UK double dip recession

[Hazelnut]

Economy is back recession into it would seem.
http://www.bbc.co.uk/news/business-17836624
　
Is austerity still the way forward, and should the government change its tactics? Or will things get better sooner or later?

[removeduser_487563287433]

I've been working four years since graduation, now, and that entire time has been spent either in recession of financial insecurity. I work in the private sector, and although I work in an industry that is booming, it constantly affects pay, advancement, and work behaviour - whether I stay at a job or have to move elsewhere.

It sucks. But... I think it's probably inevitable. I support the idea we need to eliminate our deficit.

[Plan C]

You know what is really funny? We already know the relationship between confidence and performance of the economy. Yet it doesn't stop scores of analysts falling over themselves to deliver negative opinions. Look at me, I have bad news, my 5 minutes of airtime!

Keep calm and carry the on, I say. That would put tens of thousands of idle, politicized talking heads to real work.

I agree with Ferrets, deficit is unsustainable.

[Jom]

You know what is really funny? We already know the relationship between confidence and performance of the economy. Yet it doesn't stop scores of analysts falling over themselves to deliver negative opinions. Look at me, I have bad news, my 5 minutes of airtime!

Keep calm and carry the on, I say. That would put tens of thousands of idle, politicized talking heads to real work.

I agree with Ferrets, deficit is unsustainable.

I've always found the doom and gloom economics reporting paradoxical, especially regarding markets falling, as it simply causes them to fall faster due to buyer confidence being sapped.

It sucks. But... I think it's probably inevitable. I support the idea we need to eliminate our deficit.

Is recession an inevitable by-product of deficit reduction, though? It could be that cuts are going too deep, too fast, and that in the rush to reduce the deficit, the economy is suffering, whereas less drastic cuts but over a longer period of time would see a relatively healthy economy and therefore faster deficit reduction and recession is avoided.

[Sidus Preclarum]

We already know the relationship between confidence and performance of the economy..

I.e. : none ?

*edit* actually, I take that back.
Rather, confidence follows performance of the economy ?

[Rolling Thunder]

I.e. : none ?

*edit* actually, I take that back.
Rather, confidence follows performance of the economy ?

Please tell me this is a joke.

[Sidus Preclarum]

Please tell me this is a joke.

Unfortunately for Cameron _ and even more for the U.K. _ , no.

[removeduser_487563287433]

And if the deficit reducation program was weaker then our credit rating may have fallen, our price of funding our debt increased, and our economy effectively weaker.

[Pielstick]

The absolute worst thing we can do right now is to change the direction of fiscal policy. That will create even more uncertainty and result in even lower confidence.

Right now the choice is between the government's austerity measures or Labour's plan to spend our way out of recession. As David Cameron said in the House of Commons this morning I don't think the solution to a debt crisis is even more debt. Considering it was Labour who got us into this mess I don't have the greatest confidence in them getting us out of it - especially when the Labour front bench is occupied by the likes of Ed Balls who simply can't admit it was they who made such a clusterfck of everything, yet they are falling over themselves to tell us all exactly what the government is doing wrong now.

You know what is really funny? We already know the relationship between confidence and performance of the economy. Yet it doesn't stop scores of analysts falling over themselves to deliver negative opinions. Look at me, I have bad news, my 5 minutes of airtime!

Spot on

[Justice and Mercy]

And if the deficit reducation program was weaker then our credit rating may have fallen, our price of funding our debt increased, and our economy effectively weaker.

More importantly, deficit spending is bad for the economy as such, credit ratings aside. It means resources that could be used to develop the economy are NOT being used to develop the economy, but are going instead to political programs.

I'm behind the EU on this, and I believe that the Europeans need to stop being short-sighted pansies.

[Sidus Preclarum]

Hmm, I don,t think austerity programmes are about economic growth.

Its more about paying of debt and cutting out frivolous day to day spending.

Not denying western countries have been too profligate in good years ( e.g., the U.S. under Bush, and counter-exemple, Spain )
Too bad we're in the middle of an economic crisis, and that each pound Cameron saves depresses the economy by more, slashes the U.K.'s goverment revenues by whatever-the-uk-total-tax-burden-rate-is-nowadays times that-pound-and-then-some-pences not produced
So each pound "saved" ends up as like half a pound of deficit reduction, while a depressed economy makes the debt grow in relation to GDP... Also, social tension. And long term damages to fiscal prospects, education levels, infrastructure.
But I guess that will restore confidence.

