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Quote of the day: George Osborne calls for an election

February 14, 2012 2:23 pm

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Back in 2009 when Britain was first put on negative outlook (then by Standard & Poors), George Osborne said:

“It’s now clear that Britain’s economic reputation is on the line at the next general election, another reason for bringing the date forward and having that election now…”

So now Moody’s have taken the same action, we presume Osborne will be taking the same line again.

When’s our election George?

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  • Anonymous

    As you know (if you have any economic knowledge, which I admit is doubtful) we exist in a very different economic environment. It did indeed have deserved an election when Labour looked like it was bankrupting the country needlessly.

    Moody’s yesterday – “[a downgrade]could happen in one of three scenarios… reduced political commitment to fiscal consolidation, including discretionary fiscal loosening or a failure to respond to a deteriorating fiscal outlook”

    Translation = Another Labour Government.

    It’s amusing that even the prospect of Labour contesting an election over the next few years has consequences for the UK’s credit rating. 

    • http://www.facebook.com/christhegoth Chris ‘thegoth’ Wilcox

       And yet Moodys is worried about the lack of growth, rather than who has the reins.

      *shrugs*  Thought that one was obvious.

      • Anonymous

        As they state in their own words, their concern is “reduced political commitment to fiscal consolidation”. 

        • http://twitter.com/JeevanJones Jeevan Jones

          You can only really achieve fiscal consolidation if an economy is growing, otherwise the automatic stabilisers kick in and tax revenue falls and welfare payments rise, widening a budgetary deficit.

          Fiscal consolidation cannot be achieved by cuts alone, so the Tory party has to recognise that growth-promoting policies are as-important.

          • Anonymous

            In this case the deficit has it origins in massive public sector overspending, and a dramatic increase in borrowing (in the UK and abroad). 

            There is therefore nothing inappropriate about starting to reduce the size of the public sector employment. Indeed transferring unproductive public sector employees to welfare benefit recipients can have no net negative effect on the public finances. 

            Employing more people in an overpopulated public sector leads to no more growth than doubling employment benefit. 

            I recognise this is unpopular, and that Labour cannot state directly that “the public sector employs too many people” as this is their voting base, though by stating no coalition cut so far will be reversed they have endorsed this idea.

            Tax cuts for small and medium size business and a relaxation on employment regulation for taking on new employees could make a difference, though. 

            Borrowing more when we have a record public debt cannot be the answer. Only a commitment to a lower deficit allows us to spend at our current level through a low cost of borrowing. 

            The UK is facing a pretty terrible global environment at the moment. Greece will leave the Euro in the next few months with massive consequences for the Eurozone, our largest trading partner. 

            We have to be in the best position possible to start to deal with the consequences of this – the days of forever expanding the public sector through borrowing and naming this trick ‘growth’ has proved foolish, and will do so fifty times over as we face the next few years. 

          • Redshift

            Actually it doesn’t. As in most recessions, the deficit is caused by an economic contraction and therefore falling tax revenues. 

            If the 2008 crash hadn’t have happened, Britain’s spending commitments would have been very much sustainable. As such the deficit categorically does not have its origins in frivolous public spending. Indeed, if this had been the case, the number of countries affected by the crash would have been far more limited. 

            Your economically illiterate and frankly bizarre re-writing of history, is not enough to blame the Labour government for a global financial crisis. This country could have been better protected if Labour had taken steps such as more heavily regulating banking and had a more developmental industrial strategy. Of course, that is far too inconvenient to your ideological outlook.
            Finally, to say that having people on the dole rather than in public sector work makes no difference is moronic. I suppose teaching people, keeping people healthy, keeping people safe has absolutely no economic impact at all?

          • Mike Murray

            Oh, So nothing to do with the collapse of the sub prime market or the total global incompetence of the bankers. All Labour’s fault? Really. Your message could come  straight from Tory Central Office.

  • http://www.facebook.com/christhegoth Chris ‘thegoth’ Wilcox

    They won’t do it.  They know they’ll lose.

  • Mike Murray

    The Tories and their Liberal Democrat stooges warned us that we had to have draconian cuts in order to protect our Triple A rating and get us out of “Negative Outlook”.

    They made the cuts and now we are  in — guess what? Negative Outlook and our Triple A rating is in doubt.  But the Tories and the Lib Dems now tell us that to get out of Negative Outlook and protect our Triple A rating we need — guess what? To continue with more cuts!

    These incompetent, economic illiterates haven’t a clue what they are doing. That’s why they should go.

  • Tim

    Be careful what you wish for – I’m not confident we’d wini an election now. But I get the point. Osborne is an opportunist who has no idea what he is doing!

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