Government policy economically illiterate... Britain's Fiscal Failure

BACKFRMTHEEDGE

Wookster wrote: »

Has it? I don't bother reading their drivel anymore as they are both on my ignore list.

Wookster wrote: »

I'd learn more reading the Telegraph than The Champagne Socialist

The sum total of your contribution to this thread Wookster so Bore Off - you sanctimonious, condesending, big pookster ....

Thrugelmir

PaulW1965 wrote: »

Debt matters. And it's becoming obvious to all that we need more,

Obvious to whom?

The UK has become one big DFS outlet.

There's no such thing as interest free credit.

LauraW10

Mr_Mumble wrote: »

The FT's economics editor (Chris Giles) has a response to Martin Wolf (the chief economics commentator of the FT) in today's paper, the pertinent (rather large) snippet:
http://www.ft.com/cms/s/0/e5e476e4-8b24-11e2-8fcf-00144feabdc0.html
(behind a paywall unfortunately)

From the article:-

The question is whether this strategy is reasonable

No,no the question is "is the strategy working?"....the answer is no austerity isn't working.....framing the question in this way misses the point.

For the opposition Labour party, for many commentators and for my colleague Martin Wolf, the government’s position is absurd because it condemns Britain to more stagnation. The evidence does not support this view but I still fear the chancellor is being too timid.

Errrr all the evidence does supports this view??? We have a recession and inflation what more do you want....

Three reasonable arguments underpin his position. First, Britain’s public finances are in a terrible state.

And austerity is making things worse....

Second, the evidence that austerity has inflicted more pain than expected remains circumstantial and feeble.

So where's your evidence that austerity is helping to reduce the deficit???? After all - all the evidence points to the fact that it isn't....

Third, Mr Osborne’s case for boosting monetary activism, particularly going further with the Treasury and the BoE’s Funding for Lending Scheme, is supported by sustained weakness in business investment compared with previous forecasts.

Business Investment will be increased with improved business confidence. Is more money creating jiggery pokery really what we need? What we need is a government not talking the language of austerity and a more normal less crisis-ridden environment.

LauraW10

From the article:-

'Instead of households tightening their belts more than expected, by far the most important cause of stagnation was the terrible export performance'.

Chris, I wish you could publish the sources for your data because I can't find any that confirm this on a meaningful timescale.

ONS data would seem to show that exports have grown by about 25% since 2009 and are now running at an all-time high of around £40bn/month since 2011(It's no good comparing actual to forecast because the forecasts have been all over the place)

On the other hand consumer spending is running well below the peak at approximately 2006 levels (yes, some growth 2012 over 2011 but not really significant since the big drop in 2008/9).

(Alan G posted)

LauraW10

We must have a growth strategy - Chris Giles has none. He doesn't even see exports growing. So as cuts bite deeper, so revenues will continue to decline and so we borrow more, leading to more cuts....

In the end these issues are decided by evidence and the overwhelming evidence both in the UK and internationally is if a government that controls nearly 50% of the economy imposes austerity it will damage the economy and make it more not less difficult to stabilise debt ratios.

This article will be shown to be nonsense by evidence....sadly

LauraW10

I like this comment

Mr. Giles's unwillingness to admit a mistake is admirable. True, he no longer says - as he said a year ago - that austerity is "Britain's best new export", and that "It is policymaking and delivery that generates genuine admiration around the world."

No, that would be too much even for him. Instead we get an apologia. Yes, things are awful, but it's not the fault of those in charge of the economy. Mr. Giles says it's the weak European economy (never mind that this too is the product of austerity, apparently imported from Britain). But then how do Switzerland and France have more impressive growth even though their economies are even more dependent on European exports? And why is it that exports collapsed despite a weak pound?

Austerity explains it (as @Sovavia shows) - and this is not just the conclusion of "certain [unnamed] US economists" (Summers and DeLong, incidentally) unfamiliar with Britain. It's also the conclusion of economists who know a thing or two about the British economy like Blanchflower, Posen, Wren-Lewis, Portes. Ah yes, and Martin Wolf.

Apart from that Mr. Giles talks about "uncertainty". But saying "uncertainty" is like saying "god" for anything one can't explain. As it can explain everything, it explains nothing.

http://www.ft.com/...html#axzz2NOjVn95a

Oh, how true. This is Mr Giles

Public austerity is the only long-term cure.

Feb 2012

So so wrong....

BACKFRMTHEEDGE

Laura so true. When Cameron & Osborn first came into power with an austerity agenda, they were praised by many right wing pundits for making hard decisions. Now it's ending in shambles, they can't bring themselves to admit they were wrong....

Please - If the government’s plan is working, what would a failing one look like?

HAMISH_MCTAVISH

BACKFRMTHEEDGE wrote: »

When Cameron & Osborn first came into power with an austerity agenda, they were praised by many right wing pundits for making hard decisions.

Now it's ending in shambles, they can't bring themselves to admit they were wrong....

Absolutely spot on.

LauraW10

Indeed - Chris Giles continues to be an apologist for Osborne. Martin Woolf's description of the government's present policy as "indefensible" remains convincing.

Mr._Pricklepants

Thrugelmir wrote: »

The UK has become one big DFS outlet.

There's no such thing as interest free credit.

More haiku-style meaningless soundbites from the Thrugelmiser.