At least, UK's fundamentals are strong, and isn't under the yoke of the cultists currently at the head of the BCE, so it can more easily chang course, or use its control over its currency, and I can't see it entering a Greek death spiral.

But things are no where near as bad as it was in the 1930's

You must have missed the first page.
Here :


Also : http://www.nytimes.com/2012/04/27/op...ssnyt&emc=rss#

[Denny Crane!]

Not denying western countries have been too profligate in good years ( e.g., the U.S. under Bush, and counter-exemple, Spain )
Too bad we're in the middle of an economic crisis, and that each pound Cameron saves depresses the economy by more, slashes the U.K.'s goverment revenues by whatever-the-uk-total-tax-burden-rate-is-nowadays times that-pound-and-then-some-pences not produced
So each pound "saved" ends up as like half a pound of deficit reduction, while a depressed economy makes the debt grow in relation to GDP... Also, social tension. And long term damages to fiscal prospects, education levels, infrastructure.
But I guess that will restore confidence.

At least, UK's fundamentals are strong, and isn't under the yoke of the cultists currently at the head of the BCE, so it can more easily chang course, or use its control over its currency, and I can't see it entering a Greek death spiral.




You must have missed the first page.
Here :


Also : http://www.nytimes.com/2012/04/27/op...ssnyt&emc=rss#

I'm sure the hyperbole is fun but I thought we were having a serious discussion?

Do we have 25% unemployment? Breadlines? Closing of borders? No, in fact I drive to Newcastle every Saturday night and it is wall to wall with people getting absolutely bladdered on expensive drinks, the shops are still busy and whilst we have rising unemployment it certainly isn't impossible to find a job.

[Sidus Preclarum]

I'm sure the hyperbole is fun but I thought we were having a serious discussion?

Do we have 25% unemployment? Breadlines? Closing of borders? No, in fact I drive to Newcastle every Saturday night and it is wall to wall with people getting absolutely bladdered on expensive drinks, the shops are still busy and whilst we have rising unemployment it certainly isn't impossible to find a job.

> I thought we were having a serious discussion
> Screw reality, my personnal experience is trustworthier than what official figures tell or what nobel prize winners think!!!!111

[Rolling Thunder]

More importantly, deficit spending is bad for the economy as such, credit ratings aside. It means resources that could be used to develop the economy are NOT being used to develop the economy, but are going instead to political programs.

Financial market resources are not real economy resources.

[Justice and Mercy]

Financial market resources are not real economy resources.

Financial markets are used to coordinate "real" economy resources.

They are certainly in bad shape now, which is to be expected when a government or quasi-government entity controls money. Financial markets are some of the most heavily regulated, by far.

[mrmouth]

They were in far better shape pre 1999, before all regulation that had existed after the Great Depression was overturned in two bills.

[Father Jack]

Am I the only one thinking about dip combinations? Guacamole and hummus, taramasalata and tzatziki, salsa and sour cream, aioli and chipotle... I wish I had some tortilla chips

[mongrel]

Given the choice between Obama's approach and the European consensus, hindsight and results alone suggest which is the more successful approach. We are living in the days of Ted Heath again, without the yachting or Miners strikes.

I offer this graph for those curious about to whether the current approach is of any use.

[Snoopy]

Given the choice between Obama's approach and the European consensus, hindsight and results alone suggest which is the more successful approach. We are living in the days of Ted Heath again, without the yachting or Miners strikes.

I offer this graph for those curious about to whether the current approach is of any use.

The US has the benefit of being the world's reserve currency, giving it access to a variety of tricks that the EU could never get away with. On the other hand, the EU doesn't seem to understand that cutting spending while simultaneously maintaining taxes or raising them is a remarkably poor way to deal with a recession, so there's that.

[Sphere]

The trouble is not just the UK austerity program, it is the EU wide austerity.

At the end of the day, these programs are shrinking demand in the European market and putting downward pressure on economic growth. That is not a big surprise, everyone more or less expected as much, but the proponents were predicting a surge in business and consumer confidence which would create enough counteracting growth to prevent dips back into recession.

However, it seems the balance sheets of consumers and businesses have a bigger effect on consumer and business confidence than the balance sheet of the government (Compare and contrast with the US situation to see what I mean). There's been no surge in growth in UK, nor Europe, and several nations are either in, or flirting with recession.

One way or another things will eventually fully recover, but Europe will have undergone rather serious and prolonged economic contraction or stagnation if it cannot find a way to get economic growth going relatively soon.