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[Jun. 19th, 2009|09:35 am] |
How might Labour escape this trap? One possibility is to campaign against the Treasury’s assumptions. It is certainly possible that Mr Darling is too pessimistic, as his predecessor, Mr Brown, was too optimistic. At this stage, we simply do not know. Yet it would be risky to hope for the best. It would also be embarrassing to reject the forecasts of Labour’s own chancellor.
Another possibility would be to argue for higher taxes. Here the difficulty is that the numbers are so large. Merely to eliminate the reduction in public spending as a share of GDP planned for the three years after 2010-11, receipts must rise by 5 per cent of GDP, or £60bn in current prices, to reach 41 per cent of GDP. This would be equivalent to raising the basic rate of income tax by as much as 12p in the pound.
The great American satirist H.L. Mencken once declared that “nobody ever went broke underestimating the taste of the great American public”. I am more worried by a political version of this cynical view: the idea has grown up among politicians that nobody ever lost an election by underestimating the electorate’s intelligence. But at the heart of the next general election will be hard choices, for whoever wins. A democracy should debate those alternatives openly and honestly.
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| coming soon :) |
[Jun. 19th, 2009|08:07 pm] |
Japan, (koo, hampton, etc.)
Macro view as to why not.
Krugman "we owe Japan an apology" and "voters want to repay debt"
Macro consequences of repaying debt
Wolf
European banks, (Posen) confidence and the lack thereof
trimtabs http://tinyurl.com/m3wy79
rough outline for later. |
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