From: Athinarayanan Sanjeevraja
Date: March 4, 2013
RE: Britain Losses it’s Top AAA Credit
Rating and try to regain its status.
Good Afternoon Mr.
Chancellor. I have said so in my last writing to you on September 28, 2012 on
the subject of UK Breaking Debt Rule.
I informed you how long and painful the process of reducing debt would be and how
your government can reduce the debt without choking of recovery and global
demand. Here it was my last writing to you. “UK keeps it top AAA credit rating because market
expects that your government would keep the budget tight. But your government
failed to keep the budget tight. If you lost AAA credit rating, interest rates
will shoot up and UK will never be able to diminish its deficit.
Indeed, UK GDP is shrinking. Therefore there will be less tax revenues to
reduce fiscal deficit. But I don’t see any attempts by your government to
diminish the fiscal deficit during 2012. UK adopted austerity plans in the past two years
to limit government spending and keep borrowing rates very low but the UK economic recovery remains challenge due to weak
global economy and banking troubles across major developed economies. Your
government is not executing effective fiscal consolidation programme which
should not restrain economic growth”. If I am not mistaken, UK banking system is not stable, banks are not
lending, exports is not rising, housing is not stable, private investment is
not recovering and structural reforms are not in place. It is very difficult
for UK government to regain its AAA status in a year. I insisted many times
your good office, UK need renewed investment in non-financial businesses to
reduce government deficits. If UK want to regain its AAA status, you need
intense focus on export market, corporate tax used to attract inward
investment, explicit targeting on high value FDI, ensure SME have adequate
access to finance, encouraging business growth and structural reforms should be
in place. What I observed, most of the policy makers around the world heading
in different directions because of that there will be no hope of actually
making any progress. If UK wants to improve its public finances, you should
impose heavy tax on tobacco products and luxury items, reduce NHS costs, and
reduce benefits spending. I am confident that these all have positive impact on
net revenues and would have significant benefits for UK economy.
Thank you very much for your kind attention Mr. Chancellor.
Sincerely regards,
Athinarayanan Sanjeevraja
Athinarayanan Advisory Authority
Athinarayanan Twitter.
Comments
Post a Comment