Austerity. You must do this to protect the future and get yourself out of the sh1t.
Oh sh1t. Well, we thought it would be OK but now we see that, in fact, Growth is important. Except for some of the poorer countries. For them it’s still all about austerity.
No, wait a minute. It’s Europe’s fault. They should help the poorer countries.
Austerity. Growth.
Whoops! We were slightly wrong.
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Once upon a time, I thought that people who had the necessary training and qualifications were to be respected. After all, they know what they’re talking about.
Now, maybe because I am much older, I know that this is an utter load of bollocks.
Most people, even those supposedly in charge and who should know what they are doing or saying, don’t.
And, this article sums that all up quite nicely.
To save you the bother of reading it, here are some really ‘choice’ bits:
Christine Lagarde warned that only with greater co-operation and courage could governments hope to prevent a repeat of the financial crisis.
She is the head of the IMF. so she must know what to do, right?
Apparently.
Lagarde said banking regulators had told her that reforms of the financial system were incomplete and in many cases banks were as unsafe as before the collapse of Lehman Brothers in 2008.
So, the regulators of the banks (who are ex-bankers) have told her (the head of the ‘International Bank’) that the banks are unsafe, still, after one of the banks (in the USA) was ‘allowed’ to go bust because the regulators had failed to ensure it was safe.
Europe has come under fire for its failure to end the debt crisis
Because, of course, everyone else has been really brilliant and solved their crisis.
Lagarde said: “We expect action and we expect courageous and co-operative action on the part of our members.”
Ha! So what action do they expect to see?
The IMF has expressed frustration with Europe’s piecemeal response to its debt crisis and warned that a recent respite in borrowing costs for debt-laden countries such as Spain may prove short-lived unless eurozone leaders come up with a comprehensive and credible plan.
Now, to remind ourselves, the IMF said, at the beginning of the crisis, that we should immediately impose austerity and cut borrowing. But, it seems they made a bit of mistake in their calculations:
[The IMF] admitted in its World Economic Outlook report that officials underestimated the effects of austerity measures on economic growth.
The report found that previous estimates that for every £1 of spending cuts the economy shrank by 50p were wrong and the economy shrank by around £1.30 instead.
The IMF was a strong supporter of austerity measures adopted by Western countries, including the UK, in the aftermath of the financial crisis.
As a result:
Most countries that adopted austerity programmes have missed their deficit reduction targets after a sharp slowdown in economic growth hit tax revenues and private sector activity.
So, let’s just get this right – they thought that austerity was good because we would cut debt but they forgot to factor in the fact that, as soon as we have austerity, people stop buying (and borrowing) and so the effect on the economy was a LOT worse than they expected.
I’m sure the head of the IMF will make a full and swift apology and shut her mouth in future.
The IMF has U-turned in recent months and urged government to allow their austerity reforms to be planned over a longer period to lessen the impact on growth.
But I see no apology. Nor do I see everyone ignoring her and the rest of the IMF – which is what they should be doing and should have done.
A three-year-old child would have a better grasp of the situation than they had and, not only do they earn vast sums, tax free (WTF?) but, with their qualifications and experience, they should be able to do much, much better.
Of course, what should be done is to scrap the model we have now – where debt is seen as an asset rather than a liability and the banks should be under control and should be stopped from gambling, which is what they do and which is what led us to this, now.
In fact, now, every time I see something that the IMF head has said, it just makes my blood boil.
It’s outrageous and, should I ever meet her, I just want to tell her to fuck right off.
