Coffee House

Why The Guardian has got it wrong – on cuts and on Boris.

26 January 2013

26 January 2013

‘George Osborne is under pressure to tear up his austerity programme after Boris Johnson called on the government to drop its ‘hair-shirt, Stafford Cripps agenda,’ reports the delighted Guardian today. Even Boris is against it! Even he can see that the obvious solution to our debt crisis is even more debt! Except, as you’d expect, it’s all nonsense. Kamal Ahmed at the Telegraph got it right: Boris’s problem is with Osborne’s language: talking about pain, rather than recovery. He quotes Boris:

‘We need to junk the rhetoric of austerity and be confident. I will be unveiling a seven point economic plan to drive jobs and growth in London which drives the whole of the UK economy… [we need to] stop bashing industries in which we are strong like banks… We also need tax competitiveness, we need to move to low and stable tax rates, in London and in the UK and we need to stick to it and stop moving around.’

Very sensible stuff from the Mayor, none of which was reported by the Guardian as it would have demolished its straw man of a splash. ‘Johnson hits out at Osborne’ says the headline. But further into the copy: ‘Johnson did not directly challenge the Chancellor.’ So why the headline? Why tell readers something you know (and later admit) not to be true?

We’re witnessing the difficulty the left has in reconciling its official narrative with what’s actually happening. Yes, George Osborne’s policy is not working – but for reasons that the Guardian can’t quite bring itself to accept. It’s not that his evil cuts are retarding the recovery. It’s that he’s slowly abandoning his deficit plan. The figures show that core government spending is going up, along with the debt and (last month) the deficit. The below graph, from last week’s ONS data, puts it clearly:

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Can you see the cuts? Neither can the City — and it judges people like Osborne by what they do, not what they say. It also notices his habit of shunting the pain past the election with every budget. The below graph shows, in pink, the proportion of fiscal consolidation scheduled to take place after 2015 – i.e., how much the heavy lifting Osborne wants to be done by whoever is Chancellor in three years’ time. The odds are that it won’t be him.

So with every budget and autumn statement (AS), Osborne delays pain. Now most of the pain is to come after 2015. It’s a weird-looking graph, but one worth getting your head around because this is where it’s all going wrong. And the press haven’t really picked up on it. James Forsyth has. In his political column (typically four weeks ahead of the competition) he christened this the Osborne St Augustine strategy: ‘Lord, give me fiscal discipline. But not yet.’ The markets are also on to Osborne, and now question whether his talk about austerity is as credible as a Guardian headline. Such doubts explain why Britain is now likely to lose its AAA rating.

Darling had promised to halve the deficit in four years, Osborne is now taking five years and will probably make it six in his next Budget. Those of us who criticised Gordon Brown for dissembling and taking too long to sort out the debt can hardly applaud Cameron for telling even worse porkies and Osborne for making even less progress than Labour promised. In my bleaker moments, I wonder just how much worse a job Alistair Darling would have done.

It suits a great many people — the Guardian chief amongst them — to believe Osborne’s spiel: that he is the cuts man, and that Labour would have borrowed  far more. Neither party wants to admit the truth: that Osborne is now borrowing just as much as Labour planned to. That he is cutting total spending less over four years — 3.2 per cent — than the 3.9 per cent that Labour managed in one year of belt-tightening, 1976-77.

One final thing. Jim O’Neill of Goldman Sachs is reported as warning in Davos that that Britain risks a Japanese-style lost decade. If only. From 1999-2007, GDP per capita actually rose by 8 per cent in Japan. In Britain, it looks like GDP per head won’t be back to pre-crash levels until 2021. And yes, we’re washing it all down with far more QE than the Japanese did — so the uncertainties are arguably greater. As they say in Tokyo, Kuso ga okoru


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Show comments
  • Gareth

    Can you really not tell the difference between making cuts to public services & infrastructure, and to the effects of a welfare bill which is spiralling because the economy has stagnated? Osborne got his way in shrinking the size of the state during the Comprehensive Spending Review, yet it hasn’t served to reduce the deficit significantly because many of these “million new jobs the private sector has created” are either transfers from the public sector, part-time, low wage or below the skill level of the occupant.

