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“You have run out of our money”
A British member of the European Parliament, Daniel Hannan, is speaking truth to power. In a speech to the EP, which gathered earlier this week in Strasbourg, the 37-year-old politician told Prime Minister Gordon Brown, “You have run out of our money,” and warned him, “You cannot spend your way out of recession or borrow your way out of debt.” With the prime minister sitting only a few feet away during an EP session on the economy ahead of next week’s G20 summit in London, Hannan accused Brown of spending Britain into “the worst condition of any country,” and concluded, “You are the devalued prime minister of a devalued government.”
The speech initially went unnoticed by the mainstream media in Great Britain (see a discussion of its lack of coverage on the BBC’s Daily Politics) but has since become an internet sensation:
Hannan is worth watching (he reminds me of Newt Gingrich, circa 1990-94), and conservatives in London say he is hard to peg: hyper-intellectual, right-wing, a “Euro-skeptic.” The author of eight books, Hannan is a journalist/blogger for the London Telegraph and has written for several other papers. He also reportedly backed Barack Obama in America’s 2008 election.
back to top42 Comments to ““You have run out of our money””
““You cannot spend your way out of recession or borrow your way out of debt.””
That’s beautiful!
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I wonder what he has to say about Barack Obama trying to spend our way out of recession and borrow our way out of debt, then.
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Cut off some irony cake and serve it up with debt free frosting…
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I don’t remember where I read it recently (probably Am. Thinker, Am. Spectator, or NRO) but the figures for how much we owe for Social Security and Medicare are routinely kept out of the congress’ accounting by using some other term.
Care to guess how much the taxpayers are on the hook for – if they stopped those two programs TODAY?
Somewhere in the neighborhood of $52 Trillion.
I think it’s safe to say we’re out of money.
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Ah! That was easy. Here’s the column:
http://spectator.org/archives/2009/03/24/deeper-in-debt-than-anyone-kno
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There was a cartoon in my local paper today of a man sitting on the ground outside his house which had a foreclosure sign on it, a pink slip and 40lk statement in the man’s lap, his suitcase sitting next to him. The caption read something like “Too small to bail out, but not small enough to provide the bailout money.”
Enuf said.
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I have no idea whether what he’s saying is true, but what delivery! What beautiful sound bites! “You have run out of our money”!!!!!
***swoon****
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#2, “He also reportedly backed Barack Obama in America’s 2008 election.”
I have4 no idea if that is true, but if so, it would be no big surprise since President Bush was an over-spender who, had he been a conservative, would have used his veto pen a lot more. Bush contravined too many free-market principles in support of huge irresponsible bailouts. Thus, a foreigner who may not fully understand U.S. Democrats could be excused for hoping that Obama might not go as far as Bush did toward socialism.
But those of us in the USA who are awake knew that Obama would triple the trends toward socialism.
I still admire President Bush in other ways but have to accept facts that he often disappointed conservatives.
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Whereas England’s deficit under Brown is 10% of the GNP, under Obama in the USA, it is 13% of the GNP. Under Bush, it was just 4% of the GNP.
And in the USA, a newborn baby owes far more at birth than it will cost to educate him/her over twenty years.
Liberal (statist) policy: Borrow, tax, spend, borrow, tax, spend, borrow tax, spend, and then repeat the cycles repeatedly!
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NJL: Any chance you can provide a link to that cartoon?
“The problem with socialism,” Margaret Thatcher once said, “is that you eventually run out of other people’s money.”
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MINDY: … conservatives in London say he is hard to peg: hyper-intellectual, right-wing, a “Euro-skeptic.”… He also reportedly backed Barack Obama in America’s 2008 election.
FRANK: A major clarification is in order:
Hannan only supported Obama in the general election — i.e., against McCain — and in his interview w/Neil Cavuto yesterday, he explained why: the GOP abandoned its core principles under Bush, and McCain showed no signs of reversing the trend.
