Except the Guardian was right out of stock of it, just now:
People will be amazed when they look back and reckon 2015 was OK in retrospect, given what's coming.
Richard Murphy on tax, accounting and political economy
Tax Research UK Blog is written by Richard Murphy unless otherwise stated and published by Tax Research LLP under a Creative Commons Attribution-NonCommercial 3.0 Unported License.
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Except you’ve been saying the same stuff about impending doom every year for the last 5 years. You have been wrong every time. You may be right next year, or the year after that, or the year after that. But even a stopped clock is right twice a day.
No I haven’t
I have not been forecasting a crash for a long time
I have said the FTSE has been over valued – which is true – and it has come down
Tim , so you think:
An external trade deficit + cuts in Govt spending+ rising household debts is sustainable?
What sort of cloud cuckoo land do you inhabit? Must be nice for you there.
Tim,
This imaginary cake of yours tastes like horse droppings.
Tim
So you’ve watched Withnail & I too. Good for you – it’s a great film but not really a substantive point of debate.
I think you are missing the point some what. Do you believe everything that this Government and its mates in the press tell you?
The economy did dip very deeply between 2010-12 as a result of the austerity cuts. Sure, there has been a recovery of sorts but the underlying trends have remained the same – a reliance on debt for example – private debt that caused the 2008 crash in the first place. And who can argue that we have an asset bubble in the housing market? Bubbles burst and cause pain – yes? It’s not ‘if’ but ‘when’.
And when companies start to cut back operations (as reported by Richard) there is obviously less money in the economy because there are less transactions and less wages. In other words the lack of real cash in the economy is a major concern because people then use credit (debt)instead to sepnd. The neo lib view – and Steve Keen talks about this – is that proponents of this kind of economics don’t really take into account the source of money in the economy – they do not care if it is debt or even (on current observation) if it is laundered from criminal activity. This is why most orthodox economists didn’t see the last crash – because they were not interested in what was going on behind the scenes.
Also, even in the so-called ‘recovery’ – jobs may have grown but wages remain
depressed and just how many of those people made redundant since 2008 have either got a job or are not earning the same as they were before? I know plenty of people in those positions in the private and public sectors. Please realise that when even the BBC talks about recovery it is talking about the economy as if it was a stand alone thing – not about the citizens whose lives have been fundamentally made harder.
No doubt people like you will revert to glass half full/half empty analogy and accuse Richard of seeing it as ‘glass half full’.
Well, the truth of the matter is that it is BOTH yeah? The glass is half full AND half empty. It’s dialectics mate.
Being aware of dialectics (seeing both sides of an issue – expected and unexpected consequences/ ideas with their contradictions) is an essential skill in state craft (not to mention those of who wish to debate these issues).
It is a skill sadly lacking in modern political economy and many modern politicians who unfortunately are running the country (down) because – as Steve Keen say too – they tend over-simplify the complex workings of the economy and then wonder why things go wrong.
And to avoid blame – what do we see? The unemployed, the sick and immigrants blamed for our woes by the same people who mess it up.
So please – wise up – or go back to watching your DVD collection and share the good one liners with your mates at the pub – not here.
Tim,
The economy is in a precarious state. It is being supported by a house price bubble which is encouraging excessive borrowing in the private sector and also keeping the pound high as real estate, especially in high priced London, becomes a key UK ‘export’ !
If you understand 3 sector balances you might want to take a look at Neil Wilson’s excellent 3spoken weblog. I’ve taken the liberty of marking up one of his graphs:
https://petermartin2001.files.wordpress.com/2015/12/sbwarning.png
This is clearly not sustainable. The private sector is running into deficit and running out of money. There’s no sign of the current account deficit falling. Any attempt to rein-in the property bubble may well stop the borrowing but if the private sector recovers to something like +2%, which would be a more healthy position, and the CAD falls to about 3% then the government has to run a deficit of about 5%.
They have said that they want this to be 0% !
Clearly someone’s arithmetic is all wrong. There is no possibility of the government being able to reduce its deficit significantly, no matter how hard it tries, but it very likely will crash the economy in its attempt.
Bubbles are notoriously difficult to deflate slowly. They usually do just go pop! Stand by for interesting developments in the next couple of years.
“People will be amazed when they look back and reckon 2015 was OK in retrospect, given what’s coming.”
In other words: “This year will be worse than last year, but not nearly as bad as next year”!
@MrShigemitsu
No, I’d say this year, election year, was better than last year which was better than the one before. Elections do tend to have a good effect like that!
But next year and the one after that are the first two years of a five year term. So we might just be slightly more pessimistic than usual!