go into debt at all.

Ever wondered where that money goes when it takes three banking days to clear a cheque? Way back in '95 I was told by my business bank manager that there was no reason why it takes three days. They could do it instantaneously back then.

NB: If you're a BIG business you can get your money the same day. Fancy that!

[seireikhaan]

That is something I agree with. Also, I think banks should keep a surplus of money and never go into debt at all.

Nonsense. You do realize how banks run, right? Banks borrow and lend from each other all of the time, on daily, sometimes hourly cycles. To ban banks from ever having debt is tantamount to economic suicide. They'd stop functioning, and credit would dry up faster then you can say "recession".

[Beskar]

You don't do it straight away, you do it overtime. You allow them to go into surplus first.

Once the surplus is done, you remove their ability to go into debt. It would radically change the credit system for the better and there would never be a bust like we have seen, because the banks would never go bankrupt.

[seireikhaan]

You don't do it straight away, you do it overtime. You allow them to go into surplus first.

Once the surplus is done, you remove their ability to go into debt. It would radically change the credit system for the better and there would never be a bust like we have seen, because the banks would never go bankrupt.

Except what you propose is basically impossible. Its utterly idealistic, and not in tune with how business works. A bank is not meant to have large stores of money sitting around at all times. Why? Because of their function as creditors. Without credit, new/small business and innovation cannot get started. You would essentially leave an old economic order intact, which can operate with near impunity because of severe market entry barriers which would be erected by the minimal levels of credit available. Thus, the economy stagnates, and divides into increasingly disparate income levels and socio-economic hierarchies, as the "haves" that operate business easily maintain their position by leveraging a couple banks into being their personal creditor, and the "have nots", who do would not have the influence to get the credit in the first place. Small business dies, and corporatism thrives. Not really my ideal world.

Also, to suggest that no bank would ever go bankrupt is, economically, absurd and laughable.

[Beskar]

Well, for a bank to go bankrupt, it would be because they got no money at all. Since they would be in surplus and not in-debt at any point at all, it would be basically impossible, unless the ultity of the bank is not needed, so then, it doesn't have further reaching consequences.


You have to make a choice - Good Economics with no boom/bust cycles, or continue boom/bust cycles. You don't get all the highes of a boom, and you never get the lows of a bust, however, that is the price to pay for fininical security. If more people were money wise, the first world would be a far better place.

[seireikhaan]

Well, for a bank to go bankrupt, it would be because they got no money at all. Since they would be in surplus and not in-debt at any point at all, it would be basically impossible, unless the ultity of the bank is not needed, so then, it doesn't have further reaching consequences.

Again, idealistic. Do you realize how banks profit, right? Banks profit by going into debt- that is how they generate revenue. Your idea contradicts the very fundamental aspect of how banks run. If a bank cannot lend out enough money, it will go under, because it is paying people interest on deposits they give to the bank. Deposits which(again, theoretically) serve as part of their "surplus", even though said deposits are actually net losses.

You have to make a choice - Good Economics with no boom/bust cycles, or continue boom/bust cycles. You don't get all the highes of a boom, and you never get the lows of a bust, however, that is the price to pay for fininical security. If more people were money wise, the first world would be a far better place.

The thing is, I've been pointing out exactly why what you're proposing is not good economics, and you are not debating my actual points. So no, those aren't the choices. You literally cannot have "Good Economics" without boom/bust cycles. Boom/bust cycles are an integral part of economics, and if you think they can be eliminated while still maintaining growth, you aren't dealing in reality. Eliminating boom/bust cycles is like thinking communism works great- it assumes people are innately driven, ethical, and unselfish. Which are all fallacious assumptions.

[gaelic cowboy]

You don't do it straight away, you do it overtime. You allow them to go into surplus first.

Once the surplus is done, you remove their ability to go into debt. It would radically change the credit system for the better and there would never be a bust like we have seen, because the banks would never go bankrupt.

No person ever buys a large asset with the entirety of the amount on the barrel thats why we borrow.

A Bank is no differant telling banks not to take on debt will not safeguard banks as the money will errode through inflation very fast once the money starts to be worth less you would stop them borriwing to try to make profit in various ventures and effectively the bank would bust as the shareholders would pull out.

Well, for a bank to go bankrupt, it would be because they got no money at all. Since they would be in surplus and not in-debt at any point at all, it would be basically impossible, unless the ultity of the bank is not needed, so then, it doesn't have further reaching consequences.


You have to make a choice - Good Economics with no boom/bust cycles, or continue boom/bust cycles. You don't get all the highes of a boom, and you never get the lows of a bust, however, that is the price to pay for fininical security. If more people were money wise, the first world would be a far better place.

