Policy change

Published on 11/08/2012 00:00

I FEAR the prediction “Zero growth forecast may be optimistic” in your editorial (9 August) is correct, especially as Chancellor George Osborne continues to pursue failed policies.

If quantitative easing, negative real interest rates and government borrowing really worked, we would now have a thriving economy. After all, we have been following essentially the same policies since 2008. The coalition is on course to borrow more in five years than Labour borrowed in its 13 years in office.

If we want a solution to our economic woes, then we should do precisely the opposite of the conventional wisdom.

We must stop quantitative easing. We must stop borrowing ever more money, as growing public debt will never make the nation richer.

We must have positive real interest rates which will encourage saving and ensure that there is no shortage of credit. Better still, we should let the markets set interest rates.

We must greatly slim the public sector, whose hypertrophy is the root cause of our economic decline.

We must deregulate regardless of the obstacles. We must simplify and reduce taxation.

State Britain will never boom; Great Britain could. After all, it has done so before.

Otto Inglis

Inveralmond Grove

Edinburgh

Your editorial (9 August) about zero growth and our inability to cure our economic ills, misses a fundamental problem, which is that the magic money, electronically created by the banks from thin air for so long, requires to be taken out of the system by being made real. This means that devaluation by inflation is the inevitable result.

Quantitative easing, presently being sold to us as a benefit, is the seemingly benign start of this painful process. It will devalue currency in circulation and effectively transfers money from private businesses and individuals back into state ownership, where it can be squandered all over again.

It also makes imported goods more expensive, which causes more inflation, and so on. The present coalition is merely continuing the socialist economic disaster that it inherited.

Malcolm Parkin

Gamekeepers Road

Kinnesswood, Kinross