PBR = Preposterous Borrowing Requirement
PBR is supposed to stand for "Pre-Budget Report" but it could equally stand for "Preposterous Borrowing Requirement".
In any complex package like the one which the government announced in the PBR, almost everyone is going to find some things they like and some which they don't. But it is the overall picture which appalls me, and particularly the enormous debt mountain.
All governments will automatically tend to go into spending deficit in a recession. In fact, fiscally progressive income taxes and a social security net are often collectively called "the stabilisers" as they tend to take proportionately more money off people when the economy is charging ahead while forcing the government to pay out more as it goes into recession. This will tend to moderate both inflationary booms and recessions even before and additional government action.
But for a government which was already expecting £30 billion defecit when they thought the economy was still growing, and knows perfectly well that the recession will make it much worse, to further build up the borrowing requirement in the way that they have put forward in the PBR is not just gambling, but completely reckless.
If the government is right that the recession will only last until next summer - and many experts think this is optimistic - they will still have landed the economy with annual borrowing peaking at £100 million, total national debt in excess of a TRILLION pounds, and it won't just take until after the next election, but until after the election following that, to get the national finances back on an even keel.
And if the recession lasts longer than the government now predicts, that debt mountain will be even worse.
Whoever wins the next election taxes will have to go up. Britain will be paying for the profligacy of Brown and Darling for many years after the voters have sent them to well deserved oblivion.
In any complex package like the one which the government announced in the PBR, almost everyone is going to find some things they like and some which they don't. But it is the overall picture which appalls me, and particularly the enormous debt mountain.
All governments will automatically tend to go into spending deficit in a recession. In fact, fiscally progressive income taxes and a social security net are often collectively called "the stabilisers" as they tend to take proportionately more money off people when the economy is charging ahead while forcing the government to pay out more as it goes into recession. This will tend to moderate both inflationary booms and recessions even before and additional government action.
But for a government which was already expecting £30 billion defecit when they thought the economy was still growing, and knows perfectly well that the recession will make it much worse, to further build up the borrowing requirement in the way that they have put forward in the PBR is not just gambling, but completely reckless.
If the government is right that the recession will only last until next summer - and many experts think this is optimistic - they will still have landed the economy with annual borrowing peaking at £100 million, total national debt in excess of a TRILLION pounds, and it won't just take until after the next election, but until after the election following that, to get the national finances back on an even keel.
And if the recession lasts longer than the government now predicts, that debt mountain will be even worse.
Whoever wins the next election taxes will have to go up. Britain will be paying for the profligacy of Brown and Darling for many years after the voters have sent them to well deserved oblivion.
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