Borrow and spend is no new deal

SEVENTY-FIVE years on, President FD Roosevelt’s New Deal is still held up throughout the capitalist world as the benchmark for all economic reforms.
Recession? Depression? Credit crunch? What we need’s a new New Deal. Right. So what exactly was the New Deal when it was new?
Actually it was a lot of things, not all of them consistent with one another. And there is still some disagreement among historians and economists over whether it really worked.
Some (mostly on the political left) say it was responsible for America’s recovery from the Great Depression. Others (mostly on the right) claim it slowed the recovery down.
Either way it undoubtedly did a lot of good – health and welfare programmes, cleaning up and strengthening trade unions, banking reform and more.
It was essentially anti-capitalist, the federal government taking charge of the economy to improve the lives of ordinary people. And it was largely responsible for making FDR America’s most loved president.
There has been much talk lately of new deals. Gordon Brown, I am sure, would love to see himself as a new FDR – not just for Britain but for the world.
The non-Budget budget announced this week by chancellor Alistair Darling certainly looks big and bold on paper. But it was not wide-ranging, ambitious and socially useful like the real Deal.
Whether, when we look back in times to come, it will seem good, bad or merely irrelevant is hard to say. Prediction of all kinds is dodgy, economic prediction especially so. Which makes the job of Brown, Darling – and FDR in his day – largely a matter of flying blind.
Big moves may be the best thing, but they also involve big risks. When it’s the economy we’re talking about, those risks are borne by all of us.
Now, I’m no economics expert. Which, on past evidence, makes me exactly as well qualified to talk about the economy as those who claim they are.
And I have just this to say about the government’s big, bold plan to “borrow and spend” our way out of recession:
Wasn’t too much borrowing and too much spending what got us into this mess in the first place?
I can’t advise the government, but maybe I can advise you. And my considered advice would be this:
If the recent fall in interest rates and the coming drop in VAT put a bit more cash in your wallet don’t spend it. Use it to pay off any debts you may have.
If that means stepping up your mortgage payments to get it paid off sooner, or bring down your future payments, then go for it. While interest rates are low, it’s the best value you can get for your money.


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LORD Chris Smith was among those talking New Deal this week. And unlike most of the gibberish coming out of the Treasury, what he said made sense.
Smith, once merely culture secretary, is now chairman of the Environment Agency, which – contrary to appearances – is not just about rivers and flooding.
Now he’s no longer in the government, he can “call on the government” to do things that matter. And what he’s calling for now is a “Green New Deal”.
He “called on the government” to produce “a comprehensive long-term strategy for investing in renewable energy, environmental technology, energy efficiency and carbon capture and storage”.
He said: “The long-term future of society depends on the government’s commitments to the environment as much as it does to education, health and the economy.”
He added: “We are facing a recession and there will be pressure to weaken environmental targets. I hope the government will hold its nerve and deliver a far-reaching programme that looks further than the current crisis.”
And he urged the chancellor to invest in green projects to soften the coming blows of climate change. I just hope the chancellor was listening.
Messrs Darling and Brown have other things on their plates just now. Things that probably seem bigger and more urgent. But which are in fact utterly, utterly trivial by comparison.



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PAMELA ANDERSON is famous for being the original curvaceous “Baywatch babe” and for a much-circulated video of her having sex with her then husband Tommy Lee. She is not famous for her political views. Well, not until now.
She has now written to president-elect Barack Obama, giving him the benefit of her advice.
She says: “Dear Mr Obama, bring our troops home safely. Please shut down Guantanamo Bay.” And while you’re at it, legalise marijuana.
Obviously Pammy isn’t as stupid as (a) she looks, or (b) Sarah Palin.
The vegetarian, 12-times Playboy covergirl rather spoils her liberal credentials, though, when it comes to paedophiles. Castrate them all, she says – including anyone who’s ever been suspected or accused.
Oh well, no one can be all right all of the time.