What's really happening with this new Labour government

Isn’t it time we admitted that the OBR is basically a quango designed to enforce neoliberal orthodoxy? No matter what’s wrong with the economy, whether it’s stagnation, inequality, or a need for massive investment, the OBR always seems to prescribe the same medicine: austerity, spending restraint, and keeping the markets happy.

It presents itself as a neutral body, but in reality, it just locks in a particular economic ideology and limits the choices of elected governments. It’s hard to pursue transformative policies when an unelected body is standing over your shoulder with a spreadsheet that says “sorry, can’t do that—bad for the deficit.”

It’s not about transparency or accountability. It’s about making sure certain ideas—state intervention, borrowing for investment and real redistribution are permanently off the table.

It’s time we scrapped it and trusted democratic institutions to decide economic priorities instead.
 
RavsFan said:
Enjoy the read, the period between the 90’s and 2013, the bit about printing money is interesting

Venezuela economy article
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Clearly the writer of this article has a particular opinion about government money creation that colours his views, namely:

'A central bank printing money to finance government deficits is highly inflationary. It works as a tax on savings and wages via higher consumer prices, disproportionately affecting the poor."

This statement is not self evidently true and other economists would not agree with it. It all depends on what the money is being used for. As regards hyperinflation, the most cited examples involve a shock to productive capacity of an economy. In the case of the Weimar Germany, the French army occupied the Ruhr and took control of German industry to try and enforce reparation payments. German workers went on strike and German industry ground to a halt. In Zimbabwe, it was the damage to the agricultural sector resulting from land reform. In Venezuela, an economy heavily dependent on its oil exports, it was initially the damage caused by the fall in oil prices and then the draconian sanctions imposed by the West. In each case excessive money printing may have happened, but this was more an attempt to cope with the consequences of the damage to the productive capacity of the economy rather than a primary cause. In the case of Venezuela, there was no also no doubt a significant degree of economic mismanagement.

I don't think even the most ardent MMT disciples would support reckless money creation by the government.
 
Who’s going to shill for this then?

I voted Labour to get the Tories out, they can forget it next election. I don’t care if they threaten us with a Farage and/or Badenoch government. Unless there’s a significant change in policy (which there won’t be until Reeves is removed) I won’t be voting next election.

I suspect plenty of others feel the same.

https://twitter.com/x/status/1904892337756455311
 
Billy Horner said:
Having spent most of this thread misrepresenting the concept of MMT as an idea that we can simply print our way out of the current fiscal constraints
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Fixed that for you...

MMT Is a description of what currently happens. It isn't "some form of new age travelling" economic model.

No-one (that I'm aware of) is suggesting we go on an unlimited print run with zero consequence.

The main point of it all is that the government isn't obliged to put 50,000 kids into poverty in order to finance £2Bn in Defence spending. That is a political and ideological choice.

People using the household-budget analogy to pretend that the Chancellor has no other option are wrong, both economically and morally. It's a weak excuse to hide behind.

Billy Horner said:
Also, if the world has indeed changed and we're going to need to ramp up defence spending, I think it would be perfectly acceptable for the Chancellor to exempt the additional defence spending from her fiscal rules and simply borrow the amount needed (like Germany is doing).
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Which is exactly what MMT says she can do. You've joined the dots and then declared that the picture of a house is actually a rabbit.
 
Billy Horner said:
Having spent most of this thread trashing the concept of MMT and the idea that we can simply print our way out of the current fiscal constraints, I do want to make one thing clear. Even though I am a firm believer in overall fiscal prudence and sound money, I do think the government is making the wrong choices at the moment.

Targeting welfare recipients (again) is not just immoral but makes bad economic sense if you are trying to stimulate growth. As I mentioned earlier in this thread, the poorer you are the higher is your Marginal Propensity to Consume (the amount you spend out of each additional Pound). Taking money away from the poorest not only hits them personally, but removes money from the local economy, putting a further downward pressure on growth.

I genuinely believe that the time has come for some form of modest, targeted wealth tax, which would be a perfectly reasonable way to balance the books instead, and would target capital which is broadly unproductive for the economy at the moment (being locked away in illiquid assets). The cohort paying this tax would also be the ones with the lowest MPC, meaning that raising the same amount from a wealth tax as you would from cutting welfare payments would do less damage to the wider economy.

Yes, as I've also said previously, it would lead to some level of capital flight, which would depreciate the currency somewhat and risk some inflation, but it was the concept of doing that at the same time as printing large quantities of new money that I was warning against. Taken alone, the inflationary effects should be relatively modest.

Also, if the world has indeed changed and we're going to need to ramp up defence spending, I think it would be perfectly acceptable for the Chancellor to exempt the additional defence spending from her fiscal rules and simply borrow the amount needed (like Germany is doing). From what I've read elsewhere, most analysts think that the money markets would wear it, as it's a critical requirement for a stable economy in the first place and it's clearly additional government expenditure that can't really be avoided.

Just to be clear though, I'm arguing this as a Keynesian, not as some form of new age travelling MMT advocate.
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Very much my thoughts Billy. You can disagree with a posters analysis of how we manage the economy and, at the same time, disagree with how the government is managing the economy.
 
johnsmithsno2 said:
Has elected representative Lodger, who started the thread, commented on the spring statement yet? Apologies if I've missed it.
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You seem to have a beef with TheLodger. If you have a grievance related to his position as a local Councillor why don't you just contact him directly through the available channels?
 
