Clueless In Cuckooland

WEDNESDAY, APRIL 22, 2009

Clueless In Cuckooland

I'm freeeee!!!!

Mister Speaker, the budget I am presenting today sets the seal on 12 years of unparalleled success for Cuckooland.

Public borrowing has set new records. We have never before borrowed 12.4% of our GDP in peacetime.

Public spending has only ever exceeded 48% of GDP once before - back during the glorious Labour government of the 1970s.

As for taxes, my new 50% tax rate is merely the first step. I am confident that in the next year or two we will be in a position to raise it further. Our long-term goal being to re-establish the 95% rate Cuckooland enjoyed before the Evil Thatch appeared.

Now, I know that the moaning minnie doubters will tell you I am being too optimistic.

They will say that Cuckooland will not achieve the 3.25% pa growth rate I am forecasting.

They will say that higher taxes will cause a mass exodus of entrepreneurs and brainpower.

They will say my public spending efficiency savings are pie in the sky.

They will say that I am hugely underestimating the cost of nationalising the banks, and that spiralling debt interest costs will drag Cuckooland beneath the waves.

To which I say, cuckoo.

Cuckoo, cuckoo, cuckoo.

****

What a shambles:

• Debt explosion - even on Darling's figures, debt on the Maastricht definition is forecast to be 90.7% of GDP by 2013-14 (against a Maastricht limit of 60%) - and ludicrously, that excludes anything for the cost of bank bailouts
• Wildly optimimistic growth assumptions - no mainstream forecaster is anywhere near Darling's assumption of 1.25% growth next year and 3.25%pa thereafter. Tyler's fag packet says that taking the IMF's latest growth forecasts instead would add about £30bn pa to Darling's borrowing forecast by 2013-14
• Wildly optimistic bank bailout assumptions - Darling's borrowing forecasts exclude any losses, even though he reckons the cost will be 3.5% of GDP; worse, the real cost will be more like 13% of GDP (£200bn), as forecast by the IMF yesterday
• Wildly optimistic public spending assumptions - Darling factors in £15bn pa of spending cuts, but they're in the form of Gershon "efficiency savings", the ultimate Marx Bros funny money.

There are two possible explanations for such a load of wishful thinking. Either he actually believes it - quiet possible given the record - or, more likely, they realise they're stuffed, and want to leave as big a mess for the Tories as they possibly can (like, how will Dave and George defuse that ticking 50% tax rate, given that there's no money?)

Gah!

I've said it before, and I'll say it again - I simply cannot understand why you idiots out there elected these appalling people.

Muzzling The IMF

The censored IMF table (click to enlarge)

Our terminal floundering "government" has shown it's still capable of one thing - attempting to suppress the truth.

They've managed to bludgeon the IMF into the extraordinary act of expunging an embarrassing forecast from a paper already published. The IMF has removed their forecast of the UK's bank bailout costs from their weighty Global Financial Stability Report issued yesterday.

As we said yesterday, the IMF's forecast is truly shocking. Their economists reckon that UK taxpayers face a bank bailout bill of 13.4% of GDP, or around £200bn. That's higher than any other G7 economy, and only a smidge behind Ireland (see table above).

Of course, in the real world, the Stallion of Truth has already bolted - too many people like Tyler have already downloaded a copy. And while the IMF's top management have had their arms twisted, we now know what the IMF's economists actually think (remembering that the IMF has a long history of only publishing sanitised versions of its forecasts, pre-approved by key member governments, such as ours).

We must confess we haven't read the entire 240 page IMF report, but a quick perusal reveals other awkward comments on Brown's economic stewardship.

For example, they highlight how he presided over the biggest bank credit bubble in the history of modern crashes. They say:

"... the rise in bank credit in the United Kingdom has been massive, and has been greater in the United States and European Union than in Japan in the years preceding its bubble."

And here's their eye-popping chart:

Bear this in mind when Darling starts banging on about... er... "investing for the future".