Wednesday, 18 March 2015

Less A Budget Speech, More A Really Bad Stand-Up Comedy Routine

Its no wonder that comedian Al Murray has decided to stand, in his persona as the Pub Landlord, in the General Election.  That is the level that Cameron and Osborne have reduced politics to.  Every week, Cameron has stood up, at Prime Minister's Question Time, and appeared to think that the purpose was, not to answer the questions that British voters have a right to put to him, through their MP's, but instead to crack very bad jokes.  Cameron's avoidance and evasion, when it comes to answering questions, and being accountable, has only been matched by the avoidance and evasion of tax, undertaken by the Tories rich friends, and which the Tories have facilitated.

Following in the same vein, Osborne's Budget Speech was almost completely devoid of any real data that anyone could sensibly believe.  It was again an exercise in evasion and avoidance, and a confirmation of Disraeli's comment that there are lies, damn lies and statistics.  Osborne spent most of his speech cracking bad jokes, in an attempt to provoke Ed Miliband, but, by contrast, there was a dearth of any significant economic measures in his speech.

The minor measures announced were purely political gimmicks, often that contradicted previous Tory policies.  For example, the Tories originally proposed, when oil prices were rising rapidly, a few years ago, that they would introduce an automatic stabilising measure that would reduce fuel duties when oil prices rose, and raise them when oil prices fell.  It was, in fact a stupid idea, as I wrote at the time, but now, despite rapidly falling oil prices, they are proposing to cut rather than raise duties, purely it seems to try to buy votes in the coming election.

The other vote buying measure echoed an idea that I only suggested in jest the Tories might introduce, some time ago.  I pointed out that, in their attempt to keep the house price bubble inflated, and keep their Daily Express reading voters happy, the only thing they had left, after everything else had failed, was to simply give taxpayers money to potential buyers.  That now is precisely what they intend to do.  They propose to introduce a "Help To Buy ISA" that will give £50 to potential house buyers, for every £200 they save towards a deposit!  That is a 25% rate of interest they propose to provide, out of the taxes of other savers, and homebuyers!!!!

At the same time, the best Osborne can propose for other savers, whose taxes are being squandered in this reckless tax give away, to keep the house price bubble inflated, for a few weeks longer, until after the election, is to offer them a bit less tax to be paid on their insignificant 1% or less interest, on their savings deposits.  As usual, the Tories give a little with one hand, and take away much more with the other.

The truth is that the Liberal-Tories (and they have to be considered as one and the same, because if your stomach could stand it, a look at Danny Alexander's bloated face, grinning and nodding, and fawning over every comment from Osborne, shows that the Liberal leaders are, if anything, more Tory than the Tories) have presided over economic catastrophe and failure, during the last five years, even in their own terms.  In order to cover for their failures, they have been forced to lie about the history of the last five years of their stewardship of the economy, and to lie about the state of the economy in the period prior to that.

Repeatedly they talk about the dire state of the economy prior to 2010, but after 2009, the economy was growing.  It was the Liberal-Tories that threw into recession with their policy of austerity.

They talk about Labour profligacy, but Labour's deficit to GDP between 1997-2007, was half what it had been under Thatcher and major, and was less than it has been under Osborne since 2010.

They talk about interest rates, but interest rates were falling at the start of 2010, before the Liberal-Tories took, office, and began to rise under them.  Its only been a global search for safe havens that has caused interest rates to fall since, and that is ending as hot money flows threaten to move back to where high rates of interest exist across the globe.

Osborne talks about employment and unemployment, but the fact is that unemployment has fallen only because many of the jobs are sham, as is most of the self-employment, and because UK productivity is abysmally low and falling.  Who actually benefits from the rise in employment, not the workers who are forced into these low paid jobs, that lack any kind of decent security, but the low paying firms that exploit their labour, and make profits out of them on a scale that the ordinary worker could only dream of.

Ed Miliband made one of the best performances I've seen him make.  Replying to a Budget Speech is always hard, because you have to try to respond to a mountain of detailed information at very short notice.  But, Miliband did so very well, and he was absolutely right to point out that Osborne's Budget simply cannot be believed.  The historical data was manipulated, and the projections contrived.  It was the same kind of avoidance and evasion that we have come to expect from the Tories.

In fact, the far more important economic event today will not be this sham of a Budget from osborne, but the outcome of the two day meeting of the Federal Reserve in the US.  As another indication of the avoidance and evasion of the Liberal-Tories, Osborne in pointing to economic growth left out the comparison of the UK with the US, an economy that has considerably outperformed the UK over the last five years, and an economy, which during that period has used fiscal stimulus rather than austerity, an economy that is growing at a faster pace, creating jobs at a faster pace, and which has cut its budget deficit faster than the UK, precisely because that fiscal stimulus (additional borrowing) created a growing economy, in contrast to the recessions and slow growth that the Liberal-Tories imposed on the UK for three years after 2010.

In fact, the US is growing at such a pace now that the Federal Reserve, is likely today to remove the word "patience" from its statement in respect of when it is likely to increase official interest rates. That means official US interest rates are likely to start rising in two months time, and when that happens, it will mean that the UK will be forced soon after to follow suit.  It means anyone with mortgages tied to the official Bank of England interest rate will see their mortgage payments rise, and because rates are currently so low, even a small absolute rise in rates translates into a much larger percentage rise in payments.

The corner stone of Liberal-Tory policy, having failed to create real economic growth based on industrial production, has relied on keeping the property bubble inflated, as interest rates start to rise that bubble is bound to burst, and along with it, the illusion created by the Liberal-Tories will burst too.

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