Has anyone else noticed the flaw in Darling's Cunning Plan? We simply don't have any money just waiting to be released.
Personal debt is is at record levels. Our national household savings ratio is negative, meaning we aren't actually saving anything at all. Businesses are being hit by the credit crunch because they aren't sat on big piles of cash, that's why a lack of credit to make payroll, for instance, is proving so damaging.
There is no existing money to be loosened by pump priming. All the government is doing is putting us all in more hock to the future. It's a clusterf*ck.
Quite. The other problem, of course, is that when you start pouring loads of cash into the economy—that is, increasing the money supply—you end up with one guaranteed result: inflation.
And since government spending is so colossally inefficient and wasteful, it is, in any case, going to cost considerably more to "pump-prime" the economy in this way than it would if you let voters keep more of their money and spend it as they wish.
It's always worth, at points like this, reminding ourselves of the four ways of spending money, as espoused by Milton Friedman and summarised by P J O'Rourke in All The Trouble In The World.
- You spend your own money buying something for yourself—you therefore try to get the best possible product for the best possible price.
- You spend someone else's money buying something for yourself—you still try to get the best possible product, but you are not so concerned about the price.
- You spend your own money buying something for someone else—you are deeply concerned about the price, but you are not nearly so worried about the quality of the product.
- You spend someone else's money buying something for someone else—in which case, who gives a shit?
"Clusterfuck" is hardly an adequate word to describe this situation.