Economics is not about goods and services;
it is about the actions of living men.

Via The TaxPayers’ Alliance – Economics 101: The IFS spreadsheet doesn’t tell us what policy choices are best for the poor:

Suppose you invented a policy, some kind of economic miracle, which doubled the incomes of the poorest ten per cent of families without the Government spending a pound.  That would reduce benefit spending.  It would also increase tax revenues from the poorest.  The same method that the IFS are using in their reports would show the effects of that policy as horribly regressive, cutting spending on the poor and shifting the fiscal scales against them.

Of course that is an extreme and artificial example.  But it shows the big problem with the IFS analysis, which essentially assumes that the fortunes of the poor add up to the amount of Government money spent on them.

Highlights from the past week:

• On Monday, I attended the beginning of Armed Forces Week in Wycombe.
• Budget statement on Tuesday by the Chancellor. I spoke in the debate receiving a warm reception from Prof. Kevin Dowd on the Institute for Economic Affairs’ blog. The first Cobden Centre Austrian School Seminar began at the Institute of Economic Affairs.
• Wednesday saw a major post-budget event by the TaxPayers’ Alliance and the IEA, followed by lunch with Secretary of State for Health, Andrew Lansley, to discuss health reform and Wycombe Hospital.
• Writing for ConservativeHome on Thursday, I explained why economists disagree, why they are so often wrong and where economic thinking goes next. I followed this up on Saturday with some essential market analysis of the crisis from The Cobden Centre.
• On Thursday evening, I explained to like-minded comrades over dinner how we might deliver and entrench a new open society.
• On Friday, I visited the magnificent Skidz project, which delivers motor training for young people, before dropping in on the Schools Linking Network Celebration event at Adams Park. The evening was beautifully rounded off with a wonderful Patron’s summer party in Hambleden Valley.
• Yesterday, I visited Desborough Playden before enjoying Marlow Bottom’s Rose Carnival. I ended the day giving prizes to inspiring young people at the Muslim Education Centre on Totteridge Drive.

And all this reminds me: time to begin a new Google map for my work as MP…

From conservatives.com:

George Osborne said the Pre-Budget Report represents “the greatest failure of public policy for a generation” after Alistair Darling announced plans to double the national debt to more than £1 trillion.

George, the Shadow Chancellor, described the report as a “Tax Bombshell Budget” and stressed that a debt of £1 trillion was “the bill for Labour’s decade of irresponsibility”.

“It is confirmation of the time-old truth that, in the end, all Labour chancellors run out of money and all Labour governments bring this country to the verge of bankruptcy.”

Bloggers and commentators are congratulating George Osborne on his response and pointing out little details like the £40bn of tax increases which outweigh the £20bn stimulus package. (And yet still we find record borrowing will be achieved.)

Watching BBC Parliament, the oafish smugness of the Labour front bench was almost unbearable. Here they are most likely ruining us but they are pleased with themselves. The Chancellor was particularly self-congratulatory as he compared the cost of borrowing now to the cost in 1997, but he forgets, or fails to understand, the market mechanisms by which British interest rates will be forced to rise sharply if the Government is to continue selling its bonds.

Was this a political pre-budget report? Oh yes. They hope to get away with maintaining their burdensome quango state at our ever-greater expense, by reducing taxes marginally before the election, only to boost them afterwards.

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