Thursday, December 1, 2011
Britain heads towards double dip recession as public anger against politicians grows, austerity hasn’t even started yet, there is much worst to come
For some considerable time, I have been blogging away that the UK's economy will slip back into a double dip recession.
Nothing will stop that happening under the current situation and structures in Britain.
Britain is not set up for recovery, already negative growth is happening this quarter and although xmas is nearly here, it will be light relief to future quarters of possible negative growth.
Effectively we need to stop trying to grow debt, because we are digging a bigger hole that soon will be impossible to climb out of.
What do we need?
We need shrinkage of the population.
This brings me onto another issue which I blog on, the internal immigration policy of the EU.
There isn’t one, and there should be, like a ship, Europe is being tilted in rough seas as too many people have climbed on HMS Britain from within Europe and beyond. It is in the European sense a huge measure because the treaty needs revisited and upgraded. When Europe was just a ‘Common Market’ there wasn’t a problem and the ‘founding fathers’ never thought ahead.
Like the Titanic, people thought Europe would be unsinkable, but it is seriously holed below the water line. To refloat it, we need to get people off, however that wouldn’t stop the problem.
The problem is debt and everything that falls from that like austerity which is tearing the weaker countries apart.
Greece is a prime example how it all went sideways and expect this to spread, austerity is a short term measure which in theory allows breathing space.
The OECD is predicting negative growth in the coming months, however this will run for at least 5 years possibly to nearly a decade, but to start again, everything has to fall.
Keeping the status quo is unsustainable and doomed to failure. Riots across Europe are a symptom of the wider problem.
A 'double-dip' recession will be accompanied by even higher unemployment figures, and civil unrest will led to further social problems as society in this case governments try to win support which will not be forthcoming from the people.
We might see the rise of smaller political parties making a comeback; someone has to present not just a vision but a future and road map of how we will get there. That means pain because things have to get worse before they can get better.
It will also require creative thinkers of how to get more for less, and that means replacing out dated service models in the public sector.
George Osborne will make an Autumn Statement; this is to announce more austerity to shore up the economy. He says there is no 'quick fix' for the economy and he right but by the same token, the Tories back tracked on tackling the banks and the people who run them.
That is why there can be no quick fix, in fact the only fix is there is worse to come; he hasn’t a plan for growth.
And he will not modify his deficit reduction plans.
We haven’t seen the real scale of the cuts.
Anyway the think tank OECD said the UK's GDP will shrink in the final quarter of 2011 and the first quarter of 2012.
This is the first time it has predicted a double-dip recession for the UK but it was always doing to be a double dip recession.
Anyone who thought it was a return to growth was bonkers. The markets are collapsing under fraudulent trading in commodities and derivatives.
Everyone is looking for the next big bubble to try and get rich quick; the housing market is artificially high by at least 40%.
Now, it is crashing and pricing people out of the chance to own a home.
David Cameron recently spoke of the ‘dream’ that people should have the chance to own their own place, expect to see more repossessions sky rocket over the next few years. There is no such thing as a bargain in housing.
The OECD also said unemployment, which currently stands at 8.3% will hit 9% in 2013. That is a figure which is generous as Councils start their cut backs and shedding of staff and funding of the voluntary sector gets cut. Look at your local high street, shops closing and being replaced with charity shops. In the heart of Glasgow City Centre, there are many charity shops a disproportionate number in prime locations.
Another disastrous piece of nonsense is the QE programme which is printing money backed by nothing effectively lowering the value of people’s savings.
This is being done to ‘help’ businesses via the banks as Osborne announces a programme of 'credit easing.
There is no such thing as ‘free money’, sooner or later it must be paid back and plus the interest.
And the idea of bringing forward future money for spending in government may be useful but again, it is short term thinking, sooner or later, that debt has to be serviced add to it all the other government debt, it is again unsustainable.
Inflation is sitting at 5.6% and people are seeing their take home pay cut by freezes and contracts being ‘adjusted’ to make them pay more for their pension contributions. With less money people will not spend, less money for the government in receipts and therefore money to spend leading to more austerity. That in turn will lead to government putting up fuel and everything else then also goes up.
It is a vicious cycle.
I favour measures such as the introduction of a ‘Tobin’ tax on financial transactions introduced in Scotland, along with radical public service overhaul towards public service with more commercialisation in order to build up City Sovereign Funds, my idea for local government to be more viable and accountable.
The scale of the problem is huge, perhaps that is why no one is able to fully grasp what really needs to be done; it requires a lot of work, a lot of pain and a lot of unpleasant talk and in some cases removal of people from positions of authority.
We need a new direction of travel as 3 million angry public sector workers took to the streets yesterday to complain over Westminster’s pension grab.
The Campaign for Human Rights at Glasgow University