The question is a simple one but the answer, I'm sure, won't be.
Is Labour actually doing a good job of dealing with the financial crisis we're in or not?
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
the answer is a simple one rick.
no-one will know until the crisis is over.
i suppose that success will be judged on whether unemployment is lowering, exports are rising and interest rates are fair.
we are , i think, the only economy that is reliant on house prices, hence the interest rates bit.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
The simple answer is no.
They are digging a bigger and bigger hole that our children will have to pay to get out of.
There are all sorts of ways that people have been characterising the level of borrowing that they are undertaking in order to demonstrate just how bad it really is otherwise such large figures are meaningless. I have already ddescribed the level of borrowing over the next two years as more than has ppreviously been borrowed in the whole history of the UK.
Another way is to describe it as double the amount Brown said would be sensible in his 'golden rule', 79% of GDP instead of 40%.
The other problem is that these borrowing figures are based on hopelessly optimistic growth figures that carry no credability in the markets. No-body expects the UK to meet these figures and it is clear they have been massaged for political reasons. The actual borrowing is therefore likely to be even higher, except they are risking not being able to borrow what they need on themarkets and will have to turn to more printing of money and the IMF.
The consequences are terrible. Inflation will rear it very ugly head in about two years time with a vengeance and that means interest rates will rise significantly. Taxes will be rising at a time when we are setting about a fragile economic recovery and will risk choking it off. A 'wholly home made 'double dip' recession is increasingly likely, indeed media commentators are now starting to suggest this, what I have been warning about for nearly a year now. The prspects for the economy are simply appalling.
yes though we will emerge from recession, later than most countries but it is the hangover that will be causing serious long term damage.
Guest 640- Registered: 21 Apr 2007
- Posts: 7,819
Yes borrowing is indeed high but the Labour Government know that. BarryW though is giving you an entirely political answer there Rick with an eye on Downing St entry as soon as poss. The real answer is more like Howards...nobody has a bloody clue if it will all work. The high flyer economists in the city dont know...opinions are split. But it is a clear economic philosophy and one that many believe should work. But we are in uncharted waters.
Views about the level of recovery vary enormously, views about when the recovery will actually begin those famous green shoots are also varied. If it all goes pearshaped and doesnt work out as expected by labour, then Labour will exit Downing St with haste and the Tories will win with one heck of a landslide.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
People do know PaulB. People do know the impact of such huge borrowing. There are no uncharted waters here. Common sense alone should be telling you about the serious consequences of this economic mismanagement.
The bond markets do not like this at all and they are the ones who Darling is expecting to cough up. The options for this Government are few and the most obvious and common sense actions, significant public spending cuts right now, is not being taken.
Brian Dixon
- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
politisions and common sence you must be joking.when did politicions get common sence.they are a bunch of jumped up half wits at the best of times.
