Well it has been almost 24 hours since the Budget speech and so I’ve had time to sleep on things and the only word that comes to mind is dispare. I’m not disparing for the British people or their ability to cope and make the best of things. Nor for the economy as whole which will bob along the bottom. No I dispare for our esteemed leaders who seem to think that it is every one else’s faultthat we are in a worse situation than when they started this grand experiment in proving just how right John Maynard Keynes was.

Now I’m no economist and so what I’m about to say will not doubt be shot down in flames by someone with any economic training, however we do seem to have got into this mess as result of economists advice so perhaps they don’t know as much as they like to think they do. Anyway, the basic premis of Keynes, as I understand it, is that in a recession the government should spend and in a boom it should save and cutback. Now we all know that the later part is the difficult bit as government of which ever hue like to spend money no matter what but what this government has done over the last four years is suck the life out of the economy when they should have been spending more.

There is some justification in the charge that the last Labour government were a bunch of economic fools who thought they could spend like no tomorrow, much like the rest of the country if we are all honest, but after four years of so called corrective steps to sort the mess of the last Labour government we find ourselves in a bigger whole than we started in. The old adage of when in a whole stop digging doesn’t seem to appear on the government understanding.

If we compare and contrast the performance of the American economy. Here they have had a large stimulus and growth, the likes of which we can only dream of. Now I’m not holding up the American system as a beacon of economic solvency, far far from it, but their economy is moving along quite happily when compared to our own.

We were told that we must cut back because of the bond markets and credit rating – yet we now discover it doesn’t seem that a AAA rating is important and government bonds seem to be selling at a reasonable price. Of course this, in part, is due to the wonders of Quantitative easing (QE) which doesn’t seem to make any sense at all but then again I’m not an economist.

So where do we go from here? Well it seems that we can drown our sorrows in cheaper beer, but not whiskey, but very little else. The government seems to be running around trying anything to blame this mess on other people, the Europeans, Labour, the incapacitated anyone but themselves. They had cut back on infrastructure projects, research and development, welfare just to help reduce the debt to GDP and what we find is that we are borrowing more than we did when this whole thing started yet the economy is flatlining. How does that equate to economic competence? Could you imagine what might have happened if we had borrowed to invest in growth rather than pay for government spending?

Now let me say I have no problems with keeping a tight lid on spending, I agree that the welfare state in this country is out of control and needs root and branch reform to try and align it with modern world rather than what things may have been like 10/20/30 or so years ago. I hope to live a much monger a healthier life than my forebears. One of the unfortunate side effects of this is that people who have got use living on the result of these changes over the years are going to be hurt. But there is a time to do all this and that is when the economy is growing and the government coffers are full with tax returns. Reducing benefits to the poorest in society whilst giving people who are paid a lot of money and 10% tax reduction doesn’t seem far. I know that the move to 45% tax rate doesn’t cost that much when compared to the savings to be had over reducing the welfare bill but the symbolism is telling.

We have now reached a point whereby we have to change and start to spend money on things that will get the economy going not reduce activity and if that means borrowing a few more billions to do it then so be it – after all what is an extra £15 billion when compared to the QE we are undertaking.

There are many bright ideas around as to how this money could be spent but if I was going to plump for one it is road repair. It is quick and simple and there is no need for a hugely complicated planning process. I’m sure each local highways authority has a list of repairs they could do almost straight away.

So I know nothing about economics, I haven’t got a clue how much of this system works but I do know is that what we are doing not isn’t working and the sooner we accept that and try something different the sooner we might get the hell out of this mess.

There I feel better for that. This blog won’t change a single thing but I’ve had my say and now I think I’m going to go and lie down in a dark room and place a damp flannel over my furrowed brow.

Simon Marchini
Web: http://WWW.simonmarchini.co.uk