Osbourne's Excuses

[JFKvsNixon]

So you don't think Osborne could have done anything at all? Couldn't he have spoken to the pension funds earlier to get the finance to bring forward infrastructure projects? The finance was always there.

 

Couldn't he have introduced credit easing earlier. It's been clear for a long time Project Merlin was failing badly?

 

Couldn't he have used our super low borrowing rates to borrow to bring forward infrastructure projects?

 

You cannot deny that Osborne has introduced a significant shift in strategy. From believing in the power of the markets to deliver automatic growth to a strategy where he realises the government needs to take the lead.

 

And you cannot deny that this revised strategy is starting now. It wasn't there before.

 

Of course with the help of hindsight he could have changed things earlier, but I guess he had faith in his original plan.

[Bassman62]

Sensible well-targeted cuts are what they sound like. A programme of well thought out cuts that increase efficiency, remove dead wood.

So why aren't they cutting 'Overseas Aid' first?

[JFKvsNixon]

So why aren't they cutting 'Overseas Aid' first?

 

Because it's an insignificantly small part of the budget?

[I1L2T3]

Of course with the help of hindsight he could have changed things earlier, but I guess he had faith in his original plan.

 

Of course he had faith.

 

I hope he has faith in his new plans. The OBR doesn't. Box 3.2. Page 56

 

OBR outlook - PDF file

[Bassman62]

Because it's an insignificantly small part of the budget?

£7.8 Billion small? tell that to the pensioners and low paid families who official figure show will be in fuel poverty this winter.

[I1L2T3]

So why aren't they cutting 'Overseas Aid' first?

 

I don't think they need to cut that. They do need to spend it more wisely though given the limited money allocated to it.

[ricgem2002]

So why aren't they cutting 'Overseas Aid' first?

or making the well off pay a % of their wage similiar to the working man

[JFKvsNixon]

£7.8 Billion small?

 

Read the rest of the quote.

[L00b]

Indiscriminate cuts were always going to cause problems.

Again, that's a question of (i) system scale and (ii) market expectations against timescale. Markets demanded cuts 'yesterday', keeping the credit rating meant obliging. Call it realpolitik. I understand (from indistinct recollection, admittedly), that the UK came within a hair's breadth of losing its AAA within months of the Coalition Gvt taking the reins.

I think it was wrong to rely on the private sector delivering growth. There was no evidence it would happen and we shouldn't forget that the financial crisis never really ended. It wasn't cautious. It was high risk.

I disagree. Borrowing more, when so much market scrutiny was bestowed on UK plc finances (expecting, as noted above, debt-curbing measures first and foremost), would have been the dumb play. I recall a balance/status quo between pro- and anti-Keynesians (economic editors) for months on end in 2009/2010, but both sides pretty much in agreement that keeping the BoE base rate at its historic low was a good thing for growth.

The other big mistake Osborne made was to project and foster an atmosphere of doom and austerity - he needed that to justify the scale of the cuts but the downside was destruction of business and consumer confidence.

That's more of a political discussion, and harder still to prove/quantify. Highly subjective, at any rate.

 

In my professional capacity, I saw enough SMEs go fast to the wall from mid-2008 right to this day, that no amount of doom-&-gloom "tuning out" (or creative "pinkiness and fluffiness" news editing) could have prevented, with the expected, normal after effects (suppliers not being paid, going to the wall themselves, etc, etc. = domino effect in full flow).

 

Or are you saying that the Gvt should have muzzled the doom & gloom-peddling media?

[I1L2T3]

£7.8 Billion small?

 

The government gave Vodafone £6bn last year by writing off taxes. The money is there.