1) Gay Marriage. I understand the theological reasons for a christian to be against gay marriage: a few passages in the clearly confused & frustrated St Paul's epistles to Timothy. I am still not sure why anyone gives a shit about this. I like George Carlin's advice to people who disapprove of Gay Marriage: Don't marry a Gay. Don't give ammunition to Labour who will be credibly painting you as a homophobe.

2) Grammar Schools. Yes, I understand the destruction of the Grammar schools meant clever working class kids don't get a leg up now. However I am not sure sorting the sheep from the goats at 11 is fair or equitable. 'Free schools' will achieve most of the positive effects of Grammar schools, without condemning two thirds of the population to sub-standard secondary moderns. The people who shout loudest for Grammar schools are the people who assume their kids will get into Grammar schools, and can pay for private education if they don't. Instead of hankering after a system which is not coming back, get behind Gove's reforms.

3) Europe. According to the mythology, "Cast Iron Dave" is a paid up Europhile who deliberately reneged on a promise to hold a referendum. Of course that promise was clearly made in the context of an imminent election in 2008 BEFORE the Lisbon treaty was ratified. Any "Europhilia" can probably be put down to the presence of the Federast Liberal Democrats in Coalition, and unpicking a treaty is a whole order of magnitude more complicated, costly and time-consuming than saying "no" to one not yet ratified. Right now, with battles with the civil service and the deeply entrenched public sector salariat over Health & education reforms, 'the cuts' and decentralisation more generally, the last thing the Government needs is a Battle royale over Europe. I've no doubt we'll get a referendum some time, and I'll vote 'out'. But only a complete headbanger thinks to pull out of the EU is without cost, or a major priority right now. This gives Labour a chance to paint Tories as "split" on the issue.

The one thing these issues have in common is the impression they give the electorate: Narrow concerns, mainly of interest to political wonks, of little relevance to the issues facing people RIGHT NOW. Opinion polls suggest the electorate sort of agree, but put these issues very low down on the list of priorities. Going ON and ON about them turns people off, and will make a disastrous Labour government more likely.

It used to be that the Tory party's great asset was loyalty. No more. On the big stuff, Cameron's a decentralising, fiscally responsible conservative who's doing more to deliver reformed public services than any previous PM. So deep are the reforms in Welfare, Health and Education that entire Whitehall departments are in near-open revolt. Unfortunately, much of the Tory right would like to re fight the Maastricht negotiations and the Miner's strike (and if possible, the Falklands too). This is just stupid.

Like a heroin addict coming off the junk, 2% real terms cuts to public spending is about as much as an economy can bear. You want MORE & faster? Why, when the UK's debt position is manageable? You want to openly fight Europe FOR THE SAKE OF IT? You want to tell 2/3ds of the electorate their children are thick as mince? You want to let the Labour party call Tories "homophobes". You think UKIP's more than the provisional wing of the local Golf-Club committee, having a gin-soaked rant about immigrants? You're a fucking moron.

Yes. The UKIP manifesto is a wishlist of Tory masturbatory fantasies. Vote for them, you get Labour. Get behind the PM and deliver his radical agenda on Spending, Welfare, Health and Education - all of which is viciously opposed by Labour & it's myrmidons in the Public-sector unions, but will leave the country much better off. Because if you don't Miliminor and Continuity Gordon Brown will get a go to run the country on behalf of their union paymasters instead.

Plan 'A': Stay in the Euro, drop wages & prices for local produce, until Greeks are as productive as Germans. This will take a decade or two of grinding, unrelenting economic misery, during which anyone with any talent, ambition or ability will leave the country and everyone else will be scarred by the experience. Each year brings more "austerity" more riots and more chance of extremist politicians gaining power. Germans effectively run the Greek economy. I cannot see how this will not end up with bombs in the streets.

Plan 'B': Leave the Euro on a Friday evening, and by Monday morning, all bank deposits are in Drachma, which then falls by 50% against the Euro. Greece's principal export, sunshine, becomes cheap as drachma-denominated hotel-prices fall. Once-empty hotels become full of people looking for cheap sunshine. The pain and turmoil of the inevitable capital flight and economic chaos lasts 18 months to 2 years before the economy returns to growth, but may result in extremists getting power in the mean-time.

