Ooops well I was only working up to a rubbish Dumbo gag (big ears ) so perhaps best not . Several things strike me about this as a lay person so to speak. I have to compliment you on the way you made your points .You sounded convincing clear even likeable and you do not have that awful me me me that meeja pepes suffer from. I would like to hear more from you , but to me it seems the necessity to parrot the New Labour line adds a jarring note that is just confusing .
1-You are not quite right that there has been no policy decision at all ,aside from normal stabilisers in the current mix You are about 80% right I think . Basically though ,New Labour Keynsian rhetoric , as you agree , has been ‘mostly’ any narrative port in a storm . I think it was to cover the collapse of the old 40% rule but its like claiming their ‘policy ‘was to fly through the windscreen when you crash the car . You have been somewhat disingenuous about this in the past , I hope that’s fair,
2- You conflate the subject of running deficits with continuing to sustain a bloated and unproductive Public Sector . You even pretend that you and Tim Congdon agrees ( about the nonexistent policy ?). Rubbish . While he appears to agree about the need for demand to be held high . He does not agree with you that supply can remain unreformed and that this deficit should be tossed on the money bonfire . I am certain he would ,like tax cuts and accept that we have to stop defrauding the working population . You do not make your case at all on this subject. (unless I missed it ). There is a moral dimension to this as well but I `ll leave that assuming you do be a hypocritical New Labour elitist fiend
4-Your answer is to tax and tax and tax the people getting us out of the hole .Have you any way to justify this enticing serving suggestion in the context of taxes actually raised in the past ? I seriously doubt it and if not ,…well , you are offering the power of prayer as a solution. Would you invest your own money in a company with a glossy patter but no way of demonstrating they can get the cash in ?
5-I was much impressed with an essay I picked up here about what a the cost of borrowing really depends on political stability .A country does not own its money people who live in it do and they may not pay. If you look at the effect on Polls of tax rises we are already close to tax payers revolt against New Labour . How do you seriously imagine it will be possible to sustain any tax increases remotely proportional to the required sums ?
You did not remember the miners strike when only the Conservatives were left to defend democracy from the Union barons their political pawns and the Liberal camp followers .( ahem…). Well anyway sectional strife can get pretty tasty even here Are you not assuming that the stability of the country will not be altered by the approaching storm, how the hell can anyone know that and then how much will borrowing cost ?
Although Dumbo is a low shot… it took me years to work out why,at School, people referred to my friends as ‘Noddy’.
1. You are correct. There is some element of policy decision (VAT cut plus bringing forward spending) and indeed the decision to try not to close the budget gap now (a la Ireland). But more generally the 12% figure is revenue driven. Hard to express that in 20 seconds though.
2. What matters here is the immediate decision. Both myself, and many others from left and right realise that running the deficit now is required.
3/4. Now here’s where you, me and many others disagree. I think most public spending is useful, you don’t. I therefore think we need to balance the budget through tax rises, you prefer cuts. This is a legitimate discussion to have. I try to be open that ‘taxing the rich’ is not enough. And I think that tax does, currently, fall heavily on the worst off (too much indirect, not enough direct).
5. You’re right to worry about this. We are talking about some combination of large tax rises and big spending cuts in the future. Whichever route is chosen there will be many people who lose out. I can envisage genuine anger from the losers. This one reason why I want the election to be ought on these traditional political economy questions. It is best to have this batte through an election.
[…] Last week I made mention of the way an international credit agency, Standard and Poor’s was busy trying to run UK economic policy with its statement on the country’s economic outlook. The story was picked up un similar terms by Andreas, and by Duncan on TV. […]