Double Dip

No, not that sort of double dip. This sort of double dip. It's been predicted that the UK economy is going to shrink over the next few months, meaning we are likely to see what is usually called a double-dip recession. If only it were simply about the demise of a certain sherbert-based confectionery product...

So what should be done? The red team says the government is cutting 'too far, too fast', to quote one of their favourite phrases. The blue / yellow team says the cuts are necessary and anyone who believes otherwise is a 'deficit denier', to quote one of their favourite phrases. I find it both fascinating and frustrating that people can come to such different conclusions based on the same information...

What's particularly got me thinking recently is how it seems to be all about growth, on both sides of the argument but especially with the Labour party. As I see it, there are two massive problems with this. Firstly, with the way that the growth of economies is measured, you could make the economy grow by employing people to do useless things like dig holes and then fill them in again. And secondly, the emphasis on growth ignores the existence of a rather large deficit (see this earlier post of mine). If we keep on borrowing money then surely sooner or later we'll end up just not being able to borrow any more. Like it seems half of Europe is on the brink of.

George Osborne, the Chancellor, will be giving his Autumn Statement speech tomorrow and I will be interested to see how he intends to reduce the deficit without completely destroying economic growth. Best of luck, Mr Osborne...

PS: Sorry for the lack of updates recently. Writer's block.