Either way, Greeks are much poorer and may end up with an unsavoury demagogue in charge. They were of course never rich, but just thought they were because they nicked the Germans' credit card for a while.

The same is true for Spain & Portugal, though their overspend is less egregious and their political culture an order of magnitude more mature than Greece's. The Spanish people in particular have been impressively stoic - they voted for austerity, and haven't so far chucked many rocks. They would, of course be better off leaving, but they may, just, be able to hang on in the Euro by the skin of their teeth. The public & political will appears to be there, for now.

Italy should go too, but as a founder member of the EU, there is probably just enough political will outside Italy to keep them in the club and as they're running a primary surplus, they've probably the financial ability to achieve plan 'A' without too much pain. It will of course be a decade before Italy grows again.

Or Plan 'C': the ECB can announce that all €zone bonds rank Pari Passu with Germany's. Everyone pays 4% but Germans' living standards fall steadily towards the Eurozone average as capital floods south, but the Eurozone holds together but with one economic government. The Germans will get control over the cash jar and European nations cease to be independent in any meaningful way. Good luck with those treaty negotiations!

Conclusion: Greece, and probably Spain & Portugal too will be picked off by the markets and be forced out of the Eurozone. Italy will probably stay in.

The Euro miserably failed its first stress-test, because idiot politicians thought they could defy economics and make water flow uphill by means of a resolution of the Council of Ministers. The single currency was a silly idea, badly implemented. It is a disaster which is going to cost the life chances of hundreds of millions of southern Europeans.

Be suspicious of a politician with a big idea. The safest thing to do with these creatures is shoot them on sight.

Unemployment isn't a collection of people who've lost their jobs. It's better to think of it as the pool between two fast flowing streams. People losing their jobs, or enetering the Labour market when they leave education, return to work after illness, or maternity and so on are flowing in; and people finding work, or reaching retirement age are in the stream flowing out of the pool.

The evidence suggests that, contrary to traditonal left-wing rhetoric, the rate at which people enter the pool through job losses is rather constant over the business cycle. It is hiring that influences the rate of unemployment, not firing.

Traditionally, socialists are very keen on 'workers' rights'. These include mandatory periods of leave, pensions, notice and so on. They are very hostile to flexible temporary, part-time or insecure work. The problem few left-wingers acknowledge is that increasing labour rights increases the risk and cost of hiring to an employer. When a good or service gets more expensive, less is used, the same is true of Labour.

Much is made by the left of the rise of part-time work. There are a lot of people in part-time work who want full-time. There are a lot of Temps who want permanent jobs. At the margin, removing some of the more expensive employment rights, expecially making it easier and cheaper for firms to fire unsuitable workers, reduces the risk and cost of hiring and will reduce unemployment.

This is no magic bullet, but if it forms part of a deregulation of business ("deregulation" isn't a dirty word, and it didn't cause the crisis...) then that represents a "growth strategy" which might work, unlike the Labour's plan to spend until we're Italy.

Labour's policy Committee has suggested the party, which has already promised and voted against one, may back an 'in/out' referendum on the UK's EU membership.

Of course, no-one believes that Ed Miliband, grotty little snot-bucket that he is will ever be in a position to deliver on his promise, so the promise is free. Assuming the public buy the policy at face-value, a big assumption, then it may be clever politics.

It increases Pressure on David Cameron, whom the Euronutters in his own party think reneged on his promise on the Lisbon treaty. This is a stupid, mouth-breathing, sun-reading thing to believe, and to this end, any comment with the phrase "cast iron" in it will be deleted. Of course, both Labour and the Tory Euro-obsessives know the coalition partners, the Liberal Democrats are as completely in love with the EU as the Tory Right isn't. Miliband therefore hopes to split the coalition, force an election, and win while the polls are in his favour.

However. It is transparently obvious that no politician wants to deliver on this promise. Every major party has promised, then voted against an EU referendum, with the honourable, if profoundly stupid exception of some Tory backbenchers. (And NO. UKIP isn't a 'major party') The problem for both Miliband and the Tory Euro-obsessives is that the public simply don't care about the EU. When asked, It seems the mainstream Tory position: 'say no to everything, but stay in' appears to be the favoured policy, but this is not a strongly held conviction. The message, if any, the voters give to the politicians about 'Europe' is

"do what you will, just shut up about it, OK?"

