Non - Liz Truss

[zigger zaggar]

What exactly is it that makes you so absolutely certain that you are right and Truss / Kwarteng are wrong? Perhaps you have a very detailed grasp of economics, certainly far more than I do, so what's the issue or issues? Spell it out for me.

Are you a bit slow?

 

[ErikthViking]

What exactly is it that makes you so absolutely certain that you are right and Truss / Kwarteng are wrong? Perhaps you have a very detailed grasp of economics, certainly far more than I do, so what's the issue or issues? Spell it out for me.

Perhaps you could spell this out for us: are you actually attempting a defence of the madness of Truss and Kwarteng?

The issues have been laid out in the world's media (and to some extent, in this thread) over the past eight days. Have you missed them?

So many economists at home and abroad (some quoted previously in this thread) have, at best, been mystified by the actions of The Terrible Twins and mostly condemned them. The reaction of the markets is a clear indication that either they simply don't know what their doing or they want to break the UK economy.

Apart from anything else, our pension funds have bled value this past week.

Just to make it crystal, are you actually attempting a defence of the madness of Truss and Kwarteng?

 

[Sorry Roger]

What exactly is it that makes you so absolutely certain that you are right and Truss / Kwarteng are wrong? Perhaps you have a very detailed grasp of economics, certainly far more than I do, so what's the issue or issues? Spell it out for me.

I think you have to differentiate between what Truss & Kwarteng (a) appear to want to do and (b) their actions, so far, to get there.

(a) their aspiration is a much smaller state, with greater incentives to work and invest, fewer regulations, lower unemployment benefits etc in the hope this will lead to a higher rate of growth than in the past. Personally I am not convinced, however who is to say that I am right and they are wrong. Ultimately only time would tell.

As to (b), they have been either arrogant or inept in merely asserting that their huge spending commitments will come out in the wash whilst deliberately by-passing the normal checks and balances associated with budgets. They also failed to prepare the ground for their changes by briefing the markets. And in so doing they have caused: a collapse in government bond prices, increasing the cost of servicing the National Debt by around £1 billion every month; threatened the solvency of defined benefit pension funds, forcing the Bank of England to print £5 billion of money every day for the next two weeks; wiped billions off of the value of shares, reducing defined contribution pensions; made a massive hike in interest rates all but inevitable, hiking mortgage costs for new borrowers, those on variable rate mortgages and those coming to the end of fixed rate deals; and caused a run on the pound, increasing inflationary pressure by raising the cost of imports.

So the issue is not where they want to get to, but the disastrous things they have done. Incidentally not helped by their complete and utter inability to communicate effectively or demonstrate any empathy with the very real anxiety many people feel contemplating the immediate future.

 

[stanthevan]

What exactly is it that makes you so absolutely certain that you are right and Truss / Kwarteng are wrong? Perhaps you have a very detailed grasp of economics, certainly far more than I do, so what's the issue or issues? Spell it out for me.

Perhaps you're right. I could be wrong along with the IMF, the Bank of England, the Obr, all financial institutions, all mortgage lenders and the vast majority of MPs.

 

[JIMNNINA]

What exactly is it that makes you so absolutely certain that you are right and Truss / Kwarteng are wrong? Perhaps you have a very detailed grasp of economics, certainly far more than I do, so what's the issue or issues? Spell it out for me.

Simple the PM isnt up to the job of leading the conservative party and the country.

Pop along to the nearest library or coffee shop and read the front pages.

Trussonomics has hit the ground and flattened the pound.

The next cunning plan is austerity cuts to benefits....

 

[fritter]

She's still a liberal democrat and has been undercover. Her aim is to destroy the Tory party from within. Building on what Russian asset Johnson started. Putin must be delighted.

 

[dsr-burnley]

Perhaps you could spell this out for us: are you actually attempting a defence of the madness of Truss and Kwarteng?

The issues have been laid out in the world's media (and to some extent, in this thread) over the past eight days. Have you missed them?

So many economists at home and abroad (some quoted previously in this thread) have, at best, been mystified by the actions of The Terrible Twins and mostly condemned them. The reaction of the markets is a clear indication that either they simply don't know what their doing or they want to break the UK economy.

