Makes you proud to be British. The new UK Govt recognising the looming debt crisis that will ensue in the future from unsustainable debt announced a new budget that seeks to curtail the deficit. Won't solve the problem but is at least mitigatory. Sharp contrast with the clueless Obama administration which is seemingly sworn to stacking up debt perhaps in the hope that the day of reckoning will arrive long after they have left office.

I saaid exactly samething when I saw/heard Gideon George Osborne read the budget.

Everyone has to chip-in in some way.

My only grouse is the Capital gains tax which has gone up to 28% from 18%.
In my opinion this is very high. this will discourage people from selling their properties and shares as they could be paying anything up to 28% on profit made.

I think the tax break  for new businesses gets my thumbs up.

Thank heavens for the benefits system reform. Maybe these oompa loompa's will get off their lazy back sides and get a job.

I have no problem with it apart from the increase in VAT. Damn. That 3d tv is gonna hurt my wallet lol.

Sharp contrast with the clueless Obama administration which is seemingly sworn to stacking up debt perhaps in the hope that the day of reckoning will arrive long after they have left office
How could Cameron and co would have done during the recession? It's easier to say that Obama is clueless after he has rescued the economy. Any historical precedent where a govt ran  a contractionary fiscal policy  and the economy came out of a recession?

adconline:

How could Cameron and co would have done during the recession? It's easier to say that Obama is clueless after he has rescued the economy. Any historical precedent where a govt ran  a contractionary fiscal policy  and the economy came out of a recession?

Rescued the economy indeed. I suppose it's the same way Bush rescued the economy from the 2001 recession. . . . that is until it all fell apart due to excessive credit growth which had been pumped in to recover from the recession.

Look no further than the UK, with the Thatcher administration's massive cuts in spending in the early 80s which many Keynesian economists warned would prove the death knell for the economy. Instead, Britain grew from a nation which had be bailed out just a few years earlier to one of the fastest growing economies in the G7.

This new 20% sales tax portends a new career for moi as a VAT fraudster.

Rescued the economy indeed. I suppose it's the same way Bush rescued the economy from the 2001 recession. . . . that is until it all fell apart due to excessive credit growth which had been pumped in to recover from the recession.

01 recession should now be compared with 07-08 recession? Intellectually dishonesty is what we really do not need to drive home our points.
Let me rephrase my question why didn't neoclassical hawks implement a contractionary fiscal policy when they had the mandate to do so?

adconline:

01 recession should now be compared with 07-08 recession? Intellectually dishonesty is what we really do not need to drive home our points.

Stop being a disingenuous oaf. The Keynesian argument is that a recession, irrespective of severity, is a fall in aggregate demand which can be remedied by fiscal stimulus.

Is your argument now that the US could not have recovered from the ‘08 recession without fiscal stimulus? I think that view is now largely discredited: http://money.cnn.com/2010/04/26/news/economy/NABE_survey/

Let me rephrase my question why didn't neoclassical hawks implement a contractionary fiscal policy when they had the mandate to do so?

More a craven climbdown than a rephrase. Where deficit hawks are in charge of policy during a recession, they will not use deficit spending to recover from the recession. A good example is the Bush I administration in response to the 90/91 recession. By the time Clinton was sworn in ’93, the US had had 4 consecutive quarters of +4% real GDP growth.

For me, deficit spending during a recession is not in itself a problem. The problem is the US is already overleveraged and the Obama administration, whatever the merits of its fiscal stimulus, does not seem to have a credible medium or long term plan to rein in the deficit. Whilst the market may be understanding of Govt deficit spending during a recession, it will eventually balk at the prospect of continuing to finance unsustainable deficits long into the future. That’s what the Europeans have just found out, Obama should not assume that the US will be spared or that the day of reckoning will come after it has left office.

Stop being a disingenuous oaf. The Keynesian argument is that a recession, irrespective of severity, is a fall in aggregate demand which can be remedied by fiscal stimulus.

Is your argument now that the US could not have recovered from the ‘08 recession without fiscal stimulus? I think that view is now largely discredited
Comparing this great recession to  IT's burst in 2001 is pure intellectual dishonesty. How many banks failed in 2001 as result of 01 recession and how many banks failed in 07 -08 recession. What  was unemployment rate in 2001 and what was unemployment rate in 2008-09

Your point is that a hypothetical scenario is the same as  a real life scenario.  It was the neoclassical hawks who sold us the ideas of bailout and stimulus. Why did  they not let what they learned from economic textbooks play out?   What's NABE position on bank bailout? How did it help banks and what percentage of the stimulus has been expended in relation to economic growth outcomes?
These were their positions in 2008-09, compare  it with their position in 2010.  It makes you wonder if they thought  of economic as  chemistry.

http://www.nabe.com/publib/pol/09/08/pol0908.pdf
http://www.nabe.com/publib/pol/08/08/index.html

From UK's budget, there is a VAT increase while this will be suicidal for any politician from either of political spectrum in the U.S. Also bear in mind that the UK is playing catch up with  welfare reform  because Clinton and Congress took care of this in 1996. So UK is late in the game.

adconline:

Is your argument now that the US could not have recovered from the ‘08 recession without fiscal stimulus? I think that view is now largely discredited[/b]
Comparing this great recession to  IT's burst in 2001 is pure intellectual dishonesty. How many banks failed in 2001 as result of 01 recession and how many banks failed in 07 -08 recession. What  was unemployment rate in 2001 and what was unemployment rate in 2008-09

Your points are becoming even more disoriented. There was a TARP bailout for the banks and quantitative easing by the FED which dealt with the specific banking crises. This is distinguished from Obama's stimulus package which is predicated on the idea that the state can manage aggregate demand.

The severity of the recession is irrelevant here as the same justification for using fiscal stimulus in major recessions applies equally to mild recessions. The only difference is the size of the fiscal stimulus needed.

Your point is that a hypothetical scenario is the same as a real life scenario. It was the neoclassical hawks who sold us the ideas of bailout and stimulus. Why did they not let what they learned from economic textbooks play out? What's NABE position on bank bailout? How did it help banks and what percentage of the stimulus has been expended in relation to economic growth outcomes?
These were their positions in 2008-09, compare it with their position in 2010. It makes you wonder if they thought of economic as chemistry.

Even more disoriented points, I think you are arguing for argument's sake. The banking bailout, Obama supported it, can be justified on the grounds that the banking sector plays a pivotal role in the economy. It is those numpties like you who justify Obama's fiscal stimulus and his continued deficit spending that bear the onus of proving how these actually pay for themselves in the long run.

Deficit spending cannot be sustained without a credible deficit reduction programme as the Tories/Lib Dems have proposed. Those who think the state can manage the economic cycle have had their ass kicked throughout history and currently in Europe. It's a shame ignoramuses like you fail to recognise the looming debt crises.