Morning Line: coalition starts paying for its austerity cuts

There is a well used adage of old.

Governments lose elections. Oppositions do not win them.

"What did the voting public expect? More than £80 billion of spending cuts, none of which would affect them?"

actually if you think back, the tories did not say they were going to cut 80 billion. they said they would cut "the bulk" of the deficit, not the whole thing. and the lib dems were committed to basically following labour's approach. the coalition has no mandate for these cuts.

Whichever party won the last election would suffer the same fate. The entire UK population (fed by the dumbed down media) is in denial about the deficit (most still don't even understand what this is)and therefore any cuts are considered to be unnecesary and cruel.

"It is all the Bankers fault....so make them pay for it" seems to be the tabloid cry. This misses the point that is wasn't all the Bankers fault and the Banks can't afford to pay for it (LLoyds/RBS) or won't pay for it (Barclays, hedge funds et al) and will simply domicile themselves elsewhere.

The reason why we are in this mess is simple, the government overspent and got caught out because the Banks that had over extended themselves lending to the public & businesses that were also overspending, went bust.

But the public won't accept any of the blame nor will labour who oversaw the whole bloody mess so the coalition hasn't a chance.

Anonymous 1 the deficit is £155bn therefore the cuts only amount to a 52% reduction. They are also phased in over a number of years.

So to put it simply the country will still be be piling on more debt when we are already geared up to over 86% of GDP and paying out £40bn a year on interest.

MC the 86 billion is the structural deficit, the thinking is that economic recovery will cancel out the remainder (of course the cuts will probably derail that recovery so it might not work out like this).

anonymous 2 gives the coalition a very generous account. nobody is forcing them to make cuts of this magnitude - gilt yields have been falling since the start of the year. and nobody is forcing them to take more from the poor than they do from the rich. these are political choices that the coalition have made, and they are both wrong.

Uk government debt is mostly backed by long dated gilts. Yes we do need to do something about the deficit but anyone who thinks we are in as bad a situation as other countries, is deluding themselves.

Most other countries only issue short dated debt. Viz US Treasury Bills, where the government will have to re-borrow the money in about 4 years time. The UK government only has to re-finance its debt on average every 15 years.

We don't want the debt, certainly, but don't get caught in the politically biased media hype.

What short memories some voters have. Who got us into this mess in the first place?

Yes the bankers! Can't vote them out though.

I would like to agree with Anon 2.

The thing is the government should only have to deal with its own spending issues. Having to make an unknown provision for inept mangement by industry should never be on the politicians agenda. Nice idea, but who do you suggest puts the money into the fund of incalculable liability to cover for mismanagement of unelected bodies?

As I see it the following are the reasons for our predicament .

-Government overspending-e.g. Iraq War and lack of budgetary control.

-Banks and Financial Sector overstretch, irresponsible lending.

-Lack of regulation to contain Banking and Financial Services excesses

-Lack of direction by Government, too many services, not enough industry.

What is most worrying now is that on previous calculations by Citywire readers there were some 11.6m employed people supporting the rest,

and now it could drop down to 10m, in the worst case scenario.

I agree with Anon 2, particularly about the UK population being in denial.

I could go even further and suggest that it's in denial over its own culpability through its unnecessary over-consumption of cheap credit, which has no doubt contributed to the situation, and its election of politicians who oversaw the situation...

What's also problematic, is that an economic slump doesn't really have a tangible effect on people, unlike a heatwave, flood, famine. Some people might lose their jobs, some things might cost a bit more, but everyone still gets on with their day-to-day business in the same way.

For a lot of us, the only way we know we're in a slump is because we're told we are by an ever more scaremongering meda.

I also think we need to get away from this childish vindictiveness towards the banking sector. It's not a naughty child in the playground, yet a lot of the rhetoric on citywire comments (although not in this thread) could lead you to think otherwise.

The coalition in general have misused the word fairness, how can anyone say 80billion pounds of cut which will affect the poor most is fairness, and it was a disgrace to see the coalition cheering whenever any cuts was announced and this was done because majority or all of them will not feel the effects of the cuts and also their jobs secured for the next five years with a good pension; not the 500,00 thousand that will be thrown out of jobs which they also cheered.

The recent growths of 1.2 and 0.8 which surprised the city was definitely not on the effort of the coalition but was set down before the election by the last goverment, but surprise , surprise, the coalition want the glory for the gorwth. The statement we all in together was just a means of trying to fool the public that the nasty party-Tory- is not nasty anymore knowing fully well that the poor will be hammered more.

I will definitely give credit to the coalition with support of about 90% of the media about the deficit which has been over done and used as a scaremongering promoted more by the lib-dems inorder to justify their presence in the government and will do anything to keep it going for themselves and not for the country, the only opportunity of being in a government.

The peasants will ever revolt; poor dears have little understanding of anything really; let them eat cake!

It is intensely depressing that people like Anon1 and Godfrey actually believe the discredited Labour view that government debt does not matter and can be run up more. No doubt for purely tribalistic reasons would believe anything their "leaders" would say.

Balls Brown and Co. have a lot to answer for in their spin lies and propaganda which is not in the national interest. We still have had no apology for the economic mess they left.

Everyone will have to suffer lower standard of living because of their incompetance. People have too short memories. Remember Gordon's fiddling of the "economic cycle" so he could lie about the deficit? Selling UK gold reserves at lowest price (one fifth of current gold price) when advised not to. And then the stealth tax on pensions which is £120Billion and rising.

The view that it needs more borrowing to expand the economy forgets that most consumers are indebted, fearful of the recession, and UK does not have the export industries left anyway to pay for extra imports. Despite the recession and oil and gas, UK is still running a massive overseas trade deficit.

The coalition is only reducing half of the structural (ie yearly) deficit, which is as much as can be done without serious hardship. This can only be done if everyone contributes.

In the meanwhile, the interest charges on the overall debt continue to mount up year on year, enough to pay for a lot of public services and defense.

What a legacy the coalition has been left, only to get no thanks from the ignorant brainwashed (labour education system educated) electorate..

Please John,

can we drop the old chestnut about Gold.

Did anyone know the gold price would be 5 times higher by now - NO! Hindsight is a nice thing but sensible conversation is not the place for it.

Back when Gold was sold, the price of Gold had been virtually unchanged for 20 years. Ask yourself this, would you keep such a large asset on your portfolio that had achieved less than inflationary return in the previous 20 years? No you would not. So stop the nonsense.

Balanced - I take your point about hindsight but the move to sell our gold reserves was widely criticised by economists and experts at the time, and in case it is small part of overall picture relating to this discussion.

Gold has always been a security against currency debasement and actions of foolish or incompetant governments acting in their own interests rather than in the national interest.

The fact it has gone up approximately 5 times in last 11 years of so just proves the point.