    And when Boris criticised the extent to which infrastructure spending was cut, this was certainly not directed at the Bank of England.

  • FrenchNewsonlin

    The Icelandic president made a significant point at Davos: Iceland he said, is recovering where most of Europe is in crisis because it allowed the banks to fail. Additionally and as a result, IT and innovative technology sectors are now booming with their talents released from failed banks into the general economy. (http://www.youtube.com/watch?feature=player_embedded&v=51-Jfh6ADH0) How to drum this Icy Message into political heads captured by bankers is the real conundrum.

    • the viceroy’s gin

      That guy is just brilliant.

  • http://www.facebook.com/barbara.stevens.790 Barbara Stevens

    I’ve read most of the comments, and all assume the future will be dire. Yet, we see Cameron saying we will spend 7% of GDP on foriegn aid, 11 billion and rising. If we are so poor why his he doing this, and educated man from Eton! Then we hear about the circumstances of the NHS, while each year 55 million is paid by British taxpayers for treatments for foreign health tourists, it all does not make sense. We pay 53 million per day to the EU, its all madness. Cut all this and we could invest in this country or put it toward our debts. Then we come to immigration, where will these people live? Who will keep them? Where are the jobs for them? Cameron says nothing about this at all, but people on the ground think about it often. They see their local schools over run with immigrants, who slow the learning process down for the indigenous chidren. It cost money to accept these people, therefore if we are so poor they should be stopped from coming. To me, its simple commonsense, but the MPs we have appear to have none. Why is the press not preaching to this government all these points, they seem valid to our needs, but perhaps thats the crux of the matter, they are our needs.

  • Mike Barnes

    “In my bleaker moments, I wonder just how much worse a job Alistair Darling would have done.”

    Come on, you know for a fact that he was doing far better than Osborne. For 18 months after the crash in 2009 we had 2.5% growth in our initial recovery. He warned this was fragile and not to go cutting.

    In the 2.5 years Osborne has been in number 11 we’ve had 0.5% growth. Absolutely pitiful. The reason borrowing is going up isn’t because he’s abandoned his cuts, it’s because tax receipts (as predicted) have dried up.

    Just admit it, Darling’s achievement looks remarkable now in hindsight. He was right, the people who peddled the myth of ‘expansionary fiscal contraction’ were wrong.

    Austerity is contractionary after all, who’d have thunk it?

    • the viceroy’s gin

      …except there has been no “austerity”.

    • HJ777

      But Osborne didn’t cut expenditure – and growth stalled.

      Darling bought ‘growth’ by a very rapid increase in borrowing and spending, which wasn’t sustainable.

      The major reason that the deficit is currently approximately static is that spending is higher than predicted and growth slower.

  • dalai guevara

    A yes, Boris believes it is time to call an end to banker bashing. Would anyone care to remind me please – what bashing?
    Then he implies that low taxes ought to turn our fortunes. Wot? You are calling for an end to subisidies to YOUR public transport system, Boris? Hurrah, finally the rest of the nation is no longer requireds to check their wallets regularly with regard to the fortunes that we are robbed of by TfL, all whilst we are still paying full wack for our buses.

    Boris, you are beginning to turn into a hero with a national appeal!

  • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

    Once the AAA rating is lost Insurers and Pension Funds are obliged to dump Gilts and Banks can no longer use them as collateral. The Bof E will be forced to monetise the whole Gilt Stock or pump ever more liquidity into the undercapitalised banks. The Collateral Problem is becoming dire inside the banking system as we approach System Collapse. Osborne should not have raised VAT – he tried to do a Howe but forgot that North Sea Oil was the deus ex machina in 1980 whereas today Britain has an oil deficit.
    There is simply no easy way out and the fillip than North Sea Oil provided after 1980s is now gone returning us to the 1970s Pathway to Penury in a much more competitive world. Osborne has cannibalised the Defence Budget and has nothing much left apart from NHS, Education and Pensions. The Welfare State will be dismantled in the next decade but first they will import more Third Worlders to live on its largesse. If only Labour had ditched Brown and let Darling run things. It seemed impossible for the Conservatives to make a bigger mess than Brown, but underestimating Osborne’s ignorance has rebounded viciously. It is clear that the country is headed onto a New Normal Path with decades of decline from where we are now……..if only we could stockpile weapons as Americans are doing !

