Tuesday, 29 November 2011
Osborne's Folly How Plan A Failed - time for Plan C
So George Osborne's inexperience and arrogance has shown through. His over ambitious optimism of the March Statement has given way to a sombre realism in November.
Labour's Ed Balls has urged Plan B - more spending financed by more borrowing. Good to spot the flaw in Osborne downward spiral of austerity but wrong to seek to increase the deficit.
Osborne and Alexander's Plan A has worked in so far as Britain has thus far avoided Greece, Ireland and Italy's fate and currently enjoys borrowing interest rates lower than Germany.
A third way - or Plan C is to take a long hard look at Britain's income, wealth and expenditure to ensure than a maximum amount of spending, employment and output is released by the organisation of the national resources. Harold Macmillan talked of the selling of the family's silver. The coalition has considered selling off the land of britain's largest landholder - the forestry commission, but this was ill judged and mismanaged. Since a large proportion of office space in London is owned by foreign investors, government offices in London could be sold off to foreign buyers and the UK government moved out of the expensive capital to the jobless provinces. Britain is a wealthy country, if the top 100 richest people in Britain provided the UK with an interest free loan to cover the UK budget deficit out of a proportion of their £250 billion wealth in exchange for enoblement to the house of Lords, and perhaps those among the top 100 who do not pay a full 50% tax rate on their incomes might consider coming clean with the taxman.
In general taxation in the economy needs to be shifting away from income and wealth creation and employment towards discouraging unproductive and things which create unproductive expenditure. Taxes on tobacco, alcohol, saturated fat, pollution, overseas investment, property speculation, second homes, pitbulls, quadbikes, cosmetic surgery, tattooists and other non productive elements should be increased. VAT should be levied on fatty food, whilst lowered on items which might promote growth.
It is vital that the unemployed are billeted onto businesses in order to stay in the workplace and that job sharing is increased to spread work through the economically active populous. Apprenticeships or a form of national service is vital to the NEET Group who are being cast onto the scrap heap.
FDR said it in 1933 - we have nothing to fear but fear itself.