Brendan Wrote: ------------------------------------------------------- > I understand the need to not spend public money > that does not exist. (As much as I understand the > stupidity in banks being allowed to lend money > they don?t have and then claiming the debt as an > asset along with all the other contrived ways of > magicing money from nowhere that they have) > > What worries me is the knock on effect of large > scale redundancies on the economy. It is all well > and good saving X billion ? by sacking 100 > thousand people but you?ve only saved the money > that those people weren?t paying back to you in > tax anyway which could be 50% and above, then they > are going to claim benefits, they may require > housing, they are going to stop contributing to > commerce by buying cars and video games and pooper > scoopers and borrowing money from banks, they > aren?t going to use private healthcare or > education etc etc. > > So there must be a tipping point where it causes > more damage than it solves. You are absolutely correct. Government debt also re-emerges into the economy and stimilutes private sector business. The government have done nothing to prevent any repeat of the credit crunch. A proportionate response to the irresponsibility of the City, which largely got us into our current mess, would not lead to the collapse of our economy - in fact quite the reverse is true. There is definitely an ideological element to the current government's approach to reducing the deficit, which is simply opportunism. We do of course need a reduction in the deficit - there is no doubt about this. But so much of the response is not logical, but political. Why are we ring fencing the NHS for example. It was by far the biggest recipient of Labour's largesse. Billions was poured into feather bedding consultant doctors. Even more was lost, employing useless (private sector) management consultants, failed IT projects etc. It's the worst type of populurism to ring fence health. To suggest that banks have played no part in the current deficit problem is nonsence. The reduction in tax recipts is down to the recession, which is largely a result of the credit crunch. Billions upon billions have now been poured into the banks, which leaves an even bigger hole in the public finances. And yet the government will not take action to curtail even the most extreme antisocial and irresponsible practices of bankers.