Monday 19 April 2010

Recession was made worse by Labour

Amid all the media hype over the Lib Dems and ther 'shocking' peformance since last week, there is a report out today which should finally bury Gordon Brown and Labour.

It does not say anything new that you will not have read here over the past 4 years, but nonrtheless adds academic rigour to its judgement. And that judgement is that Labour's frankly insane policy of running a budget deficit at the top of the economic cycle has made the recession far worse than it should have been.

Not only has the spending caused the recession to be worse, but of course it will last for much longer, as we are all taxed to death (and beyond) to try to pay back the money we have borrowed. The Tories were spot on in their economic analysis of 2 years ago, you cannot borrow your way out of a borrowing crisis.

I desperately hope this report focus' the election campaign back on the economy. The lack of details and lies told by all the parties is shocking. They all denounce each other whilst not addressing the gaping hole in the finances. Any company run this way would be in insolvency within a few months - the real truth is the UK risks the same.

ITV shows the X-factor but the company has been in dire straits for a long time, UK politics may like the X-Factor approach but its finances and business model issues are more like ITV.


Sean said...

Its even more spectacular if you think about it.

The followed Tory sending plans till 2000, paid down debt, let growth and tax revenues flourish.

So in effect it took just four years till 2004, amidst the worlds biggest boom to run out of money.

It really is amazing they were capable or such a feat, and still 25% of the electorate think they are credible!

Anonymous said...

The mood is clear. We will have another five years of Brown because no one wants to hear what New Labour did over the last decade, no one wants to talk about the national debt, and virtually no one understands our current predicament and where we are headed.

I will enjoy the election show, purely as an entertaining example of the stupidity of crowds, and continue my decade long investment strategy concentrating on commodities and precious metals.

If the world as we knew it collapses further, as I'm sure it will over the next few years, then perhaps conservative solutions will re-emerge, but for the foreseeable future conservative values are dead and buried.

Budgie said...

John East - pessimistic but all too plausible. Few others (present company excepted) appear bothered. Far from it being "the right thing to do" continuing with our horrendous deficit, so adding to our unmanageable debt, saddles us and our children with 20 years of austerity and penury just to pay it back.

It is like watching Brown re-fill the children's paddling pool, reassuring us that he is in control, whilst completely oblivious to the fact that the water has been sucked back preparatory to its return as a tsunami.

Andrew B said...

An academic study gets other academics excited.

If you want to get people interested in the National Debt, you need to find another way.

Something we can easily understand.

One method could be to reduce VAT to 15%, add a new 'Debt VAT' of 10% and directly allocate that to paying the interest on the national debt
- and promise to reduce the rate once we owe less than 40% of GDP.

In the future, the grounds for discussion would be between investment & raising the debt tax - or not cutting it.
Rather more visible to all than some invisible government debt someone else pays off.

James said...

Blame the media.

They happily allow the 'narrative' to be framed by the politicians. They're ether too stupid or spineless to call BS when it's heaped on them.

"Well Gordon Brown says X, Cameron has rebutted with Y" *sage nodding*.

No mention that they're both talking absolute crap. Journalists appear to have bought the Post Modern view that there is no 'Objective reality'.

So, until reality gives them a kick in the nuts to teach them the error of their ways we're stuck.

Anonymous said...

I like the idea of these simple parables to describe events.

I think Dave would do well when surrounded by people as he's campaigning and someone talks about stimulus to try some visuals.
Ask that person if he can borrow their hat,watch or mobile, or coat. Or even a fiver. .. and then ask another person if they need a hat, mobile, watch or coat or even a fiver.... and give it too them.

Ask the first person if they're happy now.
Taking from one sector deprives another. It may shore up jobs and votes in the Midlands, but its also possibly a cut to schools or council budgets in the same area.

Hairy Arsed Bloke said...

I want el Gordo to win the election (his own party will boot him out shortly after anyway). It will be the best thing that could happen to the country.

It will lead to horrific suffering for many innocent people, but that is what is needed to wake people up so that they can see just how evil the Labour party is.

Sometimes you have to break a thing before you can fix it.

Electro-Kevin said...

"Labour's frankly insane policy of running a budget deficit at the top of the economic cycle..."

They didn't realise they were at the top of an economic cycle. Boom and Bust had ended, remember ?

The reason people aren't more polarised is that:

a) there aren't the political choices anymore

b) house prices haven't crashed so everything's still ok (allegedly)

This is what disciples of the wonderful Alice Cook yearned for - an exposure of the Ponzi scheme that passes for much of the UK economy.

Electro-Kevin said...


Blame mainly rests with the broadcast media. The much derrided Daily Mail had a handle on this long ago - though I will never ever forgive them for dubbing our erstwhile Chancellor 'prudence' Brown.