BlindBoyGrunt said:
This thread started off as a comment on a Full Facts report and has since covered many bases. I was merely asking what you were referring to so there's really no need to be @rsey
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Interesting accusation.

Over the last year in particular, I have begun to notice you being rude and cutting to a few other posters that you disagree with on political issues whether home or abroad. You seem to have a strong political bent, (which is your right if you wish of course) but are dismissive of alternate or more ‘moderate’ views to your own in such a way that is often, lets say indelicate. Have a good day!
 
InglebyUTB said:
Who’s going to shill for this then?

I voted Labour to get the Tories out, they can forget it next election. I don’t care if they threaten us with a Farage and/or Badenoch government. Unless there’s a significant change in policy (which there won’t be until Reeves is removed) I won’t be voting next election.

I suspect plenty of others feel the same.

https://twitter.com/x/status/1904892337756455311
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I get that. I suspect I'll probably still vote to try and stop the far right, but it won't be with much enthusiasm.

A more moderate tory party, and I'd probably protest vote for the greens. But Reform in government could well end up like MAGA. Too high a price for me.

What I would urge anyone to do who is thinking of sitting it out at the next election is to write to their nearest Labour MP just to make it clear how angry you are and why. I intend to do so anyway.

It may not make much of a difference in the grand scheme of things but at least they can't then say they weren't warned.

Plus a lot of Labour MPs probably feel the same to a degree. Anything to give them a bit more impetus to put pressure on the leadership certainly can't hurt.
 
RavsFan said:
Interesting accusation.

Over the last year in particular, I have begun to notice you being rude and cutting to a few other posters that you disagree with on political issues whether home or abroad. You seem to have a strong political bent, (which is your right if you wish of course) but are dismissive of alternate or more ‘moderate’ views to your own in such a way that is often, lets say indelicate. Have a good day!
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I am merely enquiring what political choice you were referring to because you didn't reference it in your post. Is that too much to ask?
 
festa5 said:
I get that. I suspect I'll probably still vote to try and stop the far right, but it won't be with much enthusiasm.

A more moderate tory party, and I'd probably protest vote for the greens. But Reform in government could well end up like MAGA. Too high a price for me.

What I would urge anyone to do who is thinking of sitting it out at the next election is to write to their nearest Labour MP just to make it clear how angry you are and why. I intend to do so anyway.

It may not make much of a difference in the grand scheme of things but at least they can't then say they weren't warned.

Plus a lot of Labour MPs probably feel the same to a degree. Anything to give them a bit more impetus to put pressure on the leadership certainly can't hurt.
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The pointlessness of elections for the majority of the country, due to living in a safe seat, means there are loads of opportunities for people to vote to show that they do not support the main parties without risking Tory/Reform winning.

Every party that isn't Labour or Tory should be banging the electoral reform drum more than anything else. Labour have shown that even a thumping majority only gets you the other cheek of the same ****. The only way we will get any actual deviation from the status quo is by getting rid of the FPTP system.
 
BlindBoyGrunt said:
If that's what The Lodger wants, then he shouldn't make political posts on here.
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In fairness it was a question posed to johnsmithsno2 which I hope he answers for himself. He specifically mentions the Spring Statement which of course is an event in itself and possibly worthy of its own thread. Frankly I am amazed it doesn't have its own thread but there you go. There's nothing stopping johnsmithsno2 creating his own Spring Statement thread and perhaps he could bring TheLodger into the discussion by tagging him properly if he really does want some interaction on that particular topic. Otherwise it just appears that he's engaging in a trolling exercise.
 
Boro.Fur said:
In fairness it was a question posed to johnsmithsno2 which I hope he answers for himself. He specifically mentions the Spring Statement which of course is an event in itself and possibly worthy of its own thread. Frankly I am amazed it doesn't have its own thread but there you go. There's nothing stopping johnsmithsno2 creating his own Spring Statement thread and perhaps he could bring TheLodger into the discussion by tagging him properly if he really does want some interaction on that particular topic. Otherwise it just appears that he's engaging in a trolling exercise.
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Disagree BF, the statement yesterday is a crucial part of what's really happening with this new Labour government, no need for a new thread.
 
Corco65 said:
Disagree BF, the statement yesterday is a crucial part of what's really happening with this new Labour government, no need for a new thread.
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That's fair enough Corco, but if johnsmithsno2 wants an answer from TheLodger then he needs to ask him a question. Referring to TheLodger indirectly without tagging him is tantamount to trolling in my eyes.
 
Boro.Fur said:
That's fair enough Corco, but if johnsmithsno2 wants an answer from TheLodger then he needs to ask him a question. Referring to TheLodger indirectly without tagging him is tantamount to trolling in my eyes.
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Again I disagree BF, but obviously thats how you see it. I don't know JS2 intentions, but it didn't come across like that to me. He mentioned the poster by name, perhaps not tagging was an oversight, or something he doesn't know how to do or something he choose not to do thinking the thread owner will follow the thread. I think I have done it before. Also we don't have a board etiquette or convention to follow, although norms do become established by virtue of most people following the ways of others.
 
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