| Topic: | So what? | |
| Posted by: | Thomas Barry | |
| Date/Time: | 26/04/12 18:03:00 |
| "It may not be a double dip recession after all say leading economists" As I said earlier and you're strangely enough not addressing, it doesn't matter if it's technically a double dip or not, what matters is that the OBR and thus the Treasury and thus the entire government have for the last two years been making and relying on predictions for growth that turn out to bear no resemblance to reality. We've clearly either shrunk or stayed precisely flat during the last two years, with the result that, as leading economists who haven't drunk the same austerity Kool-Aid as George Osborne predicted we're on our way to a 'lost decade' of zero growth and stagnation. Here are the OBR's historical predictions for this year's GDP growth: June 2010 - 2.8% March 2011 - 2.5% March 2012 - 0.8% Doesn't that ring any alarm bells at all? At the Bodget, sorry, Budget, the Chancellor was working off these predictions for 2012: Q1 0.3% (currently -0.2%, so it's going to have to be a heck of a revision to get it back on track, isn't it, David?) Q2 0.0% Q3 0.6% Q4 0.3% That's a) already optimistic and b) atrocious at this stage in what should be an economic recovery. We're not the only country to have a lost decade, as Japan has gone through this already - the problem for George and the Tories is that with a clear example in front of them of why it wouldn't work they chose the deficit reduction above all else path despite it being blatantly obvious to anyone with a brain that you can't reduce deficits with no growth and rising unemployment. This is the problem with pretending that if you make the rich rich enough the money will 'trickle down' to the rest of us, it leads policymakers to ignore the fact that ordinary people spending money makes the economy go round and making them poorer eventually makes the economy stop going round. The current prediction from the Mystic Megs at the OBR is that we won't see wages start to rise for another two years. Care to guess what the consequences of that might be? [figures from publicly available OBR documents, rather than selective quotation from right wing newspapers] |