Thursday, April 29, 2010

UK election: Winner will be out of power for a generation

According to US economist David Hale, he said "I saw the Governor of the Bank of England last week when I was in London and he told me whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be"

Edmund Conway in the Daily Telegraph, who quotes this says that few understand the scale of the deception that politicians are engaging in on the amount of austerity needed.

In essence, if you believe the state should NOT grow, it means drastic spending cuts, which will have to include education, welfare and probably health.

If you don't care about the size of the state, it would mean some of that, but also tax increases that will deeply affect the competitiveness and image of the UK internationally.

Conway continues:

We have been insulated from the full pain of the financial/economic crisis so far by unprecedented low interest rates and by the bank bail-outs. At some point, the anaesthetic will wear off and we will face a period of austerity that may well make the ruling party so unpopular that it effectively becomes unelectable for decades. There will be strikes; there will be stagnation; there will probably be a double dip of some variety. But this time the pain will be unmistakeably imposed by the politicians.

Gordon Brown should bear most of the blame for this. He ran deficits in the "good times", ran up massive increases in state spending with little to show for it, and cheered on an economy propped up by cheap finance, property speculation and state spending. Now it's all the fault of the greedy bankers, and we should all feel lucky he was in charge.

No Gordon, you screwed up. The only fair result is that the Labour Party comes a distant third to the Conservatives and the new leftwing major party, the Liberal Democrats. It is only because it spreads such fear among those it has made dependent on its big state, that it has any chance of power today. If the Conservatives win, and have to engage in massive spending cuts, Labour will take the opportunity to moan about it, and offer nothing in return.

Gordon Brown's place in history will be one of utter disgrace.

(Hat Tip: Edmund Conway, Daily Telegraph)

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