If every bank in the world is in surplus the cash will have to come from someone meaning you. Someone will have to take the debt somewhere its almost like the ideas of thermodynamics

[Beskar]

You could use a voucher economy. But now that would be really showing my red stripes.

Again, idealistic. Do you realize how banks profit, right? Banks profit by going into debt- that is how they generate revenue. Your idea contradicts the very fundamental aspect of how banks run. If a bank cannot lend out enough money, it will go under, because it is paying people interest on deposits they give to the bank. Deposits which(again, theoretically) serve as part of their "surplus", even though said deposits are actually net losses.

I was using surplus in the context of money extra than deposits. A business in debt is a bad business model. Any debt should be temporarily in times of an emergency or as a repayable investment. If the actual instituitions don't even have the money themselves to cover the debts, you have the credit crunch and the great collapse we just had as the bank gave out money it didn't even have. It is a very flawed system, and yes, banks can actually work without going into such dangerous waters.

Someone will have to take the debt somewhere its almost like the ideas of thermodynamics

The banks are there so we can go into debt. We aren't there for the banks to go into debt and bail them out.

Eliminating boom/bust cycles is like thinking communism works great- it assumes people are innately driven, ethical, and unselfish. Which are all fallacious assumptions.

Yet there are many people who are driven, ethical and unselfish, how did they become like that? It is their upbringing and environmental factors. It will take generations for it to truely work, nothing can be done overnight, that is your fallacious assumption.

[rory_20_uk]

One solution is for bonds based on the project itself. So for example if you wanted to build a dam you'd sell bonds that pay interest which is a function of the value the dam brings, most obviously by selling electricity.

Banks theoretically help spread the risk by investing in many such projects, but as there are so many new and exciting things to do they increase their risk in chasing profit.

[gaelic cowboy]

What needs to happen is nothing the world is not broken just broke.

[Beskar]

The world is broke, so leave it how it is?

Sounds like a smart plan. I think you should run for government.

On the plus side, you won't be breaking it more.

[Subotan]

PFI was a god awful mess and I've no idea how it were to be otherwise. If the government needs more money, it is cheaper to go on the gilts market.

The guy who first thought that contracting out projects to private companies, so they can make a profit out of the taxpayer's pocket is a good idea has the economic competence of a badger.

Debt to GDP is what got us into this mess. "Geniuses" such as Brown can then continue borrowing as everything is fine as the GDP goes up. When the crash happens we then need to borrow even more - AND the GDP plummets.

It wasn't governments borrowing that caused the recession, it was private institutions. Brown did make a mistake in running a budget deficit prior to the recession (Although to be fair, public services were pretty grim), and the Iron Chancellor should have foreseen the recession.

In times of plenty the government should be running at a surplus to insure against the next downturn.

Exactly.

[gaelic cowboy]

The world is broke, so leave it how it is?

Sounds like a smart plan. I think you should run for government.

On the plus side, you won't be breaking it more.

Banks lent too much leveraged money they are now not lending.

Bailing out banks is one thing but stopping them lending like you want is madness none of us would even get a loan for car in your universe.

There must be a certain level of debt in the system this requires people to work to pay it off generating all sorts of activety this is good

As has already been pointed out your system will return the world to a place where only the toffs get credit and the rest of us are locked out of a system where we couldnt even borrow to fix the roof on our houses.

We are in debt it will pass just not quickly enforcement of current regulation allied with a de-emphasis on investment in housing not banning mind cos that wont work will eventually sort it.

Some goverment spending is also not a bad idea but it must be taken away quickly lest it become intrinsically part of the system of saving the economy.

[Vladimir]

That is something I agree with. Also, I think banks should keep a surplus of money and never go into debt at all.

Dear Lord. I thought we got rid of this after the Black Death.

This kind of thinking is why I disagree so strongly with economic leftists. They think the world operates on a tangible basis (forget what it's called. speices economy or something?). Thus, there's a limited amount of wealth and therefore the more someone has, the less someone else has. Dark Age thinking. It's like they want the Church to ban interest on loans again.

Money, even gold, isn't worth much. It is the perception of its worth that is important. What's the difference between a $1 bill and a $5 bill: The ink pattern. The differing in perception of value is largely what causes market swings.

[gaelic cowboy]

Dear Lord. I thought we got rid of this after the Black Death.

This kind of thinking is why I disagree so strongly with economic leftists. They think the world operates on a tangible basis (forget what it's called. speices economy or something?). Thus, there's a limited amount of wealth and therefore the more someone has, the less someone else has. Dark Age thinking. It's like they want the Church to ban interest on loans again.

Money, even gold, isn't worth much. It is the perception of its worth that is important. What's the difference between a $1 bill and a $5 bill: The ink pattern. The differing in perception of value is largely what causes market swings.

Couldn't put it better myself