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Re: Universal benefits vs Means-testing : Sun Jan 13, 2013 2:59 pm  
Sal Paradise wrote:
To just take the data and suggest that is the definitive answer is far too simplistic. The mix of private to public sector is different, the role of unions is very different, the idea the Labour was going into a period of sustained growth in 2009 is simply not believable


Thats a bit of waffling to try and create the impression that "you're wrong, I'm right because I understand these extra factors that I'm going to allude to without giving an explanation".
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Re: Universal benefits vs Means-testing : Sun Jan 13, 2013 3:01 pm  
JerryChicken wrote:
In very simplistic terms though do you think that had the "austerity cuts" of 2010 not been as deep, and had not promised much deeper cuts in future years, that the ground made in 2009 could at least have been maintained rather than slipping backwards ?


The cuts shouldn't have had anything to do with it. The Chancellor delivered a 'budget for growth' which was going to cut excessive red tape and allow the private sector to grow. The private sector would have also been able to pick up all the extra resources (labour and capital) released by the cuts in the public sector. And as the government is proud of saying, the number of jobs created in the private sector has exceeded the number of jobs lost in the public sector.

So lets not have the government hiding behind the left wing myth that the poor economic performance was due to them having to cut government. Surely small government is better for the economy than big government.
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Re: Universal benefits vs Means-testing : Sun Jan 13, 2013 5:44 pm  
sally cinnamon wrote:
Thats a bit of waffling to try and create the impression that "you're wrong, I'm right because I understand these extra factors that I'm going to allude to without giving an explanation".


Do you honestly believe that under Labour the country was going to see a growth spurt from 2009? Especially as they had said they would also have to reduce public spending?
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Re: Universal benefits vs Means-testing : Sun Jan 13, 2013 8:57 pm  
Not a spurt. I think we could have avoided a double dip recession and had growth of around 2% like we did in the first year post-recession leading up to the election. I think had it been a Lab-Lib coalition, with an economic policy headed by Alastair Darling and Vince Cable, we could have made better progress.
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Re: Universal benefits vs Means-testing : Mon Jan 14, 2013 3:52 am  
Sal Paradise wrote:
Do you honestly believe that under Labour the country was going to see a growth spurt from 2009? Especially as they had said they would also have to reduce public spending?

Unless you (or the government) wants to claim either a) the Torys weren't planning larger spending cuts than Labour, or b) that the fiscal multiplier in the UK is currently less than 0 (The Conservatives own calculations had it at around 0.5) then it is inescapable that growth would've been higher under Labour than the Conservatives. The only issue is how much higher would it have been.

Using the targets set out in Darling and Osborne's 2010 budgets (I assume steady pace of deficit reduction - both were ever so slightly back loaded), I calculate that in the 4 fiscal years from 2010/2011 - 2013/2014 the Tory were going to make cumulative net cuts (relative to Darling's plan) of 6.4% of (April 2010) GDP.

According to Oliver Blanchard (chief economist to the IMF, here) a 1% cut in public spending (in developed economies since 2010) directly leads to about a 1% drop in GDP. Therefore the Conservatives extra 6.4% of cuts would result in lower economic growth of about 1.6% for each of these four years. It thus seems reasonable to assume that instead of the Conservatives' slightly better than flat growth, we would be having around 2% growth under Labour.

ps. This only adjusts growth cuts under the Conservatives, for the extra growth due to Labour 'stimulus' (i.e. not as many cuts), so don't say it doesn't take into account things such as the Eurozone crisis and the slower than Darling expected global recovery, because it already does.
Sal Paradise wrote:
Do you honestly believe that under Labour the country was going to see a growth spurt from 2009? Especially as they had said they would also have to reduce public spending?

Unless you (or the government) wants to claim either a) the Torys weren't planning larger spending cuts than Labour, or b) that the fiscal multiplier in the UK is currently less than 0 (The Conservatives own calculations had it at around 0.5) then it is inescapable that growth would've been higher under Labour than the Conservatives. The only issue is how much higher would it have been.

Using the targets set out in Darling and Osborne's 2010 budgets (I assume steady pace of deficit reduction - both were ever so slightly back loaded), I calculate that in the 4 fiscal years from 2010/2011 - 2013/2014 the Tory were going to make cumulative net cuts (relative to Darling's plan) of 6.4% of (April 2010) GDP.

According to Oliver Blanchard (chief economist to the IMF, here) a 1% cut in public spending (in developed economies since 2010) directly leads to about a 1% drop in GDP. Therefore the Conservatives extra 6.4% of cuts would result in lower economic growth of about 1.6% for each of these four years. It thus seems reasonable to assume that instead of the Conservatives' slightly better than flat growth, we would be having around 2% growth under Labour.

ps. This only adjusts growth cuts under the Conservatives, for the extra growth due to Labour 'stimulus' (i.e. not as many cuts), so don't say it doesn't take into account things such as the Eurozone crisis and the slower than Darling expected global recovery, because it already does.
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Re: Universal benefits vs Means-testing : Mon Jan 14, 2013 7:21 am  
Cookridge_Rhino wrote:
Unless you (or the government) wants to claim either a) the Torys weren't planning larger spending cuts than Labour, or b) that the fiscal multiplier in the UK is currently less than 0 (The Conservatives own calculations had it at around 0.5) then it is inescapable that growth would've been higher under Labour than the Conservatives. The only issue is how much higher would it have been.

Using the targets set out in Darling and Osborne's 2010 budgets (I assume steady pace of deficit reduction - both were ever so slightly back loaded), I calculate that in the 4 fiscal years from 2010/2011 - 2013/2014 the Tory were going to make cumulative net cuts (relative to Darling's plan) of 6.4% of (April 2010) GDP.