But he then told Cavuto that he would have much preferred to see Ron Paul elected. “The guy I would have really voted for, had he been a candidate, is Ron Paul. I like his interpretation of the Constitution, I like his view on fiscal policy …”
Interestingly, when Cavuto asked Hannan what he thought about some people saying Hannan could be the next prime minister, Hannan demurred: “I don’t think I’m ever going to be a prime minister, and one of the reasons why is because, basically, I think governments shouldn’t do things [like financial bailouts].”
This is a Ron Paul, get-government-the-heck-out-of-people’s-way kinda guy, not an Obamassiah kind of guy.
http://www.campaignforliberty.com/blog.php?view=14341
Both parts of the interview are excellent, but his remarks about Obama and Ron Paul are in Part 2.
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REE (2): I wonder what he has to say about Barack Obama trying to spend our way out of recession and borrow our way out of debt, then.
FRANK: See his interview w/Cavuto, linked above.
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Wow! I love it! Maybe Churchill finally has a successor.
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Wow, the Republicans are so desperate for talent and credibility, they’re looking at (gasp!) Europeans for spokesmen.
JoelMark: Average annual increase in national debt as a percentage of national income:
Carter (D) 4 years–9.1%
Reagan (R) 8 years–21.1% (wow!)
Bush 1 (R) 4 years–12.3%
Clinton(D) 8 years–2.8% (not to mention leaving with a surplus)
Bush II (R)8 years–9.4%
All of these numbers are directly from offical government sources.
http://www.presidentialdebt.org
I would venture to say that it is the Republicans who drive the “liberal statist” policies and borrow and spend us into oblivion.
And by the way, what was your source. I know GDP may go down…
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The thing is, the Republicans don’t have a solution other than more of the same policies that got us into this mess. Their only answer is the same one it’s been for the last 20 years: more tax cuts and regulatory benefits for their wealthy friends, and to hell with regular Americans.
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The Republicans had promised their budget wold be released today.
Can someone direct me to it?
Oh. They failed.
Now they are going to release it next Wednesday?
Ya don’t say.
The Republicans are going to release it on All Fools Day?
How appropriate!
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Shawn Hannidy said Reagan proved deficits don’t matter??
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Is he saying ‘when in a deep hole stop digging?’ He has common sense and experience unlike the lefties we have here running the country into the ground again.
More on how easily they are actually doing it – later.
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Frank, thanks for the clarification and additional info. He was described to me today by several conservatives in Britain as a libertarian, which would square with the Ron Paul support. What’s interesting is that a lot of politicos in Britain were unaware of Hannan, or uninterested, until he became a sensation here in the United States with his Strasbourg speech. Ten years in the European Parliament doesn’t get you a lot of clout, apparently.
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#9 Joel,
By my calculations the USA’s GDP, in this massive near depression, is probably less than $12 trillion. The debt after the left doubled it the past two years is also at least $12 trillion. For the first time in US history the debt is at least 100% of GDP, more likely 120% – Bush was about 64% at the worst. Not counting the $52 trillion in future debt for SS and Medicare or next years $3.6 trillion lefty budget that has another 2 trillion in debt in it.
It is estimated that when we toss Obama out in 4 years, the interest on the debt will be over a Trillion dollars a year all by itself if there isn’t any inflation and the government can float this much debt at 3% interest. Sadly, the final most horrible stage if this mess the lefties put us in, is the massive inflation where interest rates will be at Jimmy Carter levels of 20%, if we are lucky. Making the interest payments on the debt each year is more than any amount of taxes the lefties can possibly steal from us even if they quadruple all the taxes on everyone alive – in North and South America.
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llama (18): Is he saying ‘when in a deep hole stop digging?’ He has common sense and experience unlike the lefties we have here running the country into the ground again.
Frank: And unlike your “righty,” George Bush. And unlike the whole host of “lefties” and “righties” that preceded him.
Good grief, llama, don’t you ever change the tune? “All our nation’s ills are brought upon us by lefties,” that is? Lord knows, way too many “righties” have their hands in this mess, as well.
To put it another way, an ungodly righty is no better than a ungodly lefty.
Think about it.
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I posted this story a couple of days ago (WV 3.25), but no one commented on it at that time. I guess it makes a real difference when the story actually heads the thread.
