Osborne to IMF: I Told You So
Third Year of Expansionary Fiscal Contraction

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Chancellor Zero is no more. Growth is back, even the neo-Keynesians at the FT and the wonks at the IMF can’t deny that the UK expanded faster than the rest of the G7 last year and will probably do the same this year. George Osborne is in Washington today to gloat that

“despite warnings from some that our determined pursuit of our economic plan made that impossible. All of this demonstrates that fiscal consolidation and economic recovery go together, and undermines the pessimistic prognosis that only further fiscal stimulus can drive sustainable growth. Indeed that is precisely the wrong prescription for our economies…”

Ed Balls got it wrong is the core message. Labour will point to per capita GDP which is still 10% lower than it was in 2007 – that will be a second term objective for the Chancellor. Balls will less convincingly say George has missed his deficit target, less convincing because Labour would have missed it by more and opposed almost every measure needed to reduce the deficit. The neo-Keynesian argument that higher unemployment would increase the welfare bill and thus the deficit has been proven to be wrong. Unemployment is down from what it was under Gordon Brown, with the warnings from the likes of David Blanchflower of 4 to 5 million unemployed having turned out to be political hyperbole that has fatally damaged his career as a sage. That “expansionary fiscal contraction” that left-wing wonks and economists said would never come is entering a third year…

Leading left-wing wonk and wannabe Labour MP Will Straw argued in 2011 that Britain’s economy faced the risk of a Japanese-style “lost decade” and that “expansionary fiscal contraction” was a “voodoo theory”, and even that there was no such thing as an expansionary fiscal contraction. In 2011 Guido argued the point at length with Will on the BBC’s Daily Politics:

Having failed at the time to get an on-air apology from Will for his role in Gordon Brown’s Treasury, three years later he must now accept that he was wrong about a lost decade and wrong that there was no such thing as an expansionary fiscal contraction. Over to you Will – as growth is expected to hit 3% you have a second chance to offer an apology…


REMAIN TAKES PROJECT FEAR TO CHURCH REMAIN TAKES PROJECT FEAR TO CHURCH
SOUBRY’S BIG NISSAN-DERSTANDING SOUBRY’S BIG NISSAN-DERSTANDING
JIM SHANNON ORDERED TO REPAY £14,000 EXPENSES JIM SHANNON ORDERED TO REPAY £14,000 EXPENSES
PAY “ONLY REAL RED LINE” FOR BMA JUNIOR DOCTOR LEADERSHIP PAY “ONLY REAL RED LINE” FOR BMA JUNIOR DOCTOR LEADERSHIP
NET MIGRATION UP 20,000 TO 333,000 NET MIGRATION UP 20,000 TO 333,000
POLICE INVESTIGATING TESSA MUNT ELECTION EXPENSES POLICE INVESTIGATING TESSA MUNT ELECTION EXPENSES
LEAVE.EU ON HOOK FOR £500,000 BREXIT GIG LEAVE.EU ON HOOK FOR £500,000 BREXIT GIG
TRUMP SINGS “WE’RE GONNA BUILD A WALL” TRUMP SINGS “WE’RE GONNA BUILD A WALL”
OZBOT VERSUS ANDROGENOID OZBOT VERSUS ANDROGENOID
EDDIE IZZARD’S HOTEL BILLS NOT LAWFULLY DECLARED EDDIE IZZARD’S HOTEL BILLS NOT LAWFULLY DECLARED
POLITICAL PARTY RICHLIST POLITICAL PARTY RICHLIST
EU PLOTS TAX ID NUMBERS FOR EVERY EUROPEAN CITIZEN EU PLOTS TAX ID NUMBERS FOR EVERY EUROPEAN CITIZEN
MUNT ADMITS SHE DIDN’T DECLARE LOCAL CAMPAIGN TRANSPORT MUNT ADMITS SHE DIDN’T DECLARE LOCAL CAMPAIGN TRANSPORT
OZBOT VERSUS ANDROGENOID OZBOT VERSUS ANDROGENOID
“Fat Cats For EU” “Fat Cats For EU”
“CHEATED” LIBDEM PICTURED CAMPAIGNING ON BATTLE BUS “CHEATED” LIBDEM PICTURED CAMPAIGNING ON BATTLE BUS
CHRISTINE HAMILTON HIRED ON THE PUBLIC PAYROLL CHRISTINE HAMILTON HIRED ON THE PUBLIC PAYROLL
CONSERVATIVES IN: SPOT THE DIFFERENCE CONSERVATIVES IN: SPOT THE DIFFERENCE
HULL UNIVERSITY THIRD TO DISAFFILIATE FROM NUS HULL UNIVERSITY THIRD TO DISAFFILIATE FROM NUS
CAMERON’S AIRFARE FABLE CAMERON’S AIRFARE FABLE
TELEGRAPH BLOODBATH: NEW JOBS CULL UNDERWAY TELEGRAPH BLOODBATH: NEW JOBS CULL UNDERWAY
CCHQ FREEZE MPS AND ASSOCIATIONS OUT OF VOTE SOURCE CCHQ FREEZE MPS AND ASSOCIATIONS OUT OF VOTE SOURCE
OSBORNE MISSED BORROWING TARGET BY EVEN MORE THAN PREVIOUSLY THOUGHT OSBORNE MISSED BORROWING TARGET BY EVEN MORE THAN PREVIOUSLY THOUGHT
POLICE INVESTIGATING SHADOW MINISTER OVER ELECTION EXPENSES POLICE INVESTIGATING SHADOW MINISTER OVER ELECTION EXPENSES
TOOTING BY-ELECTION CAMPAIGN KICKS OFF IN BATTERSEA TOOTING BY-ELECTION CAMPAIGN KICKS OFF IN BATTERSEA
ELECTORAL COMMISSION ON JOCK-‘COPTER CAMPAIGN ELECTORAL COMMISSION ON JOCK-‘COPTER CAMPAIGN
STURGEON DUCKS CHOPPER QUESTION STURGEON DUCKS CHOPPER QUESTION
NUS CHIEF EXECUTIVE PAID FIVE TIMES AVERAGE GRADUATE NUS CHIEF EXECUTIVE PAID FIVE TIMES AVERAGE GRADUATE
CORBYN CLAPPED COMMIE LEADER FOR REFUSING TO TOAST THE QUEEN CORBYN CLAPPED COMMIE LEADER FOR REFUSING TO TOAST THE QUEEN
SNP CHOPPER NOT DECLARED PROPERLY SNP CHOPPER NOT DECLARED PROPERLY