As Jonathan Freedland said in the Guardian this morning:
A quick look at the figures confirms that, until the crash hit in September 2008, the levels of red ink were manageably low. The budget of 2007 estimated Britain's structural deficit – that chunk of the debt that won't be mopped up by growth – at 3% of gross domestic product. At the time, the revered Institute for Fiscal Studies accepted that two-thirds of that sum comprised borrowing for investment, leaving a black hole of just 1% of GDP. If the structural deficit today has rocketed close to 8%, all that proves is that most of it was racked up dealing with the banking crisis and subsequent slump – with only a fraction the result of supposed Labour profligacy. After all, even the Tories would have had to pay out unemployment benefit.
This is the reality: Labour managed the economy well until the bankers broke its back.
But that was banker’s fault not Labour.
Osborne’s lie is that this was Labour’s fault.
That is a lie.
He knows it is a lie.
And he trades on that lie.
But he can’t build a solution based on that lie. And that’s why his solution will not work. He’s tackling the wrong problem with the wrong prescription at the wrong time.