Gordon Brown Raises the (Borrowed) Ante
From the UK Independent. Some really scary stuff here. The UK measures are, comparatively speaking, very bold, but the country has a stubbornly high inflation rate and large deficits. A couple of snippets:
Brown to splash billions on schools and hospitals
After committing 50bn pounds to rescue banks, now Government will bring spending forward to stave off recession. Jane Merrick and David Randall reports
Sunday, 19 October 2008
But the move is another major gamble by the Government, after the 500bn pound bailout of the banks, because it depends on a major recovery by the time a public spending black hole emerges in 2010.
In a further sign of the impact of the crisis on the real economy, universities yesterday warned they are on the verge of a financial crisis because of soaring rates of inflation, and may be forced to cut costs or call for voluntary redundancies among staff.
Remember that 500 billion pounds is the equivalent of about one-fifth of annual GDP. It’s as if the sundry US bailout measures added up to $2.6 trillion.
Read the rest of the article