Last week, The Spectator (no link yet) invited several economic 'Big Brains' to offer some advice on 'whither Britain?' Even if they only read the first one by Arthur Laffer that would be sufficient:
Reducing the burden which government places on the economy, through tax cuts, is the surest way to promote growth. I have never heard of a country that taxed itself back into prosperity. (My emphasis)
Louise Cooper, a senior analyst at BGC Partners, blanched at the government's proud announcement that its aim was "to achieve strong, sustainable and balanced growth that is more evenly shared across the country and between industries". She snapped back:
Such a prescription is impossible. The free market is chaotic. Highly entrepreneurial firms and people take ideas and give them a go. Does it matter that Silicon Valley's growth is unbalanced and too technologically-focused?
She also reminds us to keep our eyes across the Irish Sea:
Ireland kept its tax and regulations low throughout the crisis, and as a result it is growing again - still one of the most business-friendly countries in the world.
Casey B. Morgan, an economics professor from Chicago University, advises them to take an axe to the welfare budget:
This safety net - the welfare system - could safely be put back to the levels of five years ago. As could the minimum wage. Also, stop obsessing about the amount of new loans made by banks. They'll start lending money again when there are good loans to be made to good, credit-worthy clients.
Of course, all the crap loans will already have been made by the 'Dave 'n' George Mortgage Company' as I pointed out a few days ago! Ruth Lea, Director of Global Vision and always a lady worth listening to, suggests that the 'Dim Duo' should turn their attention to the 'Green energy' policies being rammed through by the 'Lesbian-straightener', Chris Huhne - er, that's my description of him not Ms. Lea's!
'Green energy' policies already already amount to a stealth tax of over 20% for businesses (and over 15% for households) on energy bills - and current policies could push this to 50%.
In fact, Dave and George could do no better than to persuade the Lesbian-straightener to take his talents to the lonely world of lesbianism and confine his healing hands to good works there - but perhaps the DPP has other ideas - one can but hope!
Alas, I fear that all this good advice has come to nothing. According to Fraser Nelson at The Coffee House today, the decision has been made - keep on borrowing:
Evaporating growth means lower tax revenues, so the choice is between protecting his deficit reduction plan or keeping total spending cuts at less than 1 per cent a year.
Increasing savings to, say, 1.3 per cent a year would mean he could easily meet his deficit targets. But it seems the decision has been taken to borrow even more.
It now looks as if Osborne will increase debt by even more than that 51 per cent. Tax revenues are disappointing (corporation tax is down 7 per cent last month, against the 14 per cent annualised rise the Treasury was expecting), so this means more cuts or more debt. The government's language very much suggests that, like its predecessors, it's choosing more debt.
The next time you hear 'Blinky' sobbing - apparently he cries a lot, he tells us, at musicals like 'The Sound of Mucus' - about the ravages of vicious cuts in government spending, remind yourself that in 10 of the last 12 months the government has spent more not less:
Comments