So, what was austerity all about then?

[the other bob wilson]

I was half listening to a budget discussion on the radio this morning and heard someone talking about annual interest payments on the UK National debt where someone said it was either eighteen or eighty billion pounds and no one contradicted him. I’ve not come across anything yet confirming which of the two figures are right, but I feel it must be eighteen, rather than eighty surely.

Even so, eighteen billion is shocking after a ten year programme of austerity which we were told was to “balance the books” on the huge debt left by the last Labour Government - well, that went well didn’t it!

https://www.statista.com/statistics/282841/debt-as-gdp-uk/

After looking at that chart, my question is, what was the point of austerity?

[Wales-Bales]

Re: So, what was austerity all about then?

Austerity was a training exercise to prepare people for what was coming down the road.

[JamesWales]

Re: So, what was austerity all about then?

I was half listening to a budget discussion on the radio this morning and heard someone talking about annual interest payments on the UK National debt where someone said it was either eighteen or eighty billion pounds and no one contradicted him. I’ve not come across anything yet confirming which of the two figures are right, but I feel it must be eighteen, rather than eighty surely.

Even so, eighteen billion is shocking after a ten year programme of austerity which we were told was to “balance the books” on the huge debt left by the last Labour Government - well, that went well didn’t it!

https://www.statista.com/statistics/282841/debt-as-gdp-uk/

After looking at that chart, my question is, what was the point of austerity?

They were likely referring to the percentage of GDP that is national debt - ie, if GDP is £1000m and debt is £800m then the level is 80%. It's considered important to keep it within this, what is deemed manageable level. I have to say, I'm not entirely sure why, as whilst the most relatively indebted country may be that perennial failure that is Venezuela, the US and Japan are also well above us. You can see the list of all countries debt to GDP ratios here: https://tradingeconomics.com/country...nt-debt-to-gdp

Nonetheless, the problem is that under the Global Financial Crisis (not caused by Labour although they may be guilty of a failure to prepare) the debt rose from about 30% to 70% of GDP in three years. Austerity helped arrest that decline and it stabilised until Covid fkd it up again

You can see it here: https://tradingeconomics.com/united-...nt-debt-to-gdp

and here: https://en.wikipedia.org/wiki/United...%20that%20time).

The point of austerity was to address that rather dramatic and unsustainable rise and had we not done so our debt and debt to GDP ratio would undoubtedly be higher. I guess the debate is whether that matters or whether it does but austerity still went too far.

Personally I think the books needed balancing and some fat probably did need cutting off some parts of the public sector, but I think it went on too long.

[the other bob wilson]

Re: So, what was austerity all about then?

They were likely referring to the percentage of GDP that is national debt - ie, if GDP is £1000m and debt is £800m then the level is 80%. It's considered important to keep it within this, what is deemed manageable level. I have to say, I'm not entirely sure why, as whilst the most relatively indebted country may be that perennial failure that is Venezuela, the US and Japan are also well above us. You can see the list of all countries debt to GDP ratios here: https://tradingeconomics.com/country...nt-debt-to-gdp

Nonetheless, the problem is that under the Global Financial Crisis (not caused by Labour although they may be guilty of a failure to prepare) the debt rose from about 30% to 70% of GDP in three years. Austerity helped arrest that decline and it stabilised until Covid fkd it up again

You can see it here: https://tradingeconomics.com/united-...nt-debt-to-gdp

and here: https://en.wikipedia.org/wiki/United...%20that%20time).

The point of austerity was to address that rather dramatic and unsustainable rise and had we not done so our debt and debt to GDP ratio would undoubtedly be higher. I guess the debate is whether that matters or whether it does but austerity still went too far.

Personally I think the books needed balancing and some fat probably did need cutting off some parts of the public sector, but I think it went on too long.

The percentage of debt to GDP has been up over 100 per cent at times according to some of the time

https://www.ft.com/content/57974640-8bea-448c-9d0b-32f34825f13e

and it was 95 per cent last month

https://www.statista.com/statistics/282841/debt-as-gdp-uk/

so I'd be surprised if it had dropped to 80 per cent now (I'm sure there would be Government sources bringing such a drop to our attention if it were true).

Think you're putting a generous interpretation on things when you say;-

"Nonetheless, the problem is that under the Global Financial Crisis (not caused by Labour although they may be guilty of a failure to prepare) the debt rose from about 30% to 70% of GDP in three years. Austerity helped arrest that decline and it stabilised until Covid fkd it up again"

but it can't be denied that Covid has had a significant impact on Government spending.

[Doucas]

Re: So, what was austerity all about then?

The point of austerity was to address that rather dramatic and unsustainable rise and had we not done so our debt and debt to GDP ratio would undoubtedly be higher. I guess the debate is whether that matters or whether it does but austerity still went too far.

Complete rubbish, we had the slowest recovery because of austerity. The economy is not a household budget, in order to grow it you need to invest in it, if you make cuts like our current government did well you see why we've performed so badly over the past decade.

[JamesWales]

Re: So, what was austerity all about then?

Complete rubbish, we had the slowest recovery because of austerity. The economy is not a household budget, in order to grow it you need to invest in it, if you make cuts like our current government did well you see why we've performed so badly over the past decade.

Well it's not rubbish is it - that is the reason why we (and everywhere else) had austerity

https://www.bbc.co.uk/news/10162176

You may find I agree with you in terms of the success or otherwise of it, but then we don't know what would have happened if we had done nothing do we.

[Raymond Holt]

Re: So, what was austerity all about then?

The fact that "perennial failure" Venezuela still exists at all given the sanctions imposed on it by the US and EU is amazing. Venezuela has denied the US their usual tactic of installing a Western puppet in the form of Guaido and refuse to hand over all of their oil into US control.

[Wales-Bales]

Re: So, what was austerity all about then?

https://www.bbc.co.uk/news/10162176
You may find I agree with you in terms of the success or otherwise of it, but then we don't know what would have happened if we had done nothing do we.

Technically speaking the western nations have been bankrupt since 2008, and have been printing money like crazy in an attempt to keep things ticking over. We are now at the problem/solution stage which you aren't really supposed to be aware of.

[life on mars]

Re: So, what was austerity all about then?

Although the government could not forsee what was ahead , perhaps in a strange way austerity provided a financial war chest to battle against the economic impact of Covid ,fuel crisis, , albeit it did hurt the lowly paid .

Thankfully austerity hasn't been re -introduced this time around, and those very government workers who were hit by austerity measures didn't feel the impact of 80% Furlough pay the private sector workers have during the last two years ( some even losing their jobs )