Sam Coates has highlighted how Brown and Darling have used statistics to change the size of the UK stimulus package. This will used as the spin for the G20 to show that all countries are aligned:
The Chancellor told MPs yesterday:
Many countries have already taken substantial steps to support their economies. The IMF calculate: that in the US, this year’s fiscal stimulus is worth 3.5 per cent of GDP; In Germany, 3.2 per cent; In China and France 2.6 per cent; And here too, our fiscal stimulus of 3.4 per cent of the economy.
He goes on:
In the November, Darling chose to define the UK stimulus as the additional discretionary spending the government was announcing to pump prime the economy - the bulk of which was the one year, £12 billion VAT cut. In yesterday's statement, Darling was using a figure which includes the extra money which automatically circulates round the economy through higher welfare bills and lower tax receipts - the so-called automatic stabilisers.
He than gives two reasons why this has happened. This one is relevant:
it makes it easier for Darling to paper over G20 arguments between the US (which is demanding all countries put more money into their economies) and Europe (France and Germany reject calls for a bigger fiscal stimulus.) The gulf between the US and Europe seems much smaller, however, if the automatic stabilisers are taken into account because Europe has bigger welfare systems than the US, so more money is already flowing. Bluntly, using this figure allows Darling to deny there is a significant split between countries over their stimulus packages.
This is no doubt the reason why Brown used the word “continent” rather than “country” as I pointed out here.
Brown is now all prepared for the G20. By fiddling the statistics, this allows France and Germany to be seen as going along with majority, and Moses can now say all countries are aligned and are acting in unison.
Clever but will he be allowed to get away with it?
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UK recession 'worst of all': It will be the only major economy still in a slump next year, predicts IMF
ReplyDeleteBy James Chapman And Alex Brummer
Last updated at 11:07 PM on 17th March 2009
Daily Mail
Gordon Brown’s economic credibility suffered another blow last night following a warning that Britain’s recession will be the worst in the world.
The International Monetary Fund said the downturn in the UK would be deeper than anyone previously feared - and it would last through 2010.
The IMF also said that Britain’s economy would shrink by a catastrophic 3.8 per cent this year and 0.2 per cent in 2010 - making it the only major economy still in recession next year.
Thanks. I will post about this in the morning.
ReplyDeleteSaw that Air Nokia. The NewLiars are denying it already.
ReplyDeleteApparently we are the best placed, have the lowest debt, highest growth, lowest unemployment, highest welfare, lowest taxes, highest savings and lowest waiting lists in the galaxy.