  • Mycroft

    I would be happier to leave it to leave it in Darling’s hands that in Osborne’s if he would be given a free hand, but he would form part of a Labour, and we all know here that got us last time. Osborne doesn’t inspire any confidence at all in me.

  • http://www.facebook.com/roger.hudson.946 Roger Hudson

    Labour promised a plan for ‘cuts’ but never spelled out the pain.
    Osborne has inherited a position from which there is no pain-free escape, Britain has developed an unsustainable credit fuelled consumerist economy and lifestyle.
    It is like a bicycle, stop pedalling and we fall over!
    Osborne must combine family austerity with infrastructure and manufacturing investment, retail and more ‘services’ are not the answer.
    Invest in the ‘Boris island’ airport but build it with the unemployed, shovels and wheelbarrows, a bit like the White Sea Canal but with less deaths.

    • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

      The Credit came from the Banks – it is the Banks that need sorting out. It is the Banks that need to DEFAULT on Derivatives

      • FrenchNewsonlin

        Indeed but we need to go much further in sorting out the banks, we need a global debt jubilee and a resetting of the economy. A political party with a platform of letting banks fail would win a landslide. This is Year 6 of the Great Depression — there are still no signs of exit.

  • andagain

    The thing I can’t help but notice is that graphs of our economic performance over the last few years appear to show a reasonably normal, if slightly slow, recovery until the coalition got in in mid 2010, and stagnation afterwards.

    Perhaps someone would like to explain that to me.

    • Fergus Pickering

      Look at Europe and it explains itself, old fruit.

      • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

        Lovely Fergus, but only Italy and Greece have been as disastrous as Britain since 2008

        • Fergus Pickering

          Spain doesn’t seem to be doing too well with unemployment at 26% but perhaps you know better

  • HJ777

    The Guardian has plenty of form with these sort of misleading pieces.

    During the last years of the Labour government when manufacturing output had fallen rapidly, The Guardian reported “record factory orders” in one quarter. In fact, in one quarter, there had been a record quarterly RISE in factory orders following a huge drop over several previous quarters. The actual level was nowhere near a record – it was still hugely down on a year earlier.

  • HJ777

    “Those of us who criticised Gordon Brown for dissembling and taking too long to sort out the debt can hardly applaud Cameron for telling even worse porkies and Osborne for making even less progress than Labour promised. ”

    This is untrue. There is no doubt that Cameron was telling porkies about ‘cutting the debt’ when he has no such plans.

    However, Cameron did not make any specific claim about by how much (possibly because he knew it was an untrue claim). On the other hand, Brown specifically claimed during the election campaign that “our deficit reduction plan will cut the debt in half in four years” whereas, of course, his plan only aimed to reduce the deficit by half, during which time the debt would double.

    So Cameron was being untruthful, but less blatantly so than Brown.

  • the viceroy’s gin

    “Can you see the cuts? Neither can the City — and it judges people like Osborne by what they do, not what they say.”

    .

    Huh?

    A few years ago, you were shrieking with glee over “the cuts” fantasies, even as you were instructed that they were non-existent, and your Cameroon heroes’ numbers were less than 1% different than Darling’s. Your fantasized “cuts” didn’t suddenly disappear, laddie. They never existed, even as you shrieked with glee over them, years ago. Spending went up, and was ALWAYS intended to do so, by all the LibLabCon soulmates and you bubble denizens.

    You and your fellow bubble denizens judged the Cameroons not at all, then. Not judged for what they do (which was nothing different than what the Millipedes do), and not judged for what they say (which was lies). You judged not, and merely waved pom pons for your Cameroonian heroes, as they frolicked about the bubble.

    You don’t need your today’s “bleaker moments” to wonder whether Alistair Darling would have done a worse job, lad. The numbers told that story years ago, and you were told that years ago. You just ignored it, and preached Cameroonian spin.

    And you’re still spinning.

    And as somebody mentions above, it’ll be hilarious and ironic if the Millipedes cook up a supply side agenda, and ram it up the Cameroons’ backside. Why shouldn’t they, even if they’re lying? The Cameroons have been too stupid to do what needs doing, so why shouldn’t the Millipedes make political hay off Cameroonian stupidity?

    • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

      They cannot sort out this mess and they know it. They are simply making sure their core constituency survives – the voters can go hang. There is no way to resolve the unravelling of 40 years of Credit Expansion which has been exponential without total collapse. Ever since the 1960s the Anglo-Saxons have used cheap oil to consume more than they produced industrialising Asia in the process by running trade deficits. Then from 1998 onwards it was easy credit in Ango-Saxon banking to turbo-charge China and create an export monster. It is basically a British-US-Australian problem using Yen Carry Trade to consume way more than production and have a social paradise of “rights” and “entitlements” without bearing the real cost. The whole society will implode before this mess approaches any sort of resolution

      • the viceroy’s gin

        Are you sure about the Oz being in trouble, too? I thought it was just the Washington-London axis of idiot.

        • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

          Yes Oz is screwed. Gillard has eroded the surpluses Howard accumulated and Oz is getting hammered by its exchange rate as Russia buys Oz Dollars and Mining becomes so dominant that any other manufacturing is uneconomic. The cost of living in Oz is crippling. If you go back to the 1980s you can see the borrowing done by Alan Bond, Holmes a Court and John Elliott made Oz a basket case. China has saved Oz but only for raw materials

          • Magnolia

            Very large oil fields recently discovered in the Outback.

          • the viceroy’s gin

            The Oz aren’t carrying much public debt though (41% is a song these days), and the public debt to GDP ratio is falling, so they’re paying off what little public debt they have, rather than adding to it as the other axis of idiot are doing.

            Their external debt is in solid shape, too, although I’d agree the currency may be an issue and the economic imbalance to resources is a worry. But you’re never in perfect shape, and paying down the bills is always a good sign.

            I’d take Oz and Canada over the US and UK situations, for sure.

      • dalai guevara

        Is it not peculiar that although Fraser now repeats the ‘government spending is going up’ line for God knows how many times, what he actually does is supply data that highlights that it is only RECEIPTS that are falling way short?

        This completely changes the emphasis of analysis with regard to what is actually going on in the economy right now. Yes, spending is up (slightly), but why much lower receipts than expected? What is the cause? If receipts are not coming in, surely that affects spending.

        When large numbers of formerly PAYE based jobs now run as self employed schemes, will that not affect tax returns?
        When large numbers of the working population no longer consume, will that not affect the tax returns?
        When the number of transactions on the housing market fail to materialise, will that not affect tax returns?

        All this was surely to be expected – no one can say they are surprised by the outcome. And for heaven’s sake, we must stop propagating that further governmental spending cuts would in any significant way affect overall debt levels.

        • the viceroy’s gin

          There can be no “further” spending cuts unless there have first been SOME spending cuts.

          Get the picture?

          Focus hard.

          Try.

          If you do, you might be able to see the massive spending increases over recent years, that are simply unsustainable going on into the future. That spending is causing the massive deficits and debt increases.

          • dalai guevara

            Excellent! You are a details man. Guess what, details man, my local council cut £110m last year. The council, not the county.

            You heard me, FURTHER spending cuts.

            • the viceroy’s gin

              …yes, we heard you, and you’re still stupid.

  • HooksLaw

    So more and deeper cuts sooner will help growth?

    The City? Would that be the ‘get rich quick city’ or the ‘solid dependable invest in long term productive British industries’ city?

    Banks? Boris should remember that its the banks who got us into this mess. And by their tardy lending policies are not exactly helping industry.

    As ever endless moaning from Mr Nelson as he tries to sound clever, but no notions of how to deal with the consequences of his call to make never deeper cuts or the point to them.

  • ButcombeMan

    One of the more sensible posts in the Speccie.

    More of this quality and less of the infantile and provocative Isabel, please Fraser

  • Magnolia

    Mr Osborne doesn’t understand Toryism deep down in his heart and in his guts.
    He is a coward. He will do anything to avoid being hated like Mrs T even if it means trying Labour policies which have been proven to fail when we are up against it.
    We will not get a recovery until real debt is reducing because that will be the event that makes any innate real recovery visible to people in their own lives. At that point they will be able to see for themselves that things really are getting better and confidence will do the rest.
    Am I the only one who sees todays credit problems as a mirror image of the inflation problems of the seventies? We have debt because of our open global economy where we should have had inflation?
    Ed Balls was dressed as a Tory on C4News last night talking about tax cuts, NI supply side reforms and using one part of the budget to pay for another. He has moderated his agressive manner and the large person is back. Be wary.

