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October 05, 2009


Proposition Joe

"ONLY once the economy has come out of recession and back on a sustainable path can fiscal consolidation strategies be effective."

And there's the rub.

Even in the depths of the recession, we've a constant clamour from vested interests seeking to protect their own patch. If the denial of reality is now so strong as to make cut-backs politically difficult, once a recovery has taken hold, it would become politically impossible to consolidate. Leaving us with the currently inflated cost-base permanently burned into the economy.

And that, I fear, is Mr. Begg's strategy: long-finger the cuts in the hopes that they'll never come to pass.

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