Quantitative easing is a con trick - just give us £1,000 each
Opinion digest: Bank of England failure, Olympic wobbles, and we we can't afford to cut immigration
EVERY weekday morning from The Week online - a daily wrap-up of the best comment and opinion articles from the morning papers and the top political bloggers. If you think we've missed a good one, please let us know. Contact us via Twitter @TheWeekUK.
GROWTH STRATEGY IS A FICTION
SIMON JENKINS ON QUANTITATIVE EASING
Quantitative easing must be the biggest confidence trick of all time, says Simon Jenkins in The Guardian. According to the Bank of England it has pumped £325bn into the British economy to kickstart growth over the past four years. But the money is nowhere to be seen. "The one silver bullet on which the coalition relies to pull Britain out of recession is a fiction." There has been no growth. QE means that the government buys back government bonds from banks. This merely replaces an interest-bearing bond with actual cash on the asset side of a bank's balance sheet. But since banks are now required to keep higher cash reserves, the money never makes it into the economy. If the government really wanted to inject cash into the economy, it would order Mervyn King's Bank of England to put "£1,000 into the bank account of adult every citizen".
LONDON GAMES: TIME TO START PRAYING
MATTHEW NORMAN ON OLYMPIC HICCUPS
Soldiers plugging the security gap, the M4 closed and immigration chaos at Heathrow - what else could go wrong? asks Matthew Norman in The Daily Telegraph. Today there's a sense of "a nation holding its breath and praying". We had hoped Britain would show herself off to the rest of the world at her most lovely. But London is really an ancient, crumbly old hag. We've tried to tart it up, but the mascara has already started to run. Presuming the tube system holds together, and bus drivers don't strike, arrivals at Stratford will then have a lengthy walk through the Westfield shopping mall, to be met with military personnel in fatigues. They then face two-hour long queues to be inspected and patted down. We will probably "muddle through without major catastrophe in the usual shambolic fashion" but any dreams that this Olympiad would be a slick "beacon of elegance to the world have disintegrated".
CUTTING IMMIGRANTS WOULD INCREASE DEBT
JONATHAN JONES ON IMMIGRATION
Ever wondered what would happen to the British economy if net immigration were slashed to zero? blogs Jonathan Jones for The Spectator's Coffee House. Well a new 'Fiscal Sustainability Report' from the Office for Budget Responsibility paints a grim picture indeed. They've put together projections for the economy and public finances until 2062. The forecasts show how various policies would affect the economy. In 50 years' time, with no net immigration, it forecasts that our public debt would be 187 per cent of GDP. "We'd be looking back longingly on the days when the public debt was 'only' 65 per cent of GDP." But in a high immigration scenario, it would be down to 54 per cent. The main reason is that higher immigration brings higher growth. "So those who call for lower - or no - immigration should be careful what they wish for."