Official figures show that the UK economy shrank by 0.2% in the last three months of 2011 and nobody is disguising that a double dip recession is not so much feared but fully expected.
So after 4 years of recession, who's to blame for the continual failure to move us out of it?
When the economy struggled to get above zero previously, the coalition blamed the weather and then the extra bank holiday we had for the Royal Wedding but no such absurdity has been reached for so far so why is the UK economy tanking?
The Labour party claims the blame lies entirely with government policy, cutting too fast and too deep but the Government say it isn't their fault and point at the problems in Europe which is making growth difficult for the UK.
The Europeans in turn are saying it is the global recession that is doing it for them so everyone is blaming each other and there seems to be a lot of people offering advice but nothing seems to be working.
Our Government has slashed with abandoned at the public sector, attacked the welfare system with an axe and poured tens of billions of our taxes into the banking system and still we are in the deep end and have been since 2008. Four years of trying to climb out of the hole and if anything, we are further in it then when we started.
The facts are prices have gone up for the essentials such as food, energy and petrol but wages have either stayed the same or been reduced.
It does not take a masters degree in economics to realise that if prices go up the public stop buying so much of the product which result in the businesses selling less which means they put their prices up to make up the shortfall and the public cut back even more and the vicious circle continues until the inevitable recession and the bankruptcies and the job losses which that brings and we fall even further into the hole.
Rather than the Government giving tens of billions to the banks, the obvious answer seems to be to put more money into the public pocket. A one off £1000 payment to every family would spur a flurry of spending in the local community which would not only boost the economy, stop shops closing and create jobs which keep people in work, but it will still end up in the banking system anyway.
We have tried one way and it blatantly isn't working so what have we to lose going to plan B and giving another idea a try?
3 comments:
Generally, it's the fault of whoever is trying to find or pass the blame. The People elected governments to do dumb things, and the Governments were dumb-enough to actually do what the People wanted.
More specifically, I'm not sure I follow where you're going with banks and prices. The governments, in a very real sense, had to bail out the banks first and foremost. The banks are how governments borrow money. If the governments let the banks fail, the governments would no longer be able to deficit spend, and would immediately have to balance or near-balance their budgets. Your whole 1000-pound giveaway proposal is only possible because of bank bailouts, because governments don't have 1000-pounds to give away and are thus forced to borrow it from the banks to give it to every family.
-Nog
The People elected governments to do dumb things, and the Governments were dumb-enough to actually do what the People wanted.
The wannabe Government publish a manifesto of what they will do if elected, we elect them on the strength of this and if they then change their minds after they are elected and do the opposite, nothing we can do about it so hardly the Government doing what the people wanted. eg People voted Lib Dems because they gave a stone cold, written promise not to raise student fees, within a month of taking power they raised student fees.
I don't hassle the Lib-Dems for the student fees thing. They're not the government, they're just a coalition partner, and the junior one at that. Obviously there are going to be some parts (probably most parts) of their manifesto that don't get enacted. This is all part of the trade-offs that have to be done.
However, I do hassle them for being shit.
I agree with Nog about the initial bail-out. The two options we were presented with in 2008 were (a) terrible, and (b) worse. So we went with (a) terrible.
So I think the initial bail-out was the right call. It's just that a lot of decisions both before (and since) have been the wrong ones.
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