THURSDAY, NOVEMBER 20, 2008
Unfunded Spending and the End to Prosperity
Danny Finkelstein is fighting a proxy battle for his friend George Osborne, that is why advocates of tax cuts like of Fraser Nelson,Tim Montgomerie, Iain Dale, Dominic Lawson,Nick Clegg and Guido are so willing to battle with him on the blogs and rehearse the arguments.
What is so depressing about Danny's arguments is that they are primarily about politics rather than economics. They are not even about politics with a capital "P", but the low politics of electoral calculation.
He has even taken on Arthur Laffer. Danny doesn't believe there is anything to gain from promising voters tax and spending cuts. Even though strong political leadership could make the case to the voters more credible. It is because of an unwillingness to tackle the issue head-on that the Tories have allowed the vocabulary of the argument to be determined by Brown. How come we never hear much of Gordon's unfunded spending commitments - the budget deficit? In all of this the actual merits of the case for a low-tax, higher growth economy have been ignored.
Laffer's new book The End of Prosperity: How Higher Taxes Will Doom the Economy--If We Let It Happen reminds us that there is more to the argument than just psephology. If we want to get out of this recession faster we need to lighten the tax burden on business and consumers...The Granite Hits the Fan
Granite is the single biggest funder of the UK mortgage market. If it goes tits up, £38 billion of Northern Rock mortgage assets could be liquidated...
Thursday, 20 November 2008
The FTs Alphaville blog draws our attention to bad news on the wires this morning, as the Dow closes below 8,000 and the FTSE trades below 4,000, we get the news thatGranite Master Issue PLC, the trust that is 28% of the UK mortgage securitisation market, is reporting a "non-asset trigger event". It is telling lenders that Northern Rock's collaterallisation, and hence credit worthiness, has declined significantly.
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