Who's right?

[observer]

Cameron is calling for a General Election, criticising the huge level of borrowing by Brown, which will undoubtedly cause a tax headache in the future, when the question will be: upon whom (rich or poor) will the burden fall? However, Osbourne is talking about reducing the level of borrowing, which will inevitabily mean draconian cuts in public services - so it's no wonder he doesn't want to be specific this side of an election.

[Paul Kennedy]

Problem is, nobody knows what the level of Government borrowing will be, not even the Government! ?500/600 billion seems to be the figure doing the rounds, some suggest neared ?1 trillion ......and it does need to be paid back at some stage, and nobody has any idea how deep or how long the recession will be, again not even the Goverment. Funnily enough for those people in work, with a mortgage, fill their car with petrol regularly not reliant on the interest on savings and wanting to buy some new things, at the moment life would seem to be quite good. Looks like an ideal time to call an election....before reality takes hold. Time will tell.

 

PS Even better for an election if energy prices came down....substantially and troops left Iraq...and came home rather than transfered to Afghanistan.

[Paul Kennedy]

This from the Independent, the "market's" verdict on the UK economy:

 

"Britain has become a worse credit risk than McDonald's and a host of other large companies, figures produced for The Independent reveal.

 

The collapse in Britain's credit rating has taken place over the past two and a half months, since the Government underwrote the banking system and decided to spend its way out of recession. Investing in UK government debt is now almost twice as risky as buying McDonald's corporate bonds, according to the market in credit default swaps (CDS), which provides insurance for the buyers of such debt.

 

The government debt of large economies such as the UK would normally be considered far more secure than corporate bonds. However, on 29 September, the cost of buying insurance against default on UK five-year government debt became more expensive than the equivalent cover for the US burger chain and has since overtaken Kellogg's and Coca-Cola, according to data from Bloomberg.

 

The cost of insuring British debt soared on that day, as the Government nationalised Bradford & Bingley, increasing fears that the state would have to bail out the banking system.

 

The cost of insuring for a year against default on ?10m of five-year UK debt has jumped from less than ?30,000 to ?120,000, compared with the current price of ?77,000 to protect against a similar McDonald's default. "

[Bazj]

Maybe Gordon and Darling will end up selling burgers outside Parilament one day......

 

God I can dream!!

[Peter T]

Nothing to worry about. According to what he said this morning, Gordon has saved the world, so we don't have anything to worry about.

[observer]

Actually Gordon is doing better than Dave in the opinion polls on economic competance; which is a good indicator of the depths of desperation to which we've plunged in terms of politicians. Fair point Paul; our international credit rating has taken a dive and we remember Gordon selling off all our gold reserves at a knock down price. However, we are where we are, not where we want to be: we can do nothing and let "the market" eventually correct itself, which will mean mass unemployment, firms going bankrupt etc; which in itself will drain the public purse in dole payouts and possibly lead to all sorts of social pressures. OR - one can try to stimulate economic activity with tax breaks to the majority, who will (in theory) spend = consumer demand = need to produce goods/services = jobs = money to spend (later on taxes!) It seems the whole basis of modern capitalism has a huge question mark hanging over it, when we are loaned money for instant material gratification in order to sustain an economic cycle; bit like the production of weapons = advanced technologies = jobs = wars - all quite surreal.