Thursday 23 August 2012
What did George Osborne do to the Telegraph?
This is after all traditionally a Tory newspaper and a very conservative one too. Yet day after day they are printing strong attacks on the current Government policy. Mr Osborne must have been most rude at some dinner party or other to the Barclay brothers. Most of the alternatives suggested come under the headings of:
1 - they are already trying this, but should do more
2 - Raise the deficit and hope it all turns out ok
3 - Do something different, something must be done
Kate Barker today is a classic of the weeks articles, QE not quite right, Banking reform not quite right. Nothing about real change.
None have made the blindingly obvious link between the recession, government spending and taxes. Taxes are very high, high enough to hold back demand substantially or for people to go to major lengths to avoid it (I note how very many people have suddenly become self-employed, I have a hunch this is not all down to not being able to get jobs, but partly down to realising you can halve your tax bill this way or do less work for the same money).
Alas with so few cuts to ongoing major expenditures like Welfare and the NHS and other services, but instead to capital spend, the deficit remains a mill around the Country's neck with politicians dreaming up yet more ways to raise taxes to feed the monster.
A quick end to the recession is probably impossible with such a weak global outlook, dreams of an export led boom are fantasy too as a slowing China will dump huge excess capacity on the world shortly.
The original plan was said to be 80% cuts and 20% tax rises - we need a new one, 120% cuts and 20% tax cuts. Sadly, we are not going to get this and so instead watch the debts grow and the economy shrink for a good while yet. Then when Ed Milliband gets in watch the debts grow faster and the economy stagnate.