The Deficit Myth

Osborne with his suspect deviceGeorge Osborne’s comprehensive spending review of Wednesday 20th October 2010 demonstrated that this government is hell-bent on destroying the Welfare State. 

 There is plenty of evidence to support this; for instance, the aggressive shrinking of the public sector, the £87bn of funding cuts, the cancellation of many important (Labour) initiatives and the cuts to benefits.  Furthermore, they are going to deliberately make many families homeless. 

For a supposed coalition, this government is more Tory than Thatcher ever dreamed of being.  They are belligerently targeting those least able to carry the burden of the deficit, for example; the poor, those on lower/middle incomes, welfare, the disabled – even women and children.  Most commentators agree on this.  None of this was present in either the Conservative manifesto, nor was it indicated in that of Liberal Democrats.  Who voted for this?

The coalition’s constant use of the deficit to excuse utterly irresponsible policy-making is objectionable and the argument of there being “no choice” is unacceptable.  The Attlee government of post-war Britain had a greater deficit to contend with but still managed to start the Welfare State and the NHS, thus the only conclusion one can reach is that the Osborne budget is ideologically driven and to argue otherwise is disingenuous. 

The government’s general line is that the last Labour government created the deficit and are now offering no solutions in how to deal with it.  The very fact that the deficit was caused by the worldwide banking crisis, which began on Wall Street but sent most economies into a tail-spin seemed to escape the Conservative’s notice  (it was in all in the newspapers and on the television).  They also seemed overlook the fact that Gordon Brown and Alastair Darling made sure that the economy was beginning to improve again under Labour.  During all of that time the Conservatives and the Liberal Democrats voted with the Labour government and so I imagine they must have agreed with what they were doing.  Were they lying then, or are they lying now? 

Of course the ever-opportunistic George Osborne has been quick to accept the credit for the growth during the last two-quarters (the recently announced 0.8% of the last quarter), but it will be interesting to see if this is maintained following the frankly stupid cuts he announced last week.  Yes, I do mean ‘stupid’.

I call his ideas stupid because that’s what they are.  If you put ½ million people out-of-work deliberately you should have more of an idea about where they are going to find re-employment other than a vague idea like “it will come from the private sector”.  The government has not provided satisfactory evidence to substantiate this claim.  Won’t these people– who will at least for a time be unemployed – be claiming benefits?  They will certainly not be paying taxes.  If they unlucky enough to be unemployed for over a year their housing-benefit will be slashed, so the odds are they’ll be out on the street – which includes their children.  Won’t this lead to crime?  Don’t we need more police to deal with such crime?  It worries me that most of us in the public are asking questions like these but we have a government that seems incapable of asking them.  It’s almost as if they announce such measures willy-nilly and don’t bother editing their own thoughts.

What about the rise in VAT?  I know it will discourage me from buying more goods and I can hardly imagine such a measure to be a boon to retailers or manufacturers either.  Will people be rushing out to buy more consumables with 20% value-added-tax on them?  I think the answer to that is pretty obvious when one also bears in mind the fact that most people have had their wages frozen, will lose their jobs and inflation is rising (didn’t that happen under previous Conservative administrations?).

Of course, some readers will dismiss all of this because I’m a member of the Labour Party and a socialist too, but I think that when one proposes policies one ought to think of their consequences.  I’m not an economist but even I can see that George Osborne hasn’t thought his plans through and nor have his colleagues.

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8 thoughts on “The Deficit Myth

  1. You don’t need to have a particularly firm grip of economic theory to realise that the cuts are going to be a disaster for countless people. Countless both in numbers and in the sense that we don’t count as far as the political elites are concerned, whatever party they belong too.

    The question is, how do we make ourselves count, how do we organise against the cuts?

  2. Pingback: Tweets that mention The Deficit Myth « Liverpool Lefty -- Topsy.com

  3. Damn right. The cuts are only going to make things worse for everyone except the people in D&G’s Happy Bubble of Denial.

    There’s a term for this – disaster capitalism.

  4. I’m neither a member of the Labour Party, or a Socialist, but even I can see that Mr Osbourne hasn’t got this plan thought out at all well!
    I am a self employed courier, and because of the recession, work has dried up considerably for me, and I have had to start claiming benefits to help me along. I would much rather not do this, I’d rather be out working. But seeing what’s in front of me, a possibility of other people becoming unemployed, and thinking that getting a van and setting up as a courier, will be an easy option, means possibly less work for me, and no hope of getting off benefits, which may well get taken away from me after a while. I’m already down to the bone moneywise now.
    One thing I don’t think I’ve seen throughout all these talk of cuts (until Nick Clegg mentioned something the other day), is Mr Osbourne or any of his cronies taking a pay cut. It may not make a big dent, but leading by example, would probably go a long way to showing us that we aren’t the only ones tightening our belts.

  5. you know how banks charge you and make you overdrawn then they charge you for being overdrawn? That’s this government.

  6. I love reading through a post that will make men and women think.

    Also, thanks for allowing for me to comment!

  7. The Welfare State has done more harm to more people over a longer period than any other misconceived insanity in British political history.

    Why?

    Because it’s meant that every government since WW2 has used the WS as a way of bribing the electorate to vote for them – without any regard as to how we’re going to pay for their largess.

    Example; Due to increasing life-expectancy, 65 in 1945 is the equivalent of 88 today.

    So the State Pension age should have risen by 1,5 – 2 years for every parliament since WW2. Instead, it’s remained static (for men) until 2018.

    Plain nuts.

    So the only solution is the complete abolition of the Welfare State – or genetically modified politicians who are trustworthy.

    • Hi Paul,
      You are obviously someone who has never needed the safety-net that the Welfare State provides. You’re entitled to your opinion, of course, even if I think you’re wrong. Yes, politicians are a cynical bunch but that doesn’t mean that the Welfare State wasn’t a fine and principled idea or that it has done people harm. Scrapping it would do far more damage and would have a catastrophic effect on many people’s lives.
      Andy.

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