Tuesday, 10 November 2015

George Osborne Growth Blocker


George Osborne has always been better at singing his own praises than he is at economic management tells us ( a thousand times and at excessive volume)that Britain is recovering thanks to his "long term economic plan"

Balls. The plan was to roll back the state to let the private sector grow. In fact cutting back the state damages growth and Osbore himself has become the greatest barrier to improvement. Let me explain why

1)    He's dedicated to slashing borrowing. Recovery demands that the state spends more than it's income to boost growth. That gap can only be funded by borrowing

2) Cuts in public spending hit those who need it most hardest Yet recovery requires giving more to those sections who  are more likely to spend it and boost demand than the rich to whom Osbore is transferring . Growing inequality reduces demand which comes from the people

3) Austerity boosts asset prices not earnings where recovery requires it to be the other way round. Rising house prices mean more  investment goes into mortgages rather than business so builders build only expensive housing . The best stimulus would be  building public housing for rent for those who cant afford to buy. Osbore refuses to do that On the contrary he's selling off housing stock and crippling building by housing associations and councils

4) Rebuilding a viable industrial base so Britain can pay its way in the world requires a degree of insulation and a competitive exchange rate. Osbore is the enemy of both with the result that we are dependant on pulling in funny money selling assets and building up a growing overseas debt leaving the UK very exposed to confidence collapse.

 5) Success requires public and private sectors to work together for the common purpose. Cameron believes only in lop-sided growth by a private sector which can't make it on  its own

6) Productive exporting industry needs  cheaper utilities but privatisation has increased the costs of  water, power, tele-communications so the privatised utilities can increase profits while local government reform has increased council tax on business

Unless Cameron has the good sense to transfer him to a department where he can do less harm (say the Foreign Office) Osbore will persevere obstinately down the wrong road stopping full recovery,ruining Britain''s prospects damaging the social fabric and, the only hopeful factor,ending  his own prospects of becoming leader . The Tories may be the stupid party but even they can recognise a mess when it begins to damage their electoral prospects as tis attempt to build a neo-liberal paradise surely will.

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