Independent: Fears Of New Economic Crash As British Families Run £40Bn Deficit

[pig]

In effect Osborne has privatised the budget deficit reduction.

If govt. deleverages then axiomatically private sector must releverage to achieve the same level of output (ingoring net trade).

govt policy dogma is the problem. Osborne should have run a higher deficit, let rates tick up a little faster and allowed private sector to deleverage further. Instead hes gone for the Lawson trick and created another housing/consumer boom.

Or he's keeping it going...so he can keep on going:

John Hills, Director of the Centre for Analysis of Social Exclusion at LSE, commented:

What is most remarkable about these results is that the overall effect of direct tax and benefit changes under the Coalition have not contributed to cutting the deficit. The savings from benefit reforms have been offset by the cost of raising the tax-free income tax allowance. But those with incomes in the bottom half have lost more on average from benefit and tax credit changes than they have gained from the higher tax allowance..

Edited December 24, 2015 by pig

[frederico]

The OBR is a joke. I thought everyone already understood that?

It is all very surreal, the boe keeps making wrong predictions, the OBR keeps making wrong predictions, the media and all politicians carry on as if its fine.

Then every now and then some piece of 'good' news appears and its a miracle economy.

It's especially brilliant if the CBI or rics says so.

This has gone on for over 5 ******ing years.

[zugzwang]

It is all very surreal, the boe keeps making wrong predictions, the OBR keeps making wrong predictions, the media and all politicians carry on as if its fine.

Then every now and then some piece of 'good' news appears and its a miracle economy.

It's especially brilliant if the CBI or rics says so.

This has gone on for over 5 ******ing years.

Much longer than 5 years. Mervo the Clown was still happy to claim ownership of the 'NICE' decade in 2008, even as the UK economy collapsed ignominiously around his ears.

[spyguy]

Much longer than 5 years. Mervo the Clown was still happy to claim ownership of the 'NICE' decade in 2008, even as the UK economy collapsed ignominiously around his ears.

Yes. Claiming a NICE decade a few months before the UK's finance sector became insolvent ....

[Assume The Opposite]

At this point the whole thing has become an international game of musical chairs- no indebted government/country wants to be caught out when the music finally, inevitably stops. So they extend and pretend - continuing to inflate their debt bubbles - both public sector and household.

The U.K. seems to be marginally better off than some of the other players though and Osborne has spinning this for all he's worth as a testament to his economic genius - like Broon before him.

Most people know it's all smoke and mirrors though and we haven't really got a pot to piss in. The North Sea oil income has been squandered, all the "family silver" has pretty much been sold and the real, productive economy is on its knees.

Like the Titanic though, the band will keep on playing for a while longer, so we'll keep keep the plates spinning, keep paying those tax credits and keep pretending we're a country that matters on the world stage.

Events will eventually take over one way or another though - either through an escalation of the war in the Middle East or through a full blown global debt crisis.

Merry Christmas

Spot on. I've read that our economy is around 80% services, <10% manufacturing and whatever else. Talking of the family silver brings to mind the railway 'privatisation', now mostly ran by foreign state run companies. In news today it was saying that manufacturing seems to have had a 'unexpected decline'

It's amazing how the plates are still spinning with a budget deficit, current account deficit, bank bailouts exceeding 100% GDP, PFI's, high household debt to income, trillions in unfunded pension liabilities and so on. Every time Osbourne bangs on about a strong economy it makes me laugh