Thursday, 22 November 2007

Economy in tatters (part the umpteenth but not the last)

Poor, poor Gordon; he spouted his usual litany of factors that prove his economic genius. Unfortunately whilst in the past the media and so the general public would have believed him or at least said "well he has done quite well, hasn't he", this time he may have more problems. It appears that the economy is getting closer to the point of collapse - "The City was last night calling on Alistair Darling to raise taxes or cut spending after news of an unexpected deterioration in the government's coffers raised fears of a looming £40bn hole in the public finances. In a fresh blow to the chancellor, data from the Office for National Statistics showed that despite a robust performance by the economy in the first seven months of the year, the government borrowed more money in this period than at any time since Labour came to power in 1997. The ONS said that in October - normally a bumper month for corporation tax receipts - the exchequer had a surplus of £1bn, but this was down on the £3.5bn surplus in the same month last year. That left net borrowing for the first seven months of the year at £24.2bn, up from £17.5bn in the same period of 2006-07. Analysts said that with both the Treasury and the Bank of England forecasting that the economy will slow down in the coming months as a result of higher interest rates and the credit crunch, the prospect was for net borrowing in the current financial year to be even higher than the £38bn deficit pencilled in by Mr Darling in last month's pre-budget report. In the PBR, Mr Darling said the government would not meet the budget forecast for borrowing of £34bn, but John Hawksworth, head of macroeconomics at PricewaterhouseCoopers, said the total for both 2007-08 and 2008-09 was likely to be "£40bn or more". He added: "At this point in the economic cycle, the public finances should be improving in order to provide some 'wiggle room' in the event of a future cyclical downturn. "The fact that they are getting worse will be of concern to the Treasury since it suggests possible structural weakness and potential need for further tax increases or greater spending restraint.""

I am sorry folks but when borrowing reaches these levels, whilst inflation is on an upward curve, house prices start to fall and rises in economic output look shaky, it is time to look up the word "stagflation" in the dictionary.

Poor Gordon, if only you had called an election when you had the chance; you would have won and you would now be 5 years from an election. Now you are a maximum of 2.5 years away from an election. I think 2.5 years should be nicely in the middle of a massive recession, well done Gordon you have really screwed the country up. Never mind though because your pension is nicely index-linked; it's just a shame that you'll have to spend most of it on security to keep the general public that you have so royally screwed from getting their revenge.

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