{"id":13589,"date":"2010-03-02T12:47:13","date_gmt":"2010-03-02T12:47:13","guid":{"rendered":"http:\/\/blog.widmann.org.uk\/?p=2153"},"modified":"2010-03-02T12:47:13","modified_gmt":"2010-03-02T12:47:13","slug":"browns-enron-like-constructs-2","status":"publish","type":"post","link":"https:\/\/widmanniana.org\/blog\/browns-enron-like-constructs-2\/","title":{"rendered":"Brown's Enron-like constructs"},"content":{"rendered":"
\n\"\"<\/a>
\n
\nMr Boom and Mr Bust: Labour Party poster 2001<\/a>
\nOriginally uploaded by Adrian Short<\/a>
\n<\/span>\n<\/div>\n

Willem Buiter describes Brown’s economic legacy<\/a> well in the Financial Times today:<\/p>\n

\n

Britain\u2019s true fiscal circumstances are about as bad as Greece\u2019s reported situation, once we allow for the understatement of UK public debt through the off-balance-sheet accounting tricks of the past decade (the private finance initiative, unfunded public sector pensions, student loans and other Enron-like constructs).<\/p>\n

The fiscal weakness of the UK is largely government-inflicted, rather than a result of the financial crisis and global contraction. During the long boom preceding the crisis, fiscal policy was relentlessly pro-cyclical, with public spending rising steadily as a share of gross domestic product.<\/p>\n

[…]<\/p>\n

Public finances during the last boom are the obvious guide to expectations about the likely future fiscal behaviour of a Labour government. The cynical manipulation of Gordon Brown\u2019s \u201cgolden rule\u201d (over the economic cycle borrowing only to invest) and the decision to jettison it and the sustainable investment rule (net debt not to exceed 40 per cent of GDP) as soon as they threatened to become binding constraints will cause the markets to act like St Thomas towards promises of future fiscal tightening: seeing is believing.<\/p><\/blockquote>\n

Do read the whole thing!<\/p>\n

I’m surprised that anybody can still think that Brown is the right person to get us out of this mess.<\/p>\n","protected":false},"excerpt":{"rendered":"

Mr Boom and Mr Bust: Labour Party poster 2001 Originally uploaded by Adrian Short Willem Buiter describes Brown’s economic legacy well in the Financial Times today: Britain\u2019s true fiscal circumstances are about as bad as Greece\u2019s reported situation, once we allow for the understatement of UK public debt through the off-balance-sheet accounting tricks of the past decade (the private finance initiative, unfunded public sector pensions, student loans and other Enron-like constructs). The fiscal weakness of the UK is largely government-inflicted, rather than a result of the financial […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[99,159,130],"tags":[],"class_list":["post-13589","post","type-post","status-publish","format-standard","hentry","category-economics","category-en","category-politics"],"_links":{"self":[{"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/posts\/13589","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/comments?post=13589"}],"version-history":[{"count":0,"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/posts\/13589\/revisions"}],"wp:attachment":[{"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/media?parent=13589"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/categories?post=13589"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/tags?post=13589"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}