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.
37 Responses to “The consequences of Mr Osborne: More deficit”
Anon E Mouse
Mason Dixon, Autistic – I’m not sure if you are winding me up here or not.
More money is being spent year on year on public services. There is more money being spent.
This government is not reducing any deficit – it’s increasing it and Labour activists seem to be unable to see the truth.
MORE MONEY IS NOT A CUT. This government is making a fool of you Mason Dixon, Autistic and you can’t see it…
Is it
FatBloke on Tour
Mr Mouse
I have been spending time at the Speccy preaching to the dog boilers and their thick editor – privately educated with an MOD subsidy – why Sniffy is wrong with all his talk about a expansionary fiscal contraction.
Past six months have made it very easy for me, the AD / GB recovery has been blown off track by the dog boilers and all this before the real cuts kick in. Regarding the double dip, well that was once possible now heading towards probable and Q3+Q4 are now primetime in that respect. Not guaranteed but looking ever more likely as the lack of talent in government becomes ever more apparent.
Dave the Rave is out of his depth.
Sniffy has no clue about economics – the FT was right all those years ago.
Good to see that you are now playing it straight, right wing economic mentalist and not the TB groupie pining for New Labour that you once claimed you were.
Cuts to public services are on their way.
Public services are different from public spending.
Keeping people on the dole costs money.
The deficit projections are getting larger with every passing quarter of stagnation, it will be a hard lesson to learn but you cannot thrift your way to economic salvation if all your trading partners are struggling and the plebs are all scared fartless about spending money because of all the shroud waving by Sniffy and the Dog Boilers.
AD / GB had a plan and it was working.
The muppets in charge do not have a clue.
And all this with a media establishment blinded by class loyalties.
The UK unfortunately does live in interesting times.
Be afraid, very afraid.
Or read the Speccy and then stick your head in the sand.
Anon E Mouse
Fat Bloke On Tour – Me not playing it straight?
I have voted Labour my whole life until the best electoral asset the Labour Party has ever had was dumped on by the party and Britain’s most unpopular PM in history (unelected by the Labour Party and voters in fairness to both) was forced on the public.
The election of Ed Miliband was a major mistake for Labour, compounded by the fact neither the PLP or party members voted for him – just the union dinosaurs.
Alastair Darling I agree may have been realistic(ish) which is why he was dumped on by Gordon Brown but the fact there was only a difference of £2billion cuts over the parliament, coupled with the substantial point of this article regarding the government not actually cutting you seem to be ignoring.
Anyway what about Ed Balls and his deficit denial….
FatBloke on Tour
Mr Mouse
Blow it out yer erse.
Loyal party voter and now all this tripe about debt and deficits.
It doesn’t add up to me.
£2bill difference over the parliament – no chance.
Sniffy and the dog boilers are cutting spending on services, that is soldiers, teachers and policemen, the numbers are all out there so get used to it.
AD / GB got the economy back on track, hard job which took ages but we managed to get through the Global Credit Crunch without the social carnage so beloved of Maggie and Sha**er.
We have lost that and the economy has lost its way, growth is stagnating and inflation is up – what a record after 12 months calling the shots. Dave and Sniffy are out of their depth, EB called it right in 2009 with the boomerang forecasts coming out of the Treasury and he is right now regarding the slash and burn tactics of the upper middle class right wing dog boiling orthodox economic mentalists now in charge.
The biggest deficit denier of all is Sniffy, no growth means no deficit reduction a basic point that he does not seem to understand.
Anon E Mouse
Fat Bloke On Tour – What about Ed Balls?
Well?
PS. When is your tour coming to an end. You’re not Bob Dylan you know…