Letters to the editor January 30, 2013 Heathrow vs HS2 [Re: HS2 cost-benefit is a worrying mix of naive projections, Tuesday] The comparison we should make is between HS2 and a third runway at Heathrow. The former requires a fortune of borrowed taxpayers’ money, will find it difficult to recover the cost of capital, and is a massive transfer from the bulk [...]
Fewer fiddly rules will help make childcare more affordable for all January 29, 2013 HOW much would it cost the government to raise spending on childcare subsidies to the average level in Scandinavia? Your guess is probably wrong. As a proportion of GDP, the UK government spends more on childcare subsidies than Finland, Norway and Iceland, and about as much as Sweden. The only country ahead of us on [...]
Government didn’t rescue the US from Depression – it was corporate cash January 29, 2013 IS AMERICA heading for a boom? Real GDP has risen for 13 successive quarters and now stands 3 per cent above its peak level. A net total of 4.8m jobs has been created over the past three years, with a fall of 500,000 in the public sector massively outweighed by a 5.3m rise in the [...]
Political risk could still derail a better Eurozone outlook January 29, 2013 THIS year could be a watershed for the Eurozone. There is now a real chance the region can overcome the market volatility and fragmentation of the past few years, and that countries like Greece could actively return to capital markets. European leaders have laid much of the groundwork towards restoring credibility to Eurozone policy. But [...]
The Debate: Should the government introduce a tax on sugary drinks to encourage a healthy diet? January 29, 2013 YES Charlie Powell More often than not, sugary drinks offer no nutritional benefits other than “empty calories” to a nation already suffering high levels of obesity-related diseases and dental decay. So it would be good for our health and the environment if we drank less of them. A 20p per litre sugary drinks duty would [...]
Letters to the editor January 29, 2013 Spending restraint [Re: Austerity can’t have hurt UK growth because austerity hasn’t yet begun, yesterday] I’m surprised that commentators continue to suggest that austerity is a policy, not an outcome. It is the latter. No sane leader would wish to impose austerity on his or her people. But, as in the immediate aftermath of the [...]
Austerity can’t have hurt UK growth because austerity hasn’t yet begun January 28, 2013 IN ORDINARY parlance, “austerity” means a period of cutbacks, spending reductions, and debt being paid down. So when voters hear talk of government austerity, most of them assume that’s what the government is doing. When they hear (a few) economists saying that weak growth has resulted from “austerity”, voters think cuts to public sector pay [...]
The failure of QE isn’t an excuse for further Bank of England experiments January 28, 2013 QUANTITATIVE easing (QE) is like macroeconomic doping. America is like Lance Armstrong.” Or so a British journalist overheard at Davos. Relative to the size of the economy, of course, the UK is a more likely Armstrong than the US. Central bank asset purchases here have been about 25 per cent of GDP, compared to less [...]
HS2 cost-benefit is a worrying mix of naive projections January 28, 2013 BACK in the 1840s, almost the entire rail network we use today was built over just one decade. Yesterday, the government set out the route that its proposed new high speed rail line – known as HS2 – will take to Leeds and Manchester. It wants to build this new line in two decades. Is [...]
The Debate: Should banks be concerned by the amount of bad debt sitting on their balance sheets? January 28, 2013 YES Michael Ingram There is too much debt in our banking system, and not enough growth to service it. While a degree of forbearance by banks is desirable – to consumers and companies – it is toxic in the long term. If this continues, we run the risk of ending up like Japan, where low growth [...]