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Comment by imdsm | Hacker News Reader

I don't like to get political on HN, so if this appear so, I apologise.

The problem, I think, is that people don't want to pay, but people want to spend. We want low taxes but high quality public services. We want low taxes but we want high quality social housing.

While the books of a country must be immensely complex, it can be distilled to a very simple money in, money out equation, and when a country is running at a higher money out than money in, you're getting into debt. Cutting this means cutting state funded things, from services to buildings, etc.

It's not right to use dangerous materials, but if we have less money to spend, or if we prioritise things wrongly, things like this will happen.

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Countries can run deficits. Countries can inflate away their debts. Countries can stimulate the economy to make it grow quickly enough to outpace the growth of debt.

I'd love someone who really believes in the theories behind austerity politics to explain to me how the postwar boom ever happened -- not just in the USA, but all across the Western world and the Asian Tigers.

Well, you are going to have a bit of trouble with the USA since the postwar budget and taxes corresponds to the start of the boom. President Truman wanted to keep the taxes and budget but the House wouldn't. 1946-48 were pretty interesting years in the US economy. You can also look at the difference between the US government response to 1920 crash and the 1929 crashes.

You can but you there are limits, if your debt is large enough then you can't outgrow it. Just printing money has it's problems, in this case inflation would make safe building materials more expensive to import.

I know people like to bang on about running the economy being different from running your household finances but that only goes so far. The UK is already spending 8% of tax revenue just on servicing debt.

The UK could run a larger deficit. The source / sums are done here: http://stumblingandmumbling.typepad.com/stumbling_and_mumbli...

Why would we, growth has been ticking along nicely for a developed country (apart from a blip in 2008/9 when the financial crisis hit). Also unemployment has been remarkably low over the last couple of years.

The trouble is eventualy that debt needs to be paid off, either through raising taxes or monetisation. Monetisation is bad as it increases inflation. Increasing taxes lowers spending causing smaller economic activity. All we have done is passed a burden off to the next generation.

Interest rates are negative in real terms - read the article I linked to. This means we could have free (in a very literal sense) infrastructure -- new railways, broadband, houses, etc.

The second point is that infrastructure supports growth (if done right, there are of course many ways to do it wrong), so just because headline GDP was so-so over the last decade doesn't mean it couldn't be better. Compared to the US, UK growth was rather poor and recovery from the crash has taken forever.

I did read the article. There is no free, that debt needs to be paid back at some point, passing that burden on to our children is irresponsible.

It's rather silly to compare the US to the UK, financial services makes up a larger part of the UK economy than it does in the US so of course we had a greater impact from the financial crisis.

Debt at a negative real interest rate is literally free money. Investors are judging it's better to get a guarantee of slightly less value (slightly more nominal money), than invest it in riskier investments where they might lose a lot more. Furthermore investment in the right things (which I admitted above can be hard) should promote growth, thus growing away the debt even more as a % of GDP. This is all pretty basic economics.

The postwar boom was a demographic and economic situation that is not applicable today. The US had been in a depression for a decade, and then spent another 5 years producing nothing but military hardware. There were 15 years to catch up on -- all economic growth is faster when you're starting from a low state (see: China)

Just as importantly, the demographic pyramid of the 50s looks absolutely NOTHING like today. The vast majority of the population was either working age or younger -- families had 3-4 kids average, we had no pension / medicare / SS liabilities to worry about (not to mention: end-of-life health care was incredibly cheap in comparison to today).

Nobody would be crying for austerity politics if we didn't have a massive population of retirees supported by a wobbly 1.9 fertility rate. It is not comparable to the 50s.

This isn't really about government spending, since the regulations are written by people not affected by the costs of projects.

It's a bit muddled in this case because it's public housing, but those are still far removed levels of the government (national vs. municipal). The local governments are just one of many groups of stakeholders who regularly provide input to the regulatory process.

Lots of people are happy to pay higher taxes for good public services. There are always fools who want something for nothing, but it doesn't have to be a common attitude.

The building recently went through a refurbishment that cost £8.6m. Part of that refurbishment was adding the cladding that probably played an important role in the spread of the fire.

Money is being spent, it's just a question of how. And guess who was in charge of that refurbishment...

Paying in financial terms is just scorekeeping. Paying in real terms is raw materials, labor, etc.

What you're saying becomes true when the latter is in short supply, but when the former is in short supply, something else is happening.

Another element is that this was social housing in one of the more affluent parts of London. Thus the value of surrounding properties were prioritized, and sprucing up the facade was put ahead of internal maintenance.

I would happily pay more tax in favour of better public services. Especially if those worse off than myself paid little or no tax and those better off pair more.

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