Didn't we abolish boom and bust?

By Mohammed M-Hasan on Apr 15, 08 08:37 PM in Economics

I must admit that I am quite tempted to delve into the thousands of pages of Hansard's and dig out the numerous references to the 'abolishment of boom and bust' which were bellowed by our then Chancellor Gordon Brown when he saw off a number of Shadow Chancellors in his heyday.

Those days must seem very far off now. But why are we here?

Is there a recession: No.

Are we suffering from runaway inflation: No.

Has unemployment plagued the nation: No again

Yet for some reason, we are seeing disposable income plummet, confidence in the housing market drop like a lead balloon and a daily splurge of gloom across the media.

I am not suggesting that we are in a boom, but is there a bust on the way???

Is it really feasible that the UK is on the verge of a recession simply because inflation is up 0.5% and some people who should never have been able to take out the huge amounts of credit which they did will not be able to keep their houses, yet will still be gainfully employed.

The economy will continue to grow but will do so slowly, inflation will come under control by the natural depressing effects on wage price inflation and the price that we have to pay for it is not buy yet another pair of shoes.

It is funny how just 16 short years ago; it was double-digit inflation and accelerating unemployment, which were the signs of recession.

Today, a presumably well educated population is determined to talk itself into an economic Armageddon simply because a few thousand some people can't take a cheap flight to Ibiza (big loss) and some others can no longer hide away the strains of a mortgage 6 or 7 times their income.

We will be in a bust, but not because of economic conditions, rather because too many people have lost the ability to respect the money that they have.