Apart from anything else, our pension funds have bled value this past week.

Just to make it crystal, are you actually attempting a defence of the madness of Truss and Kwarteng?

No. To spell it out for you, I am asking what is it about last week's budget that makes so many people so certain, beyond all doubt, that they are right about the economy and Truss/Kwarteng are wrong.

And you've answered that, thanks. It seems that a boatload of economists think they are wrong and the consensus is that a boatload of economists must know what they are talking about. I have less faith in economists than some people, that's all.

When you have inflation of 10% and interest rates of 2.5%, it's bound to cause ructions in the market. Interest rates are unsustainably low, and the Bank of England has chosen to try and stem the bleeding by the same old tactic of printing money. Interest rates will have to rise - it's inevitable.

The current system of spend more than we have, print pound notes to cover the deficit, and assume that the pound will never fall and the money will never run out and we will never have to pay it back - it won't work. Something needs to be done differently. Do these economists in whom you put your trust, have any idea what that is?

Remember quantitative easing was a new idea as recently as 20 years ago. It isn't a proven system that works for ever, and the cracks have clearly been showing for a while.

 

[dsr-burnley]

Simple the PM isnt up to the job of leading the conservative party and the country.

Pop along to the nearest library or coffee shop and read the front pages.

Trussonomics has hit the ground and flattened the pound.

The next cunning plan is austerity cuts to benefits....

When Liz Truss became PM, the pound was worth €1.16. Yesterday it was worth €1.13. Today it's €1.14. That's a pretty small stick to beat someone with. The average for the past 10 years is €1.20.

 

[SlowDownDerek]

No. To spell it out for you, I am asking what is it about last week's budget that makes so many people so certain, beyond all doubt, that they are right about the economy and Truss/Kwarteng are wrong.

And you've answered that, thanks. It seems that a boatload of economists think they are wrong and the consensus is that a boatload of economists must know what they are talking about. I have less faith in economists than some people, that's all.

When you have inflation of 10% and interest rates of 2.5%, it's bound to cause ructions in the market. Interest rates are unsustainably low, and the Bank of England has chosen to try and stem the bleeding by the same old tactic of printing money. Interest rates will have to rise - it's inevitable.

The current system of spend more than we have, print pound notes to cover the deficit, and assume that the pound will never fall and the money will never run out and we will never have to pay it back - it won't work. Something needs to be done differently. Do these economists in whom you put your trust, have any idea what that is?

Remember quantitative easing was a new idea as recently as 20 years ago. It isn't a proven system that works for ever, and the cracks have clearly been showing for a while.

See Sorry Roger's post, whether the underlying policy is correct is debatable. The completely irresponsible (or possibly corrupt) way they have gone about it is not.

 

[fritter]

Truss, friend or foe?
A. Depends who you are.

But a joy to see so many Tories realising that truss is putting the final nail into their gravy train.

 

[JIMNNINA]

When Liz Truss became PM, the pound was worth €1.16. Yesterday it was worth €1.13. Today it's €1.14. That's a pretty small stick to beat someone with. The average for the past 10 years is €1.20.

Have you had time to pop out and read the papers?

What about the value of pension funds in the same period?

 

[richnrg]

The current system of spend more than we have, print pound notes to cover the deficit, ... it won't work.

Printing more pound notes is a fantastic idea. They're currently going for anywhere between £2 and £5 a pop on Ebay. By printing many more we could triple the value of the pound overnight.
(I think)

 

[Kudos]

So I've seen loads of stuff about how the budget is a disaster.

I can understand it being unpopular and I can understand the market response to it being terrible what I genuinely don't understand is why the response was so bad.

I see plenty of commentary talking about it like it was obvious but haven't once seen it explained. Did anyone find a good link explaining it?

 

[northstandmark]

No. To spell it out for you, I am asking what is it about last week's budget that makes so many people so certain, beyond all doubt, that they are right about the economy and Truss/Kwarteng are wrong.

And you've answered that, thanks. It seems that a boatload of economists think they are wrong and the consensus is that a boatload of economists must know what they are talking about. I have less faith in economists than some people, that's all.