Miliband is therefore hoping to open up the old Tory "split" on Europe, guessing that it won't cost him, and may even boost his polling, if his naked politicing isn't seen through. And the Tory Euro-nutters, egged on by the UKIP Gin & Jag brigade will charge blindly into the trap. Fuckwits.

So. You're a moderately wealthy Greek person. Do you keep your money in a Greek bank, in Greece or do you make sure all your Euro notes are printed in Germany, where your bank account is and open an offshore £/$ account?

That's right, you get your money as far away from Greece (and the risk of being told one day "you're now holding Drachma") as you can.

Now imagine you're Spanish, Portuguese, Irish or Italian. You have a bit more time, but the result is the same - any money you have gets out of the country if you've any sense.

No bail-out can replace the money flooding out of these countries. The people have lost faith in the Euro project, and as confidence is the only thing underpinning a fiat currency, the Euro has already failed its first test. Even strong German GDP numbers are evidence of the flood of money from the periphery to the core not the underlying strength of the German economic model. Germany rigged the system in its favour, and is now parasitically sucking money out of its empire, an Empire even the German people never wanted.

Is there anyone NOT shorting the Euro right now? I don't think even the most pessimistic Eurosceptic expected to be this right, this soon.

Now my standard prediciton is that political will can see the Euro hold together at great cost to the wealth and living standards of the people, particularly in the periphery. I am becomming less confident they can pull this off by the day and the rise of the Anti-Austerity left means even the Iron political belief in the project of "ever closer union" is waning.

So, to hedge the Euro's demise, buy* banknote printer De La Rue.. It's going to be a bumpy ride.

*Doesn't constitute financial advice, this may not be suitable for your circumstances. Past performance is not a guide to future performance. Stocks and the income from them can go down as well as up, seek advice from a professional advisor, yadayadayada.

Most conservatives/libertarians/UKIPpers are viscerally pro-car and anti-bike. To the likes of regular commenters Simon Jester or Patrick the use of the car is natural, and facilitating anything else is a dastardly plot to subvert his way of life. This is a perverse and willful misreading of my position. I will try to deal with the commonest arguments of the Gin & Jag set in this post.

I shall refer to the first sentence of my last post.

...most journeys of longer than a few miles, and for moving goods about the country, the motor vehicle is simply the best tool for the job.

Pro-bike is not anti-car. MOST JOURNEYS even in Holland, are undertaken by car. even In Amsterdam & Copenhagen, Bicycles account for less than half of journeys. Even in the most bike-friendly countries on the planet, the car remains well provided for by infrastructure, and a popular transport choice. It's just the bike is ALSO well provided for.


The solution to congestion isn't as most Libertarian/Tory/UKIP Internet wallahs think, "more roads" because the problem isn't a lack of road space, it's the fact that everyone wants to get to the same places at the same time. The Problem is a lack of road-space at key points. For example the hanger lane underpass, or the Blackwall tunnel in London become choked beyond their capacity every single morning. If you build bigger roads to these spots, you make congestion worse, not better. This is what the M4 Bus Lane was all about.

A cursory search on Google Scholar will quickly put pay to the "build more roads" argument. This is from the first to pop up.

"Our decisions provoke unforeseen reactions. The result is policy resistance, the tendency for interventions to be defeated by the response of the system to the intervention itself... road building programs that create suburban sprawl and actually increase traffic congestion..."

So, barring a few pinch points such as the M25 around Heathrow, and by-passes which sensibly route through-traffic round town centres, more road-building is not the answer.

Then there's the money. Libertarians, UKIPpers and Tories regard themselves and economically literate, in contrast to Labour who think economics is about getting water to flow uphill. People who should know better, however lose all economic sense when discussing their favoured means of getting about. Just because one group is taxed, doesn't mean the money should be spent on them. If it were, income tax would largely go on well-tended grouse moors for the ultra rich who pay a significant chunk of it, the NHS's lung-cancer wards would be the envy of the world, and vomiting drunks would have their hair held back by liveried booze-tax-funded drunk-helpers every Saturday night. Instead the money is put into a pot and spent by the government as it sees fit.

