19 september 2011, a time of plenty ?

At a private lunch today with robert chote, the charming and excellent poacher-turned-gamekeeper who now provides the authoritative analysis of the uk's public finances from his semi-autonomous seat as head of the office of budget responsibility. As a former economist at the imf (before his stellar stint at the ifs) we had much to talk about, taking on all comers talking of a euro collapse. Just as independent central banks spread in the 1990s, so now independent budget offices (like that of the us congress) now seem to be becoming international best practice, and for all the brickbats about having no teeth (which it doesn't), this new institution is shaping up well as a marginally important piece of the macroeconomic policymaking jigsaw. It's headline publication, the fiscal sustainability report, is a surprisingly easy read that broaches the important long-term issues beyond immediate policy, such as pensions, oil and healthcare. Their ultimate conclusion is delivered deadpan but bears reading twice, "on current policy we would expect the budget deficit to widen sufficiently over the long-term to put public sector net debt on a continuously rising trajectory as a share of national income. This is clearly unsustainable." Both long-term then, and short (according to today's financial times), we may yet look back at today as a time of plenty rather than the opposite.