Do try to keep up? What keep up with you!!!

Please answer the question originally put to you by Angusa

Where does the OCED say in their latest report as YOU HAVE CLAIMED that they forecast growth in 2009? Until you answer that question which you have been dodging ever since Angusa put it you have zero credibility.

I think that where we may differ in our view of the validity of ’sharing the proceeds of growth’ as a policy is that you are looking at it from what is right / needed for the country, whereas (all) politicians have to make a subtly different calculation as to what is “acceptable” to the electorate in order to gain office.

The sad reality is that the electorate do not have a good track record in rewarding politicians who present honest, but unpalatable, positions.

The economic predicament in which we find our country is not solely the responsibility of either the government or bankers, but of all those who suspended their doubts and bought into the idea that we could somehow maintain our standard of living on the back of borrowing against inflated asset prices.

At the risk of getting into a morality debate, the tragedy is that any solution will require the genuinely prudent to shoulder the greater burden while the profligate are supported out of the mire into which they have wandered. But it was ever thus.

Preventing a recurrence of the problem will however require some serious changes not just to government and welfare policy, but to social attitudes and ideas of personal responsibility – and that is where the “Broken Britain” strategy comes into play.

Fortunately, that task is not so much about spending programmes and more about moral leadership. In teh long-term it could significantly reduce the welfare burden on public spending – but it will be a long haul (decades, not just years).

On the economy, there are a range of views as to:
a – the likely path / timeline for recovery
b – the measures most likely to have an impact on that path in the short-term
c – the long-term impact of any measures in b (which may differ from their short-term impact)
d – whether it is preferable to have a double-dip (“W”)or a prolonged slow (“L”) recovery. (a sharp “V” is most unlikely – and probably undesirable).

Whatever the measures taken and the pace of the recovery, one fact remains, the country has a large structural fiscal deficit which is unsustainable in the long-term. That will require a combination of public spending cuts and tax rises to repair. We can debate the balance as between spending cuts and tax rises, but we cannot ignore the problem.

I agree that Cameron / Osborne policy from 2006-2008 failed to address that issue, but I think that was probably driven more by political calculations than a lack of economic understanding. The evidence for taht is how quickly the party has adapted to what is a new political paradigm (inasmuch that the public may now finally understand that the economic trajectory for much of teh past decade was always unsustainable) and are willing to accept that (a) we have a problem and (b) the solutions will be painful.

Brown on the other hand appears to be adopting the Micawber approach that something will turn up to make his problem go away. In all probability taht something will be that time runs out on him and it becomes Cameron’s problem not his.