George Osborne writes: Britain is turning the corner
Chancellor of the Exchequer George Osborne writes ...
"These are still the early stages of the economic recovery and many risks remain, but thanks to the efforts and sacrifices of the British people, Britain is turning a corner.
"New figures out today show that unemployment has fallen again and the private sector has created more than 1.4 million new jobs over the past three years.
"We must now continue to stick to our economic plan. The best way to improve living standards is to tackle our deep economic problems head on and build an economy where those who aspire to work hard and do the right thing are rewarded.
"Amazingly, Labour still want more government spending, more borrowing and more debt. This would undermine the recovery and put up mortgage rates and bills, squeezing living standards for hardworking people.
"We can’t let them get away with it. Share this graphic on Facebook and Twitter today and help show how the Conservatives are building an economy that works for everyone."
George Osborne
Comments
Rather than "good growth" this is nothing more than a debt fueled bubble recovery, trying to repair the inevitable results of a debt fueled bubble bursting.
Sort of putting out a fire with petrol, sure the flames may die down for a short period then what happens?
But what did get me was I was asked "are you looking to raise money at the moment sir, whilst interest rates are low?" - I think that speaks volumes dont you?
But it's not true that none of the growth is "good growth." For a start, a significant part of it is driven by export growth, which is a tribute to British business considering what a mess the world economy is in (they've done it partly by pushing hard to sell in India and China, two big developing economies which are still growing much faster than the world average.)
And the fact that employment is up and unemployment down as new jobs are created has significantly blunted the pain of the recession and left us with a better springboard for growth as the economy starts to improve.
Most economic commentators are saying that the economy is not just accelerating but that the growth is becoming more balanced.
It would be silly to pretend that there isn't still a lot of pain ahead, or that long-term recovery is guaranteed - if the public were unwise enough to put Ed Balls in charge of the economy at the next election he'd kill our chances of avoiding a complete meltdown stone dead - but when George Osborne says that we have turned a corner I honestly think he is right.
Once the recovery is in full flow this goes out of the window. Such a huge deficit sends the wrong signals and interest rates will raise, or the credit card end up being declined.
I am aware Mark Carney has promised low rates for the next 3-4 years but he may as well promise a White christmas, if a lender wont lend. Huge pressure from the markets to spend less or raise more and as guilts look like a train wreck just a little way along the track, then the interest rate must raise, or the "lender of last resort" must fire up the printer.
You see whilst the figures do look good the underlying problems are still there, interest rates too low, cheap money being borrowed to consume, and inflation beating wage rises so living standards are falling.
Once the interest rates raise then servicing debt becomes a huge chunk of government expenditure, sorry i mean an even "huger" (is there such a word) expenditure.
Now i do not deny Ed Balls would destroy all in no time at all, but at the moment the current government are doing precious little to bring the deficit down. Missing their own targets year on year (remember ending the deficit in 5 years).
Until the underlying problems are repaired then any recovery can only be "short term"
I do not make these comments to deliberately undermine the governments work, and nor does it bring me any pleasure in having to do so, its just that the political arguments of "we are the least worst option" are not really so compelling, and if i am going to state something like that then i at least give a reason why, and what I think can be done to avoid it.