George Osborne has been humiliatingly been accused of talking "sheer nonsense" by U.S. business and technology news website Business Insider, after Osborne cited the crisis in the Cypriot banking system as an example of why Britain must continue the "painstaking work" of austerity.
Oh dear.
George Osborne has been humiliatingly accused of talking “sheer nonsense” by U.S. business and technology news website Business Insider, after Osborne cited the crisis in the Cypriot banking system as an example of why Britain must continue the “painstaking work” of austerity.
Cyprus is set to receive 10 billion euros to stave off bankruptcy but the island’s savers are being forced to pay up to 10 per cent of their deposits to raise another six billion.
“That is an example in Cyprus of what happens if you don’t show the world that you can pay your way.
“I mean that is why in Britain we’ve got to retain the confidence of world markets,” Osborne said.
Business Insider deputy editor Joe Weisenthal responded by branding Osborne’s words “sheer nonsense“:
This is sheer nonsense. This has nothing to do with whether the country could “show the world that you can pay your own way.” It has to do with the fact that the Cypriot banks had large exposure to Greek debt (because of how intertwined their economies are) and took big losses on Greek debt writedowns. And it has to do with the screwed-up Euro system, whereby no country has their own currency.
And it has to do with having an oversized banking system, and all kinds of other things. There are virtually no applicable lessons to the UK here. But the government is using the incident as another excuse to justify disastrous policy.
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.
19 Responses to “Osborne talking ‘sheer nonsense’ about Cyprus”
George Hallam
“Print and spend and you get inflation.”
only if the economy stays the same size. This will be the case if there is no spare capacity.
Otherwise, government spending has a multiplier effect.
This means that increased government spending will cause the economy to grow.
Contrarywise, a cut government spending will cause the economy to shrink.
George Hallam
“State expenditute. Maybe. It’s not investing, its spending. ”
That just depends on what the state spends its money on.
LB
Spending cuts? What cuts? Year after year,spending is up, and yet the economy shrinks.
Explain why with increased spending, the economy is shrinking. Your theory is that the opposite happens.
Now what’s happening?
35% planned tax rises. Red book increases in taxation. That’s the reason.
Take more money and screw the economy, Then use the symptom of taking money out of people’s pockets and making them poor to take more, borrow more and spend more, making the problem worse.
Corrupt_B'stard
OI!!! IMF!! a one-off windfall tax of 20% on the £4 trillion wealth of the richest 10% in this country, would pay off the nations debt at a stroke. Interested?
Brian
You’ve been listening to the clueless neo-liberal Mr. Osborne too much.
Maggie Thatcher lied. There is no comparison between a household budget and a nation’s budget. A state with a fiat currency by definition can never be bankrupt – it can always pay bills in its own currency, unless it deliberately defaults.
All UK government payments are made by money created out of thin air, just as the commercial banks do when they give you the money to buy your house. If you have a mortgage, do you think the cash used to buy the house came from savers? Do you think that the government can’t pay for anything unless it first collects taxes into some account?
Learn something about Modern Monetary Theory.
http://www.3spoken.co.uk/2011/01/how-governments-super-platinum-credit.html
Don’t mention Zimbabwe or the Weimar Republic either:
http://bilbo.economicoutlook.net/blog/?p=3773