John Lipsky of the I.M.F.
said he backs the government's financial approach warning there
were still "significant risks" which may need temporary
tax cuts. Due to the weak economic growth, and rising inflation,
which the IMF thought "unexpected", but were "largely
temporary" [how long is temporary, the length of this parliament?].
The IMF [International Monetry Fund] was, with all the information,
and expert economist to hand, ‘surprised’ at UK inflation
and low growth, who are they trying to con?
On 26/01/11 we quoted in our article Inflation
Up-Unemployment Up-Government Spending Up, that the out going
head of the CBI Sir Richard Lambert said: "We have to have
growth in employment". He criticised the coalition of failing
to come up with policies that support economic growth. "It's
failed to articulate in big picture terms its vision of what the
UK economy might become under its stewardship”.
The IMF made a
statement choreographed by the Treasury, in which they broadly
said the ConDems were on the right path, although growth was very
low, inflation was high, unemployment was exceptionally high,
prompting them to downgrade their growth forecast to a pathetic
1.5% for this year, with inflation staying above 4% for the rest
of the year.
The day after the IMF delivered its’
less than favourable report on the state of our nearly bankrupt
country, David Cameron increased this countries donation to the
IMF by £9b to £22b. This will be reflected in this
month’s government borrowing figure, and the £9b donated
to the IMF will create more debt for the future.
The current spending cuts of £9.4
billion have produced zero growth. All those jobs lost, all
the misery of inflation and higher taxes, all those companies
gone bankrupt, the whole of the Condems inflicted misery, all
for nothing. Now that’s what the ConDems call Fair Government.
This over generous donation follows hard on the heels of the increase
in overseas aid, forcing each family to pay £300 a year
towards aid, and the occasional £30m presidential private
jet. This will impact on private donations to charities, which
actually target the money raised to those in need, unlike the
government’s policy.
Now you might think David Cameron is just showing off, trying
to convince people we are the second richest country in the world,
or has he just shot himself in the foot again?
George Osborne said "The
IMF have publicly asked themselves the question 'whether it is
time to adjust macroeconomic policies' - in other words, is it
time to change course? And they have concluded definitively that
'the answer is no'." Ed Balls replied "It
says it all about George Osborne that he hails an IMF forecast
that implies rising unemployment and predicts slower growth. His
complacency about the state of the economy is concerning,"
Mr Balls pointed out that the same coalition of a Conservative
chancellor backed by the man who is now the IMF's acting director
insisted in the 1990s that there was no alternative to staying
in the ERM [Exchange Rate Mechanism] and were proved disastrously
wrong. Britain crashed out of the European Exchange Rate Mechanism
in 1992 which forced John Major to allow the pound to float. His
deficit reduction plan to increase VAT on domestic fuel was defeated
by a backbench rebellion in 1993. A young man called Cameron was
working for the Chancellor, Norman Lamont, who was fired not long
after.
The economy needs a jump
start, said shadow chancellor Ed Balls, the way to do it, according
to Mr Balls, is to make a temporary cut in tax to put cash into
people's pockets thereby boosting consumer confidence. He suggested
a reversal of the VAT rise.
Cameron’s response that it wouldn’t work, would create
more debt for the future, and was untried. Labour used this method
successfully to reboot the economy after the recession. The OBR
endorsed it because it worked.
Stephanie
Flanders the Economics editor, BBC News said that last autumn,
IMF staff thought the UK was "on the mend". This latest,
more sober assessment was that the "post-crisis repair of
the UK economy is underway". She added
that in private there had been considerable concern at the IMF
last year about the pace of the government's deficit-reduction
plans, but that in public the organisation had continued to endorse
them.
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Farron RFT
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