I’ve commented on this thread* at Liberal Conspiracy about George Osborne being the reason we can all breathe easily about the debt – and, more importantly, that he is why the markets and the credit rating agencies are breathing easily, and not burdening us with horrible interest payments.

It follows from this article by the Telegraph’s Ben Brogan.  So, rather than taking the wind out of Conservative sails, the Moody’s debt upgrade is proof that Conservative debt-allergy was in fact good for Britain all along.  Perhaps a slogan for the next election: “Our opportunistic panic about debt has saved Britain.”

Of course, this is nonsense, and as I explain in the comment, there are many sound reasons that the gilt markets are not taking fright.  In particular, Britain has a political system that is good at taking nasty decisions in a pinch – Jenkins 1969, Healey 1976, Howe, Clarke – all managed it, and gilt investors know it.

Further criticisms of Tory policy in the bust – and cautious support for Labour’s – can be found in A balancing act, which is attracting continued interest from various political types that we know at CentreForum.  It is not uniformly uncritical of Labour: the boom era fiscal behaviour was badly flawed and hubrisistic.

What most amazes me about Conservative attitudes to debt is the sheer inconsistency.  I wrote on Freethink about the bizarre, self-damning nature of Cameron’s debt warnings.  They have also said “let the automatic stabilizers operate” – but that is 90% of the fiscal swing (the rest is banking rescue, which they support).  They are all over the place.  Ordinarily, I would agree that the markets would take some comfort from a future Tory administration – but one with this confused record, I’m not sure.

*there’s also underneath a slightly less highbrow argument about whether, because the ratings agencies are culprits in the credit crunch, their words on sovereign default risk are worth f-all anyway.  I think this is  polemical paranoia, but this is the blogosphere, it’s a free world . . . .


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