Budget or bodge it?

The normal Budget rules in an economic downturn: trim taxes, so people have got more money in their pockets, cut interest rates, so people don’t worry so much about borrowing, and increase public spending to help give the economy a nudge.
Don’t expect to see much of that when Alistair Darling gets up later on today and delivers his first Budget. In this downturn, the normal rules don’t apply.
How come? For starters, this isn’t a normal downturn. Yes, we’re following what’s called a traditional credit cycle, where people now need to pause for financial breath having splurged too much on borrowed cash for several years.
But this time the banks they borrow from are pausing for financial breath too. They’ve suffered walloping losses from wacky investments that went wrong in a big way.
So they’re not mad keen on lending money even if you feel like borrowing more.
On top of all that, the Government is a recovering spendaholic as well. It’s run up years of deficits by splashing out massively on schools, hospitals, the odd war on terror and a few other things.
At a time when it’s short of money, an economic downturn also means it’s staring a reduced tax-take in the face – when people buy less, less tax is paid.
So other than that income tax cut announced by Gordon Brown a year ago don’t expect much of a give away.
Brown’s successor, Alistair Darling, might delay a few things and tinker with tax allowances here and there in the name of economy and environment, but I’ll bet my rock-bottom dollar that what he grudgingly gives away with one hand he’ll snatch back quickly with the other.
We’ll see later on.