Decline And Fall?

The shocking 0.7% decline in our GDP will hopefully have the effect of a wake up call on our government and impel them to do the right things as a matter of urgency. Listening to Osborne though I'm not sure it will. He talked about neither increasing our debt or deficit but insisted we undertake more infrastructure projects. He did not say how they were to be financed though. If such infrastructure projects are to be financed by the private sector then I am wholeheartedly in favour but how is that going to happen since banks still seem reluctant to provide loans. In order to encourage such projects Osborne would have to cut government spending harder and faster and reduce taxes. He should use the new figures as a springboard to do just that but he won't as the Treasury, having gambled and lost whilst Brown was in control, has lost all confidence in itself. This rather suggests that those in the Treasury when Brown was there should be sacked and replaced by economists of the Austrian school. There are some commentators though who seem to think the figures for the second quarter will be revised to show a less steep decline. Andrew Sentance on Jeff Randall Live this evening is clearly one of them as he felt that realistically there will be some growth in the current quarter helped perhaps by the Olympics and the fact that inflation is coming under control although he warned that we would be affected by difficult world growth. Certainly tied as we are to the eurozone the problems it is facing can only have a bad effect on us. Spain is undoubtedly going to need to be bailed out and then the spotlight will shift to Italy with France filling Italy's spot. Mr Hollande is making matters worse for France by reducing the retirement age from 62 to 60 and increasing taxation on the wealth producers. It is perhaps not surprising though that Ed Miliband has applauded Mr Hollande's economics. We have to pray that we do not have a socialist government again at least until our finances have been sorted out. This will take long enough for the present lot to do, probably at least another seven years. Miliband's lot with their socialist economics will however leave us in a mess for decades.