Thursday, September 02, 2010

Balls on the Never Never

Ed Balls said a few moments ago on the Jeremy Vine Show that the Government’s spending cuts wouldn’t work, that ‘you can’t cut your way out of a recession’, and when prompted by Vine for his own solution, Balls responded that Britain could borrow the necessary money.

Has the man really learned nothing?

34 comments:

Undercover Princess said...

"Has the man really learned nothing?"

... is that a serious question? Clearly the answer is 'no'.

Bill Quango MP said...

He said that monetarism policies of the 1930 and 1980's had been proved to have failed..
He then advocated Keynesian policies, but forgot to add that was proved to have failed and out of favour throughout the world since 1973's stagflation.

The answer is neither, but borrowing religionist nutters like Balls won't accept a different opinion.

He really is a disaster. Who let him anywhere near the treasury?

Colin said...

"Has the mean learnt nothing"

Freudian slip, Iain? ;-)

Patrick said...

thank god he isnt running the economy!

just to think that he was nearly chancellor too.

lillispad said...

Has the man really learned nothing?

He's learned that when people are unhappy and uncertain of the future (as Labour supporters are) you argue vocally against the prevailing wisdom regardless of whether it makes any sense. It gives the image of being "not like those other politicians"

I'm not sure he's wrong....

Martin said...

Balls is right, we could just call Ocean Finance and consolidate all the UK debt into one easy monthly payment.

Demetrius said...

Tell me, when I was young if you borrowed money you had to pay it back. Sometimes the interest payable was compound. So if you were not very careful you had to pay back an amount much greater than you originally borrowed. It is why I stopped borrowing around 1980. Has Mr. Balls found the magic sponge or is he just a person with a complete contempt for ordinary people?

Nonny Mouse said...

Err, we aren't in recession.

I know that Labour told us there would be one if we cut 6 billion this year, but they were evidently wrong.

JB said...

I fear he may be right. There is quite a lot in the blogosphere on this -- this post: http://bit.ly/ahKyWS has some links so may be a good intro.

Iain, perhaps you could tell us how Ed Balls should have learned otherwise. Has evidence proved him wrong? What evidence?

Salmondnet said...

Err, no of course not. he is a Brownian.

Lord Blagger said...

Borrow at 5%
Growth at 2%

I know a fianancial advisor or two that should be ringing up Balls to invest his pension funds.

Hughes. said...

These are sound plans. Borrow your way out of debt and print money to help a devalued economy.

If Labour had got back in we'd all be millionaires by now, you know, like the Italians used to be with the Lira.

Kevin Lynchehaun said...

The fact that the Labour Party could countenance this Idiot as a prospective Leader says it all

longrun2 said...

There is a saying "never attribute to malice that which can be attributed to stupidity": however it is difficult to apply this to Ed Balls' views on economics. While I may view Keble as pretty down-market intellectually, it does require of its entrants a minimum level of understanding that is a few miles higher than that implied by his reported comment.
So, no. It is not that he has learned nothing - it is that he assumes that many of the rest of us have not!

Prodicus said...

And the cost of that borrowing, Mr Economic Genius Balls? How much and who pays it?

Jockdownsouth said...

Why do The BBC, and Jeremy Vine in particular, continue to give free publicity to Labour politicians and policies without giving the coalition the right of reply? The Labour leadership election is not even of passing interest to the majority of the population, but they are concerned about the economic squeeze. Labour must be delighted that their propaganda machine is given such free flow. I worry that if the Big Lie is repeated often enough the general populace will eventually believe it.

ChrisM said...

No. It works. Government issues gilts to borrow money. Bank of England buy the gilts. Simples!

( Although I doubt he knows how the BofE get the money to buy them.... )

Mirtha Tidville said...

No he hasnt learnt any lessons because he doesnt beleive he needs to....

anne riddle said...

Stop giving him so much publicity and maybe he'll go away!

trevorsden said...

One problem with balls' theory is that we then have to pay interest on the money we have borrowed and if I remember it correctly the interest payments on the debt we have inherited from him is heading towards the cost of defence and education combined.

So that means as debt repayments rise the amount of revenue available for government policy falls - so the govt have to borrow more and that means higher debt repayments ...

Did Balls advise the Glazier family on the purchase of Manchester United?

Balls also forgets that even when under him we had growth we still ran deficits - so even with growth we cannot afford our current spending.

