The shock deficit requiring unexpected government borrowing of £ two thirds of a billion for July, has set economists off on an urgent media round to expound their theories. As usual these are conflicting, though a degree of unanimity is beginning to emerge across the piece: the present growth element, such as it exists, is not working well enough to allow the whole deficit reduction plan to come good in the end. However, both ends of the economic theory spectrum are flawed in current conditions.
Cuts alone will not deliver. They did in Canada because at the time the US was having a boom, so the Canadians had a bull market to sell to. Here our main market, the EU, is affected by a structural crisis for which there is no clear solution, predicating years of stagnation, so the Canada model, which informed much of the economic planning when the Conservatives were preparing for government, no longer applies.
On the other hand the government is right to stick to the mantra that you cannot borrow your way out of debt and it is a debt crisis, both private and public, which ails us now. Additional imbalances in the economic model, including asset inflation and banking dysfunction make matters worse. What is missing is a clear idea about what money is and what function it needs to play in setting the economy on a better path.
This is why the Blog disapproves of quantitative easing being used to fund banks with a few to making them easier on loans. What is needed is newly created money to directly fund infrastructure renewal and development, a massive public housing programme for rental properties, which will drive down rents and mortgage costs to sustainable levels. There is also a need for start up funds for neighbourhood industries to manufacture consumables and help close the trade gap.
A mix on these lines would deliver and any inflation created by printing money can be readily controlled by shrewd use of interest rates and taxation, because all who are fit will have jobs and the true role of wealth creation in the real economy will be re-established.
The alternative is to blunder on with increasing benefit costs and falling revenues, until the markets start to lose confidence and dump our bonds. In the global market with electronic money, it is not currencies which come under attack from speculators, it is government paper.
Hi, Great mail, hold responsible you, i like your concept also!
I assume from your placement time after time and I just mentation I’d pronounce have up the fitting commission!
Hellishly cooperative, I will definately be returning because i start off my subsequent task.
It became cold and cloudy!
The day the routers died – who put the 4 inch nail in the circuit breaker and poured coffee over the servers? A. The Bastard Operator from Hell
Hello, I really have a ball reading your posts, through you as a remedy for the expert advise!
Very beautiful and convenient location. I liked everything. article also interesting. Thanks to author.
Attractive section of content. I just stumbled upon your website and in accession capital to assert that I acquire actually enjoyed account your blog posts. Any way I will be subscribing to your augment and even I achievement you access consistently rapidly.