It is Obvious

Chris Rick has got altogether too much to say

Invest in the future

Posted by chrisrick13 on October 20, 2015

It is obvious: I’m not deaf

What a ridiculous statement.  Tricky to invest in the past.  Spend money because you need the result now.  Investing always is for the future.

It is a statement I hear a lot.  Just heard it again today.  Alas, it was from a Labour shadow minister.

My thought is that an investment will generate an income or a profit.  The hope is that it will be greater than the money put in or it will generate some small profit and the investment will be returned.  You can effectively roll-up any profit and just get a larger amount back at some time in the future.

From politicians I hear of investing money when all they are doing is spending it.  Labour are particularly bad at this.  It is not prudent to spend money on keeping things going but it is OK to spend money on something permanent like a bridge or a road or a railway line – step forward the Conservatives.

Investment in a power station or an airport implies some sort of return or it is not an investment.  200 years ago it took two weeks it took 3 weeks to get from London to Edinburgh in a coach.  100 years ago it was down to a day on the trains.  That was an investment with a return.  50 years ago it was 4 hours and today it is about 4 hours.  Where is the return on that investment?  20 minutes off the time to Birmingham is not an investment with a return.

The head of the TUC was interviewed yesterday mainly about steel companies closing.  She said that it was the lack of a government plan.  I’m sure she didn’t mean the Labour government in power for 15 of the last 20 years.  She also talked about the real economy and alas the interviewer did not ask her what that meant.  Surely all the bits of the economy are real?  There is talk of tariffs on steel coming into the country so it costs as much as British steel so that we can make things to compete on world markets with raw materials that cost twice as much as the competitors.  Then there is talk of subsidies for steel.  This means government money and as we have debt and deficit it means that you can count the cost of every ton of subsidised steel in bodies.  10,000 tons of subsidised steel means one less new hospital and 20 deaths a week that would not otherwise happen.  So that is one death for every 10 tons of steel subsidy.  If austerity had been in place for the last 20 years we could have subsidised steel with no body count.

It is obvious: I’m not deaf it would save me turning the radio off if I was

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One Response to “Invest in the future”

  1. Bill said

    Couldn’t agree with you more. I have no idea why Cameron wants to spend billions on shaving a few minutes off rail travel times, it certainly isn’t an investment. Rather like labour ‘investing’ in PFI hospitals, the overall cost was far greater than it would have been to simply borrow the money however they can hide the borrow in the national accounts so it doesn’t show as a debt. Smoke & mirrors, smoke and mirrows – sigh…

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