BRFR Cake Stop 'breaking news' miscellany

[BoldonLad]

Yes, @BoldonLad, you have failed to realise that all old people (in Rick's case anyone above about 60!) live in 8 bedroom detached houses whilst sleeping on huge piles of cash waiting for their daily Waitrose food delivery which consists mainly of caviar and champagne.

Where did I go wrong? 😂

It must be because I never developed a taste for Caviar and champagne.

 

[BoldonLad]

Countries aren't people.

However, lets say I'm building a house. The budget has increased from £100k to £200k.
By your measure I should just have stopped when I started to run out of money at £80k and then vastly reduced costs to keep the house to the £100k budget.

Because of the cost cutting it now has two less bedrooms, only one bathroom, no conservatory and a budget kitchen. I sell the house and realise £100k of profit. Which is great.

However lets say instead of cost cutting I take on £100k of debt. I'm able to finish the house to the original specification with the conservatory, granite worktops and 3 bathrooms. I can then sell the completed house for £500k.

By taking on debt I have expanded my economy, created more work for the people I am employing and have a return back into my own economy later on.

I didn't know you were an economist, I thought you were a software engineer.

The bit in bold seems to have worked brilliantly so far, for the UK. Successive Governments (of all parties) have borrowed more and more, and our Economy has grown and grown, everyone is employed, and, we are having to import labour to keep the boom going.

 

[BoldonLad]

They're not but the principles of finance and economics also apply. Your position relies on the assumption that the state spending more goes into the productive parts of the economy and creates more wealth. If that was the case we would just borrow to 'fill our boots' and we'll all be rich. Unfortunately it doesn't work that way. France for example has very high debt and look at the mess it is in.

Didnt that happen with Greece, in the reasonably recent past?, provoked a Euro crisis as I recall. It has all gone very quiet now.

 

[briantrumpet]

I suppose my question would be would it be OK for Matt Goodwin to go there by boat, and if so, could we buy him one?

 

[BoldonLad]

I suspect it was more of a floating number hovering around 10 years above his current age.
But we digress...

isn't that similar to "the rich" ie those with more than the person making the statement?

 

[icowden]

I didn't know you were an economist, I thought you were a software engineer.

I'm not, but I have read some stuff about the problem with austerity as an approach.

The bit in bold seems to have worked brilliantly so far, for the UK. Successive Governments (of all parties) have borrowed more and more,

But they haven't spent more and more on infrastructure. They have cut expenditure repeatedly to service debt. The last "spendy" Government was the Blair / Brown era. In 15 years things haven't got better. To me, this suggests that the austerity approach isn't working.

 

[secretsqirrel]

I suppose my question would be would it be OK for Matt Goodwin to go there by boat, and if so, could we buy him one?

View attachment 10550

Yes, preferably an inflatable one.

 

[Rusty Nails]

Borrowing to invest is fine.

Borrowing to get by, or repay debt is not.

 

[briantrumpet]

It might be rather uncharitable of me, but it dawned on me if the people harping on about small boat arrivals haven't even thought about escaping their country by paying thousands to cross the English Channel in an inflatable boat to a completely uncertain future, then they are privileged.

 

[BoldonLad]

I'm not, but I have read some stuff about the problem with austerity as an approach.


But they haven't spent more and more on infrastructure. They have cut expenditure repeatedly to service debt. The last "spendy" Government was the Blair / Brown era. In 15 years things haven't got better. To me, this suggests that the austerity approach isn't working.

I am not an economist either, but, I think I am beginning to understand, it is a bit like leaves on the line, or, snow on the line, borrowing to spend is fine, as long as it is the right kind of spending.

In my simple, non-economist head, one of the problems is that the consequences often lag way behind the actions, so, no-one (especially the economists and the politicians) ever learns what the consequences of the proposals and/or actions are.

But, I trust I am wrong, borrow more and more, build "infrastructure" everywhere, sounds fairly straight forward to me, although, if it is so simple, why isn't everyone doing it?

 

[Dorset Boy]

I'm not, but I have read some stuff about the problem with austerity as an approach.


But they haven't spent more and more on infrastructure. They have cut expenditure repeatedly to service debt. The last "spendy" Government was the Blair / Brown era. In 15 years things haven't got better. To me, this suggests that the austerity approach isn't working.

In the immediate post GFC, there was no alternative to austerity. The bond markets would not have permitted anything else. Expenditure and borrowing had to be cut across the board in order to stabilise the financial system.
Now you can argue that austerity went on too long, but from 2009 to c2014, there really was no alternative.

 

[BoldonLad]

Borrowing to invest is fine.

Borrowing to get by, or repay debt is not.

Quite, and, knowing the difference between "spending" and "investing".

 

[BoldonLad]

In the immediate post GFC, there was no alternative to austerity. The bond markets would not have permitted anything else. Expenditure and borrowing had to be cut across the board in order to stabilise the financial system.
Now you can argue that austerity went on too long, but from 2009 to c2014, there really was no alternative.

Would that be the famous "gnomes of Zurich" from the Harold Wilson years? 😊

 

[briantrumpet]

In the immediate post GFC, there was no alternative to austerity. The bond markets would not have permitted anything else. Expenditure and borrowing had to be cut across the board in order to stabilise the financial system.
Now you can argue that austerity went on too long, but from 2009 to c2014, there really was no alternative.

With my philosophical hat on, I find it curious that human activity is so controlled/affected by an invention of humans (money & financial markets) to the extent that humans die or live in misery as a result of financial decisions. It feels like it's out of human control.

I suppose in a way, it only reflects all existence - tough choices about who lives and dies in times of shortages (of food, for instance) - but the 'shortage' is not of essentials to sustain life: mostly famine is a function of food not being in the right place for financial reasons, not because the planet isn't producing enough food for everyone to eat enough to stay alive.

 

[BoldonLad]

With my philosophical hat on, I find it curious that human activity is so controlled/affected by an invention of humans (money & financial markets) to the extent that humans die or live in misery as a result of financial decisions. It feels like it's out of human control.

I suppose in a way, it only reflects all existence - tough choices about who lives and dies in times of shortages (of food, for instance) - but the 'shortage' is not of essentials to sustain life: mostly famine is a function of food not being in the right place for financial reasons, not because the planet isn't producing enough food for everyone to eat enough to stay alive.

Money in its self is of little use, you cannot eat it, drink it, etc, but, it enables and/or gives choices. Famine may be terrible, but, it is simply a reflection that there is not enough incentive for this with the food, to transport it and sell it to those without, or with insufficient. If it was worth their while, someone would find a way to "fix" famine, and, most if not all afflictions of the human race.

Perhaps not a very flattering view of humanity, but, IMHO, a realistic one.