So I'm not talking about the usual deficit that is talked about, but what is called the current account. This has been plunging under the Tories, and is a massive hinderance to our economy. I am quite convinced that foreign ownership of UK assets (increased by privatisation) is contributing substantially to this deficit, as is a large trade deficit. Anyone want to weigh in?
Last edited by Zhivago on Thu May 26, 2016 8:18 am, edited 1 time in total.
If you'd lived in the sixties and seventies, the press at the time would have told you the "balance of payments" as it was known then, was the single most important indicator of national prosperity. This changed in the eighties and the primary indicator became government borrowing, largely because the yard sale of national assets conducted by Thatcher led to a surplus and they needed some good news, because everything else was getting screwed. It's been the same ever since.
This government boasted that we would have an export-led recovery. We have had neither a recovery, nor an appreciable increase in exports. Manufacturing is actually in recession right now. Thirty to forty years of neo-liberalism has made this happen: both Tory and Labour. Manufacturing in Britain is in the pits. We haven't made proper investments in new technology, because of over reliance on services. Now we're suffering the consequences.
There is one simple answer: get rid of neo-liberal dogma and replace it with flexible, evidence-based economic management.
UKHamlet wrote:If you'd lived in the sixties and seventies, the press at the time would have told you the "balance of payments" as it was known then, was the single most important indicator of national prosperity. This changed in the eighties and the primary indicator became government borrowing, largely because the yard sale of national assets conducted by Thatcher led to a surplus and they needed some good news, because everything else was getting screwed. It's been the same ever since.
This government boasted that we would have an export-led recovery. We have had neither a recovery, nor an appreciable increase in exports. Manufacturing is actually in recession right now. Thirty to forty years of neo-liberalism has made this happen: both Tory and Labour. Manufacturing in Britain is in the pits. We haven't made proper investments in new technology, because of over reliance on services. Now we're suffering the consequences.
There is one simple answer: get rid of neo-liberal dogma and replace it with flexible, evidence-based economic management.
Under Bretton Woods the balance of payments did matter though.
As for the maths. There are mathematic 'theories' on both sides, they are not the same as mathematical facts. I asked for maths.
UGagain wrote:So the foreign sector is happy to send the UK real goods and services in exchange for electronic pounds and are happy to accumulate sterling savings.
Good deal for the UK.
Ok, so let's look at the part that isn't the trade deficit. Primary Income - that's the net transfers from employment and investment.
UGagain wrote:So the foreign sector is happy to send the UK real goods and services in exchange for electronic pounds and are happy to accumulate sterling savings.
Good deal for the UK.
Ok, so let's look at the part that isn't the trade deficit. Primary Income - that's the net transfers from employment and investment.
I don't understand what that means in context other than that the domestic private sector is losing income and savings to the foreign sector.
As for the maths. There are mathematic 'theories' on both sides, they are not the same as mathematical facts. I asked for maths.
UGagain wrote:So the foreign sector is happy to send the UK real goods and services in exchange for electronic pounds and are happy to accumulate sterling savings.
Good deal for the UK.
Ok, so let's look at the part that isn't the trade deficit. Primary Income - that's the net transfers from employment and investment.
I don't understand what that means in context other than that the domestic private sector is losing income and savings to the foreign sector.
Maybe I'm mistaken, but it seems like extraction of wealth via investment income on UK assets owned by foreign entities.
It's a transfer of pounds from the domestic private sector to the foreign sector isn't it?
The UK has had a an investment problem for ever. The establishment has always preferred to invest overseas rather than maintain productivity at home. What kept it going was government spending.
So what's new?
As for the maths. There are mathematic 'theories' on both sides, they are not the same as mathematical facts. I asked for maths.
