The Aged P

David Davies MP at The Commentator tries to explain it in words so simple that even Krugman, Obama, Hollande and the BBC/Guardianistas might be able to understand…

The ‘plan for growth’ is actually a euphemism for borrowing more money than we already are. Sound familiar?

The theory goes that the government borrows money to spend on a big project, like building a motorway. This creates lots of jobs in construction, and afterwards even more jobs are created.

We spend money to make money.

This sounds too good to be true because it is.

‘Growth plans’ have to generate enough money to pay back the sum borrowed, plus interest.

The government is already spending around £45 billion a year on interest payments alone – this is more than the defence budget.

This is actually a low figure, because those lending to us have confidence that we will pay the money back.

Countries that want to carry on spending money they don’t have (like Greece) can no longer borrow money easily and therefore need to be bailed out.

We don’t want to go there.

So, in order to ensure that banks and other countries retain their confidence in the UK’s willingness to sort out its deficit, this means sticking to the plan to spend what we earn.

I think we have learnt enough from the past decade to understand that a ‘growth plan’ is a thinly veiled call for ‘increased spending.’

Of course there is always the money tree……

Great stuff from Mark Steyn on Barack Obama who, like UK Labour Party leader Ed Milliband and Francois Hollande, the new socialist president of France, prefers to operate from outer space where he feels he can safely ignore the laws of gravity and economics…

Soaring rhetoric at a time of earthbound problems — jobs, debt — risks making the president sound ridiculous. Granted, there’s a lot of it about this time of year — commencement speakers assuring kids who can’t manage middle-school math that you can be anything you want to be as long as you dream your dreams. But Obama offers an even more absurd evolution of this grim trope: “I can be anything I want to be as long as you chumps dream your dreams.”

Unfortunately , as the French elections have taught us, there is no shortage in the west of misty eyed optimists always ready to be seduced by the snake oil salesmen who readily tell you what you want to hear. But eventually even the biggest sucker eventually gets to realise that there is no such thing as a free lunch..

Self-pity is never an attractive quality, and in an elected head of state even less so. Obama whines that his opponents say it’s all his fault. One can argue about whose fault it is, but not, as my colleagues at National Review pointed out, whose responsibility it is: It’s his. He’s the only president we have. And he made things worse. He increased the national debt by some 70 percent, and what do we have to show for it? No dams, no railroads, no moon shots. Just government, and bureaucracy, and regulation, unto national bankruptcy.

“Fly me to the moon / Let me play among the stars . . . ” Who needs another moon shot? Obama’s already up there, soaring ever more unmoored from reality. Pity us mere mortals back on Planet Earth, living in the land he made.

The good news is that while out walking the other day I came across just the bunch of fellows who can help Obama (and Milliband and Hollande) keep their feet firmly on the ground…

BTW Actually Earthbound Services is a great example of a successful local business creating jobs….there are thousands of these small businesses in the UK driving the engine of growth (and no, I have don’t have any connection with the company, just liked their lorry and found out more about them later…)

The New York Times, the house journal of the Obama administration, has obviously been given the nod from the White House to convey an important message to UK Prime Minister David Cameron from the Presidential golf course.

You have got it so wrong on the causes of those riots.

Mr. Cameron…..has blamed the looting and burning on a compound of national moral decline, bad parenting and perverse inner-city subcultures.

That is so naive.

It’s about being POOR, man. The rioting and looting was a cry for help from the blackberries of the penniless, starving hordes of England’s shanty towns as well as a political protest against Cameron’s savage budget cuts.

What’s that? These are scheduled cuts for 2012-2015? Spending for 2011 is still much the same as previous years?

Irrelevant.

It’s the perception,stupid…..the masses trust only the BBC and the BBC has, since May 2010, been constantly warning them about THE CUTS.

That is why the “protesters” (as the BBC preferred to call them) needed all those flat screen TVs. They were to be used as COMMUNITY SCREENS so that the downtrodden could bypass government propaganda and hear the truth from the BBC.

Fortunately President Obama from his years of executive experience in Chicago can redirect Mr Cameron back onto the path of righteousness.

You don’t solve these problems with “draconian punishments” and “excessive sentences”

Britain’s urban wastelands need constructive attention from the Cameron government, not just punishment. His government’s wrongheaded austerity policies have meant fewer public sector jobs and social services……..What Britain’s sputtering economy really needs is short-term stimulus, not more budget cutting.

That is how it was done in Chicago by Obama – and it is now, presumably, one of the safest cities in the western world.

So there you have it, Mr Cameron. The NYT is telling you to spend more money and ignore the debt and those scaremongers at the credit rating agencies. I am sure they could put you in touch with the Chinese bankers who have been so helpful to President Obama.

On the other hand…..perhaps you could just tell the NYT to STFU……

My other piece of advice, Copperfield, said Mr. Micawber, you know. Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and, in short, you are for ever floored. As I am!

Ah, Wilkins Micawber….if only you were in Washington to talk some sense to President Obama. The politicians might be able to conjure up some sort of last minute Debt Ceiling fix that can flatter the markets for a few microseconds but some would argue that it will really be like covering plague sores with heavy theatrical make up – and in a way the actor analogy is highly appropriate. Boston University’s Professor Laurence Kotlikoff sees the current situation as a piece of political theatre choreographed to distract the public from the cold stark facts of economic reality.

Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.

Kotlikoff differentiates between the “official” debt of approximately 14 trillion and what he calls actual net indebtedness of 202 trillion. The true extent of the government’s liabilities have been hidden by a deft piece of legerdemain, that oh so useful tool of the crooked accountant – relabelling.

Congress has been very careful over the years to label most of its liabilities“unofficial” to keep them off the books and far in the future.

But unofficial or not the liabilities are already there, dark clouds on the horizon that will never clear but will eventually blacken the whole sky.

Why?

We have 78 million baby boomers who, when fully retired, will collect benefits from Social Security, Medicare, and Medicaid that, on average, exceed per-capita GDP. The annual costs of these entitlements will total about $4 trillion in today’s dollars. Yes, our economy will be bigger in 20 years, but not big enough to handle this size load year after year.
This is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck.

This isn’t just a problem for America. It’s a problem for most of the western world. It’s the eternal confidence trick that promises rainbows and unicorns with just one rub of the genie’s lamp.

We shake our heads at the tortured self destruction of Amy Winehouse. We congratulate ourselves they we have never been weak enough to become enslaved to the drug dealers haunting the other side of the tracks. But in reality the massive amounts of debt carried by western governments are the symptoms of our own society’s addiction to robbing the future to pleasure the present.

Read the rest of Kotlikoff’s piece here – it paints a chilling picture but implicit within the message is the desperate need for political leaders who have the courage to tell the truth to their fellow citizens and the steel to confront the pied pipers of the Obama left or, as Jeff Randall of the UK Daily Telegraph calls them

media dons, Princeton’s Paul Krugman and British-born David Blanchflower, professor of economics at Dartmouth College, championing fiscal incontinence as the route to salvation.

In 1940, when Churchill promised the British people nothing but “blood, toil, tears, and sweat” it was the first time for decades that they had heard a politician treating them as adults by telling them the truth. They responded, not with despair but with a grim determination to confront the harsh realities of the present with a shared sacrifice so that future generations could live in peace and freedom.

That was leadership.

Where are the Churchills of the 21st century?