Thursday, 26 August 2010

IFS on the Budget

After a detailed (and impartial) analysis of Osbourne's June Budget, the Institute of Fiscal Studies have concluded that it was "clearly regressive as, on average, they hit the poorest households more than those in the upper-middle of the income distribution in cash, let alone percentage, terms".

This has, for obvious reasons, upset Nick Clegg - the Lib Dems, rightly, are getting increasingly worried that their deal with the Tories is reflecting badly upon them in the eyes of many of their core supporters.

In response to the report, Clegg came up with this gem:

"You cannot measure poverty with a snapshot because people’s lives last longer than a single second... the question to ask about government policy is what its dynamic effects are... across the generations".

Now, following this logic, someone who is materially poorer shouldn't complain, because in 50 years time, their kids might be financially better off. That must be a comforting thought for them...

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