Sunday, February 14, 2010

20 Top Economists Cannot Be Wrong

Top economists have woken up to the real world to deliver a damning verdict on Borrowing Brown's shameful economy spin, pleading for a 'credible' plan to stop the country going down the pan. Are they all wrong and only the wriggling ones right?

Put 20 economists in a room and you'd expect 20 different ways of solving the economic Brown mess, worded in worthy, worthless economicspeak. And who'd trust them anyway?

How refreshing that 20 of the country's finest economic brains have cut through the crap, urging rapid cuts to the £178 billion deficit and warning the government is putting the country's economic recovery at risk without a "credible" plan A or B.

Too late perhaps but a change from the usual economic drivel from the ivory towers, with weasel words wrapped up in economic ideology rather than the real world of harsh economic reality.

For crying out loud. The UK economy is crying out for a credible rescue plan, to coin a phrase. Actually theirs.

A top twenty group of academics and policy-makers have put their names to an open letter to The Sunday Times urging that borrowing has to be slashed more quickly than Dreadful Darling would dare to dream of without running it past Brown Balls.

All a far cry from New Labour cronies masquerading as 'economists', spouting and spinning the party political line.

This is a serious letter from serious people singing from the same hymn sheet, including several ex-Bank of England policy wonks, a former deputy Bank boss and head of the financial watchdog, along with a former IMF chief and the now obligatory New Labour peer.

The letter is still wrapped up in the kind of economic language which would make C.Wright Mills miffed. But armed with a well-worn copy of the Ladybird Book of Economic La-La-Land, and trusty Galbraith, it all makes sense in translation:

"Is now clear that the UK economy entered the recession with a large structural budget deficit. As a result the UK’s budget deficit is now the largest in our peacetime history and among the largest in the developed world.

Brown was telling porkies.

In these circumstances a credible medium-term fiscal consolidation plan would make a sustainable recovery more likely.

Help. The country's broke.

In the absence of a credible plan, there is a risk that a loss of confidence in the UK’s economic policy framework will contribute to higher long-term interest rates and/or currency instability, which could undermine the recovery.

Get a grip. Moneymen will pull the pug.

In order to minimise this risk and support a sustainable recovery, the next government should set out a detailed plan to reduce the structural budget deficit more quickly than set out in the 2009 pre-budget report.

Daft Darling's on a loser. Honest Osborne was right.

The exact timing of measures should be sensitive to developments in the economy, particularly the fragility of the recovery. However, in order to be credible, the government’s goal should be to eliminate the structural current budget deficit over the course of a parliament, and there is a compelling case, all else being equal, for the first measures beginning to take effect in the 2010-11 fiscal year.

Brown Balls is a bad joke. Cameron should stop wobbling.

The bulk of this fiscal consolidation should be borne by reductions in government spending, but that process should be mindful of its impact on society’s more vulnerable groups. Tax increases should be broad-based and minimise damaging increases in marginal tax rates on employment and investment.

Tax hikes are a bad thing. Slash public spending.

In order to restore trust in the fiscal framework, the government should also introduce more independence into the generation of fiscal forecasts and the scrutiny of the government’s performance against its stated fiscal goals.

Ministers have been fiddling the figures.

Economists, eh? Who'd trust 'em.

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