Osborne is going to explain how he will find £11.5 billion of cuts today. He will pretend this will solve the problems within the so-called structural deficit.
The total deficit last year was £118.5 billion.
I hope someone will ask how £11.5 billion of cuts will solve a £118.5 billion deficit. I am sure Osborne will not be able to do so because the fact is that these cuts, and all that preceded and will follow them, cannot solve this issue. Only creating full employment - where the people of the UK return to paying tax and claiming fewer benefits - will solve this issue. And that will require borrowing to get the process going - and serious borrowing at that. But as the IMF's work on multipliers has shown, such borrowing can pay for itself.
This is the only way forward. And no one on the front benches is brave enough to say it. That's why we face decades of stagnation.
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It will barely put a dent in the deficit but it’ll decimate public services even further, which is the real goal. The deficit is just a convenient excuse to slash and burn.
Indeed, Philip, ‘The Shock Doctrine’, the beloved and well tested policy weapon since the 1970s of the neo-liberal elite and their supporters worldwide. Once restricted to the countries of the developing world but now let loose on the citizens of the western world. At least Osborne and co are right on one level when they say we’re all in this together: if you are an ordinary citizen, regardless of where you live in the world, you are being shafted by the 1%.
True, Ivan – but where is the consciousness of this? I can barely believe the level of lethargy and ‘keep your head down apathy’ that seems to have rendered the populace so pliant.
In England, we’re a beaten people. We were conquered by the Romans, and we still have the top-down societal structure they imposed upon us. We were conquered by the French, and the Conqueror decided all land would be owned by the Crown, as it still is as freeholders only own title, no the land itself. Then the banks paid for William of Orange to bloodlessly invade, which he did and handed the royal prerogative of money creation through Parliament to the banks, which is why they funded him. The other European countries got rid of their parasitic arsoticracies centuries ago, while we still have ours. Being imposed on by the 1%, it’s just another day at the office for the Great British peoples.
I’d like to see local curencies springing up everywhere myself, if the govt is going to reduce the amount of money in circulation to impossible levels we’ll start creating our own.
Philip ,
The reduction is small in comparison with the total governmental spend .
People in the public sector who call themselves “managers” have a duty to implement funding cuts in the least damaging way . If they just throw their hands up and derelict their duty they have no business calling themselves “managers” .
Some problems require money thrown at them but in other cases that is just treating the symptoms whilst making the underlying problems worse .
Take affordable housing . New Labour made no effort to increase the supply of private housing stock , social housing stock , implement a universal location value tax (fee for exclusive use of the commons) , implement rent controls , discourage hoarding of land , resist a credit bubble and house price bubble or restrict immigration . The coalition is not tackling it either .
All New Labour did was fan the flames by making more and more money available in the form of housing benefit rather than tackling the underlying problems .
I earn my income from foreign companies and people in other countries they get to do them work earn 1/3rd and 2/3rd UK rates . Rather than price itself out of the market the UK needs to cut the cost of living (and impose tariffs on countries which have lower levels of social care) .
The only politician I have heard make mention of reducing the cost of living is Campbell Newman out in Queensland .
Simon
I accept we need to cut the cost of housing – as much as we can
But cutting the cost of living is deflationary and that is a dire economic exercise
Inflation works better
And in reality that is still a relative issue – can we get wages to rise faster than rents / property prices and interest
Richard
Richard ,
Thanks for your reply .
People in industries such as construction earning quite average incomes have in some case had their annual income drop by 50% in the last 5 years so I am one of the lucky ones . Wage inflation is an unattainable dream for many of us .
With regards to your last sentence , you will be more familiar with Ricardo’s law of rents than I am .
To increase economic activity by encouraging people to spend they not only need money in their pocket but also to feel like spending it . To do that they need to have their private debt more manageable and have confidence in the future .
To have confidence in the future , people need both confidence that a state pension will be there for them and also confidence that they will have a degree of financial independence themselves .
It surprises me that more people have not concluded that the game is bent and taken their foot off the gas and decided to cruise .
I agree with much of that
I said so in a radio interview this morning – and on this blog, often
Quite so, demonstrable by the fact we’ve had larger deficits before without any of this currenct nonsense.
Bill, you might know of the Bristol Pound – seems to be gaining currency(!).
http://bristolpound.org/
I know, it’s the biggest one we have and it’s encouraging it’s there. They can only create about one pound in seven from nowhere though (I asked) so it doesn’t compete on the level it needs to with private bank created money. It’s still valuable though and can be used as a weapon against the predatory utility companies and supermarkets if equivalents are developed nationally. It can stop them shrinking the functioning economy even further as they currently do by siphoning money out of it into tax havens. This is very important. This development of local currencies has to happen pretty quickly while there’s still some money left in the system unless we can work out a way of creating a parallel currency which the government can’t outlaw. Britcoin, maybe?
“US first quarter GDP figure revised downward from initial estimate”
http://www.rte.ie/news/business/2013/0626/458971-us-gdp-figure-revised-downward/