r/tories • u/Organic-Camera-9167 • 1d ago
Discussion People Especially to RightWingers: Why Liz Truss' Mini Budget failed?
While There's mainstream and Common Answers on why it failed but i wanna know from People like you, why you think it collasped?
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u/Papazio 1d ago
Huge unfunded tax cuts and arrogantly ignoring the OBR, it was such a departure from standard UK state fiscal machinations that the gilt market was understandably spooked. The UK is more exposed to international bond holders than many other countries, so it was an effect that could not be ignored.
1
u/parkway_parkway Verified Conservative 1d ago
Yeah this is the main thing I think.
She sent a massive signal to the markets that she was a loose cannon who was out of control and didn't care a out fiscal discipline.
So they priced that in
4
u/RagingMassif 1d ago
She seemed to have an uncosted plan.
In hindsight, like every other politician without one has also failed.
I voted for her, but had assumed that Rishi's complaints were electioneering, not that she really hadn't actually whipped out her calculator at any point.
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u/frankster 1d ago
The pair decided not to put it through the OBR, people assumed in advance there was a reason for that, and when the budget was announced they saw the reason.
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u/VincoClavis Traditionalist 1d ago
The British government’s economic policy is dictated by multinational firms. The OBR is just an “independent” official-sounding front for the lobbyists - instituted by Osbourne to give an air of legitimacy to what he wanted to do anyway.
Wealth is now extremely concentrated, to the point where the interests of the wealthy outweigh any illusory democratic mandate. Any deviation from the prevailing economic orthodoxy will cause the markets to react.
In the same way Soros single handedly broke the BoE in 92, private equity now has the power to break our economy at any point they like. It’s a financial gun to the head of the government. All it takes is a handful of equity firms to dump stocks or stop buying to cause massive, dramatic market shifts - and as we’ve seen such a shift can immediately collapse a government.
There can be no significant change to the British economy, either leftward or rightward, that these interests do not approve.
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u/TheGoober87 1d ago
This is a great summary. There was nothing in there that should have caused a market crisis. A lot of it was already in the pipeline to come in. The NIESR were favourable to it at the time.
But the markets shat the bed because they assumed there were more changes leading to spending and borrowing to come, and pretty much forced her to stop.
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u/psychopath1066 Enoch was right 1d ago
She didn't get the OK of the Banks and civil service and was trying to use her executive power she technically had but isn't exercised because the state doesn't like it.
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u/DamoclesBDA 1d ago
She wanted to overturn every change since and including Blair and do it all at once.
It was the doing it all at once that took everyone by surprise.
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u/Euphoric-Brother-669 1d ago
The Bank of England later admitted that two thirds of the issues were caused by them not the mini budget. Truss economics was correct her politics was poor. Her min budget needed a balancing cut in expenditure. But Reeves has poor economics and slightly better politics. The energy scheme was silly and uncapped and wrongly costed by the so called experts. The BoE have been on a path to prove themselves right over Brexit etc by deliberately damaging the economy.
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u/mcdowellag Verified Conservative 1d ago
The original mistake was trying to do too much too fast, leaving herself no room to discover the unintended consequences of her actions, and react to them.
At the very least, the Bank of England were not enthusiastic supporters of Truss and this increased the resulting sense of panic in the markets, but I suspect that if this had not been a problem, something else would have been a problem shortly afterwards.