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Incoming PM Theresa May hints at increased infrastructure spending

For 20 years the UK has spent an average of .65% of GDP on infrastructure leading to an infrastructure rating sightly worse than the US.

In February of 2016, the Guardian's Economics Editor Larry Elliot wrote:

The OECD has in the past supported the deficit-reduction programme undertaken by the UK chancellor, George Osborne, but believes Britain should join other countries in spending more on public investment.

“But the truth is that since entering No 11, George Osborne doesn’t put his money where his mouth is on infrastructure spending. He cut the level of investment in the UK with investment in infrastructure set to fall as a share of GDP,

It advocated that all countries should borrow at ultra-low interest rates for infrastructure projects, and that this would lead to stronger growth and lower debt levels. The call reflects the OECD’s concern that investment has failed to pick up during the recovery.
https://www.theguardian.com/business/2016/feb/18/oecd-calls-for-less-aus...

Now incoming PM Theresa May is taking a cue from Labour and possibly
Bernie Sanders:

Mrs May, speaking in Birmingham, launched her bid for Number 10 under the slogan: “A country that works for everyone, not just for the privileged few”.

Mrs May’s speech sounded not unlike the kinds of speech made by former Labour leader Ed Miliband or the former Lib Dem business secretary Vince Cable: a call for responsible capitalism, curbs on executive pay and rapacious takeovers.

And then May took a swipe at Osborne who was asked by the OECD earlier in the year to increase infrastructure sending......

She made a series of criticisms of George Osborne’s tenure at the Treasury, suggesting he had neglected Britain’s productivity problems and suggesting that Treasury-backed project bonds could be used to boost infrastructure.
https://next.ft.com/content/d7d17eb6-4760-11e6-8d68-72e9211e86ab

James Quinn of the Telegraph has advocated for creating millions of jobs:

Lord O’Neill said that plans for the creation of a “Northern Powerhouse” need to stay on track. Unveiling a report that 1.56m new jobs could be created in the north of England....Each of the aforementioned projects would deliver considerable investment for the construction and engineering sectors, not to mention multiplier effects in their local economies.

It is not just Heathrow that should be given the green light, but Gatwick too. The Northern Powerhouse, which I have been critical of in the past, should be given the funding it needs to create jobs beyond London. Every viable energy project – that doesn’t include Hinkley Point – should get the nod. The UK has be downgraded by the international rating agencies but it can borrow at lower rates of interest than at any time in history. It should do so to finance these infrastructure programmes.

Osborne’s mantra, time and time again, during his time at No. 11 Downing Street, has been to say the British are builders.

Surely, as we face a period of economic uncertainty, now is the time to prove that.
http://www.telegraph.co.uk/business/2016/06/30/infrastructure-projects-a...

If the Tory's pull this off, creating millions of jobs, the UK economy will be the gem of Europe. Is it possible that Hillary Clinton is listening?

While in the EU, significant deficit spending on infrastructure was against the rules. Once out of the EU the UK could increase infrastructure spending to reasonable levels, about 5% of GDP, not the current .6%.

Here in the US we are prohibited from increasing spending on infrastructure because of the "Pay as You Go" law signed by Obama. Offsets must be found or funding sources, which is the reason Bernie's infrastructure program was a measly 200 billion a year.

Here in the US we need to spend about 5% of GDP on infrastructure, this would create about 20 million jobs and add a little over 100 billion in additional FICA revenue, enough to see SS thru 2090.

Raise the SS income cap to 90%, increase the minimum wage to $15 and we can increase Seniors SS benefits, the ones that get the least, increase their benefits by $1000 the first year.

2 weeks ago I tried to explained what Brexit was about. Its not about racism. The Leave voters have something in common with people in the US who voted for Bernie. They're pissed just like we are, they just happened to have won their election.

"Create and wield political power".
Roger Fox 2016

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... if we see "conservative" parties get serious about jobs and infrastructure programs. Since the "left" parties have abdicated their responsibilities, where do they go? It would be nice to think that such a move would start shifting Overton windows to the real left, but I suspect that these programs would be structured to grant the maximum profit to financiers. They already own all the parties anyway, so we have to be alert for Trojan horses.

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Roy Blakeley's picture

This sounds like a convenient excuse to expand Heathrow and Gatwick--something the Tories have wanted to do for years against the wishes of environmentalists. The Tories have always liked big, expensive projects like the channel tunnel. It's a good way to channel public money to their friends in the construction industry. If they start spending real money on public transportation, energy conservation, renewable energy and real infrastructure (not just airports) I will be impressed. The Tories have been evil for decades. History indicates that “A country that works for everyone, not just for the privileged few” is just BS.

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Roger Fox's picture

Yes, what you describe is very likely, they'll make a big show of it but at the end of the day they won't bring themselves to do the right thing.

Because if they did do the right thing, they'd be heroes and be able to stay in power for at least a generation or 2. As Dallasdoc said above ^

They already own all the parties anyway

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FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.