Dave don't got no clue (5)

Continuing my occasional series on what a complete and utter vacuous twat our likely next Prime Minister appears to be, let's look at his speech at Bloomberg:

Mr Cameron said his party's support for the Prime Minister's bank bail-out did not mean he backed its wider economic policies which had been clearly exposed as "a complete and utter failure".

What is particularly infuriating about this is that Dave had - briefly - appeared to have grasped the concept of debt-for-equity swaps when he was interviewed by Andrew Marr on 28 September 2008, but hey. Turning to the last paragraph quoted:

"I will never pull my punches in explaining how this Government has brought Britain down." Mr Cameron repeated promises to freeze council tax, reform insolvency law and stop pensioners being forced to buy retirement annuities as he again rejected calls for him to give up-front tax cut pledges.

I have never seen any evidence that he understands or ever tried to explain where The Goblin King had gone wrong. He certainly didn't in the bits quoted from his speech. Yes, Camerosborne are forever wailing about the wall of debt that has built up under Nulab, but they fail, in the main (this speech is an exception) to distinguish between government debt (I agree that this is raging out of control because of public sector waste and overspend of £100 billion per annum) and household debt. This either stems from the fact he is genuinely thick, or perhaps because he knows deep down that The Tories are the homeowners party, and that 85% of household debt has gone into mortgages; which pushed up house prices to ridiculous levels; which in turn generated handsome profits - albeit largely on paper - for homeowners.

And so what are his solutions?

"Freeze council tax" *Sigh* Again, I agree that local councils waste billions; the solution however is not to cut Council Tax, but to cut central government grants to local councils (which are heavily skewed in favour of Labour-run councils, of course, so fair's fair); this means that central government can then reduce far more damaging nationally raised taxes on production and employment */sigh*

"Reform insolvency law" This pre-supposes that there is anything wrong with insolvency law as it stands ...

"stop pensioners being forced to buy retirement annuities" I totally agree with this one, actually, it's already in the MW manifesto. But it's hardly going to solve our economic problems, is it?

"reject calls to give up-front tax cut pledges" *Sigh* see above. In any event, as Tax God Art Laffer once explained, if businesses know that there'll be tax cuts in the near future, they shuffle their profits around so that they declare less income now and more later. So a sneaky but cunning move on Dave's part would be to promise cuts in tax rates; this means that in the first year of a Tory gummint, tax receipts will increase as if by magic! People who misunderstand The Laffer Curve* will claim that this is evidence that cutting rates boosts revenues; it is of course only a short term thing, but so what? Politics is a dirty business.*/sigh*

* The most common fallacy is that tax cuts always increase revenues; Art Laffer never said that! In any event, the UK's corporation tax rate of 28% is on the upward slope of the Laffer Curve; we could achieve the best results by cutting VAT and Employer's NIC, but that's another story.