Taxes levied on motorists are not therefore some sort of "road fund" for their exclusive use. They're more akin to rent. You don't live in a house for free; you pay for the capital cost as well as the running costs. You pay rent (or taxes) on the land. If the money spent on roads each year is the running cost of our road network, it's akin to utility bills. The rest of the tax motorists pay covers the cost of building the road network and financing it - 2,000 years of capital investment. You're also paying for the "externalities" of car use.

There's the word "externality" which brings libertarians out in hives because they think it's part of some ghastly plot to deprive them of their car. It isn't. It's about paying your way. Some externalities like Carbon are explicitly calculated, in the Stern review for example. And of course, we are paying several times more to drive a car than would be the case if that was the only externality in the price. There are other externalities too. Some are trivial: I don't like seeing fat people, and cars cause obesity for example. Some externalities however have real economic effects: Congestion is an externality imposed on other motorists with real economic costs. To ensure those costs are borne by those who value roads most, you pay through the nose to drive. This is why it works. Other externalities merely affect quality of life. Noise, danger, stress, particulates damaging to health and so on. To these I would add the social costs in atomisation and fragmentation of society facilitated by car-based urban sprawl.

People who in any other facet of life think markets are great at providing solutions to problems utterly reject them in transport. There should be a market between competing means of transport. However at present, all the investment goes to road and rail, nothing to any other potential means of getting from A-B, which might take some (SOME - not ALL, idiots) pressure off the road network at peak times. At the moment the market is grotesquely skewed in favour of the car, even where a bike would otherwise make sense, crappy infrastructure and subjective feelings of danger put people off using it. And it is this we need to address.

A bike on a commute is one fewer car in your way. Encourage cycling, and motorists benefit.

The externalites of urban sprawl, lack of local amenities, dead town centres, noise, pollution, social atomisation and social division which accompany the total domination of the car are uncosted but paid for in the "rent" you pay in taxes over and above the road budget. These bills could be reduced by better, bike and pedestrian friendly urban design. Some argue the externalities are more than covered by the current motorists' tax-burden. Others think not. But to deny the existence of externailites alltogether is anti-economics, a stupid rhetorical position normally occupied by the left.

The experience of the Netherlands is if you make a small (relative to the road budget) investment, over a long period of time in making the roads feel safe for cyclists, everyone (including motorists) benefits. Many People then DO choose the bike because it's quick, cheap, convenient and fun for SOME journeys. In Amsterdam just under half of journeys are by bike. And this benefits motorists in less congestion. Getting kids to cycle to school in particular frees parents from the chore of acting as a taxi service, and massively reduces congestion at rush hour. It also gives kids a bit of much needed freedom. Proper cycle lanes would mean fewer cyclist holding you up, a "problem" existing only in the fevered minds of anti-bike nut-cases, but oft cited none-the-less. More cyclists means more local shops as people get back in the habit of making short journeys instead of reaching for the car keys every time you leave the house, so you can get your paper and irn bru when you have a hangover on a Sunday morning without having to drive anywhere. It means your local pub is more likely to stay open, giving you a chance to gain that hangover in a social environment instead of tossing yourself off alone to the x-factor with a can of supermarket lager. It's no coincidence that towns and cities with the highest bicycle modal share feature regularly at the top of indices listing "livability" and happiness. Even in these, most people own, or have access to a car.

The point is a change in the build environment to favour the cyclist or pedestrian doesn't mean the car becomes obsolete. Rather it becomes one tool in a quiver for getting about, one chosen when the journey is long, when the weather is bad, when the load is heavy, or when you just don't feel like riding a bike that morning. Cyclists are drivers and drivers are cyclists, eliminating hostility. However, in the UK many people who wish to ride a bike are currently denied that opportunity, to the detriment of all by infrastructure entirely inappropriate for their needs.

Any comment which ultimately says "I need a car for some journeys, therefore you should use one for all" will be deleted, unanswered. Read the first paragraph of this post again before pressing submit.

