Osbornomics a total failure

The opinions - and that's all they are - of the small cabal of credit rating agencies should never again be taken too seriously after their role during the 2008 financial debacle.

All of them had bestowed AAA status on the worthless financial bundles of subprime mortgages that were traded profitably until the financial bubble burst.

Both the US and France have had their triple-A ratings trimmed in recent years, but that had no effect on their access to finance.

Global interest rates remain historically low because of the ongoing recession, especially in Europe, so it is unlikely that Britain's government will find the cost of borrowing prohibitive.

This is just as well since Osborne's economic forecasts have proved about as reliable as Mystic Meg's, based as they are on the false premise that the best way to encourage private-sector growth is by slashing spending on the public sector.

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The Chancellor's reaction to the obvious failure of his policies is to reiterate Margaret Thatcher's mantra that there is no alternative.

She was wrong and so is he. There is no justification for sticking rigidly to a formula that seems fated to deliver a triple-dip recession.

Obstinacy in the face of disaster does not equate to strength of character or commitment to political principle. It smacks of paralysis of judgement.

The reference by Moody's to "subdued" growth prospects and a "high and rising debt burden" simply repeats what has been apparent for some time and what many economists forecast as the logical outcome of the coalition government's austerity agenda at a time when most EU countries were operating similarly disastrous policies.

There is no possibility of a trade-driven recovery if major trading partners are cutting demand.

Cable told the Andrew Marr show that to embark on a slash-and-burn policy in response to the credit rating reduction would be "utterly foolish and counterproductive."

The problem for the Business Secretary is that slash-and-burn sums up government policy towards the public sector, starving essential services of finance and putting tens of thousands of workers out of a job.

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The abject fiasco of the government's back-to-work programme means a shortfall in anticipated tax revenues and a consequent increase in borrowing to meet the costs of unemployment.

Osborne's obsession with cutting the deficit rapidly is already dead in the water.

It was always the wrong priority, justified on a totally false comparison of the country's finances with an individual family's household budget and the moral obligation to repay debts.

Aside from the fact that most families in Britain go through life with a panoply of debt from housing mortgages to credit cards, government deficits are reduced by tax revenues and the best way of doing this is through economic growth.

Recent decades have witnessed a greater part of national income being reserved for shareholder dividends at the expense of wages.

Pay rises for workers and increased pensions and benefits would encourage demand, since those dependent on these incomes spend rather than save.

Higher taxation on the most heavily remunerated minority and on accumulated wealth would provide investment funds to kick-start the economy and generate increased tax revenues for the Treasury.