How dare he, part II

More from Cameron’s speech.’

Don’t they see? It is more government that got us into this mess. Why is our economy broken? Not just because Labour wrongly thought they’d abolished boom and bust. But because government got too big, spent too much and doubled the national debt.

Why has the national debt doubled?  Because of a collapse in NGDP.  The difference between now and 1981 is not economic incompetence, but the absence of inflation to wipe things away.  And why has NGDP collapsed?  Because inflation was beaten, and then the world economy collapsed because of a financial market asset-boom collapse that went disorderly.  It has affected everyone.   Brown might have been more prudent in the good times.  Call that 5-10% of GDP.  The rest is something called the Credit Crunch.

what is progressive about spending more on debt interest than on helping the poorest children in our country?

Because without that debt, unemployment might be hitting 4 million, not skimming under 3. Why can’t politicians give it to us straight?

Otherwise, a Curate’s Egg

Good parts of the speech:

Devolution; the minimum wage; civil partnerships, these are good things that we will we keep.

laws so bureaucratic and complicated even their own attorney general can’t obey them.

for now the 50p tax rate will have to stay and child trust funds for those on middle and higher incomes will have to go.

Our pension system was designed in a time when many people didn’t live till 70 …. It is out of date and it has to change.

Let’s be clear where growth will come from. Not big government, with its Regional Development Agencies and National Investment Corporations but entrepreneurs. New businesses, new industries, new technologies.  (Well, TFP growth will come from that.  But don’t forget L, Labour and K, capital . . .)

That’s why Sure Start will stay, and we’ll improve it. We will keep flexible working, and extend it.

This lever-pulling from above – it has got to stop. With Andrew Lansley’s reform plans, we’re going to give the NHS back to people. We’ll say to the doctors: those targets you hate, they’re gone.

I see a country where the poorest children go to the best schools not the worst, where birth is never a barrier. (but put money into the Pupil Premium then)

More bollox nonsense

It was you Gordon Brown who designed the system of financial regulation that helped cause the financial crisis. You want to keep it the same. We say it needs to change. That’s why we will give back to the Bank of England its power to regulate the City powers that should never have been taken away.

Really? IF the Bank had had the FSA’s role, then none of this would have happened? The Tories really do believe in the Bank of England Governors Eyebrows story.  Which is really quite scary if you think a repeat of this mess is not impossible.

Parties have been talking about raising the pension in line with earnings for years. But it never happens. Well let’s be the party that finally makes it happen.

But you broke that link!

Published by freethinkingeconomist

I'm a mid 40s, former special adviser (Downing Street 2017-19, BIS from 2010-14), former FT leader writer and Lex Columnist, former financial dealer (?) at IG, student of economic history, PPE like the rest of them, etc. This blog has large gaps for obvious reasons. The name is dumb - the CentreForum think tank blog was called Freethink, I adapted that, we are stuck now.

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