Tuesday, 5 March 2013

February Economic Digest

As Bill Clinton was fond of saying ‘it’s the economy stupid’.   And if you are still breathing after the last seven years of austerity and recession there is, with the possible exception of England’s Rugby team performance in the Six Nations, nothing important.  This blog is an attempt at a ‘digest’ – pulling together the blogs I have posted the economy over the last month.

The backdrop is well known, the Tory led coalition in the UK have been trying to get us out of the fiscal hole left by the last government and the global credit crisis.  After 3 years of pain and little progress we are now at the tipping point, do we continue as we are with more fiscal austerity (spending cuts and tax increases) off set by quantitative easing (asset purchases) or do we do something different.  The consensus is that we should change direction the argument is over whether to turn left or right.  The Government, that I try to support, is dithering about in the middle tinkering with all the levers at once.

I have been concerned with three themes all of which overlap.  Firstly I have been preoccupied with the incompetence of our government and specifically the Chancellor, Secondly I have been concerned with policies that penalise savers over borrowers and finally I have been trying to find a way out that would see the Tories re-elected.  So here are the posts

I kicked off with a piece castigating the policy of QE (like pouring more water over a drowning man) which penalises well run businesses by preserving fag-end companies that would go under if interest rates were set at realistic levels.  It also kills the return on savings, reducing consumer expenditure and killing growth. 

I got mad one evening and blasted off on eight things the Government could do now to improve things.  My first suggestion was easy - remove George Osborne, which is pretty obvious, the one’s that followed became increasingly strange as the whisky bottle was drained.

The next one has more on Zombie companies – this time backed-up with some useful statistics on the scale of the problem.

Finally I lost the plot with George Osborne completely taking a very personal swipe at his inability to run the country’s finances and his love of esoteric ‘middlewear’

There has been a long standing argument on whether you should support the poorly paid with increase allowances or tax credits.  I for one think it’s a sensible to leave people with the money they have earned rather than employ an army on civil servants to take it away (tax) and then return it (tax credit).  The main reason for this is that you are unlikely to defraud yourself whereas some £10 bn of annual tax credit fraud has now been exposed. The blog sets out an all new income tax regime to support all hard working people and reduce the number of bureaucrats.

George Osborne loses his AAA rating (long after losing his reputation) and looks like a chump.  But what makes me angry is his total inability to pick sensible measures on which he and the government are to be judged.  He continually nails his colours to the wrong mast and looks an ass.

Gordon Brown spent £87 bn (mostly my money) on tax credits for his core voters in an attempt to gerrymander the last election.  David Cameron needs to consider his options – without a bribe of some sort, there no chance that I would vote for him again.

A suggestion for David Cameron on the sort of bribe he might like offer his loyal hard working supporters. 

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