Bad news on GDP

The economic figures released today were disappointing with a 0.3% drop in GDP quarter to quarter.

There are all manner of reasons why the third and fourth quarters of 2012 were exceptional but the fact remains that we need the British economy to get back on a path to solid growth and it is taking far too long to do so.

This is absolutely not a reason to abandon the government's efforts to cut the defecit and get on the path to reducing the national debt - the more the debt goes up the more crippling the burden of interest payments.

But it does mean that MPs and Councillors of all parties need to think very hard about anything they can do to help legitimate British businesses to invest and grow, to support exports, and not to impose regulatory burdens or stand in the way of development unless there are excellent reasons.


Jim said…
There is a way, though you may not like it, it will work honestly. Its quite simply to reduce to tax burden on private sector companies. Reduce the fuel duty burden on transport (both of goods & workers).

The deficit does need to come down, but this should be done by reducing spending to match income. Its no good really to trim a little off here and there (whilst total spending continues to rise) Whole public sector departments will need to be eliminated. Lower regulation means the market will, in time, plug any service gaps (at least if they are required it will). Private sector would grow, meaning more opportunity for people, meaning less paid in benefits.

Its not by any means a "Magic wand" cure that will work tomorrow, it will take time, and it will be very painful in the short term. Thats how the market works.

Short term pain, will bring long term gain.
Chris Whiteside said…
I have an awful lot of sympathy with this argument. I would like the government to move as far as possible in the direction you are advocating.
Jim said…
I think one of the best ways to curb government overspending would be to return to sound money, rather than todays fiat currency. Historically gold and silver have always been attractive for use as money. Sound money forces sound economic policy, its often quoted as a problem with the gold standard, but as it acts as a regulator against spendthrift governments, and foolish bank loans, its actually one of its greatest advantages.

Unfortunately its not totally protected against governments, as (if paper is still used) they can devalue the currency in terms of gold, even with gold coins as currency then they can debase the coins.

Henry VIII was renound for this trick, he smelted copper into the silver and gold used for coins, then plated them with silver, the silver would wear down with useage especially in the raised areas of the coin stamp, like the kings nose. Hence Henry was often reffered to as "old coppernose"

Interestingly its silver that gives our currency its name. 1 pound (£) was defined at its original creation as being of value to 1 pound (lB) of silver.

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