I noticed an interesting little headline on the front page of today’s print version of the FT. It said “Brown pledges to help savers as Bank eyes lowest rate since 1694".
The article followed up with a typical Brownite quote: “We are looking at means by which we can help pensioners and others with their savings. That is one of the things we will look at in the run up to the budget and I am very conscious that people who have saved money all their lives need the best deal possible.”
What help could Brown offer with interest rates falling to zero and equity prices crashing? It can be only one thing. Brown is going to give another tax holiday. He will temporarily suspend withholding tax on interest payments. It is, of course, yet another terrible idea. Reducing taxes on interest would further weaken public finances, and would do little to support savings.
Isn’t it time to call a halt to all this half-baked policy inventiveness? This country would be better served with greater fiscal responsibility and higher interest rates. Macroeconomic stability – that is what we really need. In other words, no more boom and bust.