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The truths they don't want you to read....

Wednesday, February 25, 2009

Economic Summit

What do you get if you have....
An Economy Summit involving the Prime Minister and the Prime Minister and the First Ministers of Scotland, Wales and Northern Ireland, Deputy First Minister of Northern Ireland, and the territorial secretaries of state was held in London today.
apart from a lot of posturing, and a desire for the room to be vacuum sealed and the air removed?

Well not much light, and certainly no agreement.

But the press release from the Scottish Government (which seems to have been issued within seconds of the meeting finishing), a somewhat strange message was being put out by the First Minister:
"Instead of prescribing exactly the wrong medicine for the budgets of Scotland, Wales and Northern Ireland, the UK Government should look to America - where President Obama is generating more resources for the States, because he knows this is the best way to tackle the economic downturn. Indeed, in the US stimulus package, 69 per cent of the money will go to the States.

"For example, the state of Maryland - which has a similar population to Scotland - will receive some £2.6 billion extra in the equivalent of our devolved spending areas, supporting 66,000 jobs over the next two years.
Why is this strange? Because if you follow the logic of the argument about devolution of funding, then the logical conclusion is that the local Councils should receive extra cash, not the Scottish Government.

But, hey, let's not let logic get in the way of party political posturing.

On the other hand, the sudden affection for the federal system in the US may just be due to lack of sleep on the trans-Atlantic shuttle.

But the underlying message that counter-cyclical public spending is essential, only works when you have the funds available to do it; and on that count Labour have left the economy up shit-creek.

The second message: that the public sector has no fat to trim, is - self-evidently - nonsense, and no-one believes that. Denial doesn't make the trimming easier; nor does it stop the cuts needing to be made; and inaction on this will potentially do as much damage to the economy as the underlying core problems will do.

Two mismanagements don't make an election victory.

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