Can someone please explain...

[DimPrawn]

...how reducing government debt by £8bn through cuts in public spending is a good thing, whilst at the same time printing £200bn and using the money to purchase more government debt is also a good thing?

Isn't it like worrying about the electric bill for your £50 note printing press?

[EternalOptimist]

...how reducing government debt by £8bn through cuts in public spending is a good thing, whilst at the same time printing £200bn and using the money to purchase more government debt is also a good thing?

Isn't it like worrying about the electric bill for your £50 note printing press?

One is climate, the other is weather. They are different see.

[Mich the Tester]

One is deep tulip, the other is bulltulip. They are different see.

ftfy

[AtW]

...how reducing government debt by £8bn through cuts in public spending is a good thing, whilst at the same time printing £200bn and using the money to purchase more government debt is also a good thing?

QE2 is a way to buy Govt debt by proxy - banks buy it and resell back to BoE thus making nice fat profit on a very safe operation.

Printing money is a sign of debt holders being reluctant to buy it, this would have normally increased rates on gilts, but with QE2 Govt works it around - works out cheaper that way as you need to finance your debt anyway, the cuts won't eliminate full debt anytime soon, but they hope inflation would devalue it.

That's why spending review looks mild - no real increases, but if you factor in future inflation then it would do the job.

HTH

[MarillionFan]

...how reducing government debt by £8bn through cuts in public spending is a good thing, whilst at the same time printing £200bn and using the money to purchase more government debt is also a good thing?

Isn't it like worrying about the electric bill for your £50 note printing press?

If you have to ask, it means you won't understand the answer.

[HairyArsedBloke]

QE2 is a way to buy Govt debt by proxy - banks buy it and resell back to BoE thus making nice fat profit on a very safe operation.

Printing money is a sign of debt holders being reluctant to buy it, this would have normally increased rates on gilts, but with QE2 Govt works it around - works out cheaper that way as you need to finance your debt anyway, the cuts won't eliminate full debt anytime soon, but they hope inflation would devalue it.

That's why spending review looks mild - no real increases, but if you factor in future inflation then it would do the job.

HTH

[AtW]

If you have to ask, it means you won't understand the answer.

There is a popular Soviet saying: "If you can't we'll teach you, and if you won't we'll make you"...

[shaunbhoy]

There is a popular Soviet saying: "If you can't we'll teach you, and if you won't we'll make you"...

Doesn't SOUND like it will be popular!!!

[AlfredJPruffock]

There is a popular Soviet saying: "If you can't we'll teach you, and if you won't we'll make you"...

That Soviet saying could have easily made a Mission Statement for the Liberals.