Labour fudging the definition of debt in order to allow themselves to spend more is actually in some ways a smart move. The general public are of the belief that public debt is very bad when in fact a certain amount of it is very good, especially when the economy is struggling like it is.
Long term though, they are going to have to change the narrative. The Tories have been riding the back of "balancing the books" for too long and to keep lip service to that is playing into their hands.
the other thing is that while the wiser might tell you the government budget doesn't work like a household budget, actually our own household budget hasn't been that dissimilar in the past. when we were hard up, the bills went on the credit card. when we got jobs, it got paid off. that's the sensible way round. not getting your electricity cut off and starving half to death to pay off debts in the expectation of being able to live it up later.
we were just lucky we had such a good credit rating. you know, like the government.
the entire Tory austerity program wasn't just based on the logic of household finances. it was specifically based on the logic of household finances of someone with a rubbish credit rating who doesn't believe they will ever be better off in the future regardless of what they do.
so yeah i kinda get how they conned a lot of working class people into voting for them.
also it's absolutely right to consider student loans as an asset, not a liability. this is money that students owe the government, not the other way around. it was always on the wrong side of the balance sheet. it's not Labour who are now fudging the figures to allow more spending. it was the Tories who were fudging the figures to justify austerity all along.
what you want is for the debt to GDP ratio to be long term stable. that means that you can borrow at the same rate as the economy grows to keep it level. and if you don't do that, what you may find is that GDP goes down faster than the debt. So debt to GDP ratio goes UP. the converse is also true.
this is how the government budget differs from a household budget. because of the feedback mechanism. if i take out a loan it won't get me a payraise. but that's exactly what happens for a government.
@mrsbeanbag actually getting a loan can get you a pay raise, if you invest in the money in yourself. The same is true for government, gdp will only grow if the borrowing is invested.
@mrsbeanbag classic exempel of non productive, as in not generating growth, government spending is military spending.
I didn't mean to say you got anything wrong, I just wanted to add too what you said.
@ekg i'm actually in two minds about whether military spending counts as an investment or not. although tbh i don't really approve of it either way.
@mrsbeanbag most studies have the return on investment of less then 1, meaning the economy grow less then what is spent.
Most military spends, not counting salaries, goes to import of equipment. Imports are by definition counted as a decrease in growth.
@ekg yeah i was going to say, as long as they primarily use a domestic arms supplier. which the US largely does i guess. other countries less so. which goes some way to explain something i'm sure.
@ekg i'm not counting the Stargate program of course, which gets its guns from Belgium
@mrsbeanbag stargate?, I haven't had the opportunity to learn of that name.
@mrsbeanbag okay, that explains that.
@ekg if you like the sound of "military science fiction that's also cosy somehow" then you should totally check it out
@mrsbeanbag more importantly net exporters of equipment, count isreal, usa, and a few more, have a positive impact on growth.
Growth is calculated as: private spending + public spending + net foreign investment + net exports.
@ekg true although NATO members are only allowed to buy arms from suppliers in NATO countries. so it's a kind of military-industrial protectionism.
@mrsbeanbag I don't think that's true, but their certainly exists a lot of pressure on members to buy from the alliance.
Both Sweden and Israel, with others, made the call that an independent defence required an domestic arms industry, that is not without reason.
"Companies wishing to be considered as NATO HQ suppliers must be established in NATO member countries."
But maybe "NATO HQ suppliers" is a more specific thing than i thought.
@mrsbeanbag NATO HQ is an office building in Belgium, technically the people that works their. This is going to be true anyway, it would be a long way to ship office supplies from outside the alliance.
@ekg well i'm sure i read somewhere that it was a rule but i can't find it now. maybe i switched realities again, it happens sometimes
@mrsbeanbag I think you are referring to when turkey tried to buy s400 from Russia and got kicked out of the F-35 program, an program Sweden haven't joined. And that was mostly down to the Americans being scared that the Turks would share identification signatures with the Russians, that could be used to target the F-35 in future conflicts with Russian equipment.
@ekg ack, it's a political minefield isn't it. so to speak
@mrsbeanbag you might turn out to be more right then I thought, news recently reached me that the DOJ is opening a probe into Swedens sale of Gripen to Brazil. They already did it once before, otherwise this would be the kind of pressure that I would expect.
Every sale of military equipment is corrupt, but is also covered by national immunity. An investigation can't really do much, other than apply diplomatic pressure.
@mrsbeanbag I may have described NATO HQ as an office building in Belgium, but after recent expansion it's the third largest office building in the world. After the Octogon, where the Egyptian dod is housed, and the Pentagon where the us dod is taking up space.
@ekg i just looked it up and i now consider it a crime nobody calls it The Big Zipper
@mrsbeanbag I want to point out that NATO have expanded faster then the newly dubbed The Big Zipper, forcing newer members, including Sweden, to send their delegation to nearby buildings instead. Housing military command is a true challenge, requiring some of the most impressive infrastructure we humans build.
@ekg new theory about the purpose of the Tower of Babel just dropped
@ekg God destroys the military headquarters of a vast totalitarian empire. the tabloid press: "God hates it when everyone speaks the same language"
@mrsbeanbag I like the description of the Bible as an tabloid, I think that is an fair assessment of the amount of trust to place in its words.
@ekg some of the source material for the Pentateuch certainly (although it doesn't exactly make out the Tower of Babel to have been good, as vague as it is about the reason for its destruction). the prophets are like when an opinion columnist writes a book. Ecclesiastes is like when your English assignment is rewrite the Epic of Gilgamesh from a different point of view. lamentations are goth poetry. psalms are folk music. the song of songs is basically porn.
@mrsbeanbag I imagine it doesn't help most English speaker accept The King James version uncritically. In Sweden the most recent translation is from this millennium, not that I know if that helps. I have actually never read the Bible, not in hole at least. My most recent experience is YouTube Atheist reading select passages with their unique interpretation, if you remember thats era of YouTube you know what I mean.
@ekg i would be wary of anyone calling themselves "Youtube Atheist" tbh, that in itself is a doctrinal bias right off the bat. not sure how prevalent King James Only is but the NIV is certainly popular among the trendy evangelical youth you get at universities. and i really hate that one even more than the KJV.
oh also the Book of Judges serves largely the same function as cowboy films
@mrsbeanbag to expand. When Sweden sold Gripen to Brazil, including Israeli missiles, and American engines. A part of the deal was 100% counter purchases, meaning Sweden would be paid in Brazilian made or funded equipment. This is how equipment contracts typically works, because most countries are aware that importing equipment is unsuitable. I have a hard time believing that NATO would make it harder to export equipment by effectively baning these kinds of deals.
@ekg Sweden is only a recent NATO member, and Israel still isn't, so i dunno. sounds like a weird arrangement to me. the whole purpose of trade is to swap one thing for a different thing, not another of the same thing.
@mrsbeanbag sure it is both military equipment, but their exist an differences between transport aircraft, and fighter jets. And yes it was a weird deal, but counter purchases is common in equipment deals often not fully honoured.
@ekg so what are we getting in exchange from the Saudis. i guess it's oil, isn't it
@mrsbeanbag Yes, and keeping them calm about the Israel. Every time the USA give something to Isreal, the Saudis typically demands, and get, something equivalent.
@ekg yeah it can. career development loans for instance. there wasn't enough space in a toot for all that. pretty much anything the government usually spends money on counts as an investment, though. healthcare, education, transport infrastructure.. as long as they're not, oh i don't know, channelling funds into their mate's offshore accounts through spurious government contracts, to pick a random example