The Truth behind the UK 'Economic Miracle'
Much has been written in recent times about the supposed
'economic miracle' enjoyed by the Uk under the incredible
super-chancellorship of Mr Gordon Brown. Under Mr Brown's
careful and well thought out steering, the UK has enjoyed a near
'golden age' of prosperity, economic growth and fine weather.
This 'boom' has seen:-
* Over 50 consecutive quarters of economic growth
* The ecomomy is still growing 1.7% still projected to grow in
2006.
* Interest rates at historically low levels and stable.
* Unemployment at historically low levels and low compared to
our neighbours
However, a number of sources are starting to question the
perceived wisdom of the boom times in the UK - namely how is it
possible to have perpetual economic growth, a tripling of house
prices in the last 6 years, and virtually full employment? The
short answer is, of course, that it is not possible, and that
what the UK population are actually doing is staring into the
maw of a hypersized debt ridden economic meltdown, unwitnessed
since the Great Crash of 1929.
While it is undeniable that we have indeed seen 50 consecutive
quarters of economic growth according to 'official' figures, the
question that should be asked is - where has the finance come
from to pay for this expansion? From prudent re-investment of
growing corporate profits into likely areas of future increasing
demand? According to economic research at www.nodebtever.com ,
unfortunately not. The UK 'economic growth' over the past half
decade has simply been a case of massive consumer spending on
white goods and gadgets manufactured in the far east. Worse,
that spending has been paid for with debt - the UK consumer has
borrowed to the hilt of the hilt in order to grab yet another
flat screen TV or a new 4x4 s.u.v.
Personal debt in the UK had risen to about half a trillion
pounds when Gordon Brown took over. It had taken almost 600
years for debt to reach that level. By 2005, in other words in
just 6 short years of 'prudent fiscal management', that debt had
doubled to over a trillion pounds, in an era of historically low
inflation. This reliance on debt has been engineered cynically
in the following way.
Realizing upon taking the job that the UK was facing a downswing
in the economic cycle (a natural state of affairs, and a
necessary one, by the way), Mr Brown decided that he would like
to go down in history as the 'Little chancellor who could'. How
do you prevent a recession? Spend! Or at least that's what Mr
Brown had read in his 'Economics 101' textbook, leant to him by
an undergraduate intern from www.nodebtever.com. We should point
out at this juncture that Gordon Brown has no relevant economic
experience or education that would allow him to even run a
corner shop, let alone an entire country - he just happens to be
a buddy of Big Tony, and 'jobs for the boys' is almost a
cachetism of the Nulabor mindset.
Hamstrung by Tony's promises not to increase taxes or borrow
massively, Gordon found himself in a quandary - how to raise the
finance to pay for such an outrageous attempt to hold back the
tide. Simple. Get consumers to borrow it. This, of course raised
other problems, such as how to persuade the canny UK public to
take on 10 times the debt they were historically comfortable
with. Answer? Easy. Convince them that their primary (and in
fact in most cases ONLY) asset had risen massively in value,
making everyone feel rich and therefore more likely to borrow.
This he did. While promising 'no more boom and bust' Mr Brown
helped engineer the biggest house price bubble in world history,
making the majority of UK homeowners feel rich. Many became
almost instant millionaires thru this inflation, and yes, you
guessed it, they went right out and refinanced their homes,
spending the money on consumer goods, so propping up the
economy.
Gordon Brown, of course, taxes all this spending, and uses the
tax revenues so generated to create almost a million new jobs in
the UK's already bloated public sector (note the UK is now
approaching a level of public spending unseen since the old
'soviet' style centrally planned economies. In some parts of the
UK, over 50% of all spending is government spending).
In other words GORDON BROWN, UNABLE TO RAISE TAXES, FOOLED THE
UK PUBLIC INTO BELIEVING THEY WERE RICH. HE THEN TAXED THEIR
BORROWING.
It is hard to see how the generally smart and educated UK public
fell for this trick, until one remembers that bubbles tend to
suck in even the cleverest people (Sir Isaac Newton himself got
sucked into the South Sea Bubble!).
Will it continue? Will we eventually see '100 consecutive
quarters of economic growth'? Of course not. The UK has already
spent NEXT years income THIS year. In fact, they have spent THE
YEAR AFTER as well. Debts need to start to be repaid at some
point, and that point appears to have been reached last autumn,
when the UK housing bubble, rather predictably, started to
deflate, impinging negatively on the wider economy. Now
generally referred to as 'Gordenron' Brown, or even 'Gordon
Clown', the poor Fat Controller is between a rock and a hard
place - recession looming, Tony refusing to stand down, and no
one to pass the buck to. The worst, as always, is yet to come.
Hang onto your hats, people, it's gonna be a bit bumpy for the
next couple of years!