Arcadia: Wow, the Republicans are so desperate for talent and credibility, they’re looking at (gasp!) Europeans for spokesmen.
There’s nothing wrong with looking across the pond for ideas, especially when those Europeans are Brits, who tend to identify themselves more with the US than with Europe. This is exemplified by Mindy’s point at #19 – Mr. Hannan had been such an unknown even in his own country b/c Brits don’t really follow what’s going on in the European Parliament.
What a contrast it would have been if earlier this month it had been Mr. Hannan who addressed the US Congress instead of PM Gordon Brown. If Congress wants to hear no-nonsense truth in these trying economic times, then Mr. Hannan is an outstanding spokesman.
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Kayvee, it was in Thursday’s Star Ledger. From the credits, it looks like it was done by “Toles” universal press syndicate, a date 3??2009, then The Washington Post. So, maybe you can find it. (I have this information because I decided to cut it out and post it. It’s actual text is: “Small Enough to Fail, but Still Big Enough to Fund a Bailout.”
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Toles is Tom Toles. Here is some info on him and access to some of his work.
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Thanks, NJL, I couldn’t find it on the S-L’s website, but recognized “Toles” as Tom Toles, who draws for the Wash Post, so I found it there. It’s a good one, I copied it and will send it to my small-business-owning daughter & SIL.
If anyone else is interested, here’s a link. You have to register to see much on the WaPo site. It’s free, but they don’t make it easy.
http://www.washingtonpost.com/wp-dyn/content/opinions/tomtoles/?name=Toles&date=03262009&type=c
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#14, Arcadia, you shifted. Daniel Hannan was talking about the budget deficit, not the national debt. Bush’s deficit spending was 4% of the GNP and now under Obama’s proposals and programs, it is 13%. That is a huge increase in irresponsible deficit spending. I was able to criticize both Bush AND Obama. Are you capable of criticizing a leftists?
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#20, Thanks for your comments Llama.
As Hannan stated, every British child born already owes 20,000 pounds. I heard a report that claimed that every US child is born $30,000.00 in debt. These numbers are rocketing upward as we speak.
The biggest thief of all is called inflation and I think it is on our collective heels now.
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Why is it that US politicians can’t/won’t/don’t have a level of debate and discussion at this level?
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#15 “The thing is, the Republicans don’t have a solution other than more of the same policies that got us into this mess.”
Solutions which, in Reagan’s case not only cleaned up Carter’s fiscal mess, but ended the Cold War and dissolved the Soviet Union. I’ll take those solutions any day because they are solutions.
The clear headed and plain spoken Hannan reveals something rarely seen coming from a politician—the unvarnished truth. No wonder this is such a shocker to the average person and anathema to those who are regular purveyors of lies.
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Since Prime Minister Gordon Brown was naive enough to try to spend and borrow his country out of recession and debt, it follows with his pick for the POTUS.
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Businesses all the time borrow their way out of debt and spend their way out of revenue slumps. Businesses cannot grow their sales without incurring expenses and purchasing assets, unless they are geese that lay golden eggs or trees that put out dollar bills. That’s called spending. Borrowing money is a rational way for owners to finance both the current and long term assets they need to get revenues.
If businesses can do it, any entity can, including non-profit and governmental entities.
I don’t know very much about Daniel Hannan, but I suspect that under enhanced interrogation he would admit that he misspoke. Hannan doesn’t want government to borrow and spend, not because it can’t employ these means to get out of debt and contribute to prosperity, but because he simply doesn’t want government to play the role.
Hannan may be a brilliant intellectual, but he is a lazy rhetorician. He needs to persuade people that, even if the government can do something successfully, citizens should prefer that it not.
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“Businesses all the time borrow their way out of debt and spend their way out of revenue slumps”
Businesses may borrow (when they know they can later repay and there is a sound business reason to borrow) and occasionally spend(takes money to make money)to grow out of a slump, but they don’t do it all the time or they’d certainly go bankrupt. Sounds like you’re a lazy rhetorician, too.
Borrowing and spending might be part of a sound strategy toward eventual profitability but they merely make future profitability possible by allowing the business to create and distribute their product. They can’t bring it about by themselves.
