Archive for the ‘debt’ Category

This is the global lending merry go-round as explained for the general public by two leading Australian economists, wisely employing a variation of the Socratic method.

There is an answer to all this, you know, and it’s called ‘cuts’. I wonder if young Danny Alexander is up to the challenge. Ha! Fat chance.

Remember John Redwood? We might have had a chance with him.

Hat tip: Tangled Web


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Dow crashes 1000 points in 15 minutes on Greek/EU debt crisis. Wall Street thought it was a computer malfunction. It wasn’t.


Source: CNBC

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It should not be seen as much of a coincidence that on the day Greek debt is downgraded to junk, a poll comes out that lends weight to the view that the Tories are winning the key argument in this general election campaign, the economic argument.

The only game in town is Europe at the moment, with Portugal and, somewhere further down the road, Spain, next on the list for the dreaded rating drop. Whatever the virtues of wonderful and exciting policies such as Michael Gove’s brilliant education plan, which has already caused a Damascene conversion of former Fabian research chairman and now editor of the Jewish Chronicle (Martin Bright take note), Stephen Pollard, the vindication of the Tories in at least promising to focus urgently on Britain’s own Brown/Labour-caused debt crisis is surely now unchallengeable. Brown and Labour can go on denying the seriousness of the crisis all they want, but that will not make it go away.

And that’s clearly why people increasingly are now seeing that they must therefore make Labour go away on May 6th. The stakes have never been higher – for everyone. One thing’s for sure, a hung parliament or, heaven forbid, five more years of Brown – though one could and most likely would lead to the other – and we would be the ones in the unfortunate Greeks’ shoes next: 16+% government borrowing interest rates, a shattered credit rating and staring down both barrels of a titanic debt default and a bombed out economy.

But the message is finally getting through: Brown or Clegg mean economic crisis and meltdown. And only the Tories offer any hope of averting both.

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Who would have thought it? After years of denial Brown finally admits, sort of, responsibility for the banking collapse by deregulating them ‘in the nineties’, thus proving, incidentally, that the Tory banking regulatory checks and balances worked perfectly. If it ain’t broke, Brown fixes it. Now Britain’s broke.

Speaking of which, I am hoping tonight that Cameron nails Brown on the scale of the debt crisis this country faces and that his policies caused. The fact that the mainstream media can’t seem to grasp this, nor most of the bizarre economic ‘expert’ commentariat of this country (the Anatole Kaletsky-types), should not frighten the Tory leader. He must make it plain to all that we really can’t go on like this. Brown can’t blame the banks for making him cave in on deregulation ‘in the nineties’. And, as Dan Hannan I think said yesterday, if the banks’ advice about deregulation was wrong – and Brown shouldn’t have listened to it – why did he decide to listen to the same bankers over the public, trillion-pound bailout? Fool me once and all that. Two wrongs don’t make a right.

Debt. Cameron’s got to talk about it, not just to demolish Brown, but to be straight with the electorate about the scale of the challenge Brown’s scorched earth policies have left for a Conservative government to repair and for future generations to pay off. We are, indeed, all in this together. Everyone. So what is there to be done?

Well, the first thing to do is to face up to reality. The other two parties can’t do this because they are wedded to a particular ideology of big state interventionism, so the Conservatives, as always, will have to do it on their own – with a little help from the population. The reality is that public spending is bankrupting the country. I’m not saying that Cameron should be specific about where the axe will fall, but fall it must – hard and often. He’s got to level with people, but in a positive way: a little pain now; pleasure later. Reform everything, abolish waste, get more bang for your buck and fix the public finances, starting with Labour’s nightmarish overspending, currently putting us at a humiliating 20% bankruptcy risk (five times higher than France, Germany or the USA).

Labour’s all about pleasure, pleasure, pleasure -now, now, now – until there’s simply no money left to pay for it. That’s just infantile.

If the infants are returned, therefore, with “economy killer” Brown at the helm, this country will effectively be bankrupt within a few years.

As it is we already face a period of Labournomic, fake growth (where every £1 of expansion in the economy actually costs the taxpayer £2 in ‘stimulus’ money. Hey, that’s just what the figures say.) As it is we already face a period of stagflation. As it is we already face what could be another lost decade, just like the last time Labour was in charge.

Anyway, those are the sorts of things Cameron needs to talk about, along with all the optimistic stuff, obviously. People want an effective leader, not just a charming one.

Brown is neither. Cameron could be both.

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Read this and weep, Labour wreckers.

The world expects a rational conclusion to the British general election, and that means kicking out this Labour government. Only idiots and socialists would fail to do that simple thing, and let the entire world down as a consequence. But idiots and socialists – they’re one in the same thing, aren’t they? They refuse to “get it”.
“Don’t let them [the British idiots and socialists] ruin Britain again,” is the clear message from the rest of planet earth.
The only way forward for Britain, and the only way the international community will listen to Britain again (rather than being lectured to by an arrogant, unrepresentative weirdo like Brown), is by meeting their expectations by voting the arrogant fool out. Forever.

We absolutely musn’t disappoint the world.

