This Budget kills the recovery at birth...

A couple of days ago I posted this, showing some Newsnight footage and an interview with the Japanese economist Richard Koo. The basic message was the Treasury's new belief that exports will provide the growth to drag us out of recession, and a warning that the budget cuts risk delivering a Japanese nightmare of a decade or more of non-growth.

Today Professor David Blanchflower has an article in the New Statesman. It has the rather forbidding headline "This Budget kills the recovery at birth" .

I'm no economist, so I'll let you read it for yourself. Just let me quote a few sentences...

"I am now convinced that as a result of this reckless Budget the UK will suffer a double-dip recession or worse, not least because there is no room for interest-rate cuts, although lots of additional quantitative easing (QE) from the Bank of England could soften the blow."

and

"....on 22 June, Budget Day, the OBR produced a second forecast taking into account the Chancellor's new fiscal measures and showing lower growth in 2010 and 2011 but higher growth after that. The OBR's central projection is that growth will be 1.2 per cent in 2010, 2.3 per cent in 2011 and 2.8 per cent in 2012. That implies quarterly growth rates of 0.6 per cent from the second quarter of 2010. But these forecasts have large margins of error, and indeed in each of these years there is a significant probability in the OBR forecast that growth rates could be zero or lower, before the cuts have even kicked in."

Note that "before the cuts have even kicked in".....

Anyway, it seems clear that there is a large body of economic opinion that believes that Mr Osborne has greatly over-egged the cuts and that the danger of a double-dip or worse is greatly heightened by his budget.

You can't help hoping that these predictions are wrong, but the Conservatives have form in using ideological cuts to achieve political ends regardless of the costs to society...

They have always believed, after all the "unemplyment is a price worth paying".

Your unemployment of course, not theirs....