Jul 192012
 
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Osborne Out of His Depth?

With each announcement of financial news it is becoming clear that the austerity plan irrationally beloved by the coalition is failing. Now the IMF is calling on George Osborne to go to Plan B to save the British economy from it’s present stall. According to the Daily Telegraph “The IMF said that the British economy may not be able to cope with the scale of austerity planned for 2013-14. It argued in its latest staff report on the UK that the Government has room to relax its deficit cutting programme with targeted tax cuts and increased infrastructure spending should it prove necessary.”

According to The Guardian the IMF report makes clear that “the coalition’s austerity has exacerbated the weakness, wiping 2.5% off GDP since 2010.” But as the Daily Mail points out “Ministers rejected calls for a plan B to revive the economy in June, after leading economists warned the Chancellor was not doing enough to promote growth.” The Mail points out that “Forty-seven economists wrote a letter to the Observer newspaper demanding changes to the Coalition’s economic policy, claiming the UK’s finances are too unstable to withstand the spending cuts.” But that “The Treasury and senior Cabinet ministers said at the time that there was no need for a change of course and put the blame squarely on Labour’s shoulders for leaving the country with a record deficit.”

How much longer can the coalition go on blaming anyone and everyone other than their own failed policies. Remember in May 2010 the British economy, according to The Guardian, was bounding back from recession with growth in the first quarter of 2010 rising at 0.3% – more than the UK economy has grown for the last twelve months. It’s time that Osborne got a new job – but based on this record, would you employ him?

Jul 192012
 
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Clueless Cameron?

David Cameron is reported in The Telegraph saying that he believes that austerity in Britain is going to last until 2020. According to the report “Asked whether the austerity programme would now last a decade until 2020, the Prime Minister replies: ‘I think it’s going to be…this is a period for all countries, not just in Europe but I think you will see it in America too, where we have to deal with our deficits and we have to have sustainable debts. I can’t see any time soon when…the pressure will be off.'”

If the Prime Minister can’t imagine a way of getting the British and European economy working again sooner, then he really should think about standing aside and let those people who do have some ideas have a go at jump-starting the economy. Paul Krugman in his book End This Depression Now offers some simple solutions. Krugman describes the economies problems as like a car with faulty electrics. There is nothing wrong with the structure of the car, it just needs a jump-start.

Cameron, Osborne and Clegg are so blinded by their ideological convictions that they are incapable of seeing any other practical alternatives. Along with Mervyn King it’s time that they moved aside and let other people, who have got some ideas have a go.