Thread by @AndrewPRLevi

Brexit Britain on the brink.

You’ve heard of the Irish Trilemma. Solution? Ditch the Johnson Brexit.

Now it’s the Great British Trilemma:

A Johnson Brexit

B Spending

C Low inflation

A+B = rocketing inflation

A+C = austerity & recession

B+C = ditch the Johnson Brexit /1.

The Johnson Brexit (A), dislocates the UK from a major portion of its supply chains, labour force, goods & services market, research collaboration & more, shredding UK productive resources & capacity. /2.

As a result, scope for the government spending (B) required for the country to prosper & recover, without inflation running out of control, is constrained. Potentially severely. /3.

Consequently, to avoid an inflation spiral the government has to either:

- spend nowhere near adequately, causing widespread impoverishment & economic recession;

or:

- ditch the Johnson Brexit. /4.

Taxing more not only breaks Conservative manifesto promises. Much worse still: it doesn’t solve the problem. In fact, it exacerbates it, removing financial resources from a broad swathe of a UK society already under increasing, government policy-induced strain. /5.

By all means, adjust taxes to make the system more progressive, stop concentration of power in a tiny wealthy elite, drive socially beneficial activities etc. But let’s not kid ourselves they’ll ‘pay’ for anything. Certainly not the results of the destructive Johnson Brexit. /6.

Where does that leave us?

🔴 Stick with the Johnson Brexit & spend what’s needed. Result: inflation crisis.

🔴 Stick with the Johnson Brexit & don’t spend what’s needed. Result: austerity, recession, crisis.

🟢 Ditch the Johnson Brexit & spend what’s needed. Result: … /7.

Ah, the result: recovery, prosperity, low inflation.

And the political defenestration of the Johnson government by the English Nationalist Wing of their own Party.

A terminal political crisis, in other words, for Mr Johnson & his team. /8.

There’s a way out of that trap.

But it requires statesmanship, grip & exceptional political skill.

On both sides of the current House of Commons.

Don’t hold your breath. /9. End

P.S. In response to some comments, ‘borrowing’ isn’t a way out. It’s a fiction that a sovereign (fiat) currency-issuing govt ‘borrows’ in its own currency. Govt bonds are effectively interest-bearing £ (in UK case). Which is why, in my brief account, ‘borrowing’ doesn’t feature.