That thing Timberwolf linked to has been on several news sites for quite a while. Well worth a read.
Britain’s fiscal and economic problems
result from grotesque mishandling
of the economy under the 1997-
2010 Labour administration. Gordon
Brown’s reform of the financial
regulatory system, and his insistence
that the Bank of England determine
monetary policy on the basis of retail
inflation alone, resulted in a reckless
escalation in mortgage lending.
The ensuing property price boom
spurred unsustainable growth in a
plethora of housing-related sectors,
and underwrote a rapid expansion
in consumer borrowing. Believing
that this bubble was real growth,
Brown spent up to, and beyond, the
apparent expansion in the tax base
that had resulted from the propertydriven
boom. Real public spending
increased by 53% in a period in which
the economy expanded by just 17%.
As soon as the bubble burst, a chasm
rapidly opened up between excessive
spending and falling tax revenues.
In addition to skewing the economy
towards debt and public spending,
Brown and his colleagues imposed
ever-increasing regulatory and
fiscal burdens on business, and
simultaneously transferred resources
from private industry into a public
sector whose productivity was subject
to continuous decline. This weakened
the overall productivity of the
British economy.
Labour’s period in office was
characterised not just by economic
and fiscal mismanagement but also
by the promotion of a culture of moral
absolutism centred around spurious
and selective concepts of ‘fairness’.
This culture, and the accompanying
sense of individual and collective
entitlement, is the biggest obstacle in
the way of effective economic reform.
result from grotesque mishandling
of the economy under the 1997-
2010 Labour administration. Gordon
Brown’s reform of the financial
regulatory system, and his insistence
that the Bank of England determine
monetary policy on the basis of retail
inflation alone, resulted in a reckless
escalation in mortgage lending.
The ensuing property price boom
spurred unsustainable growth in a
plethora of housing-related sectors,
and underwrote a rapid expansion
in consumer borrowing. Believing
that this bubble was real growth,
Brown spent up to, and beyond, the
apparent expansion in the tax base
that had resulted from the propertydriven
boom. Real public spending
increased by 53% in a period in which
the economy expanded by just 17%.
As soon as the bubble burst, a chasm
rapidly opened up between excessive
spending and falling tax revenues.
In addition to skewing the economy
towards debt and public spending,
Brown and his colleagues imposed
ever-increasing regulatory and
fiscal burdens on business, and
simultaneously transferred resources
from private industry into a public
sector whose productivity was subject
to continuous decline. This weakened
the overall productivity of the
British economy.
Labour’s period in office was
characterised not just by economic
and fiscal mismanagement but also
by the promotion of a culture of moral
absolutism centred around spurious
and selective concepts of ‘fairness’.
This culture, and the accompanying
sense of individual and collective
entitlement, is the biggest obstacle in
the way of effective economic reform.
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