Osborne got a lot of mileage fromLiam Byrnes note (theres no money left) but the Tories seem to have forgotten about the note left by Reginald Maudling. Upon being forced out of the post by the election defeat, Maudling left a note to his successor, James Callaghan, simply stating "Good luck, old cock ... Sorry to leave it in such a mess."

All this and when labour left office government borrowing was predicted to be £42 billion LESS and growth was steady and gradually increasing.

I'd say that Osborne has failed.

1-1.5% in 2011/12 is realistic but growth will be quite good 2-2.5% in 2012/3 due the one-off boost from the Olympics.
Lots of vaiables will affect the deficit (unemployment, interest rates etc) however the deficit would most likely decline even with these growth rates.
Government spending is projected to fall 2% in 2011/2 & 2012/3 even with extra unemployment payments it would be negative. While 1% real growth would imply raising tax take especially as tax are higher in 2011/2 & 2012/13 compared with 2010/11.

Poor Bozo555, I wish he had been around last week, when the April PSBR came in a record £10 Billion.

Strange how Bozo555 goes missing when there is bad economic news.

The words train and crash come to mind.

Greg, invest in productive activities, and you get growth. Gamble on stocks going up or down, and you get a crash.
Our total public sector net debt, including the financial interventions, that is, the £1.342 trillion we paid to rescue the banks, is £2.252 trillion.
This record debt is due to the finance sector’s crimes. It is not ‘Labour’s debt crisis’, as the Conservative Party claims.
As even George Osborne has admitted, “private sector debt was the cause of the crisis".

They went to sea in a Sieve, they did,
In a Sieve they went to sea:
In spite of what the voters did say,
On a stormy morn, on the fifth of May,
In a Sieve they went to sea!

Read this satirical version of The Jumblies:The Lands Where The Tories Live

the economy was going in the wrong direction from 2003. this was when debt began to seriously build-up in the economy. booming property and finance sectors obviously brought in alot of tax revenue and there was therefore no incentive to diversify our economy from public sector spending and private sector borrowing - that and cheap imports from china ensured a prolonged feel-good factor. the chickens would surely come to roost when gordon's golden rules were conveniently abandoned - this was a great shame as in some regards gordon decision to make the bank of england independent was the correct one.

the solutions to the 2008 problems of more debt, near zero rates and printing money mean we have less ammunition when the next crisis arrives probably when greece defaults. the solutions to the 2008 problem also mean higher inflation as western gov't like the US continue to print cash to pay debt (we all know the US fed is technically bankrupt) - if gov't spending was higher inflation would be even higher and interest rates would rise quicker. lower interest rates are keeping UK households more solvent so this delicate strategy will take time and will have ups and downs but is the correct one. unfortunately the gov't spending for votes strategy is exhausted.

Britain tries to bring down its deficit by spending cuts (and tax hikes) and finds a slowing economy. The USA does not try to bring down its deficit and also has a slowing economy. What is your point exactly?

"The coalition's austerity programme was never based on sound economics"
You've made a typo there. I think what you meant to say was:
"The coalition's austerity programme was never based on the economics I believe in"
There are plenty of economist who believe economic growth comes from shrinking the state, particularly when it now makes up half of our economy. A serious economist would accept there are people who differ in opinion from yourself, a party political hack would not. I can see which one you are.

the working mans spannish element was put in there for a Lahndan reason, Flashbacks of a Fool,
http://www.youtube.com/watch?v=8Jy7VB49jIc

So houses are more affordable in the US, what a disaster (sarcasm alert just for Matt)?

Same old stuff from David Blanchflower, aka Harold Camping.

This inept Chancellor has talked the economy down by falsely claiming it was bankrupt, when it wasn't, which has decimated animal spirits among both businesses and consumers.

Didn't Liam Byrne offer up the same assessment?

He has also tried to blame a once in a hundred year global financial crisis on the previous government, which was clearly also untrue and simply hyperbole.

