Didsbury Dave
Well-Known Member
- Joined
- 1 Feb 2007
- Messages
- 39,202
I agree with every word. I can see this coming down the track. It always was going to do really but the virus has magnified things massively. We need to grow this economy at exactly the time we’ve hobbled it.Here’s the problem as I see it. There is no problem with the govt printing money to get us through this, because everyone else is doing the same, and everyone knows why we’re all printing money for all we’re worth.
There will come a point in the summer however when nations start to trade their way out of difficulty. And once they do that, our ability to carry on printing money just the same pretty much ends, because if we are just printing money when nobody else is, that’s when you get hyper inflation. So when everyone else - who is leaving lockdown earlier than we are - stop printing money, we really need to stop too. When that happens, and the government can’t prop the economy up any further with freshly printed cash, we will have to trade our way out of trouble like everyone else.
Our ability to do that is limited for two reasons. One, we have chosen to walk away from unlimited access to the largest trading bloc in the world. Two, we have made our economy so heavily dependent on the services sector that we will be hurt by what is now inevitable, namely that a lot of manufacturers will be cutting back on costs that involve reliance on the services sector. (Eg sending executives on business trips will be replaced by more zoom meetings, so less business for hotels, restaurants etc).
Now the civil service isn’t stupid. They know we face a massiveLy difficult period ahead, and we’re going to need trade deals. Far more, in fact, than the EU and the USA will do. So we are negotiating from positions of clear weakness, we know that and they know that. To them, a trade deal with the UK will be welcome, but not essential. We, by contrast, are pretty much fucked without FTAs. So I suspect we will end up doing a deal with the EU, for instance, rather than leave on WTO terms, but it won’t be pretty.
TLDR: they’ve got us by the balls. The long term damage to our economy is structural.
But you and I don’t matter, mate. There are people reading this exchange who have no concept whatsoever on how the next 12-18months will affect their life, their careers and their public services. They cannot make the connection between proximity and trade.
A recession is a newspaper headline to them as long as they keep their jobs.
They have their Brexit government now and to
admit that they are incompetent is to admit that they were duped. They aren’t going to
do it. They’ll double down on every lie and be quite happy being gaslit for years.