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08 January 2013


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Adrian Fisher

The Evening Standard fails to land one of its points. Households too can "print their own money" to a certain extent, in that they can stack up credit card debt. This facility is an expensive last resort, and is limited by the creditworthiness of the family in the eyes of others. The analogy with excessive sovereign debt is all too painfully exact.


Keep up the good work Terry, a bit of hard work and saving never hurt anyone.


Well, terry, no-one can say uou haven't TRIED to get your point over to the movers and shakers (sometimes questionably referred to as the 'Great & the Good'. One has to ask Great and Good at what 'sums'?).

David Nash of Stratford Grammar School

Dear Terry, I have read all you and your referred blog writers have to say.
In effect and to use a maritime metaphor it is that those with economic 'expertise' have sailed into deeper and deeper, storm tossed waters with no rudder and their eyes wide open and when a giant whirlpool, visible only to the ignorant ordinary person, finally swallowed them they shrugged as they went down and looked puzzled and shouted, " It's your fault, not ours !" PS Between the ages of eighteen and twenty one I worked at The Boat Show at Earls Court for our family friends, Lewis Marine who were the British agents for RIVA boats, many of which you've probably got !


Wonderful New Year card ...and our own Daniel Day-Lewis playing the man himself!
Happy new year to you Terry
Elly Mae


So, to recap:

City Spy = simple-minded.
Everyone simultaneously cutting spending, causing the economy to contract further while sending unemployment through the roof and thereby provoking a death spiral of falling revenues and increasing deficits = solution.

Got it.


This is an admirable campaign you are running Terry. Just make sure you don't end up being offered (and worst of all accepting) a job in the Government!

Terry Smith

Andrew: Just to recap accurately, I said City Spy was simple minded for suggesting that I had overlooked the government’s ability to print money, and for believing that is a solution.


Excellent stuff Terry and a good start to the year. Regrettably the flaw in your plea is that the truth and politicians, have rarely, if ever, peacefully co-existed.

If may indulge in a little fantasy, how wonderful it would be, to be able to dispense with the latter.

Chris Downing

I've long held this view of the economy. When all this first started I did a quick analysis of the numbers and came up with the conclusion that cuts to fix the problems, spread over ten years, would be something like 25% in government expenditure. A combination of staying inside tax income and reducing the debt by 50%. Taking this view to friends and down the pub soon makes one realize we are in a World of deep denial. Nobody wants to talk about real reality. And I've heard that one about Goverrnment can spend what ever it wants because it can print money, too often for it to be funny anymore.

Chris Downing

When I first looked at these numbers I thought if 1-2% cuts can fix it I must be hugely wrong. I thought the basics were about £500B tax revenues, £650B expenditure and a rising debt of £1.2T. Which for my back of a fag packet calulation meant cutting £150B overspend plus paying down some of the debt, lets say £100B a year.

That means cuts of about £250B per year just to get back into balance and reduce just a part of the debt. Isn't that nearer 40% cuts than 2%. Even 25% doesn't seem the get the books to balance.

I had expected by now to be seeing a raft of swingeing cuts of at least 10% in the first year, then another 10% the next year, then another cut.

Would I be correct in assuming I live in a whole World of denial?

Mike Mellor

Dear Andrew alias "City Spy"

I presume that the "City" part of your name refers to the financial district of the City of London.

So I guess that you're a financial and economics boffin.

Surely you have overlooked the Economics 101 concept of Gross Domestic Savings?

The most prosperous nations have the highest Gross Domestic Savings, and to get that way most of the households had to save at the same time.

What you're suggesting is a kind of countrywide potlatch, an all-out splurge and complete draining of your capital in the trust that you will regain it all.

That reminds me of the proverb that when the poor inherit the earth, it will take the rich a week to get it all back again.

I'm also reminded of the street wisdom that if a bunch of people are in a lift and the cable snaps, you should all jump at the same time just before it hits the ground, although when you are enclosed in a box how you are supposed to determine the exact moment I don't know...

Jason Abbott

Dear Terry.

It seems UKIP needs someone of your stature on their side especially now as they seem on the rise . Considering the EU will destroy the City in the end, have you thought about a career in politics with UKIP ?

Jason Abbott

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