Tuesday, 25 November 2008

UK Prebudget : Answer to the Crisis ? 25th November

Osborne: Cut interest rates instead of taxes. James Kirkup, The Telegraph (en)
" ... He said: "Interest rates are 3 per cent here, they are 1 per cent in the US. It is clear they can come down."
Mr Osborne pointed out that the US Federal Reserve is now lending direct to businesses, something that could happen in the UK. "That might be the ultimate place you end up," he said. ... He said: "They are going to wake up, they are going to look at those headlines, listen to programmes like this and then realise the entire country now is very, very heavily in debt, and for the first time really since the 1970s, we have this enormous bill ..."

Barack Obama's in a different boat from Gordon Brown. John O'Sullivan, The Telegraph (en)
" ... However often Darling or Gordon Brown insists that the crisis began in the US sub-prime mortgage market, neither can escape the bulk of the blame for a crisis that dates entirely from their time in office. It was the banks supervised by New Labour's regulatory system that bought the dodgy loans, and the Brown Treasury that oversaw a spiralling credit boom that financed such purchases. Such a boom had to go bust eventually ..."

An election by late spring 2010. Simon Heffer, The Telegraph (en)
" ... the Prime Minister may well want to go to the country much sooner than that, before the full damage becomes apparent. That was what the pre-Budget report was largely about.
It was an aggressively sectarian set of measures. Labour has identified its "people" - the client state of public sector bureaucrats, operatives and claimants sedulously created by Mr Brown since 1997 - and Monday's main purpose was to protect them ... "

Is Britain Going Bankrupt? Ambrose Evans-Pritchard, The Telegraph (en)
" ... Yes, credit default swaps (CDS) are dodgy instruments, but they are the best stress barometer that we have.
Today they reached 86 basis points, near Portuguese debt in the league table. For good reason. Alistair Darling has had to admit that the British economy faces the most sudden economic collapse since World War Two, and the worst budget deficit of any major country in the world.
Ok, this is a lot lower than Iceland, Ukraine, Hungary, and other clients of the IMF, but is significantly higher than Germany (35), USA (43), and France (49) ...
... But this is not to excuse the Brown Government for the total hash it has made of the British economy. It presided over a rise in household debt to 165pc of personal income. How could the regulators possibly think this was in the interests of British society? What economic doctrine justifies such stupidity? Why were 120pc mortgages ever allowed? Indeed, why were 100pc mortgages ever allowed? Debt is as dangerous as heroine ..."

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