The economic consequences of Mr Osborne

by Irn Bru Mon Mar 17, 2014 1:37 pm

The Great Recession is finally over but the Chancellor does not merit the flattery he attracts. Tory policy has stymied a genuine recovery that was underway in 2010.

When George Osborne delivers his fifth Budget on 19 March, he will be able to reflect that he has now been Chancellor for nearly a year longer than his predecessor Alistair Darling. At one stage, it seemed unlikely that he would last so long. The “steady and sustained economic recovery” he promised in 2010 had become a double-dip recession and the economy was in danger of an unprecedented triple dip. Conservative MPs joked in private that Mr Osborne, the Tories’ chief election strategist, was a “part-time chancellor” who “wasn’t good at either of his jobs”. On the eve of the 2013 Budget, they signalled their intention to oust him if the economy failed to show signs of recovery by the spring.

A year later, Mr Osborne is a politician reborn. After avoiding a triple dip in 2013, the British economy is now the fastest-growing of any major western nation. Once mocked as “the Submarine” for his habit of disappearing at the first hint of trouble, Mr Osborne has assumed a more public role and is in the race to become the next Conservative leader.

Yet the Chancellor does not merit the flattery he attracts. As Robert Skidelsky, the leading biographer of Keynes and a cross-bench peer, says in his audit of the Chancellor’s record, starting on page 22, GDP is still 1.4 per cent below its 2008 peak and 14 per cent below where it would have been if the recession had not struck. The US economy, by contrast, is 5 per cent larger than before the crisis. To this, the Conservative riposte is that the UK suffered a bigger crash than any other major country, with output falling by 7.2 per cent from peak to trough. But as the former US treasury secretary Larry Summers told Mr Osborne at the recent World Economic Forum in Davos, “The deeper the valley you are in, the more rapidly you are able to grow.”

In 2010, a genuine recovery was under way, with the economy growing 2.4 per cent in the 12 months to the third quarter, but premature austerity introduced by the new coalition government, in the form of the increase in VAT and the sharp cut in infrastructure spending, ensured that it was quickly choked off. To meet the Office for Budget Responsibility’s original 2010 forecasts, the economy would need to grow by 1.6 per cent each quarter between now and the election.

Mr Osborne has been the beneficiary of low expectations.

You can read the whole article here...

http://www.newstatesman.com/politics/2014/03/leader-economic-consequences-mr-osborne

This message needs to be driven home at every opportunity starting on Wednesday. And if Ball's doesn't expose this mob for all the guff that they are coming out with then he needs to go.....quickly.