The National Debt Clock

[Tiberius]

Dosen't capatilism require growth, hence spending, to operate correctly?

It requires growth in the private sector. Government spending is the public sector. By decreasing the public sector, and shifting more jobs into the private sector, the current UK government is fueling the free market, whilst simultaneously cutting back on their spending. The private sector is growing; the public sector is shrinking. Less for the government to pay, and more opportunities for capitalism to work with.

Yes, an incompetent Government using an incompetent sysytem! A Government can only be as strong as its sysytem.

The government for the past 13 years moved gradually away from capitalism. I fail to see how moving away from an "incompetent" system can make things worse. As Shinylight said, this had nothing to do with capitalism or socialism; it had everything to do with ridiculous spending by the government.

Um do the terms the terms 'banking crisis' and 'toxic debt' ring a bell.
The crisis was caused by unrestrained capitalism and wide boy chancers making a quick buck at the expense of the rest of us.

It had nothing to do with capitalism. Capitalism didn't fail; the banks did. When you have a business and you are letting your finances get out of control, you have a bad business. Capitalism predicts that such a business will fail (and most would have), but the government decided that banks were "too big to fail" and bailed them out, going completely against the market. You say unrestrained capitalism was the problem; I say the government getting involved by bailing out companies that should have been left to die was the problem. This isn't to say that regulation shouldn't exist, but when a company fails, nobody should be responsible for bailing it out other than the shareholders. It isn't fair to the rest of us.

We had to bail them out apparently, I would have been more inclined to let them fail and pick the pieces afterwards.

We would be still stuffed but at least the rich bastards wouldve been made to pay for their banditry rather than being cushioned by vast amounts of money from us normal workers.

Exactly. We would have suffered; I agree, but it was a risk we took by opening up an account with a bank. Banks aren't fun places where you can store your money for free; they are risky businesses and you risk losing it all. Most of the time, nothing happens, but ultimately it is all down to the bank what they decide to do with your money. If you don't want the risk, don't put your money in a bank...simple.

Pardon the ignorance, but was Britain running a large budget deficit before the liquidity crisis in 2008?? If not, then how was excessive spending to blame?

Yes. Here is a graph showing Britain's budget deficit for the last 30 years:



When Labour took over in '97, the Tories had just managed to balance it, and indeed we were in the positive for a few years of New Labour. Then in 2001, the spending started, and by the end of the year, we were in the red again. So yes, we were running a large budget deficit before 2008, thanks to New Labour and it's policy of "spend spend spend". Source: http://www.debtbombshell.com/britains-bu...eficit.htm

The Tories and the Lib Dems seem to have their heads screwed on right. I'm glad I voted for them.