Home > General Politics, Labour Party News > How to answer the Osborne “borrow more” charge

How to answer the Osborne “borrow more” charge

Geroge Eaton at the New Statesman says Labour needs an answer to Osborne’s charge that it would “borrow more”:

If [Labour] wants to continue to attack Osborne on this territory it will need a much better explanation of its own approach. Without explicitly declaring that it would borrow for growth (and explaining why), the party merely reinforces the impression that borrowing is always and everywhere an economic ill.

Fair enough, but George Eaton doesn’t go on to say what this explanation should be.  So here’s my version:

George Osborne is a cretin who doesn’t understand the basics of what borrowing actually is.  He thinks borrowing is something to do with some kind of international gentleman lending club, who will lend to us only at exorbitant rates unless the Tories promise to keep on bleeding the poor.

But that’s not what it is (even if the equally cretinous BBC says so).

The latest Bank of England figures show that 70% of borrowing is from ourselves.

At least Vince Cable’s Special Advisor understands the basics.  Back in 2010, Giles Wilkes sought to bring some cmmon sense to the hysterical debate about borrowing:

“All we get [from increased government borrowing] is a shifting balance between private and public assets and debts, in the absence of a massive international imbalance. Which means we can always afford to resolve either private or public indebtedness with a political solution, if we are brave enough.”

Labour is brave enough.  George Osborne is a coward as well a cretin, who apparently fails to understand that when he announces grand though probably unworkable plans to get pension funds to invest in infrastructure, he’s actually only talking about borrowing from the same institutions as invest in government bonds anyway.

There you go. George Eaton. Job done.

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  1. Agog
    February 26, 2013 at 11:03 am

    Also, everyone understands that borrowing at low rates is generally a really good idea because it’s not that hard to generate returns at a higher rate.

    There was a nice comment from a finance guy at another blog recently:

    Maybe we should think of this as LBOing the government. The government is sitting on cash (super low borrowing costs) and refusing to do anything with it. So we lever them up and pay a big dividend to the owners (citizens) who have plenty of good use for the cash, thereby restoring the dynamically efficient amount of leverage.

    Tory-leaning voters get all this very well.

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