Robert said...

As the Coalition Government are planning to increase government spending over the next 5 years I cannot see the difference between Balls' point and the coaltion plans.

http://www.johnredwoodsdiary.com/?p=6798

You accuse Balls of learning nothing in proposing to increase our borrowings, but where do you think the coalition will get the money? Off trees?

Just Wonderful said...

I'm going to have a whip-round so I can buy Ed Balls some big floppy shoes and a squeezy big red nose. If I can find a spinny bow tie i'll throw that in too.

Better still i'm going to put it on my credit card because then I won't have to pay for it!

Loki said...

Ahh Balls! (that's it really)

tapestry said...

Balls admits that revenues are falling by this statement. Yet where has any politician of any party once discussed the revenue side of the story.

April 2008 £606 billion, was followed at April 2009 with £498 billion. Revenues fell throughout 2009 according to monthly reports. Yet no one wants to mention the current figures. Revenues are now a state secret.

Assuming a double dip is likely, government receipts could well be heading to £400 billion a year. In that case Conservative plans to spend £620 billion this year are going to require £200 of borrowing.

How much more does Loadof want to borrow please? He's nuts.

Peter said...

Maybe he is hoping for hyperinflation so that the value of the money borrowed becomes irrelevant.

John Moss said...

Wehn Balls was advising then Shadow Chancellor Gordon Brown, Brown said, "You can't spend your way out of a recession or borrow your way out of debt."

So which is is, Ed?

John Moss said...

Oh. Just in case anybody forgets.

These are the annual deficits in billions for the last six years while Brown was Chancellor and Balls was his greatest cheerleader.

£25bn
£33bn
£40bn
£38bn
£31bn
£35bn

The Darling realy got going!

50 Calibre said...

"Has the man really learned nothing?"

... He doesn't understand the 'learning' process. That's why the idiot Brown put him in charge of edukashun.

Under the right, spelt W R O N G, circumstances and perhaps in another era, I am in no doubt that Blinky's potential to outdo Hitler could have been easily realised "while good men look on and do NOTHING".

trevorsden said...

Dear Robert - the coalition are planning to eradicate the structural deficit over the life of the parliament. 80% through cuts in spending 20% through tax rises.
Those are the facts. Get them straight.

Balls seems to be proposing not only to not cut spending but increase it. The difference in borrowing between these two proposals is enormous and the amount of interest payments on the borrowing would be massive.

Relying on inflation to get us out of our mess is not a good idea as it makes us less competitive reduces the value of the pound and generally impoverishes us. There is no such thing as a free lunch remember. Inflation impoverishes us all - not least those on fixed incomes.

trevorsden said...

PS
and off topic - sorry.
Its shocking to read that Michael white has actually written something half sensible about the hague affair.

Credit where credit is due - and according to White the photo being tossed around about Hague was a year old!

http://www.guardian.co.uk/politics/blog/2010/sep/02/william-hague-shaming-day-for-fleet-street-michael-white

White deserves credit for exposing the shame of the media.

Sean Haffey said...

This financial genius was reported as calling Gordon Brown the country's greatest chancellor earlier this week.

Lost touch with reality.

Unsworth said...

@ trevorsden

"White deserves credit for exposing the shame of the media."

Why? This man is an opportunist who's been an active part of the conspiracy for most of his 'career'. Nothing has therefore changed.

Chalcedon said...

Balls talking complete balls as always. Borrow money? Just spend our way into a black hole of debt. What is wrong with these Labour politicos? How they must hate the UK and the British people.

JB said...

You political partisans really don't have a clue, do you. It is ludicrous that I am the only person who has said in these comments that Balls might have a point. This reminds me why I chose finance over a job (in economics) in the Conservative Research Department (had an interesting week in which I got both job offers...). If you are going to go into politics, I thought, you should damn well know something about how the world works.

I am not saying that Balls is right, although I am probably closer to him than to the Austerians on this question. I am saying that, according to economic theory and experience, he does have a point. It is possible for the government to stimulate the economy in such a way that the debt/GDP ratio falls even as the public debt rises. Here is an example from Paul Krugman today: http://krugman.blogs.nytimes.com/2010/09/03/paradoxes-of-deleveraging-and-releveraging/

Is that a good idea right now? It might be, or it might not. Life is complicated. But it is a very real question.