The last few days have seen the newspapers filled with the carry on's of the internecine warfare in the Labour Party. To most people, struggling to keep their heads above water, the Labour fratricide is pretty irrelevant.
However, from all the verbiage in recent days, one thing does stand out: The fact that in 2006, Gordon Brown was warned that Government spending was out of control. Restraint was necessary. Note that this was way before the banking crisis and the world recession. Instead, Mr Brown began a £90 billion spending plan, virtually bankrupting the economy in the process. The collapse of the banks and global economic disaster, meant that there was no money left to deal with the crisis. The argument that Labour failed to fix the roof when the sun was shining holds true.
What is fascinating is the 2006 Cabinet document which said : "We have spent all this money and what have we got to show for it". I remember as a Conservative candidate campaigning under the slogan "Taxes up, but where has all the money gone". At the time the Tories were mocked. Who's laughing now? Certainly not the UK Taxpayers' currently paying £120 million a day in interest rates alone - to pay off the debts and deal with Gordon Brown's deficit.
You can read more HERE.
by Robert Halfon - www.roberthalfon.blogspot.com
Your thinking seems to be fairly muddled. Brown spending money on health and education (for that is where it went) *is* fixing the roof, unless you mean he didn’t spend the time diverting the economy away from services and public sector growth in the name of ”rebalancing” it (quite why, if a public sector job is unnecessary, it would pop up out of a private sector eco-system is unclear) is fairly ironic coming from a Conservative who led us to a service economy and away from manufacturing in the first place.
ReplyDeleteThe government reports were really asking whether we were getting value for money, not whether it should be spending money.
You must also admit that the national debt as a percentage of GDP now, let alone before the banking crisis was lower than it has been for 200 of the past 250 years. If we were spending unwisely then, we were also spending unwisely during the Empire and during the Industrial Revolution. When the crash hit, Britain had the second-lowest debt in the G7, and it’s still much lower than the historic average.
Here’s a helpful graph http://4.bp.blogspot.com/_Z_3bgQQpLBE/TL_tYYSpP6I/AAAAAAAAAE4/6_NAPKhXUmg/s400/debt-gdp.jpg.
John Maynard Keynes would have called Osbourne’s current strategy “the paradox of thrift”. Cutting your way out of a recession has never worked. It didn’t work in the recession that preceded the Great Depression, and it didn’t work in Japan more recently. In fact, it’s never worked anywhere, ever. Today, the UK’s debt relative to income is about 60% of GDP, comparing favourably with the US (84.8%), Italy (115.8%) and Japan, who’s recession strategy Osbourne is copying, at 218.6%.
I’m certainly no fan of Labour, but the way this debate is going is idiotic. Even now, net UK debt is £910.1 billion excluding financial interventions, but including them it’s £2252.9 billion. By your maths, £90bn was misappropriated, which equates to 3.9% of the current “problem”. Perhaps you could be more honest and accept that the remaining 96.1% of current government debt was out of any government’s control, and reducing it is a choice, not a necessity?