IMF at the door

ajay_suresh, CC BY 2.0, via Wikimedia Commons

On my list of recommendations in YouTube the other day was an extract from TalkTV. It was a discussion between presenter Peter Cardwell and Liam Halligan.

You may remember Liam, he had his own show on GB News at one time and then became a reporter. Anyhow he appeared regularly talking about economics which he seems to understand rather well. He got an MPhil in economics at Oxford and still appears on many different shows. His tenure at GB News lasted until June 2024 when he was dumped. He is no Tory or even faaaar right but seems to be centrist. I am puzzled why they got rid of him, he is very very good on things economic unlike our government. It was about this time that GB News began its lurch to the left from which it hasn’t really recovered. We still have the fool Nigel Nelson offering a leftist perspective on most things and he is not the only one. I find Matthew Stadlen unspeakable and I don’t give a monkey’s if he speaks well of me.

The gist of the discussion was that the economy is now so bad that we are looking at a repeat of 1976 when Dennis Healey had to go cap in hand to the IMF for a bail out. Our present financial circumstances are strikingly similar to 1976 hence the prediction we are on a slippery slope. It is Liam’s opinion that nobody in this government has a clue about running an economy.

These opinions are also aired by a Professor of Economics at Cambridge University, a uni not renowned for views to the right of centre, named Jagjit Chadha. Both Liam and Jagjit are in lockstep when it comes to the dire straits we find ourselves in. Last year government borrowing was predicted to be £80 billion. We actually borrowed £150 billion and this is on top of Rachel from Accounts presiding over a £50 billion black hole. I predict by the time she presents her autumn budget that £50 billion will have grown. My poor maths tells me the government is overspending by at least £120 billion a year on top of an £80 billion deficit. That smells like £200 billion a year ! Hence economists are calling it unsustainable.

The Chancellor doesn’t really have anywhere to go should she wish to find savings of that magnitude though I am sure most of us could find them. Get rid of net zero, foreign aid, invaders and so on. Just to compound her economic illiteracy the silly woman has installed Torsten Bell(end) at the Treasury to help with economic planning. Torsten is even more addicted to taxing us to death than the Caledonian Cyclops.

I am sure many of you will have fond memories of the IMF bailing us out in 1976. A £3.2 billion loan came with very stringent conditions: higher taxes (Torsten will be pleased), increased interest rates and what were then the deepest cuts ever in government spending. The arguments about the bits of government spending that can be cut will be a boon to popcorn manufacturers, we await with tensions rising. To put some meat on the bones, government spending in 1975-1976 was about £49.7 billion and it decreased to £48.6 billion the following year. By 1978 gummint spending was down to £45.4 billion. Contrast this with 2024-2025 spending expected to be £1,278.6 billion.

Some have postulated that Keith is not opposed to getting the IMF involved because he will then have to follow orders, something he has been keen on since he won the election. Anything that causes friction will be met with a “Nothing to do with me guv, just following orders” and to hell with the consequences for us poor unfortunates who end up footing the bill. The biggest question about all this is does the IMF have enough money to bail us out on its own ?

It may well have been the IMF intervention in 1976 that gave rise to Maggie’s infamous “The problem with socialism is that it eventually runs out of other peoples’ money”. In my only attempt at fairness I have to say that the Labour administration of 1974-1976 was spectacularly bad; perpetually caving in to trade union demands. However the root of the inflation was Grocer Heath’s Tory government of 1970-1974 and especially its Chancellor Anthony Barber, more often known as the demon barber. Ted Heath was a man of limited vision and turning on the money printing presses was one of the standard ways to improve the economy before an election. Heath’s problem was he called the election posing the question, who runs the country, the unions or the government. The electorate decided, albeit narrowly, that the unions ran the place and Heath went off for his great sulk to be shortly replaced by Margaret Thatcher. The sulk then managed to bite him even deeper.

With an election forecast to be happening in 2029, Nigel Farage has predicted that the markets will turn on this government and it won’t be long before it collapses. They may well force Starmer to step down, ably assisted by many of his knife sharpening colleagues, only to be replaced temporarily by Crayons. If the markets don’t like Keith we can easily imagine their opinion of Ms Dunning-Kruger writ large. If it does play out like this there will be an enormous bun fight for the keys to number 10. Nobody does vitriol and violence like the left. We may well see the fall of the government long before 2029. It is going to get very very nasty and I am going to enjoy every minute of the comrades shafting each other.