Wednesday, 25 April 2012

It's a double dip

Looks like we are in recession again...


Two consecutive quarters of "negative growth" ie shrinkage, in the economy and it's officially a recession. However this is effectively meaningless - in truth our GDP growth has been hovering in recession territory ever since the credit crunch in September 2007. A sliver above zero, or a sliver below - makes no odds.

To get us out of recession the government would have to drink some bitter medicine. They would need to cut spending by about £200 billion; that's £120bn to eliminate the deficit, and another £80bn to hand out as tax cuts to the wealth creators - business, industry and the like.

£200 billion may sound like a lot of money, but it would only take government spending back to 2005 levels.

So, what to cut? Well, the welfare system is our single biggest ticket item at £207bn, so it would have to be the main candidate. There are some lesser wins: £18bn per year by leaving the EU; perhaps £5bn pa by withdrawing our armed forces from Afghanistan, but really, the bulk of the pain would have to be taken as welfare cuts.

And the government just won't swallow that pill. So we're going to remain in or near recession.

2 comments:

Anonymous said...

How do you propose cutting welfare spending, though?

Nationalist said...

Deport a couple of million immigrant workers and give their jobs to native unemployed people. If they don't want to work, tell them tough, it's work or starve - no more dole.

Also, no benefits for children born out of wedlock.