Osborne is categorically promising to make us worse off

‘First, let’s be clear; what George Osborne is saying is that GDP us at risk of falling.

And let’s be clear, what we also know is that we are already operating in an economic environment where we are using less than the UK’s economic capacity.

In in other words, GDP could be bigger than it is, but is being constrained because there is a shortage of demand (so C is under performing); business is under investing because business is sitting on massive likes of cash (so I is under performing); G is under-performing because of austerity and we know imports are apparently growing faster than exports. No wonder George says it is not a pretty picture.

And despite knowing all this Osborne is saying that if C, or I or (X – M) fall then he has an obligation to reduce G. In other words, if these three elements of GDP is falling George Osborne is saying that he has a duty to exacerbate the trend by cutting government as well.’

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