Kerrrching ! Brown Opens The Till Again

George Osborne remarked a couple of weeks ago that all Labour governments end up running out of money, and this one is no exception.

The trouble with this one is that it is now abusing the privilege.

Today they've just risked pouring another £1bn down the tube with the mortgage prop-up scheme.

This sort of distortion in the mortgage market is a bad idea because:
..it can only be paid for with yet more government borrowing (this is actually taxpayer-sponsored guarantee of bad debt, financed through government debt, to try and get us through a recession which was partly caused by debt in the first place);
..it will be a difficult scheme to withdraw, because even once we're through the recession they'll always be some "deserving" cases - so this could actually end up being a permanent drain on the taxpayer;
..it encourages poor discipline amongst home buyers, who may over stretch themselves in the future in the "knowledge" that lilly-livered governments will help them out if the going gets rough;
..it opens the way for other government-inspired (and taxpayer-funded) debt guarantee schemes, to which all the above problems will also apply;
..home repossession, however painful and horrible, is one of the things that helps get the housing market going again, because it brings new houses onto the market, increasing supply and further reducing prices until such a time that people are prepared to buy again.

As is usually the case with socialist governments, this administration is awash with short-term, highly expensive market distortions that do nothing to deal with the long-term problems. Brown is obsessed with wanting to be seen as "caring" and "understanding people's plight". This is as much a political move as it is an economic one, but it's a political move paid for by money we do not have. And all along the reality is that if he hadn't taken so much money off us through tax in the first place we wouldn't be half as badly off as we are now.

Instead of taking the only path that would really help - massive government spending cuts, dealing with the borrowing and giving what he can in tax cuts, new Labour is showing its old Labour colours - spend, spend, spend when we simply can't afford it. £1 trillion worth of debt, and still courting, thanks to madcap initiatives like this one.

Osborne was right - they do all end up absolutely broke.

But Gordon Brown is, quite frankly, taking the piss.