The last government was not to blame for the financial crisis (albeit it was worse in the UK than in other countries because of our over-reliance on the financial sector), but it is largely to blame for the scale of the subsequent debt crisis because it spent too much money during the good years because someone was labouring under the misconception that they had abolished the boom and bust cycle.

Shame UK house prices aren't back to 2002 levels too, that would bring much relief to those priced out of the market and end the reliance on credit crunch causing levels of lending.

@Matt

"Strange how Bozo555 goes missing when there is bad economic news."

No I don't. Nice to see you ignore all my points as usual. What impact do you think the housing boom under New Labour had on the low and middle earners? Still waiting for your answer.

Who can forget the stories this week about how Britain is set to become a nation of renters? I wonder why that is?

I thought reckless (not wreckless) lending was part of the problem in the first place?

Danny,

Sorry it's not relevant to this article.

Could you do a piece about Treasury Reserves please. Osborne and others have said the public won't fund the war in Libya and it will come out of the reserves (budget speech and others) so I would like to know more about reserves and the cost and can reserves actually be used to fund the NATO mission in Libya as there seems to be not a great deal of information out there on reserves but what there is seems to indicate pretty strict criteria for using reserve tranches etc.

@Greg: On the contrary, government spending does create wealth. For example spending on health and education is very profitable both for the individual concerned and for society as a whole. In economists-speak, the stock of human capital is increased as a result. This is in fact far more profitable than, say, you drinking a pint of beer in the pub, which is also economic activity. Just because it is more easily measured does not mean it is more important.

Thank you for the reply Danny. Sorry if I seemed rude by calling you a hack, it was uncalled for, the internet makes it far too easy to be rude and I shouldn't stoop to it.

Economists who do support shrinking the state:
Just about everyone that works for:
-Adam Smith Instiute
-Institute of Economic Affairs
-Cobden Centre
-Cato Institute
-Von Mises Academy

Some names:
Don Boudreaux
Russ Roberts
William L. Anderson

If they were still alive today then (I hope I am fair when I put words in their mouths but they were all definitely opposed to the big state):
F. A. Hayek
Milton Friedmann
Ludvig von Mises
Adam Smith.

I feel I should point out that Nobel prizes are not all they're cracked up to be. Paul Samuelson won a Nobel Prize in economics and he thought, well into the 80s, that the Soviet Union's economy would overtake the USA because he thought central planning was superior to free market capitalism.

You also Danny, seem to be blind to the effect that the crisis, through the paniced flooring of interest rates has had on what was a jinormous real estate price bubble. I.e. the bubble should have imploded but it hasn't due to this management tactic. The situation is not in control!

George Osborne's policies have failed. He talked down the economy -- and now it is sinking. You do quite a bit of talking down the economy yourself. Who ever said repairing Labour's appalling economic legacy would be easy. Labour turned the British economy into a financial basket case. It was Labour that allowed the property bubble to develop. It's was Labour that failed to regulate the banks. Mr doom a gloom you are becoming just an appalling apologist for Labours irresponsible past governance.

George Osborne talked down the economy - and now it is sinking. HA haaa!! that's a bit rich coming from Mr DOOM and GLOOM... So what's Mr David Blanchflower answer? follow the United States example, and pump even more borrowed money into the economy?

David - if we do not go into a deep recession then you should apologies for talking down the economy.

As one of the supporting protagonists of the fiscal malaise this nation finds itself in i find you partly responsible for the current situation.

You are therefore not the person to be listening to when wse need to pull out of it.

It is arguable whether the so called recovery was real, given the fiscal and monetary measures implemented. We must get away from this Voodoonomics debate on growth verus cuts and discuss what will help the UK to have sustainable long term growth and employment. And this includes discussing the structure of the economy, as highlighted by Red Tory, Philip Blond. ie. why only 4 big banks, 4 big accountancy firms, 4 big telco operators and so on.

ps. all your money printing Mr. Blanchflower is not a solution, but a plaster to hide the wound and impoverish us all.

The last government ran down the UK's wealth creating industrial base and expanded the state which is now consuming wealth placing the UK at a competitive disadvantge to better managed countries.
http://www.easyhomeprojects.org/