Cameron commits us to economic misery

Posted on November 23 2009

Brown and Cameron clash over budget deficit | Business | guardian.co.uk .

Brown offers Keynes - give or take - which is the only way there is to get out of a recession caused by market failure (which is what happened).

Cameron disagreed:

Cameron rejected Brown's arguments, insisting that the budget deficit must be reduced much sooner. "Dealing with this deficit is not an alternative to economic growth — the two go hand in hand. If investors see that there is no will at the top of government to get a grip on our public finances, they are going to seriously doubt our country's creditworthiness."

The idea that dealing promptly with the fiscal deficit would damage the recovery was "profoundly wrong", said Cameron.

He also announced today that if the Conservatives win the forthcoming general election then they would introduce an emergency budget within 50 days of coming to power.

We know he is offering a corporation tax rate of 25% in this plus a small company tax rate of 20%. That's a cut of over £4 billion in business tax.

So that increases the hole he has to fill.

So there are two choices:

a) Big tax hikes for ordinary voters

b) Big service cuts for ordinary voters

Of coourse, option (c) is both

A great sales pitch, guaranteed to deliver increased unemployment, extended recession and misery. No wonder his appeal is falling.

Not least because there is no need for it at all: government spending in a recession pays for itself.

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3 Responses

  1. Georges says:
    November 23 2009 at 9:29 pm

    Richard,

    Brown offers Keynes

    Maybe I missed it. When/where exactly was governmental spending dialled back during the previous growth period? There are, you know, two sides to the Keynesian coin….

    Georges

  2. Howard says:
    November 24 2009 at 12:46 am

    Brown offers a simplified, bastardised Keynesianism for sure but at least he has half – or even a quarter of a clue. Whereas Cameron and Osborne are, literally, clueless. It’s not clear yet whether the Tories have been rumbled by the electorate but I sincerely hope so.

  3. linda kaucher says:
    November 24 2009 at 1:47 pm

    Government spending in a recession pays for itself?

    How that money is spent is a key factor.

    With the religious commitment to liberalisation of this govt (but no different with a Tory govt) state spending does not support the UK economy. Everything going to foreign firms equalls profits overseas and firms bringing in own workers. Unemployment and increase welfare payments here. Earn/spend cycle broken.

    But we mustn’t draw attention to that gaping hole????