According to Oliver Blanchard (chief economist to the IMF, here) a 1% cut in public spending (in developed economies since 2010) directly leads to about a 1% drop in GDP. Therefore the Conservatives extra 6.4% of cuts would result in lower economic growth of about 1.6% for each of these four years. It thus seems reasonable to assume that instead of the Conservatives' slightly better than flat growth, we would be having around 2% growth under Labour.

ps. This only adjusts growth cuts under the Conservatives, for the extra growth due to Labour 'stimulus' (i.e. not as many cuts), so don't say it doesn't take into account things such as the Eurozone crisis and the slower than Darling expected global recovery, because it already does.


...and presumably Osborne is aware of all this ?

...and continuing with the presumptions he is now either stuck on a runaway train, has no plan b, or is cutting budgets as a deliberate political exercise with no care to the outcome ?
Cookridge_Rhino wrote:
Unless you (or the government) wants to claim either a) the Torys weren't planning larger spending cuts than Labour, or b) that the fiscal multiplier in the UK is currently less than 0 (The Conservatives own calculations had it at around 0.5) then it is inescapable that growth would've been higher under Labour than the Conservatives. The only issue is how much higher would it have been.

Using the targets set out in Darling and Osborne's 2010 budgets (I assume steady pace of deficit reduction - both were ever so slightly back loaded), I calculate that in the 4 fiscal years from 2010/2011 - 2013/2014 the Tory were going to make cumulative net cuts (relative to Darling's plan) of 6.4% of (April 2010) GDP.

According to Oliver Blanchard (chief economist to the IMF, here) a 1% cut in public spending (in developed economies since 2010) directly leads to about a 1% drop in GDP. Therefore the Conservatives extra 6.4% of cuts would result in lower economic growth of about 1.6% for each of these four years. It thus seems reasonable to assume that instead of the Conservatives' slightly better than flat growth, we would be having around 2% growth under Labour.

ps. This only adjusts growth cuts under the Conservatives, for the extra growth due to Labour 'stimulus' (i.e. not as many cuts), so don't say it doesn't take into account things such as the Eurozone crisis and the slower than Darling expected global recovery, because it already does.


...and presumably Osborne is aware of all this ?

...and continuing with the presumptions he is now either stuck on a runaway train, has no plan b, or is cutting budgets as a deliberate political exercise with no care to the outcome ?
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Re: Universal benefits vs Means-testing : Mon Jan 14, 2013 9:04 am  
JerryChicken wrote:
...and continuing with the presumptions he is now either stuck on a runaway train, has no plan b, or is cutting budgets as a deliberate political exercise with no care to the outcome ?


Osborne has no plan b. His plan is to use the failure of plan a, to claim there is no alternative.

Whenever he is confronted with evidence of economic failure he says "that shows it is even more important that we aren't diverted from the path".

Watch for this line to come out when the UK loses its AAA credit rating, that Osborne clings on to as evidence of his great performance at making the markets have 'credibility' in his plan.
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Re: Universal benefits vs Means-testing : Mon Jan 14, 2013 3:23 pm  
JerryChicken wrote:
...and presumably Osborne is aware of all this ?

...and continuing with the presumptions he is now either stuck on a runaway train, has no plan b, or is cutting budgets as a deliberate political exercise with no care to the outcome ?

I would like to think the Chancellor and his team spend more time reading about the consequences of deficit reduction than I do, so I would hope so.

I think that the Tories have invested way too much political capital in deficit reduction. If they were to be honest and say: 'We - like the IMF and other respected bodies, hugely underestimated the negative effects of deficit reduction during this period of economic trouble. If we had not cut so far so fast, we wouldn't have entered into a double dip recession (which has lead us to borrow even more than in Alastair Darling's plan). We're going to go for plan B' they would be absolutely wiped out at the next election.

I don't think political expediency is the only reason though. The Conservatives like to cut the state whenever they can. I think they would've made cuts for ideological reasons anyway, the recession has only gave them a good excuse to go further than they otherwise would've been able to get away with.
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Re: Universal benefits vs Means-testing : Mon Jan 14, 2013 3:28 pm  
One new pension for everyone – no means-tested add-ons.

Interesting to see that the government now believes in universal benefits.
One new pension for everyone – no means-tested add-ons.

Interesting to see that the government now believes in universal benefits.
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Re: Universal benefits vs Means-testing : Mon Jan 14, 2013 3:41 pm  
Mintball wrote:
One new pension for everyone – no means-tested add-ons.

Interesting to see that the government now believes in universal benefits.


And in principle this is a good idea.

However it's tied to an increase n the pension age to (eventually) 68 and having to pay NI for 35 years instead of 30.

I think having to work in manual jobs until you are 68 is going to result in a sufficient cull of the population to make it affordable!

Also not sure how IDS sells it as good for women who take time off for child care because your national insurance is credited for time off looking after kids up to the age of 12.

I also wouldn't trust IDS as far as I could throw him so there is bound to be some small print somewhere that results in more people losing out than predicted. The devil will be in the detail in this one.
Mintball wrote:
One new pension for everyone – no means-tested add-ons.

Interesting to see that the government now believes in universal benefits.


And in principle this is a good idea.

However it's tied to an increase n the pension age to (eventually) 68 and having to pay NI for 35 years instead of 30.

I think having to work in manual jobs until you are 68 is going to result in a sufficient cull of the population to make it affordable!

Also not sure how IDS sells it as good for women who take time off for child care because your national insurance is credited for time off looking after kids up to the age of 12.

I also wouldn't trust IDS as far as I could throw him so there is bound to be some small print somewhere that results in more people losing out than predicted. The devil will be in the detail in this one.
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