To deny there are any problems caused by the total domination of the car of our built environment is perverse and willfully blind. To pretend there are no solutions is stupid and unbelievably ignorant and selfish. Even Jeremy Clarkson sees that a town with fewer cars is simply more pleasant to be in - that is he admits the benefits of car use are offset by costs largely borne by others. No-one wants to see the freedoms granted by the private car lost. But I do want to see a return of the freedoms it has taken away.

I often get accused of being anti-car. I am not. For most journeys of longer than a few miles, and for moving goods about the country, the motor vehicle is simply the best tool for the job. I just accept the car is often not best tool for the job, and universal car use has a number of negative effects. This leaves an enormous number of journeys for which the car shouldn't be the first choice. My problem is that people are forced into cars, as other options have been, effectively, denied through short-sightedness and poor urban design.

Margret Thatcher hailed in 1989, the "Great Car Economy", embarking on a grand scheme of road-building, which like so much the Tories do, brings out the crusties in vicious and bitter protest. A decade of Swampies living up trees led to the abandonment of "the biggest road-building scheme since the Romans".

More recently the claim is often made that petrol taxes "hurt the economy". Of course they do, but the question should be whether fuel duties hurt more, or less than other taxes. I argue they don't hurt any more than income taxes. The Conservative-led government faces protests by drivers who don't want to pay & feel there should be more roads, that road-building will be the key to stimulating the economy. This is one of the few areas of expenditure, along with the provision of free-parking, that the tax-payer's alliance can be relied upon to support. It ignores the costs of motoring.

Let's go through the hidden costs of "the Great Car Economy".

Cars make towns noisy and stressful. You can estimate the cost of this by looking at houses on main roads, which often cost 30-40% less than those in quiet cul-de-sacs less than a hundred yards away. There's an economic externality of car use, costed for you, right there.

Every 40 cars, roughly, represents £1,000,000 in capital expenditure. For much of the country, that's £2,500 per year, per car. For 95%of the time, this capital is sitting, unused in parking lots. Is this not a colossal waste of resources on a scale equivalent to the Great wall of China? Those parking lots are unsightly, and represent an enormous waste of potentially valuable land, which reduces the value of the area around it. This too is a waste of resources.

Cars facilitate harmful behaviour. People under-estimate how much a long commute makes them miserable, and over-estimate how much a big house makes them happy. People therefore live a sub-optimal distance from work, a long way from family and friends. People are less happy than they would otherwise be.

Cars have changed the built environment, brought about urban sprawl, which atomises society. Cars have driven other options - bicycles and walking out of the picture, by making them so unpleasant. It is simply not enjoyable to share space with tons of speeding metal. As a result, there are few 'local shops'. The car encourages big-box shopping, ripping the heart out of town centres.

Once you have spent 60% of an annual salary on a car, you tend to use it for every journey even ones where (once you've parked) would be quicker to walk. This leads to obesity and ill health. Driving, especially in heavy traffic, is stressful. Adrenaline and Cortisol, when not accompanied by exercise, is hard on the heart and encourages fat deposits. Even if you go to the gym, the damage done by stress hormones while driving is difficult to burn off.

The problem, ultimately is that overuse and over reliance on one transport technology has created a sub-optimal equilibrium. People cannot see beyond THEIR car and the need for it. Blinded by a set of cognitive biases and perverse incentives, the car is used for every journey. And of course, as we've organised society completely around it since the mid-70's, people feel they've no choice. They're probably right. At present, there is no alternative to having £30,000 worth of depreciating metal on your drive. Public transport is simply nasty, as I laid out in detail in this post, a while ago, and we now live too far from everything to consider any other solution.

Ultimately the conclusion is that more roads and more cars isn't the answer. Cars simply fill any extra space, and if you build "enough" space, you get Milton Keynes. We must do things more cleverly.

So, the experiment in the great motoring society has gone as far as it can go. Any further increases in the number or use of cars are likely to generate negative returns to human happiness. It is Government's role therefore to provide infrastructure to other alternatives: a network of cycle tracks and city infrastructure - not to exclude the car, but to provide an alternative, to both tribes' benefit. Motorists should remember the most tireless campaigners for smooth roads are cyclists for whom a pot-hole is not only a punctured tyre, but potentially a broken collar bone. The infrastructure can and should be built with all road-users in mind.

