George Osborne needs Plan B?

[AndyHB]

Today's Observer carries an article that suggests that Osborne's plan for the UK economy isn't working and that the UK's economy needs a more gentle approach to cuts.  Now, I am not sufficiently knowledgeable about economics to comment on this, but it was interesting to hear - on the Andrew Marr show - that the last time such a numerous voice of this sort was heard was back in 1981, when 300+ economists of the time warned that the economy was insufficiently robust to cope with the efforts of Thatcher and Howe in cutting the then deficit.  This call resulted in Maggie's famous 'The Lady's Not For Turning' speech and was followed - more importantly - within a matter of weeks by a massive improvement in the economy, suggesting that not only was it robust enough to cope with the efforts, but that it had actually responded positively to the actions taken.

Now, I think that we are too close to the change of direction initiated 9 months ago (remember that the incident above was about 18 months into the life of the new policy) to know just what will happen, but it is worth remembering that even the best economists can make massive errors of judgement - so saying that this or that economist (dis)agrees with  what a Government is doing is akin to asking a gambler the result of this or that horse race!!

[AndrewF]

well, it is well known that if you ask a bunch of 5 economists the answer to a question you will get 6 answers - an agreed statement and one from each of the dissenters from that statement!

[ecuworrier]

Today's Observer carries an article that suggests that Osborne's plan for the UK economy isn't working and that the UK's economy needs a more gentle approach to cuts.  Now, I am not sufficiently knowledgeable about economics to comment on this, but it was interesting to hear - on the Andrew Marr show - that the last time such a numerous voice of this sort was heard was back in 1981, when 300+ economists of the time warned that the economy was insufficiently robust to cope with the efforts of Thatcher and Howe in cutting the then deficit.  This call resulted in Maggie's famous 'The Lady's Not For Turning' speech and was followed - more importantly - within a matter of weeks by a massive improvement in the economy, suggesting that not only was it robust enough to cope with the efforts, but that it had actually responded positively to the actions taken.

Now, I think that we are too close to the change of direction initiated 9 months ago (remember that the incident above was about 18 months into the life of the new policy) to know just what will happen, but it is worth remembering that even the best economists can make massive errors of judgement - so saying that this or that economist (dis)agrees with  what a Government is doing is akin to asking a gambler the result of this or that horse race!!

well the IMF are championing boy georgie's corner by reevaluating the growth of the economy from 2% -1.7% - 1.5%

history is pretty good at lessons of why we should think twice about doing things like it was done previous...  i'm not sure we can rely on history for our current economic situation.... the mainframe of the economy is very different to the 1980s.... at present according to someone at the GMB conference banking managers are getting 30% wage increases .... while folks is losing their jobs or is having the wages frozen or decreased in effect... inflation is at 7%


GOD BLESS!

Peace and Love,

[AndrewF]

We should indeed think twice, because as you say the situations are not comparable. However that does not mean that we can't learn the lessons and adapt what was done before which worked in those conditions so that it will work in these conditions.
(Not that I am saying that Osbourne has done this....!)