Sunday, September 06, 2009

Needs must when the devil drives

Labour are getting their pre -announcement spin in today on "halving the budget deficit".

Now often trailed major announcements from Labour turn out to be nothing of the sort. We have learn't through painful experience that Labour tries to dominate the headlines with its chosen phrase whilst sneaking the reality in a very small bit of print hidden away in long reports.

Its who and what they are.

However we should perhaps not dismiss the idea that the Treasury may really be under the threat. Shell - a vastly better run organisation the UK under Labour - had its credit rating downgraded recently. Its not clear the UK could survive with its current spending profile if our credit rating was reduced or if the Bank of England didn't keep printing money to buy our own debt.

The money printing must end soon, and the real challenge will then be to persuade enough foreigners to lend us their money on the promise that our children will pay it back, by forgoing vital health care and social services just to win Brown a few more votes today.

Perhaps the crunch is much closer than we have been lead to believe.

Perhaps Labour are trying to make a virtue out of a necessity.

Perhaps they have been told they can't carry on with the policies of bribing the voters by selling their children into debt.

But as ever don't believe a word these people say. Check the facts, check the details. They have form for deceit and untruths and should not be trusted.

Here we go: Dalring is now talking about borrowing at a slower rate sometime in the future when there lots of money around. ( Remember last time there was "lots of money around" it was because consumers were loading themselves with insane amounts of debt - which the govt was helping itself to in terms of VAT, stamp duty and taxation on the increased economic activity )

I should point out also that The Budget Deficit and The National Debt are not the same thing - even though Laboutr spin and dedciert masters would like you to think so. Halving the budget deficit just means diggign the hole of debt salvery slightly slower, not filling it in. And every year there will be the interest to pay on that debt ....


James Higham said...

the real challenge will then be to persuade enough foreigners to lend us their money on the promise that our children will pay it back


Letters From A Tory said...

Actually I think Labour will be very honest about their cuts, knowing that they will never have to implement anything that they say.

Man in a Shed said...

Not sure I can share your faith LFAT, but most probably they will announce spending reductions that will start in a few years time, with Treasury assumptions about growth a cost "efficiency savings".

But what is perhaps more intresting is their plans to cut overseas aide and the NHS which I heard on the radio this morning ( of course lots gof things get pre-annouced by Labour - few get done so the salt cellar is needed here ).

It would be a cunning move since as the NHS is one of the largest draws on the budget even small savings across the board int he NHS and cuts will turn out very large savings over all allowing Labour to cut less else where and say Tory figures don't add up or that the Tories will devastate other areas.

It turns David Cameron's guarantee on the NHS and overseas aide into weaknesses that he will have to back of ( making Labour look less bad ) or make more sweeping cuts elsewhere.

It will be interesting to see how that plays.

I suspect Labour's terminal problem is that no one is listening any more.

The Half-Blood Welshman said...

Halving the deficit is about as much use as a chocolate teapot, a surplus is what we need!

TheFatBigot said...

I doubt we have ever before had a government that looks on every problem as an opportunity to gain electoral advantage rather than something they must address in their capacity as our government.

The public accounts are awful and everyone of any sense knows that government must scale back its activities. Not just cut the costs of what it does but reduce what it does. They must get their fingers out of goodness knows how many pies. Instead they calculate ways to wrong-foot the opposition whether or not their proposal would be of benefit to the country.

No sense of duty. Self-interest is everything. It's utterly disgraceful.

wildgoose said...

I'd like to change how we measure the size of our economy.

Rather tnan just bare GDP it should be GDP after debt servicing has been removed.

That way we can see what is genuine economic growth and what is just consumption expenditure brought forward from the future.

Man in a Shed said...

@Wildgoose That's a good idea. Of course its also something a newspaper or other think tank could do.