The solution to these problems, is to organise a system where there are fewer cars, used more intensively.

Technological change will help. Nevada has just issued a license for Google's automatous car. This will, in time, enable fleets of driver-free vehicles to act as taxis. It doesn't take much imagination to see this working very much more cheaply and efficiently than a situation where everyone has their own depreciating asset, though this is several years away. Fewer cars, not being driven by people, means a safer and less threatening road environment for other users. Although the total cost of hiring a self-driving car for each journey may in time become lower than owning a private car, the fact you're making a marginal decision for each journey, rather than the costs being concentrated in one enormous sunk cost of purchase, will tend to make people consider alternatives in a way they currently don't. Even if the volume of vehicular journeys increases, driverless cars will be more efficient users of fuel and road-space. They will also be safer.

People are simply not designed to drive. Our lizard-brains simply can't cope. The road environment and the cars on it have been made forgiving to the inadequacies of people driving cars, but it is something no-one can do successfully. Don't believe me? Ask the insurance industry. Racing drivers, those who ACTUALLY can control a car better than anyone else are not considered a good risk. People tend to compensate for extra safety features in their car or any extra skill, by taking more risks. The risks are most keenly felt by people without a ton and a half of steel wrapped around them.

In time, insurance costs will dictate that cars will not be allowed to be owner-driven on the public roads. At present, the only tool with which you can, by recklessness kill someone and escape gaol, is the car. This will change and machines will make better drivers than us.

I am not anti-car. I accept the benefits, and the necessity for widespread car ownership at present. It's just that it's used for over 90% of journeys. People don't walk to the pub anymore, neither do kids cycle to school. And the reason is that the car has changed towns - there are no local services in suburbs any more; ourselves - most of us are fat, and feel the need to change into special clothes to walk a mile; and the environment - the roads are simply too hostile to allow your kids to cycle to school.

If you can address the inappropriate journeys - in particular the school run, much of the congestion motorists currently suffer, would vanish. Kids SHOULD enjoy the independence of making their own way to school, as they do on the continent. This requires investment in infrastructure to separate the cyclist from the motorist. Many (not all, obviously) people would like to cycle to work, but feel it's too unsafe. Investment in infrastructure would take a few of these cars off the roads at peak times too. And if we can encourage delivery driving overnight though a fuel tax rebate, we can have smoothly running roads for everyone, all day.

Every cyclist commuting to work, is one fewer in other motorist's way. But the the entire national cycling infrastructure budget is less than that to widen 4 miles of the M25. Even footpaths are often sub-standard and blocked by (what else?) parked cars. Ultimately, those who want to walk and cycle shouldn't be put off by crappy infrastructure because the car enjoys 99.99% of the spending and an absurdly privileged place in society. If we can change this, then those who still want to drive will have a more enjoyable time too.

In the UK, around 20% of the 'Greater South-East's' GDP goes North. Following the American Civil War, about 20% of the North's GDP flowed south. Much of American Growth from then until 1914 was merely the south catching up with the North's industrialisation. After unification, about 20% of West German GDP flowed east.

The moral of the tale is that if a highly invested, competitive area (like Germany & Northern Europe) finds itself in a currency union with an uncompetitive area (Like the Club-Med), funds must flow from the competitive area to the uncompetitive area, so that the capital investments can be made to allow the uncompetitive area to catch up. It may never do so, as East Germany or the American South found. The damage done to the population's competitiveness by socialist idiocy or slave-agrarian economics, is just too great.

What is happening instead, right now in the Eurozone is that capital is fleeing the periphery, rather than flowing to it. This is because savers ask themselves 'Why have a bank account in Italy or Spain and risk holding Pesetas or Lira in a few years, when you can open one in Germany and 'risk' holding Deutchmarks?' The result of this (amongst other effects) is a massive collapse in the money supply in the periphery nations, which central bank action cannot counter, because monetary policy is set for the core. Big falls in money supply lead to depression. Against this backdrop, attempts to stabilise the debt by fiscal contraction in Italy or Spain are like a sticking plaster on an arterial bleed.

