The 'saviour of the world' will be rumbled as an incompetent
charlatan one day. The only question is will he be rumbled in time?
The banking crisis is one thing and nobody is sure that the plan
attributed to Brown (but actually produced by bankers for Darling!)
will work. There are many pitfalls before than can be chalked up as
a success.
But it is Brown's legacy of 11 years misrule - of which Brown's
banking crisis is part - which is really bringing Britain to its
knees. Debts, debts, debts public and private are the legacy of
Brown to be paid off by future generations and by those now
contemplating their retirement. The public debts were directly
Brown's responsibility and some of these were hidden, 'off-balance-
sheet as it were, as PFIs (Private Finance Initiatives) which if
carried out in a public company would send the perpetrators to gaol.
The Private debts were caused by Brown letting go the controls on
lending. All roads point to Brown as the cause.
Now he and Darling are proposing to make matters worse by increasing
borrowing still further to spend more money which he hasn't got.
I weep for those who are now mere children. Their future is mortgaged
xxxxxxxxxxxxxx cs
Gordon Brown's legacy: debt and more debt
By Simon Heffer
The arrogance that comes with the mistaken belief that Gordon Brown
has just made himself saviour of global finance hasn't taken long to
assert itself.
As we reported on Friday, Mr Brown has promised to maintain his
spending pledges on capital projects and public services. This is
despite the fact that the economic prospects predicted at the time
these pledges were made are now fantasy. Growth is non-existent, tax
revenues are tumbling, borrowing is ballooning, yet Mr Brown thinks
it is business as usual.
I have quoted Jim Callaghan before and, for Mr Brown's edification if
no one else's, I do so again: you can't spend your way out of a
recession.
Mr Brown thinks he knows better. Having also borrowed money to bail
out the banks - and who is to say that will work, or that more banks
might not need assistance? - the total borrowing this year is
predicted to be £90 billion- £100 billion.
Given how wildly inaccurate most earlier predictions have been, we
can assume that is a conservative estimate. Mr Brown has learned
nothing. The debt will take generations to pay off. I hope our
grandchildren will be grateful for this unwarranted imposition on them.
Some of Mr Brown's advisers think this attitude is reckless. They are
right. Elsewhere in Whitehall, and despite the Prime Minister's
grandiose promises, a rather different policy appears to be in
operation. The Ministry of Justice, the Department for Work and
Pensions and HM Revenue and Customs are reported to be planning the
loss of 34,000 jobs between them.
That trend is likely to continue around Whitehall, making serious
inroads into Mr Brown's client state. It might even have to be
emulated in local government, a growth industry all of its own in
recent years, and for which Tory empire-building in some county
councils has been just as culpable as Labour extravagance.
Mr Brown has in the last few days smelt an unlikely chance of not
being defeated at the next election, thanks to the illusion that he
knows what he is doing. He has been helped by the manifest failure of
the Tories to conceal that they don't have a clue either.
Mr Brown can only maintain the illusion by keeping from the British
electorate the true horror of what, thanks to his economic
mismanagement, must now happen. The reality is grim: tax rises,
reduced credit, a slump in demand, falling house prices, business
failures, and a massive rise in unemployment.
A truly responsible government would take the appropriate action to
restore sound finances. It would spend less and borrow less. It would
also deregulate. Has anyone - in any political party - thought
through the consequences of what will be Britain's first recession
with a minimum wage, for example?
If businesses are forbidden to pay below a certain rate there will be
far less recruitment, and redundancies will come far more readily as
jobs become uneconomic to the employer more quickly.
Labour would rather borrow recklessly to subsidise the unemployed
than deregulate to stop there being so many unemployed in the first
place. It is all part of the madhouse economics that have put us in
this mess.
Similarly, why all this pressure to slash interest rates? Lower rates
provide banks with even less incentive to lend to each other, and
profoundly discourage the saving we desperately need to enable us to
live within our means, and prevent us once more from being crippled
by debt.
The last time a Labour government tried to pretend that the normal
laws of economics didn't pertain, and that it could defy gravity, the
International Monetary Fund had to come in and sort out our finances.
Does Mr Brown want another such public, and international,
humiliation? Because he is going very much the right way about having
one.
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