Tag Archives: quantitive easing

In which we see how Dr Evil can tell politicians a thing or two about how their economic strategies are perceived. 

In a joke repeated throughout the film spy-spoof Austin Powers: International Man of Mystery, the villainous Blofeld-like Dr Evil makes efforts to extort from the world’s superpowers the sum of one-million dollars. This figure is laughed at, since Dr Evil is still thinking in terms of the economics of the 1960s. Realising his error, he re-states his threat, this time demanding $100 billion, a sum which causes outrage among the United Nations [1].

Today, this latter sum is no less laughable than the former. Consider the EU, where in 2012, its budget was 129.1bn euros, a 1.9% increase on 2011, with the grubby money-ink-stained fat hands of neo-Maoist President of the EU Commission, Jose Manuel ‘Unelected-doesn’t-need-lessons-in-democracy’ Barosso urging a 6.8% tax rise for the commission’s 2013 budget from nations who are being urged to cut their own national spending [2]. Examine the negligible effect of quantitive easing (QE) in the UK, where at the time of writing, £325 billion has been ‘injected’ into the economy in an effort to kick-start growth. Yet just last week, the UK’s recession deepened with a 0.7% fall in GDP between April and June, after £50 billion worth of QE was paid into the economy in February [3].

The reasons for such economic malfunction are multiple and subject to a variety of individual causes, but one thing is for sure, the money is being spent and invested by those whose mismanagement was responsible for the economic crisis in the first instance. Big Government knows only how to spend the taxpayer’s money, not truly invest it. How many more billions will such governments try to impress the general public with, forgetting that this is the taxpayer’s money who would sooner see money well spent rather than just spent?

Whatever the currency, the theory that spending billions stimulates growth is a ruinous fallacy. The argument is lost both economically and politically. When politicians talk of billions of pounds of investment being undertaken, or billions of Euros being spent on an initiative, or billions of dollars being injected into the economy, the electorate are rightly cynical and unimpressed with this rhetoric.  The word ‘billion’ has lost its significance and its ability to impress, precisely because such sums have proven themselves worthless in salvaging the economy and show little return for the taxpayer.

In today’s world there is no need for Dr Evil and his trivial demands for billions. Discredited policy, politicians and economies are villains more reckless and immediate in destroying what remains of the way we live now.

© thepanopticonblog, 2012