The prospect of a double dip recession – not just for the UK but across much of the world economy – seems to increase daily.
US house sales slumped by 27% in July.
Mortgage lending in the UK fell by 18% in the same month.
Confidence has been sucked out of both economies; in the US by fear that the stimulus is ending, in the UK by the ferocity of the ConDem attack on jobs, spending and demand that can only and inevitably mean that they want and are planning to deliver a recession, or a depression.
In both cases – and throughout the Eurozone where austerity has become the norm – even in Germany where more than anywhere the opposite policy is needed – this austerity is absolutely the wrong policy.
It is only government spending that can keep us out of recession now. What is more – as I have shown – cutting jobs now saves the government no money at all, and in all probability imposes considerable costs after multiplier effects are taken into account.
This means this is not the time for cuts. This is the time for government spending – selective spending with a focus on investment admittedly – to create the demand that will get us out of recession and deliver the new economy we need.
This is, of course, the Green New Deal. For more detail, there’s much here.
It’s the alterative to the inevitability of stagnation, recession or depression that neoliberal politics is offering.
It’s hope when all the ConDems are offering is fear.
It’s a no-brainer for the people of Britain. Unless of course you’re seeking to increase the power and wealth of an elite by abusing the population of the UK – as this government's regressive policies seek to do.