[DemolitionRed]

George Osborne announced 5 days ago that we are in the black and the current government is now in budget surplus.

https://www.telegraph.co.uk/business...osborne-right/

Was all this suffering worth it? Was it something that had to be done? and will we now be better off as we move towards Brexit?

[bots]

It's great news. Money can now start to be used improving services etc rather than making interest payments.

[Alf]

All what suffering? Having to have a McDonalds only once a week instad of the usual five times?

[Crimson Dynamo]

Good news that we have steadied the ship and the IMF agree. Now we will have a quiet undramatic budget and steam ahead with Brexit.

[smudgie]

Hopefully now we are in the black there won’t be any need for more cuts.
The interest that was being paid on the day to day spending should be put to good use as well,

[Kazanne]

Originally Posted by Alf

All what suffering? Having to have a McDonalds only once a week instad of the usual five times?

Spot on Alf, we only suffer if we expect want more than we need.

[Northern Monkey]

Terrible news!

F’king sick of these Tories

[smudgie]

Originally Posted by Northern Monkey

Terrible news!

F’king sick of these Tories

Awful isn’t it.

[Jamie89]

I mean I don't really understand how it all works but I don't see how it could be a bad thing? Wouldn't that make being in the red a good thing? Or if they're both bad things then what's the point in anything

[Crimson Dynamo]

Originally Posted by Northern Monkey

Terrible news!

F’king sick of these Tories

[bots]

Originally Posted by Jamie89

I mean I don't really understand how it all works but I don't see how it could be a bad thing? Wouldn't that make being in the red a good thing? Or if they're both bad things then what's the point in anything

being in the red means you are spending other peoples money rather than your own, which i guess is a good thing, but only if you don't need to pay it back

[DemolitionRed]

Originally Posted by Jamie89

I mean I don't really understand how it all works but I don't see how it could be a bad thing? Wouldn't that make being in the red a good thing? Or if they're both bad things then what's the point in anything

A lot of people don't understand Jamie. Its obviously a good thing for home economics but government debt and balancing the books is hugely different to the way households survive.

When we have a deficit we can allow higher government spending because there's more money in circulation. The only way the government can run a surplus is by taking money from the public purse. It needs to tax the people more than it spends on the people. The problem with that is, there has to be a continuous filter of money coming from the private sector to keep the government afloat. The government has to rely on the private sectors willingness to keep borrowing but when borrowing reaches a stage where the debt can no longer be serviced, they go into liquidation (something we are seeing at the moment) and when they go into liquidation we then reach a point of stagnation and with stagnation comes economic crisis.

https://www.youtube.com/watch?v=A02ajx4Qz28

Time to remind ourselves of Bill Clintons celebrated 4 years of being in surplus before everything came to a grinding halt.

[DemolitionRed]

We have been running deficits since 1694!

[user104658]

Well a lot of people seem to be taking it as meaning there is no longer debt ... We are still in huge debt and still making huge interest payments. You could also make a strong argument that we are not in a "real" budget surplus until we are in the black and still properly funding councils and public services which we are currently not. I mean... Getting into the black is in theory never a difficult thing to do? You just cut outgoings. The government could have been in the black instantly 10 years ago, simply by cutting every penny of health spending. Yes, people would have been dying in the streets, but we would have been "in the black"...

So I guess it just depends how far you're willing to go on a sliding scale? I personally would much prefer that a budget surplus be achieved by increasing productivity, or at least increasing efficiency, rather than simply cutting what we already have.

[Kizzy]

Debt is doubled isn't it? What this effectively means is the govt are hoarding money, not paying anything whilst imposing austerity measures and wage caps on public services, which if we are in the black they have no reason or justification for...

Why do they want this money is it a war chest? further bungs to 'helpful' parties?
I too would like to know why anyone sees this as a positive, 'there is no magic money tree' may said... well where is this money from then and what is it for?

[Crimson Dynamo]

"Research published by the International Monetary Fund said Britain set an example for other countries to follow in slashing the deficit by cutting public spending, rather than raising taxes."

[Mystic Mock]

Originally Posted by Alf

All what suffering? Having to have a McDonalds only once a week instad of the usual five times?

Not every family can afford a McDonalds nowadays in this country as the working class are getting poorer.

[Kizzy]

But the IMF warns that upbeat assessments of the global economy “ignore debt levels that remain close to historic highs and the inevitable end of the cyclical upswing”.

“Servicing debt will become a major burden,” it warns.

[Crimson Dynamo]

Originally Posted by Mystic Mock

Not every family can afford a McDonalds nowadays in this country as the working class are getting poorer.

that is patently not true

[kirklancaster]

Originally Posted by Jamie89

I mean I don't really understand how it all works but I don't see how it could be a bad thing? Wouldn't that make being in the red a good thing? Or if they're both bad things then what's the point in anything

You make it all so simple to understand Jamie.

[user104658]

Originally Posted by LeatherTrumpet

that is patently not true

Well no it's not but really what I find more concerning is that it's becoming difficult to make a half decent meal for a family from scratch for much less than a McDonalds . Obviously it's better to do so because McDonalds has the nutritional content of hamster bedding... but still.

[Livia]

Whether it's a good thing or not depends entirely on your political leaning.

[Crimson Dynamo]

in terms of politics it will harden the general public's opinion that the Conservatives are much better with money than labour

[Kizzy]

Do economists get taught that macroeconomics is 99% political?

[Livia]

Originally Posted by LeatherTrumpet

in terms of politics it will harden the general public's opinion that the Conservatives are much better with money than labour

That's the way the circle goes, isn't it. Labour spends, the Tories get in a nd have to make cuts to get the economy back on track, Labour gets back in, spend all the money, and so it continues...