Libertarian meat eater, right wing in the sense of conservative with a small c.

Tuesday, 13 May 2008

When in a hole...

...stop digging you bloody idiot.

Alister Darling has a great many worries at the moment, ducking the clunking fist from above, dodging sideswipes from Ed Balls and the ever present danger of the voters from below, (and I'm sure that he sees the voters as being below). However, his job, the one we pay for, is balancing the budget, making sure that the country doesn't go ever deeper into debt and so what does he do?

Borrow an extra £2.7 Billion to bribe his way out of the 10% tax debacle. Clearly he felt that the public finances were not in a deep enough hole with unfunded pension liabilities, various PFI nonsense that has until recently been "off book", (hidden in one of the most pathetic attempts at cooking the books by the OEGK), and all the other costs and debts so he's swapping his spade for a JCB.

Before Darling manages to dig to the earths core, could we just get a magic 8 Ball as our chancellor, at least it wouldn't be wrong all the time.

7 comments:

John B said...

Eh? Any chancellor who runs a budget deficit equivalent to less than annual GDP growth (ie keeping our ability to service the national debt constant) is grossly irresponsible. The current lot have kept well below that over the cycle, and borrowing to increase people's income when the economy falters is a good idea.

Idiots who thought it was Terribly Terribly Bad for the government to borrow money for fiscal stimuli were precisely the reason we had a Great Depression...

Falco said...

"Any chancellor ..etc...is grossly iresponsible."

Whereas this one is mortgaging the future simply to save his badger eyebrowed career.

"The current lot have kept well below that over the cycle"

Please select the position to place your goalposts.

"borrowing to increase people's income when the economy falters is a good idea."

It can be but considering how high a tax burden and the size of the debt we are servicing it would be much more sensible to cut taxes and reduce spending.

"Idiots ..etc.. were precisely the reason we had a Great Depression..."

Bollocks, it was a bubble bursting that caused the great depression.

John B said...

"this one is mortgaging the future simply to save his badger eyebrowed career."

But mortgaging the future is A Good Thing - it means that we can use money we'll have when we're richer to benefit ourselves now. On an individual level, that's risky because one might lose one's job, get a pay cut, etc, but (Malthusian lunatics aside) the UK overall can be pretty confident in significant GDP growth over the next 10 years...

"It can be but considering how high a tax burden and the size of the debt we are servicing it would be much more sensible to cut taxes and reduce spending."

The point is, the debt isn't any bigger than it was 10 years ago, and cutting government spending during a downturn is a terrible, terrible idea /even if/ it was too high to start with. I thought you did A-level economics - look at injections and multiplier effects...

"Bollocks, it was a bubble bursting that caused the great depression."

No, the bubble bursting caused an economic slowdown. Governments' failure to stimulate demand (combined with a bout of protectionist moronitude) was what turned that into a Depression - indeed, it was only the forced increase in spending brought by WWII that brought about US economic recovery...

Mr Potarto said...

Falco: "this one is mortgaging the future simply to save his badger eyebrowed career."

john b: But mortgaging the future is A Good Thing


But is saving his badger eyebrowed career A Good Thing?

I didn't do economics at any level, so I am free to ask, "cutting government spending during a downturn is a terrible, terrible idea", is that *all* spending? Would cutting people being paid to do non-jobs really harm the economy more than taxing us to pay them in the first place?

John B said...

"Would cutting people being paid to do non-jobs really harm the economy more than taxing us to pay them in the first place?"

The short answer is "yes" - empirically, the short-to-medium term decline in consumption brought about by one person becoming unemployed is greater than the increase in consumption you'd get if you divvied up their pay packet and handed it to everyone (i.e. cutting taxes).

John B said...

Sorry, I missed your most important point:

"But is saving his badger eyebrowed career A Good Thing?"

Not sure, I think public life needs more people with ridiculously mismatched hair colours...

Falco said...

Ony 6 months late but what the hell.

"I thought you did A-level economics"

You would surely have noticed if I was there.