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Lost the confidence of the market for UK government debt pushing up borrowing costs for government and for others (as well as causing problems for pension funds

Lost the confidence of the market for UK government debt pushing up borrowing costs for government and for others (as well as causing problems for pension funds who own that debt). She did this by launching a series of unfunded tax cuts and doing so without an assessment of the impact on the UK's finances.

usefulcat 4y ago
> She did this by launching a series of unfunded tax cuts Another interesting difference between the US and UK. Republicans do this routinely in the US, and have done for many decades now. The last Republican president who didn't do this was George Bush (the first one). After promising "no new taxes" during his campaign, he later agreed to do the fiscally responsible thing and raise taxes in order to offset spending increases. He was not re-elected. That was ~30 years ago, and to my knowledge no subsequent Republican president has made that mistake.
- klelatti 4y ago
  Two things: - The UK doesn’t have the $ - I think in this instance it was partly the fact that they didn’t seem to be interested in the fiscal position and didn’t publish an assessment because they thought it was bad - so the markets assumed the worst. Don’t think any U.S. president has gone quite so far - happy to be corrected!
- iwillbenice 4y ago
  > After promising "no new taxes" during his campaign, he later agreed to do the fiscally responsible thing and raise taxes in order to offset spending increases. That is an extremely charitable parsing of the events. The more accurate (realpolitik) version is Bush said the no new taxes quip, and Democrats subsequently laser-focused on making him (slightly) raise taxes, showing he is a "liar". My take away is to learn not to promise overly optimistic outcomes when your political rivals have a significant stake in seeing you either be a success or a failure. Edit: Not sure why this was flagged. Did not mean to come off as hostile or aggressive. Anyways, cheers.
  - usefulcat 4y ago
    > The more accurate (realpolitik) version is Bush said the no new taxes quip, and Democrats subsequently laser-focused on making him (slightly) raise taxes, showing he is a "liar". These days I think a Republican president in the same position would be a lot more likely to refuse to sign it, even it if meant shutting down the government. But politicians (and voters) really were much less divided back then compared to today. > My take away is to learn not to promise overly optimistic outcomes when your political rivals have a significant stake in seeing you either be a success or a failure. Over-promising is the bread and butter of campaign rhetoric; candidates do it all the time (certainly in US presidential elections at least). If it was really that much of a problem in practice, you'd see more election winners who hadn't previously promised all kinds of things they have no chance of delivering.
- rsynnott 4y ago
  While they do, I'm not sure they ever have in quite _these_ circumstances. The UK is (a) seeing some of the highest rates of inflation in the developed world and (b) needs to massively subsidise energy costs due to the energy crisis caused by the Russian invasion of Ukraine. Now, I'd argue that borrowing enormous amounts of money to give a tax break to the upper-middle-class is almost _never_ a good idea, but it's particularly not a good idea in the current climate.
- lenkite 4y ago
  US can run jaw-dropping debt-to-GDP ratios that are the envy of other nations thanks to $ being the world's reserve currency. US protects this privileged status religiously by any and all means - economic/diplomatic/political/military.

usefulcat 4y ago

> She did this by launching a series of unfunded tax cuts Another interesting difference between the US and UK. Republicans do this routinely in the US, and have done for many decades now. The last Republican president who didn't do this was George Bush (the first one). After promising "no new taxes" during his campaign, he later agreed to do the fiscally responsible thing and raise taxes in order to offset spending increases. He was not re-elected. That was ~30 years ago, and to my knowledge no subsequent Republican president has made that mistake.

klelatti 4y ago
Two things: - The UK doesn’t have the $ - I think in this instance it was partly the fact that they didn’t seem to be interested in the fiscal position and didn’t publish an assessment because they thought it was bad - so the markets assumed the worst. Don’t think any U.S. president has gone quite so far - happy to be corrected!
iwillbenice 4y ago
> After promising "no new taxes" during his campaign, he later agreed to do the fiscally responsible thing and raise taxes in order to offset spending increases. That is an extremely charitable parsing of the events. The more accurate (realpolitik) version is Bush said the no new taxes quip, and Democrats subsequently laser-focused on making him (slightly) raise taxes, showing he is a "liar". My take away is to learn not to promise overly optimistic outcomes when your political rivals have a significant stake in seeing you either be a success or a failure. Edit: Not sure why this was flagged. Did not mean to come off as hostile or aggressive. Anyways, cheers.
- usefulcat 4y ago
  > The more accurate (realpolitik) version is Bush said the no new taxes quip, and Democrats subsequently laser-focused on making him (slightly) raise taxes, showing he is a "liar". These days I think a Republican president in the same position would be a lot more likely to refuse to sign it, even it if meant shutting down the government. But politicians (and voters) really were much less divided back then compared to today. > My take away is to learn not to promise overly optimistic outcomes when your political rivals have a significant stake in seeing you either be a success or a failure. Over-promising is the bread and butter of campaign rhetoric; candidates do it all the time (certainly in US presidential elections at least). If it was really that much of a problem in practice, you'd see more election winners who hadn't previously promised all kinds of things they have no chance of delivering.
rsynnott 4y ago
While they do, I'm not sure they ever have in quite _these_ circumstances. The UK is (a) seeing some of the highest rates of inflation in the developed world and (b) needs to massively subsidise energy costs due to the energy crisis caused by the Russian invasion of Ukraine. Now, I'd argue that borrowing enormous amounts of money to give a tax break to the upper-middle-class is almost _never_ a good idea, but it's particularly not a good idea in the current climate.
lenkite 4y ago
US can run jaw-dropping debt-to-GDP ratios that are the envy of other nations thanks to $ being the world's reserve currency. US protects this privileged status religiously by any and all means - economic/diplomatic/political/military.