Ann Pettifor takes Mr Osborne to task for the latest figures on borrowing that show his austerity plan is working the way he planned.
Ann Pettifor is the co-founder of the think tank PRIME
One has to feel sorry for the chancellor. Many mainstream economists – in both the City and academia – backed him to the hilt: egging on his austerity policies, and boldly forecasting the rate at which the deficit would fall. The governor of the Bank of England caused controversy by endorsing the strategy. Markets greeted the austerity programme with euphoria. And No 10 was castigated for preparing a plan B.
Professor Chick and I were among the few to sound a warning, in our June, 2010 publication: “The economic consequences of Mr. Osborne” we insisted that once the private banking crisis had been transmitted to the real economy, fiscal consolidation would not ‘slash’ the government’s debt, but cause it to rise. Our argument was not based on ideological conviction, but on a century’s worth of macroeconomic evidence.
Today, those who shared our fears have been vindicated – even before the coalition’s deep, job-destroying spending cuts have been fully implemented. The announcement by the Office for National Statistics (ONS) that the deficit had widened dramatically in April by £10 billion -the largest April budget shortfall since monthly records began in 1993 – has been seized upon in shock by the chancellor’s friends in the media and the City. Without any apparent qualms, they have fallen over themselves to deplore the rise, and predict economic gloom.
Mr Osborne ought to choose his friends (and economic advisers) more carefully.
To reach hundreds of thousands of new readers and to make the biggest impact we can in the next general election, we need to grow our donor base substantially.
That's why in 2024, we are seeking to generate 150 additional regular donors to support Left Foot Forward's work.
We still need another 124 people to donate to hit the target. You can help. Donate today.
37 Responses to “The consequences of Mr Osborne: More deficit”
Mr. Sensible
Mr Mouse, this extra spending isn’t going on services; they’re still being cut, but it is going on less useful stuff; less tax revenue and more unemployment benefit because more people are unemployed. Last week the claimant count went up again.
This shows, yet again that the economic strategy is hurting but not working.
georgie elliot
RT @leftfootfwd: The consequences of Mr Osborne: More deficit: http://bit.ly/l0htmO writes @primeeconomics' @AnnPettifor
FatBloke on Tour
Mr Mouse
Any news on the large number of your extended family who work in the public sector – has anyone lost their job, had their hours cut, terms and conditions chopped?
Good to see that your public persona is getting closer to reality – right wing mentalist dog boiler and not the TB groupie you pushed for so long.
As for the economy, this is what you get when send a complete novice to do a real job – he is a wee boy in a man’s world and this is only the start. Interesting to find out if Dave the Rave’s political skills extend to bumping his chancellor and his economic policy while keeping his credibility and electoral vehicle above the fray?
You have to ask, just what will it take to get rid of Sniffy?
Double Dip recession / 3 million unemployment / rising deficit?
Who would step up to offer the alternative?
What would that alternative be?
Ash
“You have to ask, just what will it take to get rid of Sniffy?
Double Dip recession / 3 million unemployment / rising deficit?”
Alas, I fear nothing would be enough. He will keep his foot on the brake for the next four years, insisting the whole time that it is actually the accelerator and taking any bad news as evidence that he needs to push a bit harder.
Anon E Mouse
matthew fox – (As usual) you have completely missed my point. The tax take is down because, contrary to Gordon Browns assertions, the economic cycle has not been eradicated and now we are in a recession – the “bust” part of his comments.
And the government are NOT cutting anything – it’s all talk:
http://www.spectator.co.uk/coffeehouse/6971423/the-austerity-hasnt-started-yet.thtml
Look at your history – Thatcher said she was cutting and wasn’t. May I say that if you have nothing to contribute to this fine blog why not try that?
Contributing nothing that is…