Because of the slow economy, Prime Minister Cameron will announce that Britain will not be able to reduce its structural deficit at target.
I don’t know how many times Paul Krugman and co. can be right about their predictions, and everyone else wrong, before Keynesian economics starts to be applied.
When youth unemployment spirals to 1 million who can’t pay much in taxes because they have no damned money, and 8.1% of the total UK population can’t pay much in taxes because they don’t have jobs, and nobody has any damned money because the Euro zone is close to collapse because Europe doesn’t have enough damned money, then cutting the structural deficit might become impossible – given that (I’m sorry for the repetition) not enough people have damned money to pay sufficient taxes in Britain to pay off structural deficits.
The employment minister, Chris Grayling, blamed the eurozone’s troubles for the rise in joblessness. “These figures are bad news. They are … the consequence of what we’re seeing in the eurozone.”
“If you go back four months, unemployment was falling, youth unemployment was lower than 900,000. We’ve seen a big slowdown in the economy I think as a result of the crisis elsewhere.”
But the business secretary, Vince Cable, declined to blame unemployment on the euro crisis, telling Channel 4 News the problem lay in low domestic demand.
“I would certainly not blame the euro-crisis. The problem particularly of youth unemployment is deep rooted and has been with us for a very long time. Our domestic economic conditions are very difficult in large part because of the legacy we have to deal with. I am not trying to look for a scapegoat or a way of escaping responsibility for it.”
Paul Johnson, director of the Institute for Fiscal Studies, said there was a growing likelihood the OBR would say the recession had inflicted deeper permanent damage than thought: “That is going to be the big judgment for the OBR. How much of what we have seen over the last year do they think is structural and how much do they think is cyclical? Six to nine months ago, there was a lot of disagreement among the macro-economists in the City about what kind of recession it was and how fast we were going to bounce back.
There’s an entire army of economists promoting theoretical frameworks that benefit a small elite of financial managers and political allies, and they have been consistently wrong about every economic development since 2008. It really isn’t that difficult to see when 1 out of 10 people don’t have a job, and 5-6% employment is the norm, governments are going to have a hard time finding revenue to pay down debt.
If you believe in balanced budgets you should be a goddamned Keynesian right now.
Western financiers throughout Europe and North America were given trillions of US dollars of basically free money to stay afloat, and lo – they’re floating now, but those same strategies are dismissed as useless for the demographics unable to peddle influence. Not coincidentally, us non-free money recipients aren’t able to shuffle billions of $$ around the globe.