Comments on: The last ten years of borrowing were not all wrong http://www.johnredwoodsdiary.com/2007/09/18/the-last-ten-years-of-borrowing-were-not-all-wrong/ Conservative Party Member of Parliament for Wokingham Sat, 05 Jul 2008 15:49:25 +0000 http://wordpress.org/?v=2.5.1 By: Dunsaving http://www.johnredwoodsdiary.com/2007/09/18/the-last-ten-years-of-borrowing-were-not-all-wrong/#comment-6291 Dunsaving Wed, 19 Sep 2007 09:27:02 +0000 http://www.johnredwoodsdiary.com/2007/09/18/the-last-ten-years-of-borrowing-were-not-all-wrong/#comment-6291 The lending problem can only be made worse by the Government's policy on tuition fees/student loans. Through Blair's attempt to expand the number of graduates and Brown saddling them with student loan debt we are not in a position where recent graduates are sitting on debts of The lending problem can only be made worse by the Government’s policy on tuition fees/student loans. Through Blair’s attempt to expand the number of graduates and Brown saddling them with student loan debt we are not in a position where recent graduates are sitting on debts of

]]> By: Dr. Christopher Wood http://www.johnredwoodsdiary.com/2007/09/18/the-last-ten-years-of-borrowing-were-not-all-wrong/#comment-6287 Dr. Christopher Wood Wed, 19 Sep 2007 07:43:38 +0000 http://www.johnredwoodsdiary.com/2007/09/18/the-last-ten-years-of-borrowing-were-not-all-wrong/#comment-6287 ... or sharing the same toilet bowl as Ming. … or sharing the same toilet bowl as Ming.

]]> By: Tony Makara http://www.johnredwoodsdiary.com/2007/09/18/the-last-ten-years-of-borrowing-were-not-all-wrong/#comment-6259 Tony Makara Tue, 18 Sep 2007 18:11:01 +0000 http://www.johnredwoodsdiary.com/2007/09/18/the-last-ten-years-of-borrowing-were-not-all-wrong/#comment-6259 John, do you think it is possible to achieve permanent on-going growth without eventually having to succumb to runaway inflation? Almost all economic textbooks teach that a free-market economy has to contact after it has expanded to avoid inflation. Also do you consider interest itself to have an inflation dynamic? I don't refer to the nominal rate of interest which of course acts as a cover for inflation but rather the real rate of interest. Seeing as interest is a demand for money that doesn't already exist it must therefore introduce an inflationary dynamic? Sorry to bomb you with all these questions John but as someone facinated by economics I'm very interested to read your views on economic matters. Reply: It is possible for an economy to enjoy long periods of growth without runaway inflation. Remember the international context matters a lot for an open economy. The main point I am making is that this government has lurched from a money policy that was too easy - driving inflation up- to a money policy that is too tight, causing a credit squeeze. We could have enjoyed reasonable growth in the middle of this decade with somewhat higher interest rates, which would have been better. John, do you think it is possible to achieve permanent on-going growth without eventually having to succumb to runaway inflation? Almost all economic textbooks teach that a free-market economy has to contact after it has expanded to avoid inflation. Also do you consider interest itself to have an inflation dynamic? I don’t refer to the nominal rate of interest which of course acts as a cover for inflation but rather the real rate of interest. Seeing as interest is a demand for money that doesn’t already exist it must therefore introduce an inflationary dynamic? Sorry to bomb you with all these questions John but as someone facinated by economics I’m very interested to read your views on economic matters.

Reply: It is possible for an economy to enjoy long periods of growth without runaway inflation. Remember the international context matters a lot for an open economy. The main point I am making is that this government has lurched from a money policy that was too easy - driving inflation up- to a money policy that is too tight, causing a credit squeeze. We could have enjoyed reasonable growth in the middle of this decade with somewhat higher interest rates, which would have been better.

]]> By: Brian Tomkinson http://www.johnredwoodsdiary.com/2007/09/18/the-last-ten-years-of-borrowing-were-not-all-wrong/#comment-6251 Brian Tomkinson Tue, 18 Sep 2007 14:37:43 +0000 http://www.johnredwoodsdiary.com/2007/09/18/the-last-ten-years-of-borrowing-were-not-all-wrong/#comment-6251 Of course not all borrowing was or is wrong. But it is the size and quality of the borrowing that need to be examined. How can it be right to lend money to people who will not be able to repay the loans or to encourage profligate personal consumption based on debt? As for inflation, I fear your statement that "the anti inflation war is won" may come back to haunt you. As for the government, they have burdened the public with massive amounts of public debt much of which is not even shown in their accounts. Of course not all borrowing was or is wrong. But it is the size and quality of the borrowing that need to be examined. How can it be right to lend money to people who will not be able to repay the loans or to encourage profligate personal consumption based on debt? As for inflation, I fear your statement that “the anti inflation war is won” may come back to haunt you. As for the government, they have burdened the public with massive amounts of public debt much of which is not even shown in their accounts.

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