Try not to choke on your coffee: George Osborne reckons the British economy is “out of intensive care”.
Now, he says, the task is to “secure the recovery”.
He’s starting on Wednesday with cuts totalling £11.5 billion which, once fiscal multipliers are taken into account, means a contraction of around £20 billion in the national economy.
Securing the recovery. Good luck with that, Gideon.
The good news is that he is expected to announce investment in infrastructure projects, including roads, railways, education and science. He has realised – probably too late – that cutting all those infrastructure projects at the start of this Parliament was economic suicide and is trying to do something about it before everyone realises he’s an idiot. He is, of course, much too late for that but the investment – if it goes to well-advised places – might just do some good.
Don’t bank on it, though.
Osborne’s claims about the economy are based on statements that government borrowing has come down and employment is up – but we know that the first isn’t true and the second is not helping. In other words, he’s built his castle in the sand.
Government borrowing rose by £300 million in 2012-13, from £118.5 billion to £118.8 billion, according to the Office for National Statistics. That’s not a huge amount, you may think, but remember this government reckons it has cut borrowing by a third since taking power. That would put borrowing at around £100 billion right now, which is clearly inaccurate.
The debt is now £1.9 trillion, up from 1.1 trillion a year ago – 75.2 per cent of GDP, up from 71.1 per cent.
We all know what the problem is: Austerity – the self-perpetuating (and self-defeating) policy that will eventually bankrupt us all (but not the country. Because we have our own currency, the UK is unlikely ever to go bankrupt. You see, when the Tories told you that, they were lying).
The worst of it is that the other main political parties have signed up to the delusion that all these cuts might actually do some good.
Ed Miliband has ruled out more borrowing. That in itself is not a bad idea. But Ed Balls has admitted that he would follow Tory spending plans, at least for the first year of a Labour government, and there’s a consensus that pensioners will probably be the next defenceless social group to be hit with cuts – this time to benefits such as winter fuel payments.
They are talking among themselves. It seems unlikely that any of them has bothered to look out of the window to find out the real effect of their idiot schemes.
And so the agony continues. Based on an economic fallacy, perpetuated on the masses, while the very rich continue raking it in.
The longer this goes on, the greater the danger to us all.