    • dalai guevara

      Yes, I have seen that – and it was not convincing.

    • David Lindsay

      If Osborne will do anything to avoid being hated, then he is not making much of a job of it.

  • Fat Bloke on Tour

    Trevor

    Sniffy is a cuts man.
    Just ask the MOD, the councils, the police …
    Then you can ask the poor, the sick, the unemployed …
    Where to stop?

    That is only one side of his naked politics.
    Where are the cuts for the pensioners, Oh sorry I forgot they vote.

    • Fergus Pickering

      Where have you been, Fat Bloke. Or were you here under another name?

      • BuBBleBus

        Hes been on hes hols. To get some sunshine. On tour now back for more fat stuff. But he hasnt figured out who hookslaw is.

  • Fat Bloke on Tour

    Trevor

    Please stop trying to be clever with you 76/77 factoid.
    You cannot compare the figures — inflation is something you seem to ignore.
    Consequently as always you are being partial, slanted and forced with your analysis.

    • Fraser Nelson

      They are real terms figures.

      • Fat Bloke on Tour

        Trevor

        It is a headline figure without any context or background.
        You are not telling the full story regarding the situation at the time.
        Is the state of 76/77 the state of 2012/13 – No, no and thrice no?
        Where now is BL, NEB, BrShip, public sector housing …
        Oh and how we need them now – thanks Maggie.
        Have you managed to split the figure into capital spend / current spend?
        Have you managed to split the figure into AME and DEL spend?
        Have you managed to tell the story in cash terms?
        Consequently you are at it.

        • HJ777

          You look even more idiotic than usual claiming that Fraser hadn’t taken inflation into account when he was presenting real terms figures.

          Then you invent some other waffly, nonsensical criticism rather than the apology that was called for, and would have been proffered by, anybody with any grace and intelligence.

          • Fat Bloke on Tour

            Trevor

            Cutting posts again.
            I fear your bottle has crashed as Sniffy’s “Expansionay Fiscal Contraction” has turned into the economic train wreck it was always going to be.
            Admit it you got it wrong.
            Watch the film “Ace in the Hole”.
            It will explain Sniffy’s political slant on his economic policy.
            He thought the Credit Crunch was just another recession.
            How wrong he and you were.

            • HJ777

              Been drinking again?

              • Fat Bloke on Tour

                Fat Boeing

                Is that it?
                Are you claiming that the dog boilers and their nakedly political economic policy is driving me to drink?
                Really you need to try harder, even engage your brain.
                Otherwise it is all SpeccyLand tripe.
                You need to do better.
                Otherwise it is all too easy.

                • HJ777

                  I think that answers my question – you have been drinking again.

  • Fat Bloke on Tour

    Trevor — AKA “Fraser”, the fastest spinner in the Nelson family even though my brother is a DJ.

    Please could you try and explain the deficit plans of Sniffy and AD a bit better.
    What you put in the article is tripe and politically slanted tripe at that.
    However your stupidity and inability to look behind the press releases you base your articles on has produced a greater truth.
    Sniffy was at it from the start , he was playing politics with numbers and his total inability to generate growth has left him high and dry as the tide has gone out.
    You have to ask though iis why all the cuts?

  • http://twitter.com/tomdaylight tomdaylight

    It is the worst of all worlds. All the pain of austerity rhetoric, none of the action to resolve things. Osborne needs to stop talking about austerity and start actually doing it.

    • dalai guevara

      No one ever ‘gets away with’ anything. What goes round comes round, that is a fact of life.

  • Fat Bloke on Tour

    Trevor

    Any reason why my last post got bumped?
    Was the “Graduate” joke just too much for you?
    Or do you not appreciate the fact that we have lost £100bill of output this year down to Sniffy and his dog boiling economics?

  • Colonel Mustard

    The left and truth? Chalk and cheese. Snowman in the sun. Might as well believe in fairies at the bottom of the garden. Never happen. The whole ideology is One Big Lie so don’t expect them to embrace the truth or honesty.

