Comments on: There’s no need to talk ourselves into recession

By: apl

apl — Sun, 20 Jan 2008 11:32:10 +0000

JR:

By: mikestallard

mikestallard — Sun, 20 Jan 2008 08:28:05 +0000

This socialist government will not cut back on any spending. A leopard cannot change its spots. Also, after ten years of success, it is now playing its second eleven. These are not revolutionary thinkers.
As things get worse, the government will reach for more taxes.
It will also print more money.
This will lead to a resurgence of inflation – look at the gas bills! – and thence to more industrial unrest – especially from the public sector (police, teachers).
I give this lot until Easter. Already people are talking about a "winter of discontent" – remember dear old Jim? ("Crisis – what crisis?")

Didn't Mr Brown look at home next to the Chinese Communist leader! Compare that with the pictures of him next to George W on the golfing trolley where he did not look at all at ease. In China his Chinese Black suit and collar and tie corresponded perfectly with his hosts as he inspected the soldiers.

By: Matthew Reynolds

Matthew Reynolds — Sat, 19 Jan 2008 21:27:03 +0000

That is quite right . If Quango spending was halved in five years with many of them either axed , merged , scaled back or hived off then

By: Matthew Reynolds

Matthew Reynolds — Sat, 19 Jan 2008 20:27:03 +0000

That is quite right . If Quango spending was halved in five years with many of them either axed , merged , scaled back or hived off then

By: Bazman

Bazman — Sat, 19 Jan 2008 18:35:34 +0000

I work for a company that makes parts for one of the large 4 wheel drive vehicles, including the most expensive and desirable one. As well one of the most popular cars. A world market. America being the place where most of these vehicles will be sold.
The number of parts required remains steady with an upward trend.
A good sign I would say as the one of the first things to be canceled would be the new car when people are worried.

By: Neil Craig

Neil Craig — Sat, 19 Jan 2008 17:46:58 +0000

As you say the good news is that jthe part of the economy that makes real things & provides real services is doing ok it is just the part that depends on the paper prices of things, mainly housing, going up forever that isn't.

However I think the bad news is that we are growing at 2 1/2% & heve been doing so for a decade while the world average has been 5%. So we have been in comparative recession for that long. This is a much more comfortable bit of managed decline but it still means that the next generation will be poorer than the children of Chinese peasants.

By: Ed

Ed — Sat, 19 Jan 2008 14:54:21 +0000

One tax cut which would be a good investment in the longer term would be to cut CGT to a flat rate of 10% and to slash corporate tax to the same level.

By: Tony Makara

Tony Makara — Sat, 19 Jan 2008 14:43:54 +0000

John, there is a problem here and it is due to our dependence on imported fuel and foodstuffs. Whenever we need to cut interest rates to make more money available it weakens the purchasing power of the pound in relation to those imports and creates inflation. This in turn leads to higher wage demands and we end up weakening the economy even further. This I know that you know already. However I'm interested in hearing what you think we can do to remedy this?

Reply: The answer is that if we cut interest rates when there is plenty of credit around and sterling weakens, then as you describe we fuel the inflationary spiral. If we cut interest rates when there is a credit squeeze, there is not enough money to allow wages to go up fully to compensate, so we all get a little worse off as sterling falls. It also encourages business to put more into import substtituion and export, which is what is beginning to happen and needs to happen on a large scale. It is certainly working in the US after the big fall in the dollar.

By: Brian Tomkinson

Brian Tomkinson — Sat, 19 Jan 2008 11:07:17 +0000

So many lies have been told that there is scepticism about any economic statement – particularly from government. Brown's "stewardship" of the economy has been based on profligate state spending and unsustainable consumer debt. This was always a recipe for disaster, the only question being when it would happen. That time has now come and, regrettably, I fear things are going to get a lot worse. Inflation is rising rapidly – particularly in the basic family necessities, as anyone who buys food, energy and fuel will testify. Devaluation of the currency will increase inflation and most people will suffer as a result. Wages and salary negotiations in the public sector are now regularly in the news. The similarities with the 1970s are all too worrying. Labour has shown itself unable and unfit to govern but we need to hear much more from the Conservatives leadership about how they would put this ailing economy back onto a sound basis.