Duncan’s Economic Blog

Dale versus Krugman

Posted in Uncategorized by duncanseconomicblog on July 8, 2009

Well known Tory blogger Iain Dale says:

It’s worth reading the article in full, because you can be sure that’s what a lot of potential investors in the UK will be doing. I don’t think it will be encouraging them to put their money into this country. I’ve said all along that restoring economic confidence is the main task of the government, as few people will want to risk their money in an economy which looks risky. The level of deficit spending is another factor in a potential investor’s decision. Many still believe that our credit rating is in danger. If we lose our triple AAA rating then all bets will be off. It hardly bears thinking about.

Well known Nobel Prize winning economist Paul Krugman says:

Hmm. My attention has been on other things, so it’s been a while since I looked at British bond rates and CDS spreads. But here’s where they are right now: 10-year bond rates at 3.737, compared with 3.337 for Germany; CDS spread at 71 versus 35 for Germany. Really not so bad.

But, but, wasn’t Britain supposed to be hurtling toward bankruptcy? 


4 Responses

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  1. Mr. Mxyzptlk said, on July 8, 2009 at 2:40 pm

    well Dunc mervyn has been promised his reward from the torys


    The Shadow Chancellor has just told the House of Commons that a Conservative government would restore supervision of banks, building societies and other major financial institutions to the Bank of England.

  2. charliemarks said, on July 8, 2009 at 9:56 pm

    Investors know the UK govt will pay back – even if it means massive spending cuts. Since it looks almost-certain that the Tories will get back in – or we’ll have Ramsay McBrown falling into a 30’s style coalition govt – no worries.

    I think this means that we’re going to be paying for their crisis…

  3. Will M said, on July 9, 2009 at 8:56 am

    osbourne’s playing politics. if the bank’s in charge of banking supervision, the tories can deny responsibility for banks giving massive bonuses away.

  4. Paul said, on July 9, 2009 at 8:57 am

    Quite a lot of the comments on Iain Dale’s site say he is wrong and knows not of what he speaks.

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