Note that the leftist argument that it's fiscal contraction which is causing the lack of growth is complete twaddle. THERE IS NO MONEY because IT'S ALL GOING TO GERMANY, so THE ECONOMIES WILL CONTRACT. Firing a few Spanish or Italian civil servants and building fewer roads is neither here nor there as far as their GDP numbers go.

But the UK is in a slightly different position to Italy and Spain because it's in control of it's money supply. We're not Greece, we're not Italy or Spain because we didn't join the Euro. What the left-wing plan to spend more risks is the Japan's disease where a pig-headed unwillingness to write off bad investments facilitated through expansionary fiscal "stimulus", left them with the highest per capita public debt in the world. And still their economy doesn't grow, despite decades of stimulus.

The evidence appears to suggest that expansionary fiscal policy (running a deficit) loses any stimulus effect on GDP growth when public debt hits around 80% of GDP (France, Germany, The USA), and debt kills growth entirely when it hits about 120% of GDP (Italy, Japan). Thanks to decades of overspend, there is no Keynesian firepower when it's needed. So there's no argument for more "stimulus" here, as the "Iron Chancellor" spent all the 'stimulus' long before the bust. Gordon Brown was a disaster for which I will be paying for the rest of my life. It Could have been worse, had Blair got his way and taken us into the Euro.

So, back to the Eurozone: Spain and Italy need Quantitative easing to ease the monetary pressure caused by the capital flight. Germany is simply unwilling to risk inflation and will sacrifice the economies of southern Europe on the altar of price stability. Meanwhile, the rest of Northern Europe are simply unwilling to make the transfers necessary to sustain currency union, let alone to allow the investment necessary to allow 'the South' to catch up.

What we're witnessing is the simple logic of currency union. Brits are broadly happy to subsidise other Brits farther north. Germans are content to throw money at Germans farther east. Ditto Yankees are happy to subsidise the ex-confederacy to their south. But Brits and Germans are NOT content to see vast sums head south to subsidise people whom their electorates consider feckless because they still enjoy siestas. Without a 'Demos' there is no democracy. And for the same reasons, there can also be no currency union without fiscal union. And fiscal union in the EU is impossible unless we all think of ourselves as 'European'.

And we don't. So the Euro will fail.

There MIGHT be enough political will to hold it together, for now. Indeed I think this is the most likely outcome. But eventually, decades of increasingly grinding poverty to which the Euro will condemn Spaniards and Italians will persuade the Spaniards and Italians vote to leave; or Germans will tire of writing cheques and vote to kick them out. Either way, the Euro's a doomed project.

It's not 'if' but 'when' and 'will there be piles of rotting corpses on the street again as a result?'

Have a look at this video (1-minute, safe for work)



My reward for getting out of the way of the considerate driver of the Merc (the reason he took a while to pass as I moved accross was that he was giving plenty of room behind - thanks) was a near left-hook from the John Lewis lorry following him. The problem is, once you let one car through, everyone else thinks they can pile past, even when there is no room. This is why it's often safer to "hog the lane".

Sorry.

I'd rather annoy you than be killed to death by the arsehole behind. And if I'm annoying you, at least that means you've seen me.

The answer to any question about why cyclists do something which appears irritating or selfish, the answer is usually "because some drivers are arseholes".

The two views, broadly about what's wrong with the UK fiscal position are what I would characterise as the "right-wing" position: The Labour party spent too much in power, believing the tax from the Banks would continue indefinitely. When the wheel came off the economy, tax receipts dried up, and the deficit-financed spending looked insanely unaffordable. I've been saying this since 2005.

The left, on the other hand, cannot see any fault in their beloved state. In their view, if only the wicked rich people would willingly cough up 50 or 60% of their incomes (a "fair share") then all the lovely state spending would be affordable. From this develops a nasty attitude where people are blamed for using absolutely legal tax planning to minimise their bills. The biggest "relief" claimed by "the Rich" accounting for the "tax gap" (defined as the difference between the headline rate and the paid rate) is the ability to carry forward losses.

