The United Kingdom: A Land Of Confusion
Is it any surprise that the UK economy is lurching from problem to problem when there seems to be such little agreement from the controlling politicians and money managers as to what is actually happening?
The last few days have been a great example of just how mixed up things really are - and how little basic ecnomic knowledge there seems to be in this government and the UK media.
It is worth pointing out that the articles linked to below are all from the BBC. This is in no way an attempt to single out the Beeb in any way. Simply, the BBC has very reliable reporting and does not alter or remove web pages - this means that they can be linked to without needing to change broken links a few weeks later. The criticism is aimed at the politicos…
The UK started the week with an increase in the currency rates as notes from the MPC meeting suggest that Quantitative Easing will not be extended in the short-term. This was taken as a bullish sign that the economy is recovering. Phew!! Everything will be ok…
On Wednesday, Alistair Darling tells us that more borrowing by the government is the best way to help the economy. This is despite news in September that suggested that the real cost of the bailout is already in the region of 95% of GDP. Scary.
He backs up this statement with the soothing news that “it will mean the bills we face as a country will be lower”. The natural conclusion to that must be that he presumes that Britain will either be forced in an aggressive inflationary environment, or default on these loans. Neither seems like a good option.
Meanwhile, the NIESR - an economic think tank - is suggesting that retirement ages need to be increased to age 70 or taxes will need to rise by 7% to cover the high debt levels. These tough measures are the kinds of stories that have been dominating UK news for some weeks as the Conservative Party tries to make itself seem capable of high office next year. It seems increasingly safe to presume that Mr Darling doesn’t read the daily newspapers too often himself.
That newspaper avoidance might be for the best as George Osborne lays into him for his econominc plans laying in tatters as it is announced that the ‘green shoots’ of recovery have turned into a further economic downturn by the end of the week.
With all that, I’d like to remind readers of my own recent prognostication that this isn’t a short recession, but instead there is very likely to be much worse to come in my post 2016: The End Of This Recession. See how positive I am???
On that note, I’d like t leave you with a musical accompanyment - Land Of Confusion by Genesis.