Cash flow is a problem when you don't have it; that isn't the case currently, nor are there indications that it will be so in the short or intermediate term. So it isn't.
The aim was to put a more balanced view than a debt version of typhoid mary
The depression years public debt was about twice as high in % terms of gdp 150% v something like 70 odd%as it currently is with relatively less social spending. The state spending budget is higher because of things like the NHS, state pensions for an ageing population, etc these are areas of spending for individuals undertaken by the state.Some of the welfare spending is a state subsidy to industry on a non means tested basis in the form of low paid workers. Not sure the point you are trying to make but if it's that our commitments are more, thats a reflection of where we are today v 1930 obviously If you are saying that somehow limits the ability to cut v 1930 im not sure I would agree
cutting back on a lower percentage budgets means you have less absolute ability and option to cut back as far as state spending goes in that area because it's a smaller figure in real terms. You would then have to look at other areas of expenditure to cut, and where the money was going, or ultimately to increase revenue at a time when it will be falling to plug any shortfall, which means increasing taxes. But lets be clear about this, the answer is really growth and that doesn't primarily come from austerity measures. It may eventually arrive despite them
The depression years of the thirties didn't end because of austerity measures, they ended because of the war and gov pushing debt up to 250% of gdp and the expenditures that followed
We managed to recover from the 30's long depression and the war to eventually the 'you've never had it so good. super mac quote, though some say he missed a bit of punctuation after 'it'
Some of public borrowings for market intervention and the current rates of interest are to try to induce Industry and consumers to spend any cash funds and so hopefully increase economic activity. The cost of that policy has partly been to help inflate property prices, which in turn may result in higher HB social costs. Property in terms of individual homes are assets which in general attract little tax overall, this at the expense of savers, the sort I think MT suggested encouraging but whose savings currently will yield little, and also at the expense of annuities and therefore cash based pensions because of low interest rates
Whilst at some future date interests rates may rise, currently the BoE are talking about negative rates. I believe I already clearly pointed out the higher interest cost lol, in fact there was a provision for that that Osborne looted to help meet his targets. The point was to illustrate that debt changes both with rates and economic growth and about it's nature especially in low interest rate environments, it was not a suggestion of short term refinancing at every point just to shuffle debt figures for expenditure costs for public window dressing
The credit card analogy isn't correct btw since the face value of the debt would have been reduced though the interest rate to pay it had increased
Private capital costs incidentally are almost always higher so moving public financing initiatives to private companies consequently means a higher interest cost to the taxpayer than it would under gov borrowings, but politically gov borrowing is seen as norty, regardless of debt levels, so joe public pay more on interest rates
Greece is not the UK. It never was. One problem for shared currency countries, is that currently they do not share one economic agenda or policy.Whilst a common currency with Germany may be reassuring it does not come with the attached underlying German economy, just conditions on future borrowings from EU source funds.
The answer is really growth, unfortunately you don't get it from cutting, but cutting is the norm because it's expedient, overall politically safe, and less risky, just painful for recipients, and lost growth; meanwhile the Treasury hopes either for an external stimulus or an improved change in investment and consumption spending, somewhat against the odds.
