The double dip predictions

Brian Corbett

Me.
Like many observers, it became inevitable when £200 billion of cash stimulus produced only minimal growth.
That £200 billion has to be taken back, one way or another (inflation, certainly being one of them) and when it does it will cause the economy to drop off a cliff.

I SUPPOSE if it's done over a decade and just trims 1% off GDP during that time its TECHNICALLY not 'double-dip' - but if economic growth is minimal and repayment is rapid, then the 'double-dip' is certain, in a '>1 million less public-sector workers' economy.
The best guess, IMO, would be 2 million less by 2020, with a retirement age of 70 (rising to 80 by 2050) and benefits bonfire for all 'universal' hand-outs (child, heating, TV, bus pass etc)

Gawain

Great idea, it will be worth reviewing this list a year from now. The prediction that resonates most with me is Alan Budd's. Too many economists have forgotten the roots of their discipline in philosophy and history. It is now taught as if it was a science. A science that can make precise and accurate predictions about future human behaviour ! If the last two years has taught us anything economics is less a science and more a branch of hermeneutics.

A double dip recession is a possibility, but, there is also a possibility that there won't be a dip. My concern is that by over focussing on the dip end of the range of possibilities these economists will affect behaviour and make the prophesy a self fulfilling one. It looks to a non economist that there is a subconscious guilt amongst economists about their failure to predict the recession in 2008 and they are now erring on the side of doom. Perhaps we just have too many economists.

TrevorsDen

Whats so horrible about a double dip recession - it merely shows the limits that there are to 'stimulus'. Growth will resume after the double dip and will probably be more soundly based.

The aim of policy is not to avoid a double dip but the rectify the problems which caused the first dip (slump) and to put the economy on a sound footing for future growth.

Assuming that a double dip is a defeat of some kind is just a fiction put about by the opposition and by journalists who have nothing better to write about.

The defeat is in reality a defeat for 'stimulus' - there are limits to what 'sky-hook' economics can achieve and an economy cannot be sustained by endless stimulus measures which require ever more borrowing and rocketing debt.

Jannie Geldenhuys

If there is no double dip will Robert Skidelsky, Liam Byrne, Polly Toynbee, Gordon Brown and all the other members of the "Spend baby, spend" party admit they were wrong?

Richard of York

Double Dip IS part of the plan, Oik is not bothered if it happens or not.
I am sure he and the treasury will have factored it into the calculations.
I am now waiting for the first "It was always going to happen no matter what" headline.
Lets see who does a double dip benefit...the poor or those with large cash accounts waiting to pounce on cheap property and businesses that will hit the market when bankruptcy looms.
Unemployment is the price worth paying it means some Tory benefactors can pick up a few bargains come the fire sale.

Chris lancashire

TrevorsDen post is eminently sensible and reasoned - couldn't agree more.

Sir Graphus

It may be possibly to sustain recovery; but only by continuing to pump borrowed money into the economy, which circulates it by consumer spending on an ever increasing number of imported goods. Borrowing can be set at a level to give 0.5% growth. That's the easy bit.

If "recovery" means giving people the means to p!ss the nation's wealth away like this, then is it a recovery worth having?

In my book, a recovery would be when factories started opening in Middlesbrough, exporting high quality goods. No-one seems to be proposing this.

AlanL

I am afraid I discount Lilico (and Blanchflower) as The Boys Who Cried Recession. Eventually right, but having predicted five of the last two recessions, from their respect right- and left- wing biases, they have rather burnt their credibility (even a stopped clock ...)

I place more weight on Alan Budd - predicting the future in certainties, rather than fan charts of probabilities, is a mugs (or journos) game.

There WILL be another recession.

I am just not sure if it will be next year, or within twenty years.

Steve Tierney

Well, for posterity - I believe we are still IN recession. So if there is a "double dip" that would just be the illusion stripped away to reveal the reality. The trouble is the "official" calculation is based on GDP which is a ridiculous measure based on smoke and mirrors and little more.

Wily Trout

Did anyone ever make such an excellent collection of the pronouncements of the great and good back in 2005, 6 and 7? Like Anatole Koletsky, the Times oracle, saying over and over again that there would not be a recession...? Perhaps we should look at what he is currently saying to we can be confident that the opposite will take place.

gordon-bennett

Surely there must be a quote somewhere from david blanchflower. He is usually quick off the mark to paint The Coalition's policies in a bad light, which is why he is featured so depressingly frequently on the wretched beeb (=the real opposition).

Simon Stephenson

Richard of York : 11.08am

Fortunately for the country, but unfortunately for we who would like to see people like you shown to be the nonsense-peddlers that you are, there will be no playing-out of the socialist alternative to the coalition's economic policy. It's a pity, because if there's one thing that the world would benefit from becoming abundantly clear, it's that the forecasts and projections of socialist economics are wrong in just the way that non-socialists have always said they were.

But the people of the world just can't afford the cost of the experiment, which will mean that every generation or so, there will be a new group who haven't had first-hand experience that trying to make 2 + 2 equal 5 invariably means that you end up with 3, or less, instead of 4.

As Warren Buffett suggested, what we learn from history is that people don't learn from history.

TGF UKIP

There is huge political capital acquired through being right and if growth in 2011 does finish up being less than 2%, all the Labour warnings of "too much, too soon" will be proved correct.

The Bigging up of Boy George Budget was hugely flawed in cutting spending and increasing personal taxation where that would damage most - on the higher earning wealth creators. But all in the name of "fairness" and "progressive" equality of course, just as we might expect from a Cameron government.

ajs

R of Y an economist, now, as well as all the other "ists". School of hard knocks, doubtless. Take a holiday, lad.

Simon Stephenson

TGF UKIP : 3.38pm

"There is huge political capital acquired through being right and if growth in 2011 does finish up being less than 2%, all the Labour warnings of "too much, too soon" will be proved correct."

Total bullshit. Neither you, nor anyone else, can possibly say for definite what would have happened had Labour's plans, rather than the coalition's, been followed over the last few months. All non-socialist economic thinking was/is that to delay addressing the structural deficit was a greater risk to the economy than to start tackling it immediately after the election. There has, however, been no action from the coalition to reduce the impact of the cyclical economic stabilisers, and no genuine disciple of Keynes would have called for anything more stimulating than this.

The truth of the matter is that pre-2007 socialist, dream-like economics had led the economy to overrun and imbalance itself to such an extent that there was no economic policy that could have prevented that major corrections that are still taking place. It's just cloud-cuckoo-land to think that there is a policy that can be pursued that will allow us to avoid the consequences of the obstinacy, the stupidity, and the economic illiteracy with which the politicians managed the economy between 2001 and 2007.

TGF UKIP

Simon Stephenson, all that Labour needed to say is what they've said: that the level and pace of the re-balancing might imperil the recovery. Thus if the forecast of 2%+ is not achieved they can claim victory in exactly the same way Dave & Co could have claimed victory if they had said Brown's spend and borrow splurge would lead to ruination. Instead, as we all know they continued with their "match Labour spending" idiocy right through to ruination actually arriving.

Th Bigging up of Boy George Budget was entirely political and from that point of view was entirely successful by enabling the Speccie's cover of 26th June to be "Osborne Takes Charge" and the Political Editor to title his piece "Osborne is becoming the true Tory leader".

From derided to deified in one easy Budget.

Richard of York

@Simple Simon
What exactly does your rambling post actually have to do with mine.
Do you deny any of the points I made?