The Daily Telegraph political editor Andrew Porter reports on an article George Osborne wrote for the paper.
It is a statement of fact that, with interest rates still at 4.5 per cent, there is plenty of scope to stimulate demand with lower rates.
The Conservatives have been attacked for appearing to agree with the “Keynesian consensus” that spending out of trouble is the right course of action.
But Mr Osborne for the first time unequivocally distances himself from the plans which he calls a “spending splurge” and a “reckless gamble.”
He says: “This is exactly the wrong approach – the policies that got us into this mess cannot be the ones to get us out of it.
“It doesn’t work. Look at Japan. Between 1992 and 2002, Japanese government net debt grew by 58 per cent of GDP. Over the same decade the economy only grew by 9 per cent. The end result was a crippling debt burden and a landscape littered with the evidence of endless white elephant public works programmes.”
This as the Conservative and Unionist blog
reports is absolutely deluded.
Doesn’t he also realise that the Japanese central bank cut interest rates to zero (they were never very high to begin with) and that also failed?
So absolutely no knowledge of economics at all and he’s the Tory Shadow Chancellor.
Still, I’m never one to miss a good quote – the author of Conservative and Unionist Blog also has another question on Osborne’s “White Elephants”
And here’s another issue. The biggest item of new borrowing will be to bail out the banks. Supposedly the Tories support that. So why do they support throwing our money at the City of London to fix the mess made by people who have donated millions to the Tory Party in recent years yet describe money to be spent on children’s centres, schools, hospitals and public transport as “white elephant public works schemes”?
It will be a cold day in hell before we get answer to that question – but then we know the answer; don’t we.