Hey, Right Wingers!
Distressed by ever higher deficits? Confused by low growth rates? Nervously eying the Bond markets and the Credit Rating Agencies?
Want to cut deficits?
Want to reduce the National Debt as a share of GDP over
the medium term?
Want to be a real Fiscal Conservative?
Sure you do.
Then, if you’re in a social market economy, don’t suck demand out of the economy when it needs it most, because if you do, you’ll have to rely on automatic stabilisers to offset a persistent lack of growth, and you’ll end up with an increased underlying cost base, find it ever harder to make real spending reductions, and find yourself caught in a horrible cycle of low growth, high costs, topped with a rich, creamy topping of stagnant incomes and investment.
Then you find yourself horribly exposed to any increase in borrowing costs, which will be all the worse as the lack of growth will make medium term deficit reductions harder and you really need low financing to make any sort of progress, a spike in borrowing costs would be utterly catastrophic, thus hemming you in on all sides because you’ll have ever less freedom to change course because of a fear of market reaction.
Trust me, son. You don’t want that.
I’m all for cutting deficits. But I’d do it Like a Boss.
So, if you don’t want the other economies kicking sand in your face at the G20, sign up for my patented Real Fiscal Conservative Checklist, guaranteed to make a real Fiscal Conservative out of even the pastiest Austrian, sallowest goldbug or 80-pound mellonite.
1. Fiscal and Monetary Stimulus during a demand Crisis.
2. Tough, clear and unavoidable planned deficit target reductions targeted when growth returns, with both timing and extent of reductions required policed by an external agency given clear guidelines.
3. Within Fiscal Envelope dictated by growth levels and borrowing costs, ruthless prioritisation on spending with potential to increase long-term trend rate of growth. Yeah, we’re doin’ it Endogenous style.
So sign up now, before it’s too late.
After all, if you let your economy stay puny for years to come, it’ll get ever harder to start pumping fiscal iron.
Or I’ll be round later to kick sand in your face, Mr Osborne.