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South Shields premier political blog

Printing money is not the answer

with 4 comments

Alastair Darling printing money

Quantitative Easing with known qualities and quantities

There are some who would have us believe that “quantitative easing” (the printing of money amongst a few other measures) is a leap in the dark, a journey into the unknown, and a risk of final resort worth taking. All of these statements are of course a load of baloney, but the Chancellor, Alastair Darling, and the Prime Minister Gordon Brown are prepared to make this final throw of the dice toawrds the end of their government’s period of useful purpose.

This inflation of the money supply had been tried previously in Japan after their banking crisis of some years ago resulted in interest rates of 0%, it didn’t work and recovery took almost ten years! It was tried before that in Argentina and eventually resulted in hyper inflation after three years of deflation, and of course we all know how many noughts both the Germans (in the 1930’s) and the Zimbabweans in the 2000s, needed to add to their banknotes before loading wages into hand carts.  There is historical empirical data which suggests these measures can eventually blow up in your face and totally ruin a nation’s economy.

I somehow cannot imagine that Angela Merkel will be advising her EU colleagues to be following the British example, the Germans will be very wary of the consequences!

As even far eastern economies attempt ‘stimulate’ themselves markets have become nervous yet again having learned the history of failed attempts to reinflate.

In our case, there is even greater worry, the young men charged with leading the Conservative Opposition appear ready to go along with Brown’s plan for now, instead of steadfastly setting their faces firmly against it by calling for a return to sound money. We should be up front and honest with the public, telling them the brutal truth that things will get worse before they get better, the first period of an incoming Conservative government and possibly the next, will be fully occupied with trying to right the economic wrongs of Brown’s disasters. The public finances cannot sustain the madness that we now see, the books will need to be balanced and it will be painfull, public spending will need to be harshly reigned back, the government knows this but will be ready to assault the Tories with charges of wrecking public services. The message needs to be made plain now that this will be the consequence of Labour’s failure to grapple with it’s own self made problems.

As in the 1970s the boundaries of the state will need to be rolled back so that the private secor can have room to breathe, room to grow again and provide the tax revenues that will sustain a smaller public sector, There is little point at all in hiding from this unpalatable truth. Right now it feels as though ALL of our politicians are prepared to obfuscate and delay the inevitable, there is a bitter pill out there and it needs to be swallowed, NOW, not 12 months down the line.

As we approach the next election one of the biggest qualities that the Conservatives could offer the public is honesty and integrity about the state of the nation’s massive debts and inherent weaknesses, they owe us nothing less.

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Written by curly

March 6, 2009 at 10:15 am

4 Responses

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  1. I think this is called “The Zimbabwe Protocol” and was decided upon at least 6 months ago.

    The Conservatives have thus far failed to offer alternatives or a decent and honest commentary on what this Government is doing (and is failing to do). They have failed to explain Labour’s culpability to the people without resorting to cheap political point-scoring. Are they really an opposition or the same policies dressed in Blue???

    What is patently obvious is that within 2 years of now, taxes will HAVE to rise to fund this reckless gamble, irrespective of whether we have emerged blinking into the sun of a new economic dawn.

    This government has been and will continue to be reckless and willfully negligent with our futures, for the sake of what???

    Sometimes, if something is dying it is better to attend the funeral and move on than spend fruitless and costly effort on a revival of a corpse.

    Revolution….?

    Pax.

    Shrewdy

    March 6, 2009 at 10:29 am

  2. I tend to agree with Shrewdy, the Conservatives have failed to offer any concrete alternatives, choosing only to suggest that they would have to opt for an austerity budget to address the PSB and reduce spending on the public sector. Both, I accept are necessary, but what would they do NOW?

    UK Voter

    March 6, 2009 at 11:58 am

  3. That’s not Jacqui Smith… is it?

    Sunny

    March 6, 2009 at 5:06 pm

  4. The only policy that will work now and will stop this crisis happening again is that of sound money and deep govt spending and tax cuts to put the value of money back in the hands of people that matter – the general public. The only people you can trust! 😉

    Only the Libertarian Party has such a policy. Other parties’ policies will just prolong this recession and create the next one.

    What we are seeing at the moment is the everyday spending and saving choices of the general public fighting back against the past and present distorting decisions made by govt. The general public will not give up (indeed they do not even know they are fighting) and the only way for the govt to win is through more and more control as they see that “people are not making the right decisions”.

    Sam

    March 10, 2009 at 10:31 am


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