“Squeezing out an extra 6 billion (Con) or 15-17 billion (Lib)is just

Comment on General Election 2010 Poll Results by David.

“Squeezing out an extra 6 billion (Con) or 15-17 billion (Lib)is just cutting creation of value”

That’s a very good point, 6 billion when described as efficiency savings or £1 in every £100 the government spends, doesn’t sound a lot and on face value what David Cameron says about British people having to cut back during the recession makes sense.

However, the Tories aren’t looking at the big picture. The 6 billion (which isn’t a lot of money for the economy relatively speaking) may well be wasted money, but it’s money that’s going to be flowing through the economy this year at a time when we are barely in growth. I recall reading 6 billion is actually more than the current estimated increase in GDP this year, so if the Conservatives win the election, the small growth that’s getting us out of recession will be removed from the economy!!!

I tried to find what the 2010 estimated GDP figures are, but could only find the % increases/decreases (not the actual billion amount). Where are the GDP figures?

6 billion won’t make even a tiny dent in our national debt (I think the estimate for national debt increase this year is around 160 billion). If it’s going to cost the country public sector jobs at a time when private investment just isn’t happening in the economy it seems to me to be a risk not worth taking.

Yes government shouldn’t waste money when it knows it’s wasting money, but we are still talking about peoples jobs and if a significant amount of the 6 billion is in wage costs (I have no idea if it is or not), that’s a LOT of unemployed people, they’ll be claiming benefits and not contributing to the economy which means we don’t actually save 6 billion!

What we gain in “efficiency savings” is partially lost to increased benefits and lower tax receipts.

Pretty much 50% of everything we earn goes back to government, so when government spends 6 billion on public sector workers jobs, 3 billion goes straight back to the government in taxes anyway, so if we cut jobs that saves the government 6 billion, we don’t actually save anywhere near 6 billion and that doesn’t take into account the money taken out of the economy that goes through British businesses.

My understanding is no other country that’s out of recession is planning to make cuts in their economic stimulus packages this year. For the sake of trying to save 6 billion on what appears to be ideological/political grounds I think it’s a risk not worth taking.

If we had full details of where the 6 billion was coming from, for example if it doesn’t cost jobs, maybe since reducing the deficit by 6 billion this year is a small start I’d support this idea, but we don’t have reliable information on where this 6 billion would come from.

David