    • Noa

      And I for one no longer know where the Left ends and the Right begins. Perhaps it’s in the Right wing of the Conservative party, that is, the smaller half.

  • Russell

    Even Sky News are now reporting the Guardian lie that Boris is criticising Osborne for ‘cutting’ too severely.
    I expext this type of reporting from the luvvies at the bbc, but to find Sky at it as well is pretty depressing.
    At least the speccie (Isobel apart) tells it more truthfully.
    The constant reporting of doom & gloom, savage cuts, splits in the coalition etc.is really getting too much to listen to and read about, especially as most of it is lies,spin or incompetent reporting.

    • perdix

      Even SKY is a “copy & paste” journalism house. Very little original reporting, much speculation, searching for splits and disagreement, little understanding of real problems. OK most SKY watchers aren’t interested or knowledgeable, so SKY has to fill the space with someting.

      • HooksLaw

        Agree. A jumble of vacuous talking heads.

  • jazz6o6

    The truth is that neither Osborne or Cameron have the intellect or courage (unlike Mrs T who had both) to (a) Carry through the necessary reforms and the program which flows from them. And (b) Explain what they are doing in plain English.
    Probably because they are scared to.

    • http://www.facebook.com/roger.hudson.946 Roger Hudson

      ‘She’ never really cut much from the government budget either.

      • jazz6o6

        Maybe she had enough on her hands. Sorting out the trade unions, denationalising basket case industries, dealing with Tory backstabbers etc etc.
        But it is a pity she didn’t cut harder and deeper, it wil happen eventually.

        • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

          They were hardly “basket cases” – they were cash cows which is why Electricity, Gas, Amersham International, BP, Rolls-Royce, BAA, are such a joy to foreigners making unregulated profits in the UK

          • dalai guevara

            …which emphasises the fact that if you are in debt, you will eventually be asked to hand over assets in return. Let’s call it…the Greek Syndrome.

            Part 2 will be in a theatre near you soon – now guess what’s up for sale next…

          • jazz6o6

            Err sorry they were all basket cases which is why the govt sold them off the taxpayer could no longer afford their upkeep.What about British Shipbuilders, British Steel and British Leyland, to name a few more ‘success stories’.
            Why do you think we lost so much industry ? Because the govt decreed it should be disposed of ?
            No, we lost it because we were no longer competitive thanks to years of bad industrial relations, bad unions, bad management, under investment and lousy governments (Con and Lab).
            Of course it’s much easier for the lazy minded to blame it all on Mrs T.

    • George Anderton

      I yield to no one in my admiration of Mrs T but you must admit she did not have the Lib Dem monkey on her back as is now the case.

      • jazz6o6

        True enough.

  • Fat Bloke on Tour

    Trevor

    Could you please improve your desktop publishing skills, your graphs are pathetic.
    No style and little substance – dog boiler headlines wrapped up as economic facts.
    You still don’t get it and Sha**er is 30 months behind the times.
    Sniffy has scared the plebs fartless – they are in survival mode / demand rationing
    The corporate sector will not invest because there is no demand.
    If you want to understand this train wreck watch the film “Ace in the Hole”.
    It was 50 years ahead of its time.

    • dalai guevara

      aaaahahaha, you crack me up – you must be a Scot…

  • Fat Bloke on Tour

    Trevor

    When are you going to own up to the fact that you have got the Sniffy recovery totally wrong. As was mentioned on here by myself and others the dog boilers of the ConDemNation were never going to generate a recovery and a double dip recession was probable given the nonsense of the “Expansionary Fiscal Contraction” they were basing the recovery on.

    So where are we, what have the dog boilers produced?

    30 wasted months.
    Benefit slavery with no wage, low or no productivity jobs.
    The re-introduction od dog boiling as a social policy after 80 years.
    The loss of £180-200 bill of economic output.
    The loss of £70-80bill in tax revenue leading to more public sector debt.

    FY 2012/13 we are

    • Colonel Mustard

      I wish I had a pound for every time you use the word “dog-boiler” and another pound for every time your comrade tele-tubby uses the word “revanchist”.

      Yawn.

