The Autumn Statement is this week - on Wednesday, at about 12.30. I will, as usual, be discussing it on Radio 2 very soon after the Chancellor has sat down, but it's always worth thinking about the background in advance.
Here is what George Osborne said his borrowing forecasts were in June 2010:
For the record this was his growth forecast:
I stress: I do not think growth and borrowing the most important economic criteria, but George Osborne does. For that reason I focus on them.
There are the out turns, taken from ONS data issued in the last fortnight in the case of borrowing and from the Treasury Pocket Book and OBR over various years for other data:
Growth is down over the vast majority of the period - even if moving towards target now, but without impacting most people.
Borrowing exceeded all forecasts.
Debt is over £160 billion more than forecast, and rising this year when borrowing is going to overshoot the forecast in 2010 by more than £60 billion.
As disaster stories go this takes some beating.
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New Year’s Resolution: I will not induce deflation. Bond Market says “sorry, don’t be so silly”.
This is not so much a prediction, more an alternative narrative. The worst looks like it’s waiting for Christmas Day to be done with before it kicks the door in.
Quite right Richard; an illustration of the failure of austerity as an economic policy. If we had a government that wasn’t composed of elitist (in the worst possible way), egotistical ideological obsessives we might now be thinking that it was time to get rid of austerity as a policy, and look at alternatives that would actually benefit the UK as a whole; alternatives like, say, a Green New Deal.
But of course, since the modern Conservative party is now almost wholly composed of libertarian market fundamentalists, all they’ll do is shout even louder for yet more austerity, insisting that the reason the “medicine” hasn’t worked is that there just hasn’t been enough of it, not that it was the wrong policy in the first place.
So the destruction of public services and local government will continue unabated, and, no doubt, the anger and resentment that fuels the rise of parties like UKIP will increase.
A clear case of misdiagnosis. Continual misdiagnosis. Time to for them to be struck off.
Wow, I didn’t realise that the last year of the Labour government saw a 4.3 per cent decline in GDP. That is shocking. As there ever been worse annual performance in living memory? Even the 70s/80s/90s recession weren’t as bad as that.
And it had nothing to do with Labour
You might have noticed the whole world suffered the same crisis
Labour did not rule the world
And I didn’t realise the last Labour government was running the banks and taking the reckless decisions that people like Fred Goodwin and the Board of Lloyds took. Silly me.
This has been on my blog a while and on twitter
http://paperblogwriter49.blogspot.co.uk/2014/11/the-tories-cannot-be-trusted-with.html
Ah, so you are the prolific Morning Star letter writer!
In the old days, the Labour party used to usually get into power on the back of a Tory debt filled boom. Now if Labour or even a better party got in, they would inherit an even more terrible situation.
This is all because the Tories have used USA style economics whilst ignoring the fact that the value of the USA dollar is kept artificially high because oil is traded in dollars and IMF/World bank loans are handed out in dollars too. The pound is well……the pound. It is not really a world currency – unless there is something I am unaware of? The deficit that the Americans have would destroy any other country but the dollar enables them to defy gravity. We don’t have that comfort blanket. We never will. But our stupid politicians ignore this and borrow American neo-lib orthodoxy.
If the dollar was stopped being used in the above way (say if the Arabs said they wanted to trade oil in Euro’s), then the American economy would just go down the drain quicker than the eye. And there’d be a war.
There’s no doubt that taxes will have to rise and that corporation tax in particular has to be collected.
But to take any more money out of a low wage economy would be suicidal. I know rich people – they don’t spend money on more crisps or snacks; they invest in more assets and go to Lidl!!. The ones I know are asset rich but cash poor. There are a number of cost cutting exercises/income generation ideas I’d like to see happen (sorry Richard, please indulge me):
1. Get out of NATO and stop playing with military toys. We should declare ourselves neutral like Sweden or Norway – or whoever is neutral. Then we need to have a smaller but well trained and well equipped armed forces. If we don’t want to do this, then try to get the military more involved in daily life in this country and help out with civil engineering and other stuff in the community – never mind going abroad to help out there.
2. Get rid of Trident and/or develop our in-house version – but lets not buy any more American crap.
3. Start charging airlines VAT on aviation fuel. I’m not sure if they do this but I heard that they didn’t. Polluting costs – now shut up O’Leary and take it like a man. At least apply some reasonable rate so that the exchequer gets some cash in but just enough so people still feel they can fly (albeit a little less they can spend in duty free).
4. Scrap duty free (bah humbug!!).
5. Implement a transaction tax on all trading in the City of London. It wouldn’t have to be much would it? It would equate to a few less bottles of Bollinger per year – that’s all (honest – ahem ahem).
6. Reduce the royal household and ensure that all lands apparently belonging to Charlie and Lizzie are nationalised and generate income for us.
7. Start treating public schools (which were public at one time but were then stolen from us by elitists) as businesses and tax their transactions. They are not charities or whatever lame excuse they give us.
8. Lets have a debt jubilee – write it off – it’s just got too silly. All governments have armies – the banks don’t – yet.
9. Create a state bank with local regional versions and distribute pounds and any more QE through that – keep it out of private bank hands.
10. Lets make some new friends on the international stage. Lets try better relations with some of the scary left wing governments of some of those oil producing countries in south America with whom we can get good deals on fuel. Why keep up old alliances when they no longer serve our purposes?
Do this for 3 years of the new parliament then reign it in in time for the next election at the beginning of year 4.
I think I’ve had too much coffee tonight – sorry – I’d better stop there. But I’m sure there’s loads of loop holes that could be closed if even for a short while that could help.