When you have inflation of 10% and interest rates of 2.5%, it's bound to cause ructions in the market. Interest rates are unsustainably low, and the Bank of England has chosen to try and stem the bleeding by the same old tactic of printing money. Interest rates will have to rise - it's inevitable.

The current system of spend more than we have, print pound notes to cover the deficit, and assume that the pound will never fall and the money will never run out and we will never have to pay it back - it won't work. Something needs to be done differently. Do these economists in whom you put your trust, have any idea what that is?

Remember quantitative easing was a new idea as recently as 20 years ago. It isn't a proven system that works for ever, and the cracks have clearly been showing for a while.

While I think the way Truss has gone about it is wrong and only adding inflationary pressure, and opined as much during the leadership race, I still find lots to agree with here.

Interest rates and money printing have been unsustainable and a historic aberration for far too long. Only made worse in recent years to pay for covid of course. But that fact makes the new even more borrowing, tax cuts, and even more money printing in reaction to the markets - all the more concerning. It's all just heaping more inflationary pressure on.

 

[dsr-burnley]

Have you had time to pop out and read the papers?

What about the value of pension funds in the same period?

I get my paper delivered. No need to pop out.

The markets, like so many people, have overreacted to a budget with very little real news in it. The questions that have caused the panic could have equally been asked on Thursday or Wednesday, but that's how market traders work - when one sneezes, they all reach for their handkerchief. If a few influential traders take the same position, everyone else down the chain has to take the same position because the penalty of being wrong when following the trend is far lower than the penalty of being wrong while going your own way.

It'll stabilise. How much damage is done in the meantime, we'll see.

 

[SlowDownDerek]

So I've seen loads of stuff about how the budget is a disaster.

I can understand it being unpopular and I can understand the market response to it being terrible what I genuinely don't understand is why the response was so bad.

I see plenty of commentary talking about it like it was obvious but haven't once seen it explained. Did anyone find a good link explaining it?

Well it's a disaster politically to give loads of tax breaks to the wealthy funded by debt at a time when lower income people are in massive trouble, but that's up to them to deal with - in all probability the economy will be looking much more positive in two years no matter what they do so perhaps they've factored this hit to their reputation in.

Economically though the markets clearly are of the opinion that the UK is in a precarious position and this type of unfunded fiscal policy is a bad idea. They are gambling that it will stimulate sufficient growth and it seems the verdict of the world's bankers is that it won't.

 

[stanthevan]

I'm absolutely flabbergasted that there are a couple on here actually trying to defend this disastrous budget despite all of the evidence. I guess blind loyalty is the only thing that Truss can depend on now.

 

[DJ]

When you have inflation of 10% and interest rates of 2.5%, it's bound to cause ructions in the market. Interest rates are unsustainably low, and the Bank of England has chosen to try and stem the bleeding by the same old tactic of printing money. Interest rates will have to rise - it's inevitable.

Part of the idea of helping with the energy crisis (along with trying to be a vote winner) was that it would soften the increase in inflation and with it, interest rates.

Making sure people can actually afford their mortgages is a quite crucial part of dealing with the cost of living crisis.

Whether their plan is right or wrong, announcing it with zero explanation, or OBR scrutiny has caused massive problems for the UK in the immediate term. Even the most fanciful rossette-wearing lifer cannot dispute that.

 

[Druss_the_Legend]

I'm absolutely flabbergasted that there are a couple on here actually trying to defend this disastrous budget despite all of the evidence. I guess blind loyalty is the only thing that Truss can depend on now.

Imagine if Labour or the EU had done something to cause the impact last weeks fudge-it did. I am very sure DSR would be on here defending them to the hilt...

Now where is that Pinocchio emoji..

 

[stanthevan]

Imagine if Labour or the EU had done something to cause the impact last weeks fudge-it did. I am very sure DSR would be on here defending them to the hilt...

Now where is that Pinocchio emoji..

Even the right wing press are having a go (the Express being the obvious exception). The good news for the heartless few who are left to vote Tory is that Truss intends to dig herself out of this mess by slashing benefits.