      • HooksLaw

        Dear Colonel – if the fathead has any clue he is hiding it remarkably well.

        For a start he talks about economic output as if it can be conjured out of thin air.
        What he really means is endlessly borrowing more and more to fake the notion of a healthy economy.
        He also ignores the 0.5% contraction in Germany.
        And the recession in the Eurozone.
        Banks have poured billions down the toilet.
        On top of that we have eye watering sovereign debt.
        Individuals are trying to save or pay back debt rather than borrow or spend.
        This is the reality. Not ‘dog boiling’ invective.

        Governments are not the creators of wealth. And as we regularly report on these pages this government is not cutting particularly quickly and, with 200 billion of QE and 0.5% interest rates is not the driver of slow growth.

        What the government is doing is controlling its own spending to reflect what it can afford in taxes. The UK’s GDP is about £1.44 trillion. Government spending is about 690 billion (of which £47 billion is debt repayment). Just how much more does anybody expect the government to spend (ie borrow) in order to impact on the GDP figure?

        • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

          £200 bn in QE ? More like £375 billion

        • Fat Bloke on Tour

          Hookie

          You just don’t understand.
          The UK has roughly 60bill hours of human endeavour each year to try and provide the lifestyle that we all want.
          With technological progress what we can produce increases year on year, to try and claim otherwise suggests that you ignore human history to try and justify the failures of Dave the Rave and Sniffy.
          There are many things that can be done to move things forward.
          Transparency.
          Tax justice
          Treasury rejuvenation.
          National Investment Fund.
          Manufacturing policy driven by anyone but civil servants.

  • Cutla

    How did we get to this point, selfish people and organisations pushing their own agenda to such an extent they are willing to lie, cheat and misrepresent information and people rather than have a grown up discussion over the massive problems the nation faces? What is best for the nation seems to have taken a back seat to whatever ideology people support.

    • Coffee House the Wall

      The Guardian has run its course and should close.
      However perhaps we should simply await events since it is dying anyway.

      • Ipsmick

        So that would mean nothing other than unpleasant, right-wing newspapers? Hurrah. Every time you think things can’t get worse here, in The Land of Despair, a nasty surprise pops up.

        • George Anderton

          As opposed to unpleasant left wing broadcasting media.

          • David Lindsay

            What, Sky?

        • Tim

          Is the public sector jobs ads still keeping the Guardian afloat?

          I thought the tories were going to stop that little scam and spread the cash more widely?

          Btw lips pickle or whatever your name is, you pay your money you take your choices. Lefties talk a good game but clearly all pay for their sky subscriptions and read the Sunday times.

          They slag off the mail because people actually read it (paper and online)

          • David Lindsay

            There is nothing stopping anyone else from setting up a public sector jobs supplement.

        • Colonel Mustard

          Don’t come here then dipstick. Plenty of unpleasant self-congratulary left wing sites around where you can join the comrades in a hate-fest in the Land of Delusion.

      • George Anderton

        What does it matter what the Guardian says hardly anyone reads it.

      • telemaque

        Not true.
        And anyway most of us see it as a voice of reason

        • Noa

          No. Most see it as the voice of Treason.

          • telemaque

            And the DT has our interests at heart

  • http://twitter.com/ally1611 ally

    The Government is paying people to be out of work when it should be stimulating the economy: the tax take is reduced due to zero growth so borrowing goes up. QE has boosted stocks and reduced the cost of government borrowing but squeezed out consumers as prices have risen ahead of pay. Further cuts and benefits freezes will only accentuate this problem further.

    • alexsandr

      but unemployment is falling. So they are paying less and less. But immigration is spoiling it. We have scarce jobs, why do we need to share them with the world?

  • Rhoda Klapp2

    The press haven’t picked up on it, you say. That may be true, but it was picked up down here in 2010 and the observations have been repeated daily and weekly. Also above the line to some extent, I must admit. There is nothing new here, Osborne has been a flop, and not due to unforeseen circumstances but to sheer unwillingness to take that actions which might have made a difference. As I was saying back in 2010, why take the flak for ‘cuts’ and not do any cuts. It is a failure of timidity.

    Perhaps he ought to visit the bottle bank and see if he can take out a loan. His balance seems to be zero at the moment.

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