Back to the 1970s
[Re: Why Osborne’s housing subsidies feel right out of the 1970s, Friday]
The parallels between today and the 1970s are obvious. The chancellor wants to subsidise a dysfunctional industry (volume housebuilding) rather than let the market find a solution.
You’re quite right that we seem to be on a journey back to the 1970s. At first, I thought it might be some sort of parallel. But I hadn’t realised that those in charge were following the exact blueprint: competitiveness falling, inflation rising, energy production stifled, and social and economic division.
The Help to Buy programme is a daft idea with the potential to blow up into a property bubble. And it forgets that private debt levels are almost certainly still too high. Problematically, this will not even stimulate house building. Increasing demand (without allowing supply to increase) will only push prices higher.
As a Conservative voter, I despair. David Cameron and George Osborne are clueless – they’re well on their way to being judged by history in the same way as Edward Heath and his failed chancellor. As a wise man once said, for those that choose to ignore history, history has a habit of repeating itself.
BEST OF TWITTER
A thought for Eurocrats. What if Cyprus left the euro, devalued, defaulted and then recovered? What would that say to Greeks?
Fitch had previously said that the UK’s credit rating hinges on the Budget. But it hasn’t immediately downgraded the UK.
Since the Cyprus crisis broke, the pound has been rising – a safe haven effect. Once the crisis is resolved, expect it to fall back again.
How to describe the government’s economic strategy? If it was a deficit reduction strategy, you’d expect the deficit to be reduced.