German minister ridicules Brown's recovery plan

[Roach-Rampino]

Gordon Brown's plans to soften the impact of recession have been denounced as "crass" and "breathtaking" by the German Finance Minister.

Peer Steinbrück triggered a diplomatic row with Britain on the eve of today's European economic crisis summit as he accused the Government of "tossing around billions" and saddling a generation with debt. He scorned the Prime Minister's decision to cut VAT and boost investment on public projects at the cost of increasing national debt to £118bn next year.
Dispensing with the usual niceties of diplomatic language, he questioned the wisdom of following the philosophy of economist John Maynard Keynes of using public cash to stimulate the economy. "The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking," he told Newsweek magazine.
"When I ask about the origins of the [financial] crisis, economists I respect tell me it is the credit-financed growth of recent years and decades.
"Isn't this the same mistake everyone is suddenly making again, under all the public pressure?"
Mr Steinbrück went on to question the effectiveness of this month's VAT cut from 17.5 per cent to 15 per cent:
"Are you really going to buy a DVD player because it now costs £39.10 instead of £39.90? All this will do is raise Britain's debt to a level that will take a generation to work off," he said.
European Union leaders will today begin debating a €200bn (£175bn) fiscal stimulus package supported by Mr Brown with the backing of Nicolas Sarkozy, the French President, and José Manuel Barroso, the European Commission president. Their stance – discussed at a Downing Street meeting on Monday – had already attracted Mr Steinbrück's ire when he accused other European leaders of behaving like "lemmings" in response to the crisis.
The comments of Mr Steinbrück, a Social Democrat, may not necessarily be shared by the German Chancellor Angela Merkel, who is a Christian Democrat, but they will raise the diplomatic temperature at an already difficult summit, which will also discuss climate change.
George Osborne, the shadow Chancellor, said the comments "totally demolished Gordon Brown's central political charge that only the Conservatives oppose his expensive and ineffective VAT measures".


Source:http://www.independent.co.uk/news/uk...n-1061269.html

[GTI]

I think this is very fair comment. Most of the effusive praise for Brown's policies has been coming from across the Atlantic, it is time we got a little balance from nations not mired in consumer debt or reliant on consumer spending to get them out of their hole.

Brown himself has admitted that he has broken most of his earlier "Golden Rules", which were very easy to pontificate about during the boom times but a lot harder to implement in the slump.

[BertRoot]

I think there is a reliance from Brown on the dimmer section of society who see his ministrations as a good thing for their own economy though really have no comprehension of how little he is doing for the country as a whole.

[CzarJunkie]

I found this excerpt in a BBC News article on the German Economy:

That pessimistic outlook was echoed by Sebastian Wanke at Dekabank: "There won't be an improvement in the fourth quarter. The situation will only get worse."

Not really connected and a little puerile but fuck it, it made me laugh.

http://news.bbc.co.uk/1/hi/business/7726162.stm

[GTI]

I think there is a reliance from Brown on the dimmer section of society who see his ministrations as a good thing for their own economy though really have no comprehension of how little he is doing for the country as a whole.

Its like bitter medicine, people think that because he is a dour-faced Scotsman, son of a preacher man.... his policies may sting, but ultimately they will be good for future prosperity.

[blaggard]

It's worrying just how much public support the Brown "borrow more" solution is getting, why are people intent on leaving him at the wheel of this runaway bus?!

[GTI]

I found this excerpt in a BBC News article on the German Economy:

That pessimistic outlook was echoed by Sebastian Wanke at Dekabank: "There won't be an improvement in the fourth quarter. The situation will only get worse."