If anything has been made evident, it is that our current congress are not businessmen. Taking ownership of AIG and then trash talking their (our) investment to divert attention form their own foolishness is hardly a sound business practice.
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The only ‘commodity’ our government is producing right now is an onerous tax burden, shackles on liberty, and a ruling class making power plays.
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KEN – What do you mean by “occasionally spend”? Every income statement I’ve ever seen has a section called “Expenses” after the part called “Revenues.”
Theoretically an operating statement could refuse to recognize a single expense item. The business could transfer them all to a later accounting period, but that’s practically unheard of. Businesses spend continuously, until they go out of business. Moreover, businesses constantly seek to accelerate spending, the only way to increase sales. Healthy businesses control their spending, within reason; only dying businesses cut it absolutely. Because profits are never enough to finance the working capital required to generate new sales, businesses must borrow. Borrowing is a sign of a healthy business, and stockholders like to see their equity leveraged. Some companies borrow just to make their balance sheets look livelier and more attractive.
OK, by “spending” you really mean “waste.” I get that. So let’s have an argument about the economic use and relative efficiency of government spending as opposed to other forms of spending, or none. My point, is that you utterly fail to make that argument simply by pejorating the concept of “spending.”
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Scroop, I would argue that the more successful companies have cash on hand as opposed to borrowing for their growth. Obviously one can’t start with cash on hand without either investors or borrowing but continued indebtedness is not healthy for a company. The simplest reason is that they have to pay interest on their debt.
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Too much cash is a sign that a company is not using assets efficiently. That makes the company a target for competition or hostile takeover.
Growth presents profitable companies with classic challenges, which seem improbable but can lead to failure and bankruptcy. This is because profits alone don’t provide enough cash flow to buy the necessary inventory and other assets, so the company can suddenly fail to fulfill orders and be shut down by suppliers. This is week 1 of Finance 101.
Interest expense was a big factor in the early 80’s but in normal times it’s cheap enough (assuming the banks are lending) to leverage-up your equity. Debt may also be cheaper than giving up equity, diluting profits, and sacrificing future capital gains. Debt can pay for itself by buying efficiencies, taking discounts from suppliers, and so forth. Standard lending relationships are a badge of honor and a recommendation for future business contracts.
My point is that conservatives demagog basic budget economics. They tell lies about what is possible or not when the real issue is what is desirable or not, and why. What if Obamanomics works? I think it will, but that won’t make conservatives happier with government. They oppose government, no matter how wonderful it could be, because they envision a different kind of society. Of course, this crop of conservatives would fail to persuade anybody else on behalf of their alternative vision, so they probably have no choice but to demagog.
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#36 Scroop Moth
“What if Obamanomics works? I think it will…”
First, what is “Obamanomics?”
Second, how/why will it work?
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Let me get this straight. People here are agreed that Obama doesn’t know what he’s doing, that he, too, is spending money we don’t have, but because the Republicans, who aren’t in power, haven’t put forth an alternative, we should go with what we all know won’t work (the Obama plan). Is that right?
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Frank in Spokane,
Thanks for the links to that speech so I could hear his rationale. The idea that we should pick our politicians so that other countries will like us better rubs me the wrong way, but I’ll grant the guy his right to feel that way.
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You ask, “How will Obamanomics work.”
1. Govt. spending will counter excess saving, replace demand, and raise GNP. This will directly employ workers and indirectly raise employment by creating more customers.
2. Obama will restore the market’s capacity to set the price of risk accurately, by requiring transparency in the field of “shadow banking” that produced unregulated (and undisclosed) derivatives. Obama will reverse the financial deregulation that created financial companies that are “too big to fail.”
4. Obama will make public investments in future productivity (i.e., education)
5. Obama will introduce efficiencies and cost savings in health care.
6. The above will increase income by an amount greater than the increase in taxes.
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Thank you, Scroop Moth.
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Business borrows and spends on productive assets – factories, people, technology, etc. The goal of these investments is a positive ROA/ROI. The argument that goverment spending is similar is strained in my opinion. We’ll see, but color me skeptical that Obamanomics will work…
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