As the recent economic recovery gathers pace, one should be wary of the claim that this vindicates George Osborne’s policy of austerity, which remains far from proved.
I suspect PPI compensation gave a significant boost to consumption. While the total amount paid in compensation was modest when considered in relation to the size of the economy as a whole, the money was a windfall for households and a direct injection of cash into their finances.
I would wager that most of this money has been spent and thus contributed in part to raising GDP.
As we have seen while the economy is growing, the balance of trade has deteriorated sharply, revealing the disfigured and dysfunctional state of our national economic model.
We are a post-industrial, consumerised economy that structurally continues to consume more than we produce.
Meanwhile, national politicians enthusiastically support the closing of this gap by way of inward investment from foreign interests under the fatuous claim “we’re open for business”.
What they are failing to acknowledge is that the country is being sold from under our feet to the highest bidder.
We may sustain growth for a few more years but this recovery bears many of the hallmarks of the boom that led us to disaster in the first place since it is based on rekindling exponential growth of consumption and credit. Without these the economy stalls.
Our destiny is now clear: we are headed towards becoming a country of colonial servants presided over by a new oligarchy. Politically and economically we are locked in a vortex of madness and no-one seems to know what to do about it.