The issue so far is all about whether the scheme should get planning permission or not. Only if it does get planning permission will the question arise whether the money can be found to pay for it. The answer obviously being no.
Yep carry on ad infinitum. Where are the export sales in these activities? Where is the new capital for UK PLC being generated? The disadvantages of public spending Time lags There may be a considerable time-lag between spending and the benefits that arise. For example, a decision to increase spending on education will take many months and maybe years to implement, and many years or decades to see the full benefits. Indeed, the full benefits may never be measured and recorded because of information failure. Public spending can be inflationary In trying to promote growth or reduce unemployment government spending can be inflationary, especially if the government has to borrow from the financial markets or if the spending is rising too quickly, as might occur if public sector pay increases without an efficiency gains. Monetarist economists, such as Milton Friedman, are anti-fiscal in their approach to demand management, preferring to regulate by controlling the quantity of money in circulation. Government spending, they argue, in inherently inflationary, so the best role for government, also suggested by the New-classical economists, is to improve supply-side performance, especially labour productivity. New-classical economists, such as Robert Lucas, highlight what see as the general failure of government to influence consumer behaviour. Markets tend to clear effectively if left alone, hence a government should not interfere in the working of markets. If government does interference, say by increasing spending, and this is expected, then people will expect an inflationary effect, and will bargain for higher wages. The increase in wages shifts the AS curve to the left, with no gain in aggregate output. If people understand how policy operates, its effect on the real economy will be much weaker. In what often appears a rather odd assertion, new-Classical economists argue that demand management only works when it is unanticipated by firms and households. The New-classical approach is highly critical of relying on past events to predict the future. If policy-makers rely exclusively on gathering and using past statistics, they are unlikely to make very accurate predictions. They argue that the only way to influence economic performance in the long run is by improving the conditions of supply rather than trying to create economic growth by increasing demand. Public spending can generate a debt burden Borrowing to fund spending will add to the national debt and can create an excessive debt burden for future generations. Trade-offs There is a potential trade off between unemployment and inflation, first analysed by A.W. Phillips in the 1950s. If the aim of public spending is to create jobs, there is the strong possibility that prices will be driven-up, and any growth in jobs will only be temporary as the economy quickly readjusts to the previous level of unemployment. Crowding out Crowding-out theory is closely associated with the economists Bacon and Eltis, who looked at the apparent de-industrialisation of the UK economy during the 1960s and 1970s. Crowding out can be defined at the process of ‘squeezing’ out the privately owned manufacturing sector by the expansion of the public sector. It is argued that crowding out occurs because of the inherent scarcity of financial and real resources. The more the (inefficient) public sector uses scarce resources, the less resources are available for the more efficient and productive private sector. Bacon and Eltis identified two types of crowding out. · Financial crowding out - if the public sector expands and needs to borrow from the financial sector interest rates may be driven up. This leads to a reduction in private sector investment. · Resource , or physical, crowding out - in a similar way, as the public sector expands there is an increase in the demand for other resources which drives up their price, including wages and rents – hence the private sector suffers. Source: Bacon, R, and Eltis, W, 1976: Britain's Economic Problem - too few producers, McMillan Political constraints A major constraint to government spending across the EU is membership of the Stability and Growth Pact which limits government borrowing to no more than 3% of national income in any one year, and accumulated public debt should not exceed 60% of the value of national income. The purpose of the Stability Pact was to prevent euro area countries weakening the value of the Euro by printing money, which occurs when governments borrow from the money markets. In the late 1990s, the UK Chancellor imposed a different constraint – that borrowing is acceptable if it funds capital, rather than current public sector spending – the so-called golden rules. However, by 2006 a large number of EU countries had exceeded the debt limits laid down in the Stability Pact. Greek debts In 2011, Greece needed a massive bail-out from other members of the euro area to cope with debts which the IMF estimated were some 165% of GDP (for 2011).
And a white elephant of a race track in the arse end of buttfucknowhere will address the above points how?
But that's my point. It wont end up being private money. It'll have to be bailed out, regularly, by public money.
No it wont. If it goes down,it goes down. They will likley get some grants but any scam business can get those. And its not like they will be creating an employment black hole if it does. someone thinks they can make it pay, isnt that what new business and the tory way all about? Opportunity + desire = wealth generation
And you think its isnt...any of the, pay tax? Erm.....and what about JLR, Nissan, honda, BMW...few subsidies going their way too. It seems how business is done these days: get grants or VC money, either way tax payer pays
Most of the major World Championship-level racing circuits around the world are subsidised by their national governments and local authorities. Silverstone already has to try to compete with them, but with no subsidies - which is really tough. If the UK government were able to find any money to subsidise motor sports, Silverstone, Donington and MSV could all make out good cases for getting some. Why waste the money on a half-baked fantasy circuit in the middle of nowhere which doesn't even exist?
And I suppose the new link road and all the updates to the A34 around Silverstone were privately funded? Oh no, hang on a minute...
