Bloomberg warns of global recession
New York mayor Michael Bloomberg today warned that a global recession is on its way, fuelled by public and private debt.
In a keynote address at the British Conservative Party conference, he said: "The sun is rising on our borrowing bacchanalia."
He advocated a policy of financial conservatism, putting money aside to cushion the effects of an economic crash.
He told the audience in Blackpool: "To me, fiscal conservatism means balancing budgets - not running deficits that the next generation can't afford.
"It means improving the efficiency of delivering services by finding innovative ways to do more with less.
"It means cutting taxes when possible and prudent to do so, raising them overall only when necessary to balance the budget and only in combination with spending cuts.
"It means when you run a surplus you save it, you don't squander it.
"And most importantly, being a fiscal conservative means preparing for the inevitable economic downturns - and by all indications, we've got one coming."
He said the Northern Rock "debacle" was evidence of the turmoil in the financial markets, but he said the crisis was not purely down to the collapse of the sub-prime mortgage sector.
"The fact is, this is not a mortgage crisis - it's a crisis in confidence and we're all in it together.
"It is being driven by rational expectations of a worsening credit crunch - which is a self-fulfilling prophecy."
He said it was not yet known whether the downturn would be a "dip or a dive".
The tycoon added: "In New York, the economic uncertainty our two countries face today is beginning to feel similar to the economic downturn we experienced six years ago - but this time, the stakes are higher because more people owe more debt and so do our governments.
"The sun is rising on our borrowing bacchanalia and pretending otherwise will only make the recovery slower and more painful."
Mr Bloomberg received a standing ovation following his wide-ranging speech, during which he also praised David Cameron's "ambitious" green agenda.
He also slipped a number of jokes into his conference address, telling party members: "Let me weigh in on the most controversial issue on the world stage today: I, too, am very disappointed that the Chelsea Football Club fired its manager."