It's important to see exactly where most of this comes from. Most high-rate tax-payers are not on PAYE. They're company directors, and have a great deal of control over their income: how and when it's paid. Many of these are personally liable for the debts of the firm they run. One of the commonest forms of start-up finance for businesses is an extension on the family Mortgage. The investment in a business often involves spending huge sums, borrowing against future earnings. This, in accounting terms, takes the form of years of losses. These are then carried forward into subsequent, profitable tax years. This is why debt interest is taken out before the profit line. It means that new, growing companies, from which a large portion of job creation comes, face low tax-bills despite high operating profits.

This is not abuse, in any way, shape or form. This is the tax system doing EXACTLY what it is designed to do. Howling down entrepreneurs for apparently low tax bills will result in lower employment growth as people decide at the margin to stay in PAYE employment, rather than take the plunge, extend the mortgage, and start up a company.

The left believe themselves to be moral, seeing state spending as a form of charity. It isn't. The problem is that high state spending doesn't in the long-run lead to better outcomes. It doesn't even seem to be correlated particularly strongly with equality. There are other, much stronger correlations with equality.

There is no doubt that there are too many reliefs, and that a flatter, simpler tax system may well raise more money from "the rich". But it's important to not, for reasons of envy and spite, take a knife to the Golden Goose. The left's obsession with high marginal tax rates is one of these idiocies. Of course the right has idiocies too - the obsession with tax-cuts over fiscal stability is merely the other cheek of the same arse. Likewise the twin obsessions with Tax dodging (left) and benefits cheating (right). Of course, if the benefits system is too complicated (and it is) people will seek to retain benefits while taking casual work. If the marginal tax rate is too high (and it is - over 100% for some low-waged workers) people will avoid paying it.

There's an argument about where the peak of the Laffer curve is, but both sides seem to be sold on the notion that the peak of the Laffer curve is where we should be targeting tax rates, as if the whole purpose of the economy is to generate Government revenues. They are just disagreeing about where the peak is (40-45% right, 60-70% left).

There's an argument about what the correct level of redistribution is. I can be persuaded that because so much of one's earnings can be predicted by where and to whom you were born, redistribution should form a significant part of government spending. These aren't particularly important.

The aim of a tax system is, as Jean Baptiste Colbert remarked “The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing.”. There is a limit to how many feathers can be got from the goose. And we're there. The rich simply won't pay any more than they are. The poor are already over-taxed, but simply have less power to avoid it. The British economy, an abnormally open and international one, is nearly 50% state, and over 40% tax. Everyone must (and broadly do) simply accept the state cannot grow any more.

The other way to reduce the hissing is to make the taxes low, simple, universal and fair. Often, in New Zealand and the UK in the 80's cutting tax rates has released more revenue as the marginal price of avoidance falls. High marginal tax rates are distorting, especially on the lowest paid. And the benefits system must be constructed with an eye to the incentives. Clearly to my mind the British tax and benefits system does none of these things.

Spending must fall, but it must fall gradually, leading to the left's headbanging bleating about cuts, but also upsetting the idiot right with their bleats of "continuity Gordon Brown". Of course, Osborne is cutting spending as fast as he can, raising as much tax as possible to balance the books. He's simplifying the welfare state, flattening taxes. Allied to market reforms in Health and Education, this is a Government which is doing most of the right things.

Where they fail is in giving in to Labour's spiteful anti-rich rhetoric. The Conservatives must unashamedly stand up for the wealth creators, and the elements of the tax system which benefit them, without which there simply would be no point to the enormous risks most business owners face when they start out. Carrying forward losses is NOT abuse, and should not be limited. Osborne missed an opportunity to stand up for the people he needs to employ the vast army of unemployed. This lack of courage, not policy, not the brute business cycle is what will cost the Tories the next election.

The people don't LIKE the Conservatives, they never have. But they do RESPECT the conservatives when AND ONLY WHEN they're doing what Conservatives know (and the people know, in their deep subconscious) to be right. Thatcher's appeal wasn't in being right, though she often was, but in acting with conviction. Balanced books, restrained state spending, and support for the motor of the economy, Business, are conservative values. Doing what's right (but uncomfortable in the short-term) while appeasing the siren calls of class envy merely looks like Janus-faced, lilly-livered lack of moral fibre.