I would like the energy to write more about the budget, but I found today surprisingly tiring. Some of my long Covid is back again, I fear (only eight rounds of antibiotics, so far). So, please accept these tweets for now:
The data is really quite staggeringly bad and all this is by choice, and utterly unnecessary: inflation is going, as a matter of fact in 2023 as Danny Blanchflower and I have always said it would. What is this austerity about in that case?
I wrote for The Mirror on this during this afternoon, but it will not be out until tomorrow. I will share it then.
But what I rather strongly suspect is that the Tories will like this no more than the country will. I suspect a backlash.
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Chart A, Real Household disposable income per person, 7.1% fall. Hunt is trying to spin the OBR Fiscal Outlook as showing the Government halving the fall in disposable inome in the second year, 2023-24. In fact this ‘half’ disguises a ‘double whammy’; with two very bad years (in fact the two worst in modern history), This is less ‘recession’ and for some unfortunate people will no doubt look like, and feel like depression. This Government has to go. Now.
Agreed
Bless you Richard – now get into bed!!
Have a good rest – you’ve done more than enough. Let’s hope Mark Littlewood never recovers from his brush with the reality and morality you pasted him with today.
Some people I talk to think that Tories know the game is up and are just waiting to lose the next election so that Labour can carry on their good work.
Aye – recession it is!
Thanks
In the middle of your discussion with Littlewood, he was keen to argue that the low interest rates we have had were an exceptional phenomenon. He appears to believe we are returning to an older ‘norm’, although I have no idea how long he has been preaching that proposition. He also made the point that Hunt offered nothing at all on growth. What struck me about the line of thinking on these two ideas; was that after almost zero interest rates (negative rates for safe assets); how does Littlewood expect the private sector to invest in growth (take risks), if they didn’t invest for years and years under the neoliberal, Conservative IEA orthodoxy, when borrowing was dirt cheap?
Insight to make that point but time was called before I could really get to it, as I recall
Richard. I have just read the NEF report “ The Case For a Tiered Reserve Monetary Policy Framework” which is an issue you have discussed before. Am I right in thinking that the amount of the claimed “black hole” is effectively currently being transferred from the public purse to the commercial banks because of a decision by the Bank (which seemed innocuous at a time of low interest rates in 2009) to pay the going interest rate on central bank reserves. As the report said, “ But paying out interest to the banking sector for holding money in this way is an exception, not a historic norm.” Is it possible that reversing this exception would be an alternative to the pain we are about to go through?
Essentially you are exactly right
… and that is why we need to keep pushing on this front.
Whilst in each interview I see squabbling of a few hundred million here/there there is no discussion of the tens of billions related to interest on excess reserves etc.
Maybe it is just me being a bit of an “anorak” but these accounting (and other) issues related to National Debt that feature on your blog are really important. I would also note that the level of comment on your last piece was huge so perhaps it is not just you and me that care!
I will be
Clive Parry’s point: “Maybe it is just me being a bit of an ‘anorak’ but these accounting (and other) issues related to National Debt that feature on your blog are really important.”
That is where I am! Interest on commercial bank reserves with the central bank, accounting for Index-linked Bonds, QE accounting, Consolidation of PSND ex-BofE.
See the subsequent blog and one to come
Saw Rees-Mogg on Channel 4 claiming the OBR’s forecasts were not reliable and citing an article in the Times.
Most people don’t know which sources are reliable and might be swayed by confident statements which deny the criticisms. Their cynicism needs little encouragement. Thus the points don’t stick as well as they should. It is the ‘fake news’ ploy.
G K Chesterton said “when people stop believing, they don’t believe in nothing, they believe in anything. ”
I used to wonder why intelligent and well qualified people came out with stuff I doubted they really believed. I now often think they want to undermine proper debate so they and their toxic tabloids can continue to fool most of the people for most of the time.
Make sure you look after yourself.
It was a terrible interview
Your angle is interesting
I first heard/read that Chesterton quote 40 (ish) years ago. It is only now that I am beginning to understand the profundity of it….. and it scares me ****less.
Rightly so
I think we can say it worked to ‘get Brexit done’.