Sunday, 3 April 2011

George Osborne is a reckless, incompetent fool II

The other day brought to light the not-unforeseen revelation that the British chancellor, George Osborne, is making up economic policy as he goes along, and pissing off his colleagues and major investors at the same time.

Now we learn he's actually expecting the British public to make up for the failure of his voodoo economics by driving themselves ever further into debt:
The Office for Budget Responsibility has raised its prediction of total household debt in 2015 by a staggering £303bn since late last year, in the belief that families and individuals will respond to straitened times by extra borrowing. Average household debt based on the OBR figures is forecast to rise to £77,309 by 2015, rather than the £66,291 under previous projections.

Economists say the figures show that George Osborne's drive to slash the public deficit and his predictions on growth are based on assumptions that debt will switch from the government's books to private households – undermining his claims to be a debt-slashing chancellor. (1)
Genius. Public spending down. Unemployment up. The only way demand can stay up is by people taking on more personal debt. Obviously, the people doing it are going to be the sort of people who cant afford to and really shouldn't. So the government's problem becomes a personal, family problem. Nice one, George. And if they don't decide to shore up demand by taking on more debt - and given how fragile consumer confidence is, there's no reason to believe people will decide to play Gideon's Game - then we're hit by the triple whammy of high unemployment, low demand and a stubbornly high deficit.

And people thought New Labour was irresponsible for taking on sovereign debt. This is shoddy beyond words, a cynical attempt to move debt off the government's books into the wallets of British workers and taxpayers.

If all goes according to plan, four years from now, Osborne will be able to stand up and announce he's delivered on his promise of eradicating the deficit to the mass ranks of the unemployed, impoverished and bankrupt.

Rather more likely, he'll me belated announcing that the 'crisis' is continuing and further austerity is needed to revive the economy - to the mass ranks of the unemployed, impoverished and bankrupt.
1 - "Ministers admit family debt burden is set to soar," by Toby Helm and Daniel Boffey. Published in the Gaurdian, 2nd of April, 2011. (

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