Not really connected and a little puerile but fuck it, it made me laugh.

http://news.bbc.co.uk/1/hi/business/7726162.stm

The Germans are obsessed with Wanke and Kunt, there is a Hans Kunt where I work and everyday I walk past the Basel Kunstmuseum

[CzarJunkie]

I really don't see what the problem is, taxes will undoubtedly have to increase and public spending be curtailed. The only question is when? Do you want to do it during a major downturn in the global economy, or do you want to do it when economic conditions have improved? It's a risk he's taking, theres no doubt, but you can't have your cake and eat it. As a nation we've enjoyed the last 10 years of prosperity, well guess what, thats over and someone is going to have to pay the bill. But let's stick it on the card for now.....................

[blaggard]

As a nation we've enjoyed the last 10 years of prosperity

No that was debt not prosperity, and we solve it with more debt?? We have no reserves thanks to this Government and he is just making it worse.

[CzarJunkie]

No that was debt not prosperity, and we solve it with more debt?? We have no reserves thanks to this Government and he is just making it worse.

I think you'll find it was prosperity. The British economy has seen unprecedented growth over the last 10 years. The fact most of it was fuelled by an irresponsible nation getting into personal debt is not a fault of the Government. Like I've previously posted, those that are criticising Brown now would have been the first to pipe up had he rigourously regulated the financial institutions. He would have been accused of stifling growth and harming our economic future.

You can't have it both ways.

[blaggard]

I always critisised him, selling the gold reserves when it was cheap was a good move?? 10p tax? billions out of pension funds?

[CzarJunkie]

I always critisised him, selling the gold reserves when it was cheap was a good move?? 10p tax? billions out of pension funds?

Where do you think this money went? He didn't spend it on a solid gold yacht or a shopping spree at Harrods. It went to pay to improve public services after the tories had royally fucked them.

[Over Carl]

It went to pay to improve public services after the tories had royally fucked them.

The only public service I have ever noticed any improvement in is london transport, I believe most improvements in london transport will be driven and budgeted by the mayor's office. (However, I can think of crazy london transport schemes that have probably squandered as much money as they've spent on the stuff that's worked)

I think a more appropriate saying would be you can't have your cake or eat it, or even look or dream about the damn cake.

[CzarJunkie]

I think a more appropriate saying would be you can't have your cake or eat it, or even look or dream about the damn cake.

Plenty of people have had their cake and eaten it over the last 10 years, we've been like pigs in shit for a long time and now it's time to pay up.

I suggest anyone complaining to suck it up and encourage their friends and family to behave more responsibiliy in future, as it's the British public as much as anyone who has caused this mess.

[4me2]

I really don't see what the problem is, taxes will undoubtedly have to increase and public spending be curtailed. The only question is when? Do you want to do it during a major downturn in the global economy, or do you want to do it when economic conditions have improved? It's a risk he's taking, theres no doubt, but you can't have your cake and eat it. As a nation we've enjoyed the last 10 years of prosperity, well guess what, thats over and someone is going to have to pay the bill. But let's stick it on the card for now.....................

This is a red herring that the smug bastards conservatives are clinging too.

The reality is this argument about debt has been going on for many years in Germany the main root cause being the reunification. Millions of East German pensioners were plundering the national reserves without ever contributing fuckall into the pot. German pensions are contribution based unlike our national pensions and East Germans were all credited with 100% pensions as there was "no unemployment" in communist states. Infact in general the East German pensions are way higher than that of the west Germans because of this.

The fact that half of Poland and Russia are also now living in Germany with German passports only increases their debt.

The Germans aren't playing cleanly in this at all but those are some of the true reasons for the unwillingness to create any more debt. If they did there would be a major uproar from opposition parties in their Coalition govt.

Personally I'm convinced their was a secret pact between Helmut Kohl and the Russians to get the remaining Russian troops out of East Germany a couple of years after the Reunification. Since then at least 2 million Russians have been given German nationality claiming to be decendents of Germans. They always bring accross the Russian grandparents who claim full pensions averaging 1200 Euros per wrinkly.

[4me2]

Where do you think this money went? He didn't spend it on a solid gold yacht or a shopping spree at Harrods. It went to pay to improve public services after the tories had royally fucked them.

As well as financing the Iraq and Afghan wars.