Wednesday, January 27, 2010

Tories beg for more recession

What makes my day is the sweet sound of Tory fury on the economy. It may only be 0.001% growth, but it is too early dammit. "We are badly prepared for recovery" grimaces Osborne. Too right you are, the last thing you want is any recovery before the election.

Now Osborne may have a point that this government deserves no credit. Governments don't fix recessions, they sit them out. It wasn't exactly a grand achievement of Brown to inject a fiscal stimulus - it is no hardship for a government to spend all of the next government's money as well as your own. It is some hardship for the rest of us of course, carrying that extra debt, but that has to be balanced against the benefits of the stimulus.

There is a fine economic judgement to the question of how much a government should borrow during a recession to keep the economy going. But this is swamped by the crude political judgement - spend the money now on Labour priorities: ID cards, dodgy IT, tax credit fiascos, harassing photographers, etc, so there is less for the Tories to spend later on their political priorities: rich, married, dead people.

Let's face it, the public sector deficit is breathtaking, and Labour is to blame. Gordon Brown way before the credit crunch had become less like, er, Gordon "prudence" Brown and more like Ken Clarke. The Tories are quite justifiably furious about it, as we all should be. But they'd rather we didn't think too hard about the difference between the state of the public finances and the state of the economy.

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