I will try Marek......
Speaking of the econoomic situation. I have been warning for some time on this forum that the Government are going in exactly the wrong direction in dealing with the recession and their strategy does not make sense. By failing to cut public expenditure they are placing the whole of the burden on the private sector and in doing so they will deepen and lengthen the recession. My point there being that it is the private sector on which we depend to generate the wealth we need to pull us out of this and the more you weaken it the more difficult recovery will be.
I found this in The Telegraph this morning:
""""""""""""""The strategy being pursued by Gordon Brown and Alistair Darling as the economy slides into recession has the audacity of desperation. They aim to depict the profligacy of Mr Brown's 10-year stewardship of the economy as a virtue. The then Chancellor used the boom years to spend, not save, leaving the British economy ill-prepared for the downturn. The Brown/Darling response? High borrowing is just the ticket in a recession. It is the life-raft that will "get us through". "The responsible course," the Prime Minister said yesterday, "is to borrow now to maintain growth and output."
Such a stance would be just about defensible if the public finances were sound in the first place. They are not. In the first half of this year, the Government borrowed £37.6 billion. By the year's end, that figure will have doubled; some fear it may even treble. To depict this level of indebtedness - the highest since the Second World War - as a conscious act of policy is, even from a party addicted to spin, brazen.
The shadow chief secretary, Philip Hammond, nailed it most effectively: "Increasing borrowing is not a strategy for dealing with the recession; it's a consequence of the recession." He also upbraided the Prime Minister for his assertion that this debt would be repaid when the economy recovers, rightly pointing out that Mr Brown "didn't pay back during the good times we've just had". There is also a worrying vagueness about how this borrowed money is to be spent. Mr Darling has talked about "bringing forward" big infrastructure projects. But this country's glacial planning process means big construction projects can't simply be whistled up. The lead time is measured in years, not months. We will be out of the recession before a brick is laid in any of Mr Darling's putative "grand projects".
There is a deeper danger in this distinctly dated Keynesian response. As a group of distinguished economists noted at the weekend, ramping up the public sector could put the state in such a "dominant position" that it would "stunt the private sector's recovery once the recession ends". """""""""""""""""""
Nice to see journalists, and front bench spokesmen from my own Party, catching up with what I have been saying for some time. Brown is on a course that could lead to a 'double dip recession'.
2009 will be a difficult year, the recession will dig deep and the public will not feel the recovery until well into 2010. No-one yet is looking forward to what happens then. The Brown plan will lead to money supply led inflation in about two years time when the economy is in its recovery phase and commodities start to rise. Interest rates will then increase rapidly in response.
The Government will be faced with one of three options:
1/ To increase taxes
2/ To make massive cuts in public expenditure
3/ To do a mix of 1 and 2 above
If option 2 is taken sooner rather than later we will reduce the problems later. They should not do option 1 now because that will deepen the recession and turn it into a full blown depression. Sadly I do not see the Government doing option 2, Brown's stubborness and misplaced faith in high public spending demonstrate that.
There will therefore be a serious problem in 2010 whatever Government wins the election. If it is Brown then you can see Option 1, increase taxes and that will compound the problems and create the 'double dip' recession. This second recession will in many ways be worse and will be totally home grown.
If the Conservatives win then there is a bigger chance that Option 2, spending cuts will be on the table. I think it will be too late to avoid the 'double dip' but it might be in time to soften it and for it to be a mere 'downturn' rather than turn into a full recession.
Right now commentators are not looking forward to what will happen in 2010/11 and are too preoccupied with the immediate problems but mark my words they will, in the not too distant future, be turning their attention to beyond the present problems and then the expression 'double dip recesssion' will be uttered.....
Remember, you heard it here on Doverforum first....
Sorry to rain on the parade but economic reality cannot be avoided.