Quote:
Originally Posted by frogstamper
I grant you Rizzy he did inherit a good economy, but to infer he somehow blundered through ten years as chancellor and fluked the best period of growth we have ever had is disingenuous to say the least.
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Not disingenuous at all.. The fact is that our previous boom was funded by debt. Both public and private debt. And, yes, I do count mortgages as debt.
The current recession was caused (originally) by people defaulting on Mortgages. Mortgages given by banks for stupid amounts (I know people who have mortgages for up to 6 times their annual salary and have no real hope of ever paying it back) and with minimal checking. Banks did this because a) it was profitable at the time and b) they were allowed to. Who allowed them? Amongst other people, Gordon Brown (who was Chancellor of the Exchequor at the time and would have been able to stop them).
In the meantime, this was causing house prices to go up and forcing people to get ever higher mortgages to buy these houses. Who did nothing to stop this? Yep, Gordon Brown. He did nothing because it makes the economy appear healthy. Wether it is or not is another matter enitrely, and apparently almost entirely irrelevant to the government as long as they look good come election time.
The amount of money being lent meant that banks often don't have enough capital to lend money. If our economy were not so heavily reliant on debt, then it would have weathered the current recession a lot better than it is.
As for the idea of printing more money and buying your way out of the problem, well, that's worked wonderfully for Zimbabwe, hasn't it?
GB may not be directly responsible for our current situation. But he *is* responsible for laying the groundwork for it, and has singularly failed to tackle it.