Clegg proves himself staggeringly economically inept

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Nick Clegg proved just how staggeringly economically inept he and the Conservatives are in his LibDem conference speech today. He said:

So how did this debt crisis happen? Put simply, over the course of the recession, 6% of our economy disappeared. The shock was so profound that even now the economy is growing, we are poorer today than we thought we would be. All the old predictions about our future economy — predictions on which spending plans had been based — have turned out to be wrong. We can’t keep spending money as if nothing had changed.

The problems are there. They are real. And we have to solve them. It’s the same as a family with earnings of £26,000 a year who are spending £32,000 a year. Even though they’re already £40,000 in debt. Imagine if that was you. You’d be crippled by the interest payments. You’d set yourself a budget. And you’d try to spend less. That is what this government is doing.

It’s very hard to believe anyone in his position could be inept enough to believe this.

The simple fact is that the UK is not a household as Clegg suggests, nor is it a company. It’s a country. A country that issues its own currency, in which it demands to be paid. No household can do that. So unlike a household it can’t go bust.

But more seriously, although a household can jettison costs and ignore the consequences to help it manage its debt because it does have fixed income in a currency over which it has no control, a country cannot do the same. Indeed, it must do the opposite.

A country, if it jettisons costs by sacking people still has to feed the people it has jettisoned. They don’t go away, like a child thrown out of home to cut the household bills does. People the state jettisons are still in the country, and without an industrial strategy and economic policy to provide them with work — something the LibDems won’t offer because they don’t believe in market interference — they still have to be fed by the state after they’ve been thrown out of its employ because there is no one else to take them on when the economy is operating at way below full employment levels, as now. Worse, because they aren’t working now they aren’t adding to national income or paying tax either now - so far from jettisoning the cost as Clegg suggest we can by making cuts we actually save nothing and cut our income at the same time, making things doubly worse.

His analogy utterly misses this point.

Put bluntly, it’s wrong.

And he’s either stupid to think it’s true. Or a blatant charlatan for suggesting he thinks it’s true when it isn’t.

Either way he’s not fit for office.

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