Monday, October 27, 2008

Making virtue out of necessity.

Its usually a good idea to make a virtue out of any unwelcome necessity that comes along. And that's probably what our Prime Minister has been doing over the last few days. And all in the name of Keynes. When I first heard him talk about his plans to increase public borrowing to help us all through the recession, I thought that he'd taken leave of his senses. It seemed to me that the scale of borrowing was already astronomical. And the benefits bill is about to rocket along with the unemployment figures. And tax receipts are about to collapse along with business profits. Where on earth would this extra money come from? Or more to the point, how would the Prime Minister persuade the markets that he had a plan for repaying the debts. What would happen to our currency. But when I heard him speak today, I realised that he has no actual plans to increase public spending to any significant degree at all. Its just Gordon Brown trying to make a virtue out of a necessity.

What our Prime Minister is doing is justifying the eye watering sums of money he is going to have to borrow just to pay off the bills that he knows are going to be delivered though the letter box of 10 Downing St.. He believes that if he uses the phrase 'borrow to invest' instead of 'borrow to spend' often enough, he'll persuade us that he has some choice in this matter - and be able to justify breaking his so-called Golden Rule. All that our beleaguered Prime Minister will be able to do is perhaps bring forward capital projects already planned. I wonder whether the voters will believe any of this 'spin'.

7 comments:

eric said...

i think its quite clear its bringing forward big capital projects....seems sensible enough to me, what is the conservative suggestions?
i'm open to all ideas, but today is just Gordons, where are the conservative options? suggestions?

Glyn Davies said...

eric - I don't think anyone would criticise bringing forward already agreed capital projects. But this is hardly what the Prime Minister has been talking about. I think it is the duty of an opposition to point out that we are unable to introduce a programme of Keynesian spending becaus ethe Prime Minister has spent too much already to allow such a strategy to be adopted safely.

Pigeon Man said...

Definition of a "pyramid scheme": Gordon Brown's spending plans.

Anyone heard the latest 'joke'? Gordon Brown telling anyone who will listen that consumer prices are going to drop. Anyone heard anything so ridiculous? For his next party trick Gordon Brown will produce a carrot from a 10kg bar of solid gold.

eric said...

fair comment, i tend to disagree, but i don't think the oppositions role is to just say what shouldn't be done. They are there to represent their constituents, make suggestions, what is the conservative plan to take us out of recession, put it forward, shout it from the roof, if Gordon goes with it then its a win win. But theres nothing coming forward other than, oooo what your doing son, it'll never work.

Glyn Davies said...

Pigeon man - I would expect pressure on prices to drive down inflation. I find it difficult to understand why interest rates have not been lowered further. The MPC do seem to be impotent followers of events.

eric - You make a fair comment, which is being made by many others. But I always think the Irishman who said that 'if you want to know the way to there, I wouldn't start from here' was making a reasonable observation.

eric said...

this irishman, fair point, but then almost certainly gave directions? (or asked them in for a guiness?)
Go on Glyn, lets have a few suggestions on what the conservatives would o, they are in a win win situation, but putting nothing forward does them no favours at ll.

Glyn Davies said...

Eric - I will do a post on this at the weekend - when I have some time.