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Liam Byrne, no stranger to the odd pork pie, told a whole tray-full of them a few minutes ago during his interview on Radio 4. In response to the serious damage caused to Darling’s tax-on-jobs NICS policy by 23 business leaders, who between them employ over 500,000 people, and who’ve come out in favour of the Tory proposal to more or less scrap the plans, Byrne wriggled, exaggerated, diverted and lied like only he can. The ever-changing Labour economic narrative has just morphed again, this time into an even bigger cutting machine.

For instance, while Darling was only a few days ago talking about £12Bn of ‘efficiency savings’ – of cutting Labour’s massive overspending in other words – today Byrne talked about £35Bn in cuts. Where the hell did that come from? I’m sure he has an answer (he always does), but that’s a monster leap in the cuts bidding war in just a couple of days, and gives some indication as to how hurt Labour’s economic policies have been by the letter (the bigger the lie, the bigger the damage – it’s always been proportional with Labour). Anyway, that’s the first bit of wild exaggeration.

Then he goes on about the Tories ‘magicking’ up figures out of thin air (yes, Liam Byrne said that, ho ho). They will need to find an extra £9Bn in cuts, on top of Byrne’s new £35Bn mega-number (he was on a roll by now). The reality is, of course, a little more modest. The Tories will need to find £11Bn in savings, of which £4.9Bn will be counted as a loss against the extra NI money that would come from Labour’s tax hike and rest pumped back into the services they have ring-fenced. Byrne damned out of his own, lying mouth again, then.

Whatever the rights and wrongs of this Byrne wriggling, what it shows is that the Conservatives have won the argument on cuts; Byrne’s wild numbers at least show that the debate is heading in the right direction, that the government must stop overspending so that it can cut the monstrous national debt. The other thing he singularly failed to do was attack the letter from the business leaders itself. Never once did he say that the businessmen were wrong about the tax on jobs, or, directly at least, that the Tory policy was wrong, either. He did make some feeble reference to the last NI rise, hilariously saying that jobs actually rose after it (it was well before Brown’s bust, when public sector employment was still ballooning, and paid for by, you guessed it, tax rises lol), but the thrust of his trainwreck argument was that the Tories were right, but they’re Tories, so they’re still wrong.

Very lame, Liam. Even for you.

Massive win for the Tories.

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Thanks to Iain Dale’s heads-up, I’ve just seen what I think should and could be a politically game changing post by John Redwood on his blog. I say that because it made me realise, to my shame, that I’ve been as taken in by the Labour revisionist narrative on the economics of the Thatcher years as virtually everyone else has (and I dare “everyone else” to say otherwise). It’s potentially game-changing because, for one, rather important thing, it’s all evidentially true.

One of the myths perpretrated by Labour and the BBC is that Margaret Thatcher came in and cut public spending. She did not – spending on the main services grew rapidly under her control. She did cut plans in 1981 to help the recovery, but the overall figures for total public spending including capital, current and debt interest were:

1978-9 (last Labour year) £71.2 billion
1980-81 (first full Cons year) £120.2 billion
1981-82 £130 billion
1983-4 £137.5 billion

(These are all cash figures taken from the Red Books of the day – they also represent rises in real terms, though on a much smaller scale than the cash increases)

She tackled the deficit and the need to fuel growth by asset sales in the middle and later years, and by better control providing better value for money. She also got the high rate of inflation down which she inherited, and put through crucial trade union and nationalised industry reforms.

Margaret Thatcher had no need to cut public spending by the £39 billion Labour now say they need to reduce it by,(or by the then equivalent) because she ran things more prudently and did not borrow so much.

I do wish the commentators and interviewers wouold look at the numbers and the published facts, instead of all this misleading spin. They could also point out that say a 10% per cent overall cut over 4 years is a very modest cut by private sector standards, and has been delivered by many private sector companies with no dimunution in quality of service.

There are several simple truths – it is possible to cut public spending by substantial amounts without sacking a single nurse, teacher, doctor, soldier. It is possible to cut some public spending and make things better by doing so. It is possible to greatly increase efficiency throughout the public sector, if only someone started to run it with the taxpayers interests at heart.

It is also an immutable law of public sector reform in the UK that Labour spin doctors and some BBC journalists will wish to keep alive the myth of the massive “cuts” of Margaret Thatcher, and the myth that all cuts are damaging if not politically impossible.

It’s so obviously time for a new Conservative government because it’s so obviously time to get on with reversing the dire consequences of the devastating new Labour decline. Watching that little weasel Liam Byrne on Question Time just now, the first part of whose incoherent outgas was to whine incongruously that it’s time “to front up” to the economic disaster confronting Britain (that his party designed, facilitated and delivered), simply reinforces the fact that, astonishing though it might seem, his own second point was entirely correct, though not quite in the way that he intended (surprise surprise): we are faced with a “clear choice” between Labour and the Conservative Party in the general election. That choice amounts either to more of the same under Brown, or an honest attack on Brown’s economic crisis under the Tories.

Not an especially tough choice, then, is it, actually?

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