Concern within the Labour Party that Jeremy Corbyn is doing well

petra of course the type of economics theory I support says that governments should borrow in times of economic downturn in order to stimulate the economy. Quite the opposite too what GO is doing. In fact GO if he was honest knows this but prefers for po!iticasl reasons to push austerity as the panacia, and does so by talking about domestic budgets etc., which of course is entirely wrong.

GO real goal is to push back the welfare state as far as he dare - all the way if he can continue to fool the electorate - and thus ensure smaller tax bills for the wealthy.

Whitewave. My last post might might have given the impression that I'm against borrowing, I'm not. I would not be in the position I am today without borrowing.
But in those days we lived in a world where we thought our jobs would never end. I was very lucky in that companies didn't invest in apprentices for my trade, so I was on a very good wage.

soon, read some of the links that dj has done. They explain very succinctly how a government should run its economy. The trouble is that you are still buying into the Tory "austerity" argument. Don't allow them to lie to you, unlress of course you believe in a small state.

Soontobe. "But what happens when a household/business/ country has borrowed and borrowed?
I'll give you a clue. The same thing that happened to Greece. IT GOES BUST.

I am hoping that gillybob or GillT57 comes along soon to confirm some of this.

How can you ensure that you can repay the loan? And the increase in income?

You do none of those three things trisher. You attempt austerity. Big time.
You can do a bit of investing, but only a little. You look at your expenditure, line by line. Painful but necessary.
If you dont, the alternatives are worse. A lot worse.

This is just silly Soon. I appreciate that 2 + 2 = 4 but you can get into more complicated maths than that surely. If you have ensured that you can repay the loan and that the outcome of the increase in income that comes about because of the loan far outweighs the cost of the loan that is surely worthwhile or do you believe in the "rich man in his castle the poor man at his gate" where no person, company or country should try to improve their situation?

Could you also tell me why what the current government are doing is so wonderful? They are not investing - just spending and cutting.

The money has already been borrowed. And spent.
The country are further on. They have already done the borrowings. Now what?

Most people are no longer comfortable with further borrowings. Borrowings have to be repaid. With interest.

People at the last election, 3 months ago, which includes the right of the Labour party, are no longer happy with endless borrowings.

Soontobe don't take things so literally. You wanted the household analogy you got it. Of course it isn't perfect. The scenario is mine. If you take out all the variables the basic prospect remains Do you stop caring for some? Struggle on although you are losing the battle? or Invest? You haven't answered the question!

But what happens when a household/business/country has borrowed and borrowed and borrowed. Borrow some more?

Of course it isn't soontobe This government is borrowing at an ever increasing rate but are it's borrowings being spent it the best way?
www.telegraph.co.uk/finance/economics/11187727/Its-time-to-come-clean-about-our-national-debt.html

Just as much as you say "The answer is not always to borrow" The answer is not always not to borrow either.

I will give you a real life synonym. My daughter teaches; she also runs a business with her partner. He lectures and, as well as the business gives his time to voluntary work to do with his subject. They still struggle as the children of the household are teenagers just going to university. My daughter is going to take a loan to do her Masters which will mean she can teach at a higher level and earn more. She will continue to play her part in the business and to work while she does this. This is a loan to invest in and improve their future.

If they did what the government are doing they would borrow to pay for their day to day needs while giving some of the money to their current employers in the hope that these employers would give them a higher salary.

As a family we just as, I would say, the vast majority of this country, are fiscally extremely conservative. This does not mean we would not see the need to invest in our ifranstructure (homes and places of work in our cases) or our training. This is just what Jeremy Corbyn is suggesting.

Yet Osbourne and Cameron are still saying how many more small businesses we have under their government and every chance they do brag it up

Only 44% of new businesses are still going after 5 years.

I think I will.
It assumes good health of the future employees.
It assumes that they will want to work, and work for that business, and actually care.
It assumes someone will lend to you.
It assumes the business will flourish.

Third of which is that the interst rate is going to be low enough according to your credit rating. I could go on..

We actually run a business. The answer is not always to borrow.
If you have a household, the answer is not always to borrow.

trisher. With respect, your scenario assumes a multitude of things. The most obvious of which is whether the household is in debt already. The second of which is it assumes that the business is going to be profitable.
Out of interest, did you read the scenario somewhere?

Yep trisher, a no brainer. The other less socially sound comparison is the first mortgage I got. I was in my early 20's, in a marriage that later went bus but we borrowed £2,500 for our first house. As life proceeded, I was lucky enough to be able to work and borrow more money when my family grew. I'm not sitting in the house our children grew up in. If we were renting a similar home we'd pay over £1000 a month in rent. If we downsized, we'd pay about £700 in rent. We couldn't afford the rent on our pensions (not and have any kind of life ) So borrowing worked for us, as I'm sure it has for many other gransnetters.

So you are talking of borrowing.

Well if we must have the householder comparison here we go. There are 10 people in your house, only 2 of them are working and contribute towards household bills. You are just covering costs. You are offered a chance to buy a business which will employ all 10 people each earning a small salary first year, then more as the business develops. In order to buy it you will need to borrow but all will contribute to the repayments. Do you struggle along as you are, although the costs are steadily increasing and it seems you will be unable to fund all of the people very soon? Do you stop feeding/clothing/caring for some of the 10 now because eventually you won't be able to afford them anyway or , do you borrow the money invest in the business and build more prosperity for everyone?
No brainer innit?

The householder gets another job?

If you cant spend money that you dont have, and you are not suggesting borrowing, what?

The answer is to spend the money in sensible ways that encourage growth and development. Even in the 1920-30s governments knew this. Before even the start of a welfare state they gave money to develop work schemes for areas where poverty was rampant. The Tyne bridge in Newcastle was built as the result of such a scheme. nearly 100 years afterwards we are being persuaded by right wing propaganda that the only way forward is to make the poor suffer.

No soontobe that is not what anyone - other than the Tories - has said. The simplicity of your post shows just how brainwashed people can be.

Gracesgran, I feel the same as you, I just had to post about the youngsters , since posting I have received a telephone call from a young girl asking how can she join the Labour Party and can she come to our branch meetings, she wants to hear more about the leadership election. How excluded young people have been , listening to these youngsters I am recalling how I developed an interest in politics as a gal, and how important social justice became for me at a young age . Corbyn's age has been questioned, yet it is he who is speaking of the youth of this country .