Posted by: Dirk | November 1, 2010

British Double Dip

A colleague of mine just gave me this: Swizzels Matlow’s Double Dip. Straight from the UK, available online. The only customer review says: “Used in goodie bags at party and better still, got a triple dip instead of double dip for the same price (free cola flavour at the end). Yummy fun!”

A triple dip for the UK would be catastrophic, I think, even if it comes with free cola flavour at the end. It is up to British voters to judge whether this is yummy fun or not. Cutting government expenditure in plain economic crisis seems to be a bit of a gamble, as the FT has recently noted as well:

Government spending is also supporting growth, yet it is set to be cut by more than 6 per cent of GDP over the next five years. A boost from companies rebuilding stocks will also dissipate at some point.

“In the second quarter of next year, when you get the serious spending cuts, that will be the real test of the recovery,” said John Hawksworth, an expert on fiscal policy at PwC. “When the cyclical rebound effects are not so strong, a bit like the US you might run out of steam.”

Labour argues that the spending cuts are unnecessarily harsh. “They are betting the farm on the view that however hard they cut, the private sector will soak up what will be about a million lost jobs,” said an adviser to the shadow chancellor. “Is the private sector that confident?”

Well, in case of problems, the UK at least has a country to talk to that is undergoing the same effort: Cuba.

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